Jetstar has been fined $90,000 for breaching the terms of the Air Pilots Award 2010 by unlawfully deducting training costs from the wages of six cadet pilots. The Fair Work Ombudsman brought proceedings in the Federal Court at Sydney under the Fair Work Act.
The training costs were incurred at a time when the cadet pilots were formally employees of a New Zealand Jetstar entity and travelled frequently to New Zealand. The cadet pilots' employment was subsequently transferred to two Australian Jetstar entities, after which point their employers deducted a total of $17,500 from their salaries. The deductions have already been repaid to the cadets as the employees' union, the Australian Federation of Air Pilots, successfully brought action on their behalf in 2011. In setting the fine at 68 percent of the maximum penalty available, Justice Buchanan criticised Jetstar's decision to continue making deductions even after receiving legal advice that they breached the Award.
Jetstar's decision to domicile its pilot training scheme outside Australia and make the assertion that trainees were not subject to Australian awards was contentious, particularly when many of the trainees were Australian residents who had been recruited in Australia and spent time in Australia during their traineeship. We note that the Fair Work Ombudsman has parallel proceedings ongoing against Jetstar over the use of cabin crew engaged by Thailand and Singapore entities on certain domestic Australian sectors where Jetstar claims the employees are not subject to Australian awards.
Key Takeaway
Employers need to be cautious when asserting that employees who live in Australia, are sent to Australia for work or who travel extensively to Australia for work are not subject to Australian awards. Detailed legal advice should be obtained on the issue, and employers should be aware that the regulators are taking a keen interest these arrangements.
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