Report in which the committee requests to be kept informed of development - Report No 277, March 1991

1. 151. By communications dated 2 and 27 October 1989 and 24 January 1990 the International Federation of Air Line Pilots Associations (IFALPA) presented a complaint of violations of trade union rights against the Government of Australia. The Government sent its observations on the case by communications dated 23 January 1990, 23 April 1990 and 4 October 1990.
2. 152. At its meeting in May 1990 the Committee decided to adjourn its examination of the case until its next meeting, and in the interim asked the Government to provide further information in relation to certain matters (272nd Report of the Committee, adopted by the Governing Body at its 246th Session, May-June 1990, para. 8). At its meeting in November 1990 the Committee again decided to adjourn its consideration of the case, and asked its Chairman to request the Government and the complainant to provide any additional information they might want to submit in relation to the complaint (275th Report of the Committee, adopted by the Governing Body at its 248th Session, November 1990, para. 6).
3. 153. In a communication of 11 December 1990 the complainant made a further submission in relation to this case. The Government supplied its observations on this submission in a communication dated 15 January 1991.
4. 154. Australia has ratified the Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87) and the Right to Organise and Collective Bargaining Convention, 1949 (No. 98).

A. The complainant's allegations

• The original complaint
  155. 155 This complaint is presented by IFALPA on behalf of its Australian affiliate, the Australian Federation of Air Pilots (AFAP). It arises out of a dispute in the domestic airline industry, and relates to two principal sets of issues: first, the ability of pilots collectively to negotiate, through the AFAP, with their employers free of government intervention, and secondly, their right to take industrial action in support of their case without hindrance or victimisation by the Government.
  156. 156 The AFAP is registered under the federal Industrial Relations Act 1988, and at the time the dispute began represented all pilots employed by the four major domestic airlines in Australia (Ansett Airlines, Australian Airlines, East-West Airlines and IPEC).
  157. 157 On 26 July 1989 the AFAP claimed a pay increase of 29.47 per cent from the four Airlines. On 7 August the Australian Industrial Relations Commission (AIRC) handed down its decision in a National Wage Case, which had been presented on behalf of the trade union movement by the Australian Council of Trade Unions (ACTU) (to which the AFAP is not affiliated). This decision set out a series of "National Wage Principles" which were to govern wage increases within the federal industrial relations system until further review by the AIRC. Amongst other things, the decision provided for general increases in award wages of up to 6 per cent, subject to certain productivity and efficiency improvements. Claims for increases beyond this amount would have to be dealt with as a "special case" before a Full Bench of the Commission. Access to the 6 per cent increase was stated to be conditional upon the relevant trade union entering into a commitment (which would be embodied in a legally enforceable "award") to the effect that it would not "pursue any extra claims, award or overaward" other than in a manner consistent with the principles laid down by the AIRC. The AFAP refused to give the necessary commitments, and indicated that it wished to pursue its claim outside the National Wage Principles, by means of direct negotiation with the employers in the industry. The Airlines responded that they were prepared to negotiate only within the framework of the National Wage Principles laid down by the AIRC.
  158. 158 The AFAP held meetings of its members between 11 and 14 August 1989. These meetings authorised it to take industrial action in support of the wage demand. The Federation then directed its members to work only from 9.00 a.m. to 5.00 p.m. each day (the "9 to 5 campaign"). This instruction took effect from 18 August 1989. It had the effect of severely disrupting the operations of all four Airlines.
  159. 159 On 18 August 1989 the Airlines applied to the AIRC for the cancellation of existing awards to which the AFAP was party. The Commission gave the Federation until 21 August to agree to work to award conditions or the awards would be cancelled. The AFAP refused to give any such commitment. The awards were cancelled with effect from 21 August 1989, whereupon the Airlines asked each individual pilot to agree to work according to a new contract of employment. This they refused to do.
  160. 160 At around this time the Federation became concerned that the Airlines were about to take common law action against itself and individual pilots. They were also apprehensive at the possibility of (unspecified) criminal proceedings. In order to minimise these risks some 1,647 members of the AFAP employed by the airlines resigned from their employment with effect from 24 August 1989. These resignations were effected in accordance with the terms of the pilots' contracts of employment.
  161. 161 Following this action, the pilots were subjected to a deliberate campaign of intimidation and denigration by their former employers and by the Australian Government. The Government had allegedly also had the support of the ACTU in its campaign against the AFAP. On or about 24 August 1989 civil proceedings were commenced against the Federation, its principal officers and "many individual pilots". Concerns at the possibility of criminal proceedings continued, although no such prosecutions had in fact been initiated. In addition to all of this, many pilots were threatened that they would not receive their full superannuation entitlements.
  162. 162 The resignation of the members of AFAP had brought domestic air services to a virtual standstill. The Government had responded to this by: (i) permitting international carriers to carry passengers on domestic routes; (ii) waiving certain airport charges as a quid pro quo for the Airlines continuing to pay full wages to all staff apart from the pilots; (iii) making Royal Australian Air Force (RAAF) planes and crew available for civilian flights; (iv) modifying regulations governing the training and certification of pilots in order to facilitate the employment of foreign pilots in operations formerly carried out by AFAP members, thereby undermining the Federation's position in the dispute; and (v) making public statements in support of the Airlines, and denigrating the AFAP and its members and officials. According to the complainant the changes to the rules relating to the certification of pilots had compromised safety standards in the industry in order to meet economic and political objectives associated with the dispute between the AFAP and the Government and Airlines.
  163. 163 In October 1989 the AIRC made a number of awards which obliged the Airlines to observe specified terms and conditions of employment in relation to individual pilots employed by them. As of 27 October 1989, the AFAP was not a party to these awards. However, it was made party to the awards in May 1990 after giving certain assurances as to its future conduct to the Commission.
  164. 164 By its communication of 24 January 1990 the complainant indicated that on 23 November 1989 the Supreme Court of Victoria handed down judgement in the common law case brought by the Airlines against the AFAP and six of its officers (four of whom were members of the executive, and two of whom were trustees of the funds of the Federation). The Court determined that the Federation and its six officers were liable to pay damages in respect of the torts of interference with contractual relations, unlawful interference with trade or business, and unlawful means conspiracy. Following further hearings in the early part of 1990 damages were assessed at A$6.48 million. The defendants were also ordered to pay the Airlines' costs.
  165. 165 The complainant considers that awards of damages of this nature constitute "victimisation" on the ground of trade union activity. If they became the norm it would be impossible for any representative organisation to organise industrial action, or for any employee to contemplate participating in such action, without running the risk of being sued in damages by their employer. This would tip the balance in employer/employee relations heavily in favour of employers, and would constitute a return to an era preceding the establishment of the trade union rights which the ILO has fought so painstakingly to define.
  166. 166 The complainant states that in late 1989 the Government, for reasons of "electoral popularity", modified its former highly aggressive stand against the AFAP. For example, it recommended to the Airlines that they should not seek to claim the damages awarded by the Supreme Court of Victoria. The complainant considers that a similar posture at an earlier stage in the dispute would have prevented the present situation from arising.
• IFALPA's further submissions
  167. 167 By its communication of 11 December 1990 the complainant makes further submissions in relation to: (i) the reasons for the dispute; (ii) the immigration of foreign pilots; (iii) victimisation of the union and its members; and (iv) recognition of the AFAP by the Airlines.
  168. 168 The complainant states that according to the Government the central issue which was at stake in the dispute was the effect the pilots' pay claim might have on the "Accord" between the Government and the ACTU. However, the complainant considers that more recent developments bear out the AFAP's contention that the rejection of the pay claim was merely an excuse to destroy the Federation prior to the deregulation of the domestic airline industry in November 1990. In support of this contention, the complainant states that: (i) only the ACTU and the Government are bound by the Accord; (ii) that the 29.47 per cent pay claim has never been discussed or examined in order to determine "whether it would meet the guide-lines of the Accord"; (iii) that pilots employed by Qantas (the Australian overseas carrier) received pay increases of 18 per cent at the time the AFAP was pursuing its 29.47 per cent claim. Over the same period, air traffic controllers received 20 per cent, and judges and politicians received more than 30 per cent; (iv) that the new awards covering pilots employed by the Airlines contain a productivity scale allowing for salaries between 30 to 100 per cent higher than those achieved prior to the dispute; and (v) AFAP had always been prepared to discuss productivity improvements with the Airlines and indeed had discussed the potential for a reduction in the number of pilots with Australian Airlines in July 1989.
  169. 169 Referring to its earlier allegations that the rules relating to the training and certification of pilots had been relaxed in order to facilitate the employment of overseas pilots, the complainant indicates that the AFAP had also become concerned at possible abuses of immigration procedures for the same purpose. It had indeed obtained an injunction in June 1990 to prevent the issue of further visas or the extension of existing visas in relation to pilots already in employment in Australia. Despite this vindication of the Federation's position, the Airlines were still trying to recruit overseas pilots rather than re-employing some of the 700 Australian pilots who remain unemployed having been forced to resign at the start of the dispute in order to avoid punitive fines and awards of damages at common law. The complainant quotes from various letters and statements in order to show that the Government is actively assisting the Airlines to implement their overseas recruitment policy.
  170. 170 The complainant further alleges that there is increasing evidence that the Government had been victimising the AFAP "by persuading other foreign airlines not to employ its former members". This "persuasion" had, in some instances, involved threats to withdraw foreign airlines' landing rights in Australia if they were found to be employing AFAP members. As a consequence, both AFAP and individual pilots are preparing to take legal action against the airlines concerned on the grounds that their failure to re-employ Australian pilots previously involved in the dispute is discriminatory.
  171. 171 The complainant also claims that the media had continued to subject the AFAP and individual pilots to a campaign of intimidation and denigration. For example, the press had published unsubstantiated reports of threats of violence by AFAP members against foreign aircrews, and had accused pilots caught up in the dispute of exploiting their families in the cause of attacks upon the Government and the Airlines.
  172. 172 The complainant describes the process by which the AFAP became party to the new awards in the industry in May 1990. It asserts that despite the fact that the Federation had given the necessary commitments to respect the decisions of the AIRC the Government still refused to accept that under the Industrial Relations Act the Federation remained the sole representative body of Australian domestic pilots. The Airlines had also refused to recognise, or negotiate with, the Federation. Indeed, just before the Commission's decision in May 1990 to make the AFAP party to the new awards, the Airlines had filed an application to deprive it of its capacity to represent the industrial interests of pilots employed by them. This application was still pending.
  173. 173 Again with the support of the Government, the Airlines had been encouraging pilots to join either in-house associations or the Australian Transport Officers' Federation (ATOF) (even though the eligibility rule of this latter enables it to represent only clerical and lower management staff rather than pilots). This behaviour constituted a denial of the pilots' fundamental right to choose their own representative body. It was also inconsistent with government and ACTU policy relating to the rationalisation of trade union structures.

B. The Government's reply

1. 174. By its communication of 23 January 1990 the Government provided a detailed reply to the complainant's initial allegations. This response: (i) provided background information on the federal industrial relations system within which the AFAP had voluntarily decided to operate; (ii) outlined the history of the industrial campaign which gave rise to the matters to which the complaint relates, including the decisions and findings of fact by independent courts and tribunals in relation to the actions of the AFAP and its members; and (iii) replied to the complainant's specific allegations. In a further communication of 23 April 1990 the Government: (a) provided an account of developments in the dispute subsequent to its response of 23 January 1990; (b) set out its response to the further allegations by IFALPA contained in its communication of 24 January 1990; and (c) provided supplementary information concerning the capacity of non-registered unions to operate outside the federal industrial relations system in Australia. By its communication of 4 October 1990 the Government provided information relating to developments between mid-April and late September 1990. In doing so it also provided replies to the queries which were directed to it by the Committee at its meeting in May-June 1990 (272nd Report, para. 8). By its most recent communication, the Government provides its observations on the further submissions of the complainant and also an update on court and tribunal proceedings involving the AFAP and its members.
   • Background
2. 175. The Government explains that in Australia legislative competence with respect to industrial relations is shared between the Commonwealth and the States. The federal system is primarily based on the Industrial Relations Act 1988, which with effect from 1 March 1989 replaced the broadly similar Conciliation and Arbitration Act 1904. Each of the States has adopted its own form of industrial regulation. There are many differences between the various systems as to matters of detail. But in broad terms they all provide for the prevention and settlement of industrial disputes through processes of conciliation and arbitration, and they all accord an important role to organisations of employers and workers (depending, in most cases, upon systems of voluntary registration).
3. 176. The Government states that Australian Bureau of Statistics figures show that as of 30 June 1989 there were 299 trade unions in Australia. Of these, 140 (47 per cent) were registered under the federal Act. The vast majority of the remainder were either registered or (in the State of Victoria) "recognised" under one or more of the state systems. It is, however, possible for a trade union to exist and effectively to represent the industrial interests of its members even though it is not registered or "recognised" under either state or federal legislation. Indeed, the AFAP was in precisely that position between 1959 (when it was established) and 1986 (when it was registered under the federal legislation for the first time, its application for such registration having originally been lodged in 1980). In terms of award coverage, Bureau of Statistics figures show that the basic terms and conditions of employment of 32.6 per cent of all employees are determined by reference to federal awards; 49.8 per cent are covered by the awards of state tribunals; 2.6 per cent by unregistered collective agreements; and 15 per cent by "other means" (including individual negotiation). It can be seen, therefore, that participation in the federal (or state) system is truly voluntary. The AFAP had chosen to register under the federal legislation, and functioned only in that sphere. (The Government also points out that, for historical reasons, there was a separate federal industrial tribunal for flight crew officers between 1967 and 1989. This was comprised of a member of the former Australian Conciliation and Arbitration Commission, and operated in essentially the same manner as that body. The Flight Crew Officers Industrial Tribunal was abolished in 1989, and its functions were merged with those of the AIRC. This occurred prior to the events which constitute the subject-matter of the present complaint.)
4. 177. Registration under the Industrial Relations Act confers substantial benefits upon the organisation concerned: particularly in terms of legal status, organisational security, access to the AIRC and the capacity to obtain and enforce awards on behalf of its members. Registration also carries with it a number of obligations, including: compliance with certain statutory requirements designed to ensure the democratic control of organisations by their members and to protect the other interests of those members; the duty to notify the AIRC of industrial disputes to which the organisation is a party, and to participate in proceedings of the Commission in relation to such disputes; and to accept, subject to statutory rights of review and appeal, the decisions of the AIRC in relation to matters affecting the organisation and its members. Failure to adhere to the norms of this system of dispute resolution may result in denial of access to the benefits of the system and, ultimately, may lead to the exclusion from it (by means of cancellation of registration).
5. 178. Over the years the AIRC (and its predecessor, the Australian Conciliation and Arbitration Commission) has developed highly sophisticated procedures for dealing with industrial disputes which fall within its jurisdiction. The end-product of these procedures are "awards". These may be imposed by arbitration, or may be wholly or mainly the product of agreement between the parties to the dispute. Such awards may regulate some or all of the terms and conditions of employment of persons employed by employers who are party to the award. They may also deal with a range of procedural and substantive issues - for example the duty of employers to consult with unions which are party to the award prior to technological change, or occupational health and safety standards to be applied at the workplace. Awards are legally binding on the parties, and breaches may lead to the imposition of penalties and, where appropriate, the payment of any remuneration due under the award to employees entitled to the benefit thereof.
6. 179. The AIRC also plays a very important role in the social and economic life of the community through the agency of periodic "National Wage Cases". In the course of these cases (which normally take place between two and four times a year) the Commission hears submissions from peak employer and union bodies, the federal, state and territory Governments and other interested parties. In reaching a decision, the AIRC is required to have regard to what is in the interests of employers, workers, the community generally and harmonious industrial relations. The jurisdiction of the tribunal in these cases is based on claims made for improvements in wages and conditions in a number of industries and involving particular awards applying to those industries. Parties to other awards may then seek to have those awards varied to take account of the Commission's decision. Normally, the process of variation is largely automatic, although in recent years it has been made subject to the applicant union being prepared to give an undertaking to abide by the so-called National Wage Principles (which are themselves the product of hearings under the "National Wage System"). It is most unusual for unions to decline to give the requisite undertaking. If they do refuse, they will not be able to obtain the benefit of the decision through the award mechanism. They may, however, seek to obtain similar (or improved) benefits through direct negotiation with employers. Employers are usually somewhat reluctant to concede wage increases or other improvements in terms and conditions of employment by this means, but have the legal right to do so if they choose.
   • The Airlines' dispute
7. 180. The Government presents evidence which in its opinion establishes that the AFAP had been profoundly dissatisfied with the operation of the federal system of conciliation and arbitration for some considerable time. For example, in February 1989 the Executive Director of the Federation was reported in one of its publications (entitled "Deadline 89") as having said:
   • We are now at the stage of deciding whether or not this system will ever provide us with real wage maintenance. A major reason for the stopworks (i.e. meetings between union officials and members) being called was to inform you of the major battle ahead should the existing system not become flexible or pragmatic enough to remedy your real salary slippage. Should it reach that stage then it will be a real battle, as we will be fighting the Government, the Arbitration system, the companies and all the vested interests. Pilots, by being united, have done it before and we can do it again.
   • In July in another publication the Federation had asserted that "the present archaic system of industrial relations in this country must be abolished".
8. 181. This dissatisfaction with the system explains what the Government considers to have been a premeditated refusal to agree to adhere to the principles enunciated in the National Wage decision of 7 August 1989.
9. 182. Turning to the cancellation of the awards to which the AFAP was a party, the Government points out that section 187 of the Industrial Relations Act 1988 enables a Full Bench of the AIRC to cancel or suspend an award where it is satisfied:
   • - that an organisation has contravened the Act, an award or an order of the AIRC; or
   • - that a substantial number of the members of an organisation are refusing to accept employment either at all, or in accordance with existing awards and orders; or
   • - that there is some other reason why an award of the Commission should be cancelled in whole or in part.
10. 183. In its decision of 19 August 1989 the Full Bench found: (i) that the AFAP was encouraging its members to refuse to accept employment in accordance with the then-existing awards and orders; (ii) that the result of the AFAP's directive to its members was that the general public was being seriously prejudiced; (iii) that the industrial campaign of the AFAP was being pursued by industrial action contrary to directions made by the AIRC; and (iv) that the AFAP had refused to undertake to lift the industrial action and bans or to pursue its claims in accordance with the processes of conciliation and arbitration under the Act. These findings led the Commission to the conclusion that:
    • The Federation is clearly not prepared to accept its responsibilities under the Act and awards and we do not believe that in this case it should continue to receive the benefits provided to the Federation's members as a result of it being a party to these awards of this Commission.
11. 184. The Government emphasises that cancellation or suspension of an award does not have any adverse effect upon the terms and conditions of employment of workers to whom the award applied. They continue to be employed under contracts of employment the content of which would be the same as the appropriate provisions of the cancelled award. The cancellation affects only the position of the Federation, including its capacity to secure improvements in terms and conditions of employment through the award mechanism, and to enforce the award provisions through the procedures set out in the Industrial Relations Act.
12. 185. The Government confirms that from 23 August 1989 onwards the Airlines refused to accept the partial performance of their contracts by the pilots which was inherent in their refusal to work other than from 9.00 a.m. to 5.00 p.m. On 24 August 1989 they began serving writs on the Federation and certain of its members and officers. On the same day the pilots resigned en masse from their employment. This was done in accordance with the terms of their contracts of employment. The Government also indicates that as part of their response to the "9 to 5 campaign" the Airlines were contemplating the termination of the employment of the pilots. This response was, of course, pre-empted by the mass resignations of 24 August.
13. 186. These resignations led to the virtual collapse of services by the Airlines. This had potentially very serious consequences for workers elsewhere in the airline industry, and for the national economy. If continued over an extended period, the absence of air services could seriously jeopardise the material and personal well-being of members of the community and, in some cases, pose a risk to the life, health or personal safety of members of the community, particularly in remote areas. It was these considerations which led the Government to take the steps outlined by the complainant in order to maintain air services. However, the Government points out: (i) that the involvement of the defence services ended on 15 December 1989; (ii) that the carriage of domestic passengers by international carriers ended on 31 December 1989; and (iii) that the waiver of airport charges ended for IPEC on 8 November 1989, and for the other Airlines on 12 January 1990.
14. 187. The mass resignations of the pilots also caused the Airlines to charter aircraft and crews from outside Australia, and to advertise for pilots, both in Australia and overseas. The Federation responded to this latter development by publishing notices in Australian newspapers and in trade journals overseas warning pilots who accepted employment with the Airlines that they would be acting as strike-breakers, and that terms of settlement of the dispute between AFAP and the Airlines would involve the dismissal of such pilots. Nevertheless, by March 1990 the Airlines had succeeded in recruiting sufficient pilots to meet current passenger demand (which was running at between 80 and 88 per cent of demand a year earlier). They had also been able greatly to reduce their dependence upon the use of chartered aircraft and crews from overseas. This explains the ending of the special arrangements referred to in the previous paragraph.
15. 188. The Airlines not only advertised for new pilots, they also contacted their former employees individually, and offered to discuss re-employment on the basis of individual contracts. They also gave a public indication that, subject to suitable vacancies being available, former pilots would be re-engaged at levels of seniority equivalent to their former position - so long as applications were received by 22 September 1989. In its communication of 4 October 1990 the Government indicated that the process of "normalisation" was almost complete. Levels of passenger demand and "revenue passenger kilometres" for the quarter ending 30 June 1990 were running at around 97 per cent of the same quarter for 1989. The last chartered foreign aircraft left Australia towards the end of April 1990. As of 15 May 1990 Ansett Airlines and East-West Airlines between them employed a total of 553 pilots, of whom 502 were Australian citizens and 51 were citizens of the United States. As of 6 August 1990 Australian Airlines employed 280 pilots, of whom 51 were foreign nationals and 229 were Australian citizens. Between them the Airlines now employ in the order of 900 pilots, as compared with more than 1,600 before the dispute began. This reduction in the total number of pilots employed by the Airlines reflects improvements in productivity which have been implemented subsequent to the dispute. The Government is unable to supply precise information as to the employment position of the 1,647 pilots who resigned on 24 August 1989. However, it does indicate that approximately 50 per cent of the pilots presently employed by Australian Airlines are persons who have been re-employed subsequent to their resignation in August 1989. The equivalent figure for Ansett Airlines is 60 per cent. Around 500 pilots are believed to have obtained employment with overseas airlines, whilst the remainder must be assumed either to have found other employment within Australia or to be unemployed.
16. 189. In October 1989 the AIRC made a series of new awards requiring each of the Airlines to observe specified terms and conditions of employment in relation to pilots employed by them. The new awards differed from those cancelled in August principally in that they provided for increased salaries in return for certain productivity improvements, including the removal of a seniority-based system of bidding by pilots for duty rosters and increased average flying hours. They also differed from the cancelled awards in that the AFAP was not a party to them. The Federation had participated in the proceedings leading to the making of the awards, but the Airlines had submitted that in the circumstances it should not be party to the new awards. The Full Bench of the AIRC upheld this submission, but also indicated that the Federation could apply to be made party to the awards when it was prepared to give appropriate undertakings as to its future conduct.
17. 190. On 12 February 1990 the AFAP lodged fresh applications with the AIRC seeking to be made a party to the relevent awards. In proceedings before the Commission the Federation indicated that it now accepted the conditions laid down by the Full Bench in October 1989. It also stated that it was seeking the continuing involvement of the AIRC in effecting an orderly return of AFAP members to employment with the Airlines, and in re-establishing relations with the Airlines. At the request of the Commission, the Federation formally stated that if its application was accepted it would: (i) accept any subsequent decision of the Commission about awards covering the hiring of pilots; (ii) desist from any action other than through the Commission to prevent or discourage pilots from gaining employment with the Airlines; (iii) desist from any harassment or intimidation of pilots currently employed; (iv) desist from picketing activity in relation to matters in dispute since August 1989; and (v) advertise widely, including overseas, the Federation's changed attitude.
18. 191. The Airlines opposed the application by the Federation. However, the Commission took the view that making the AFAP a party to the relevant awards was the course which provided it with "the better chance of securing and preserving orderly relations in the industry with fairness to both employers and employees". Nevertheless, it also considered that "sufficient doubt" had been cast upon the bona fides of the Federation to warrant the adoption of "safeguards" which would enable its behaviour to be kept under review. Consequently, the Commission imposed a moratorium on the award respondency issue until 15 May 1990. On that date the Commission granted the application of the AFAP, having satisfied itself that the Federation: (i) had not impeded applications by its members for jobs with the Airlines; (ii) had made "acceptable efforts" to prevent the harassment of working pilots; and (iii) had given an undertaking to ask overseas associations to remove all impediments imposed by those associations on the recruitment of pilots by the Airlines.
19. 192. Since May 1990 the AFAP has been involved in a number of proceedings before the AIRC. These have included applications to vary awards covering the employment of pilots initiated by both the Federation and the Airlines, and an attempt by the Airlines to obtain orders under section 118 of the Industrial Relations Act 1988 to exclude the AFAP from representing the industrial interests of pilots in their employment. The Federation challenged the jurisdiction of the AIRC to deal with this latter application in the High Court of Australia. This challenge was unsuccessful, and the matter is still pending before the AIRC. The Federation has also involved itself in a number of other legal proceedings in the aftermath of the dispute, including an unsuccessful attempt to prosecute the Airlines for "obstruction" of its officers under section 306 of the 1988 Act, and a complex series of proceedings whereby it has attempted to impugn the grant by the immigration authorities of entry visas to foreign pilots. According to the Government, the fact that it has been able to initiate or participate in all of these proceedings shows that the AFAP has not in any sense been deprived of the opportunity to represent the industrial interests of its members in proceedings before the appropriate courts or tribunals. The fact that those proceedings have in some cases produced results unfavourable to the Federation reflects the merits of the arguments put to the tribunals, and not any inherent bias or legally imposed restrictions on the rights of the AFAP.
20. 193. As regards the common law actions against the Federation and certain of its officials, the Government confirms that on 23 November 1989 the Supreme Court of Victoria found that the defendants had acted unlawfully on a number of counts when they had instigated the "9 to 5 campaign" in August 1989. However the court had also ruled that the defendants had not acted unlawfully in organising the mass resignation of the pilots, or in publishing the "warning notice" to potential "strike-breakers". It also declined to issue an injunction to restrain the Federation from publishing any such notice in the future. Following further hearings in February 1990, the Court awarded damages totalling A$6.48 million, plus costs. Immediately after this decision the Airlines released a statement whereby they indicated: (i) that they would not take action to recover damages from individual officers of the AFAP; (ii) that they reserved their position as to whether to enforce the damages award against the Federation; and (iii) that they would seek to recover full legal costs from the Federation. The Government repeated its earlier appeal to the Airlines not to enforce the damages award. On 14 March 1990 the AFAP lodged a notice of appeal against the decision of the Supreme Court of Victoria. In November 1990 it lodged the necessary documents for the matter to proceed to a hearing before the Full Court of the Supreme Court of Victoria. However, it is still not entirely clear whether the AFAP will go ahead with its appeal. If it does, the matter will not be heard before the middle of 1991 at the earliest. Meanwhile, the Airlines have taken no action to enforce either the judgement as to damages or the order as to costs.
    • The specific allegations
21. 194. The Government professes to have had some difficulty in understanding the precise nature of the allegations contained in the complainant's communications of October 1989 and January 1990. However it based its replies on the assumption that the complaint related to: (i) the use of the civil law and alleged threats of the use of the criminal law in the context of an industrial dispute; (ii) threats of withholding of superannuation and other entitlements of pilots upon resignation; (iii) refusal by the Airlines to recognise the AFAP as representing pilots in the domestic aviation industry; and (iv) the role played by the Government in the dispute. This last included: (a) providing an improper degree of support for the Airlines; (b) hindering pilots from taking industrial action and victimising pilots who did so; (c) intimidating and denigrating pilots and their leadership; and (d) seeking to exclude the AFAP from representing pilots and engaging in collective bargaining on their behalf (for example through its intervention in proceedings before the AIRC). The Government also notes that the complainant alleges that its requests to the Airlines not to proceed with their claims for damages represented "a change of position merely for reasons of electoral popularity".
22. 195. The Government prefaces its response to these allegations by pointing out: (i) that the wage increases claimed by the AFAP in July 1989 were deliberately made outside the requirements of the National Wage Principles which applied to all registered organisations within the federal system; which had been endorsed by a special unions conference convened by the ACTU; and which had been formulated by the AIRC, taking account of the state of the economy, the public interest, and the interests of employers and workers. If the Federation's claim had been conceded, it is probable that the operation of the National Wage Principles would have been jeopardised, not just in the airline industry but throughout the economy. In support of this proposition the Government refers to a letter from the ACTU to the Airlines, dated 11 August 1989, indicating that if the pilots' claim was settled outside the Principles it would need to pursue "with the greatest vigor increases equal to those offered to pilots for all other airline workers"; (ii) that the Government considers it unacceptable for an organisation which has voluntarily registered under the federal industrial relations system to repudiate its obligations under that system in the manner which the AFAP had done in this instance; and (iii) that the industrial campaign initiated by the AFAP and its members caused serious damage to the community and to the national economy.
23. 196. As regards its role in the dispute, the Government does not accept that, in the circumstances of such a highly damaging dispute, it was in any way unfair or inappropriate for it to make public statements supporting the processes of conciliation and arbitration, supporting the Airlines' refusal to concede the Federation's demands and criticising the AFAP and its members for making the claims they had and for embarking upon a campaign of industrial disruption. Nor does the Government accept that such actions are contrary to the principles of freedom of association.
24. 197. As to its intervention in proceedings before the AIRC, the Government points out that it has a statutory right to seek leave to intervene in all proceedings before the Commission, and that it has a further right to intervene without leave in the public interest in proceedings before a Full Bench of the Commission. As an intervener, however, it is in no different position from any other party which seeks and obtains leave to intervene. It is entirely up to the Commission to decide how much weight it will attach to any submissions or evidence presented by any intervener. In the present case the Government considered that it was necessary to intervene in view of the importance of the issues involved.
25. 198. Similarly, the Government considers that the actions it took to maintain domestic airline services were warranted by the importance of those services to the social and economic well-being of the community, especially given Australia's great size and sparse population.
26. 199. The Government totally repudiates the allegation that safety standards had been compromised in relation to the licensing arrangements for overseas pilots, aircraft and flight crew. In support of this position it refers to the report of an independent Parliamentary Inquiry which concluded in December 1989 that the airline system had not been rendered unsafe by changes in procedure due to the dispute.
27. 200. The leasing to the Airlines of defence force aircraft and personnel was justified by the need to provide services to geographically remote areas which could not be serviced adequately, if at all, by other means.
28. 201. The Government denies that it hindered pilots in their engaging in industrial action or victimised them for so doing. The Government considers that it behaved responsibly by exhorting the AFAP and its members to act in accordance with the principles and processes of the system within which the Federation is registered. The position in which the Federation and its members subsequently found themselves was entirely the consequence of their own actions.
29. 202. The Government further denies that it intimidated or denigrated pilots. The Government does not understand the assertion that it has engaged in such actions. It is true that the Government made public statements and submissions to the AIRC critical of the industrial claims and campaign by the AFAP and its members, and that it publicly rejected the AFAP's position that its members' occupational skills and work justify exceptional treatment for pilots compared with other workers. The Government points out that the AIRC made findings to the same effect. Consequently, the Government does not accept that its conduct in this respect could reasonably be seen as intimidation or denigration of pilots.
30. 203. The Government also denies that it has sought to exclude the AFAP from engaging in collective bargaining on behalf of its members. In support of this assertion it quotes from a public statement by the Prime Minister on 16 November 1989 concerning the Government's attitude to the AFAP:
    • The Government wishes to reiterate firmly its position first on the right of pilots employed by the Airlines to be represented by a union of their choice, and second on the ability of pilot employees to seek changes to the current contracts on offer.
    • My Government has always accepted that pilot employees can be represented by a union of their choice. My Government is philosophically committed to the right of employees to be represented by unions.
    • Which union represents pilots employed by the two Airlines (Ansett and Australian) is a matter for those pilots themselves.
    • Former pilots considering re-employment need have no concerns as to their right to be represented by a union, and clearly there are established procedures for any union that represents pilots employed by the Airlines to put arguments as to the form of award conditions.
31. 204. The Government also points out that in its decision of 23 November 1989, the Supreme Court of Victoria expressly rejected the Federation's claim that the Airlines and the Government had engineered the dispute as part of a plan to, among other things, remove the AFAP as a representative of pilots in the industry. Evidence before the court clearly showed that the AFAP had been preparing itself for a major dispute since February 1989, if not earlier.
32. 205. As regards the consequences of the mass resignations of the pilots on 24 August 1989, the Government points out: (i) that whilst in a technical sense the AFAP remained in dispute with the Airlines (under the federal industrial relations system, a registered union may create a dispute to which it is a party in its own right by making claims in relation to persons eligible to be its members), the same was not true for its members. This was because they had voluntarily resigned from their employment, and thus could not be said to be engaged in a strike or other industrial action against the Airlines; (ii) that the AFAP had been found not to represent pilots currently employed by the Airlines and those pilots were found not to wish to be represented by the AFAP; (iii) that there is no obstacle to pilots currently employed by the Airlines joining the AFAP if they wish or, if that occurred, the AFAP representing their interests; and (iv) that the AFAP had had several opportunities to have its claims dealt with by the processes of conciliation and arbitration, but prior to March 1990 had consistently failed to avail itself of those opportunities. Following the decision of the AIRC on 15 May 1990 the AFAP had again become party to awards applying to pilots employed by the Airlines, and had been involved in various proceedings before the Commission. The application by the Airlines under section 118 of the Act to exclude the AFAP from representing pilots within their employ was based on a number of grounds, including the fact that "the overwhelming majority of pilots employed by the applicants (i.e., the Airlines) are vehemently opposed to being represented industrially by the AFAP". This is borne out by the fact that the employed pilots had formed or joined "staff associations" which had entered into "agency" arrangements with another federally registered union. This application is still pending before the AIRC. Like the other difficulties in which it found itself, this application was entirely the consequence of the Federation's own actions.
33. 206. As regards the common law action in the Supreme Court of Victoria, the Government points out that this action was commenced only after the AFAP: (i) had refused to abide by the directions of the AIRC not to engage in work stoppages; (ii) had refused to end the "9 to 5 campaign"; (iii) had encouraged its members not to work in accordance with existing awards and orders; and (iv) had refused to pursue its claims in acordance with the processes of conciliation and arbitration set out in legislation under which it had freely chosen to register. It should also be noted that the court found the meetings which authorised the "9 to 5 campaign" not only occurred after the AIRC had issued a direction not to engage in industrial action, but were also convened in a manner which did not comply with the Federation's own rules.
34. 207. The liability of the AFAP and its officers largely turned on the fact that by embarking upon the "9 to 5 campaign" the pilots were acting in breach of their contracts of employment. This in turn rendered those who caused them to do so liable for the tort (civil wrong) of "interference with contractual relations". The defendants were also liable for the torts of "unlawful interference with the trade or business" of the Airlines, and for "unlawful means conspiracy". The "unlawful means" in these instances were furnished by the interference with contractual relations, and by the fact that the Federation had been involved in breaches of section 312 of the Industrial Relations Act 1988. This is a provision which makes it an offence (punishable by a fine of up to A$500) for an officer or agent of an organisation bound by an award to engage in certain conduct which constitutes incitement to boycott an award. Its purpose is to protect the integrity of the system of conciliation and arbitration by ensuring that organisations which are registered under the 1988 Act do not subvert it by inciting their members not to adhere to the terms of awards handed down by the AIRC. The Court considered that there had been breaches of this provision (although no prosecution in respect of any such contravention had actually been initiated), and that this constituted "unlawful means" for purposes of the torts of "unlawful interference with trade or business" and "unlawful means conspiracy".
35. 208. The Government states that it does not support the use of the civil law as a normal means of resolving industrial disputes or ending industrial action. However it considers that in the present case the Airlines found themselves in a situation where the processes of the civil law provided the only meaningful remedy in relation to the behaviour of the AFAP and its members and officials. Such proceedings would have been unnecessary if the Federation had been prepared to advance its claims through the AIRC.
36. 209. The Government also points out: (i) that the Airlines had not gone ahead with their actions against individual pilots (other than six officers of the Federation); (ii) that they had indicated that they would not seek to enforce the damages award against these six officers; (iii) that the Prime Minister had again publicly called upon the Airlines not to enforce the award of damages against the Federation. The Government denies that this initiative was based on political considerations: rather it reflects its assessment that there would be little point in proceeding to collect these damages, especially in view of the progressive return to normal operations by the Airlines and the possibility of a renewed industrial relationship between the four companies and the AFAP; and (iv) that to date neither the award of damages nor the orders as to costs have been enforced against the Federation.
37. 210. The Government notes that the complainant does not provide any particulars as to alleged threats to use the criminal law against the Federation or its members or officials. Nevertheless the Government categorically states that it did not at any time attempt, or threaten, to use the criminal law in relation to the industrial action by the AFAP and its members. It should be noted, however, that a number of statements were made in the course of proceedings before the AIRC to the effect that pilots currently employed by the Airlines had received threats of violence. If any evidence was brought forward of criminal conduct in this respect, the Government would expect the normal processes of the criminal law to be put in train. No such evidence had so far been brought forward.
38. 211. As to the complainant's allegations about the payment of superannuation and other entitlements upon the termination of pilots' employment, the Government understands that all pilots formerly employed by the Airlines were paid their full entitlements. Although the trust deed applying to the superannuation benefits of former Ansett pilots permitted the withholding of benefits in certain cases of misconduct and negligence, it is understood that this provision did not apply in the present circumstances. As concerns former pilots who returned to work for the Airlines, they were given the choice of either keeping any benefits already paid and joining a new scheme for all pilots, or repaying benefits paid and rejoining their old scheme. In its most recent communication the Government indicates that number of individual pilots are engaged in, or are contemplating, litigation with their former employers about the quantum of their superannuation payments. These are disputes as to matters of individual entitlement and were not part of any systematic attempt to put pressure on the Federation or its members.
39. 212. The Government considers that the complaint relating to the alleged refusal by the Airlines to recognise the AFAP as the representative of the pilots cannot be sustained. In support of this proposition, it points out: (i) that no action was taken against the AFAP in relation to its continued registration as an organisation of employees under the Industrial Relations Act; (ii) that there was no interference with the rights or capacities of the AFAP under its registered rules, nor with its ability as a registered organisation to make claims in relation to employees eligible to be its members; (iii) that the Federation at all times had undiminished access to the AIRC for the resolution of the industrial situation in which it had placed itself; (iv) that the cancellation of awards to which the AFAP was a party and the making of new awards in relation to employment in the industry to which the AFAP was not initially a party followed proceedings before an independent tribunal, the AIRC, in which the AFAP had full opportunity to be heard; (v) that there was full recognition of the AFAP as representing pilots employed by the Airlines prior to the mass resignations; (vi) that subsequently it was found by the AIRC that the AFAP no longer represented pilots currently employed by the Airlines and that those employees did not wish to be represented by the AFAP; (vii) that in proceedings before the AIRC the Airlines opposed the AFAP's being made a party to the new awards; (viii) that the AIRC had none the less indicated that it was open to the AFAP, subject to meeting certain requirements in relation to its position as a registered organisation, to apply to become a party to the new awards. As a result of undertakings given to the Commission in March 1990, this had in fact occurred; (ix) that the Government had repeatedly stated throughout the dispute that it was up to the AFAP to decide whether it would accept its obligations as a registered organisation and seek to restore, in an appropriate way, its industrial relationships with the Airlines; and (x) that the functions of the AFAP as a registered organisation in relation to pilots in the other sectors of the aviation industry had not been affected and it had continued to be a party to the relevant awards throughout the dispute.
    • IFALPA's further submissions
40. 213. By its communication of 15 January 1990 the Government provides a detailed response to the further submissions of the complainant. It notes that the points raised in these submissions appear simply to be an elaboration of matters previously raised, or to be closely related to them. The Government also states that many of the claims made in IFALPA's communication of 11 December 1990 are either misleading or incorrect.
41. 214. The Government categorically rejects the complainant's analysis of its motives in the dispute. Its concern had always been to ensure that the 29.47 per cent claim was dealt with in accordance with the National Wage Principles. There was no conspiracy to destroy the AFAP. The complainant totally misrepresents the nature and effect of the Accord. This is an agreement between the Government and the ACTU. It does not, and in constitutional terms could not, bind the AIRC. That body formulates National Wage Principles after hearing submissions from all interested parties. Not only had the AFAP never sought to intervene in national wage proceedings at any stage, but it had accepted the principles and obtained wage increases in accordance with them until its repudiation in 1989 of the AIRC and the dispute-resolution procedures established under the Industrial Relations Act. In May 1990 the AFAP had reaffirmed its acceptance of the principles and the jurisdiction of the Commission.
42. 215. The wage increases for Qantas pilots, domestic pilots and air traffic controllers referred to by the complainant had all been determined in accordance with the National Wage Principles. Salary increases for judges and politicians were dealt with under separate legislation, but had been awarded only after consideration of the National Wage Principles by the relevant tribunal.
43. 216. The Government rejects the suggestion that its actions in relation to the immigration of overseas pilots in any way contravened the principles of freedom of association. It also denies that there has been any abuse of procedures, but notes that questions relating to the legal validity of certain of its actions in this regard had been raised in proceedings initiated by the AFAP. These matters were still before the courts. The injunction referred to by the complainant had been granted only on an interim basis pending full trial of the action. It did not, therefore, constitute a "vindication" of the Federation's position.
44. 217. It is not true that the Airlines are continuing to recruit pilots overseas. Australian Airlines has not recruited any foreign pilots since 21 March 1990, and Ansett Airlines has not offered employment to any pilot who would require government approval to work in Australia since the end of 1989.
45. 218. The Government notes that the complainant has not provided any evidence to support its assertion that the Government has been victimising the AFAP by persuading other foreign airlines not to employ its former members. The Government denies that it has acted in any way to victimise the AFAP or its members. It also points out that s. 334 of the Industrial Relations Act makes it an offence for an employer to refuse to employ a person because the person is or has been an officer, delegate or member of a registered trade union or employer organisation.
46. 219. As regards alleged media intimidation and denigration, the Government states that it respects the independence of the media and does not direct or interfere with their editorial practices and policies. It also points out that the Federation and its members have various means of legal redress available to them if they consider that they have been unfairly treated by the media.
47. 220. As concerns the alleged refusal of the Government and the Airlines to "recognise" the AFAP, the Government states that it is misleading to assert, without qualification, that "under the terms of the Industrial Relations Act, the Federation remains the sole representative body of the Australian domestic pilots". It is correct that, in its eligibility for membership rule, the AFAP expressly covers domestic pilots, thereby making it an easier matter for the AFAP to invoke the jurisdiction of the AIRC in relation to matters involving pilots and entitling the AFAP to be a party to awards. The 1988 Act does not, however, preclude the industrial interests of employee pilots being represented by other competent bodies. So, for example, the AIRC has accepted the interest of ATOF in representing employed pilots by permitting its intervention in proceedings before the AIRC in which the AFAP is seeking to vary current awards. It has also been accepted by the AIRC that individual groups of pilots may be represented before it. Furthermore, submissions made on behalf of employed pilots indicate that they continue to be opposed to the AFAP's representing their industrial interests.
48. 221. As to the alleged refusal of the Airlines to recognise or negotiate with the AFAP, the Government points out that it is open to any registered union which is unable to make headway in negotiations with an employer to invoke the jurisdiction of the AIRC, including its capacity to convene compulsory conferences under s. 119 of the Industrial Relations Act. The AFAP is in fact presently involved in a substantial number of proceedings before the Commission. Some of these matters have been initiated by the Federation, some by the Airlines.
49. 222. As regards the claim that the Airlines are actively encouraging their pilots to join ATOF or "in-house" associations, the Government reiterates that its position has always been that it is for the pilots themselves to determine the union to which they wish to belong. It adds that it has no knowledge of pressure being applied in the manner alleged by the complainant, and states that both Ansett and Australian Airlines deny having applied any such pressure.
50. 223. In conclusion, the Government states that the practical difficulties which the AFAP continues to encounter are a direct consequence of its own actions in 1989. Even so, it is to be noted that the AFAP is in a position to participate freely in proceedings before the AIRC relating to the air transport industry and to pursue all of its rights and remedies as a registered organisation. It is through the legitimate use of such processes that the AFAP, like any other registered union, will be able to re-establish and maintain an appropriate place in its industry. If the AFAP had not repudiated those processes in 1989, despite its obligations as a registered organisation, none of the matters about which IFALPA complains would have arisen. Throughout the entire dispute, the Government has been motivated by two principal considerations: - first, that the dispute should be resolved in an orderly and effective manner in accordance with the processes provided under federal industrial law and the National Wage Principles established by the AIRC, thereby providing a proper basis on which employment of pilots in the domestic airline industry could proceed; and - secondly, its awareness of its responsibility to assist in maintaining and re-establishing domestic airline services, and thereby to seek to limit the disruption caused by the dispute to the economy, the employment of workers in the airline and other affected industries, to national commercial and social life generally and to prevent, as far as possible, serious harm to the life, health and personal safety of members of the community.
    • In pursuing these objectives, the Government had acted responsibly in the public interest, and in a manner fully in accordance with its obligations under Conventions Nos. 87 and 98. In the circumstances, the Government considers that the complaint made by IFALPA cannot be sustained.

C. The Committee's conclusions

1. 224. This complaint arises out of a protracted and complex industrial dispute in the domestic airline industry in Australia. The complainant's allegations basically centre around two principal sets of issues: alleged interference by the Government and the Airlines with the right of the AFAP freely to represent the interests of its members, and denial of the right of the Federation and its members to take industrial action to protect and to promote their legitimate industrial interests.
2. 225. Information provided by the Government shows that the basic terms and conditions of employment of some 32 per cent of the Australian workforce are regulated through the federal system of conciliation and arbitration. Like almost all of its state counterparts, the operation of this system is heavily dependent upon the registration of organisations of employers and workers. Registration is voluntary, but confers substantial benefits in terms of legal protection of organisational security and of access to procedures for the prevention and settlement of industrial disputes by means of conciliation and arbitration under the auspices of the AIRC. Access to these benefits is subject to a number of conditions, the most important of which are adherence to specified standards of democratic control of registered organisations, and adherence to the orders and awards handed down by the AIRC. Some 47 per cent of Australian trade unions have elected to register under the federal legislation. The overwhelming majority of the remainder are registered under state law.
3. 226. Within the legislative framework established by the Industrial Relations Act 1988 (and its forerunner, the Conciliation and Arbitration Act 1904) there has developed a sophisticated system of national wage fixation. This system centres around periodic National Wage Cases. In formal terms these consist of an application to vary existing awards in a number of key industries. Before arriving at its decision in these cases the AIRC hears submissions from all interested parties - including trade unions (usually through the agency of the ACTU), employers and governments (federal, state and territorial). It is also obliged to take account of the interests of employers and workers generally, and of the interests of the Australian community as a whole (sections 3(c) and 90(b) of the Industrial Relations Act 1988). The benefit of decisions in National Wage Cases normally flows through to all other awards in the federal system, and through State Wage Cases, to state awards as well. In recent years the AIRC (and its predecessor, the Australian Conciliation and Arbitration Commission) has followed a practice of adopting, and periodically revising, a set of guide-lines known as the National Wage Principles. Access to the benefit of National Wage decisions is then made conditional upon the union concerned giving an undertaking to the effect that it will not press any industrial claims other than in accordance with these Principles. Refusal to give (or to honour) this commitment means that the union and its members cannot derive benefit from the decision through the procedures established under the Industrial Relations Act 1988. It is, however, free to pursue its claims by processes of collective bargaining outside the system, if it so chooses.
4. 227. The AFAP did not register under the forerunner of the 1988 Act until 1986. But it had participated in the federal system of industrial regulation (through the Flight Crew Officers' Industrial Tribunal) for many years. It appears to have become increasingly dissatisfied with the operation of the system in terms of protecting the real incomes of its members. Consequently, in August 1989, it declined to give the "no extra claims" commitment which was a pre-condition of access to the benefits of the Commission's decision of 7 August of that year. Instead it opted to pursue a substantial claim outside the framework of the federal system of conciliation and arbitration. It appears to have been perfectly within its legal rights in adopting this course. However in doing so it, in effect, cut itself off from access to the dispute-resolution procedures established under the Act of 1988. Subsequent decisions of the AIRC made it clear that this access could be restored if and when the Federation was prepared to agree to abide by the norms of the system. This eventually occurred in May 1990.
5. 228. Faced with the Federation's decision to "opt out" of the wages system, the Airlines declined to engage in collective bargaining, other than within the parameters of the prevailing National Wage Principles. The employers also appear to have been entirely within their legal rights in adopting this course. Furthermore, they were encouraged in their stand by the federal Government.
6. 229. The Committee does not consider that these events disclose any breach of the principles of freedom of association. Registration under the 1988 Act is optional. The AFAP had elected to register, and to accept the advantages which derive therefrom. The Committee considers that it is reasonable for the legislation, and the AIRC, to require adherence to the norms of the system of conciliation and arbitration as part of the quid pro quo for these benefits. This does not appear to be in any way inconsistent with the guarantees provided by Articles 2 and 3 of Convention No. 87, or by Article 4 of Convention No. 98. Workers can form and join the union of their own choosing. That union can then elect to register under the federal Act if it wishes. Alternatively, it may register under one or more of the state Acts, or it may remain unregistered. Whether registered or not, it may formulate its programmes in full freedom. It may also engage in free collective bargaining. If that bargaining takes place within the framework of the Industrial Relations Act, the outcomes must conform to the current National Wage Principles. If it takes place outside the legislative framework, then the parties may strike their own bargain. In the present case, the employers, supported by the Government, declined to engage in collective bargaining other than in accordance with the Principles laid down by the Commission. The Committee is not competent to express any opinion on the advisability or otherwise of their adopting that position. But it is competent to determine that in doing so neither the employers nor the Government acted in a manner which was inconsistent with the principles of freedom of association.
7. 230. Faced with the employers' refusal to negotiate on its 29.47 per cent claim, the Federation decided to take industrial action in the form of the "9 to 5 campaign". This action was clearly intended to have, and had, the effect of severely disrupting the operations of the Airlines. On 23 August 1989, after several days of such disruption, the employers indicated that they were not prepared to accept the partial performance of their contracts of employment by the pilots, and required instead that they work in accordance with the terms of their contracts. They also initiated common law proceedings against the AFAP and a number of its members and officers. In anticipation of this response by the employers, the pilots resigned from their employment en masse on 24 August 1989 - apparently on the basis of legal advice to the effect that this would minimise their exposure to damages actions at common law.
8. 231. At one level, these mass resignations might be said to have brought the industrial dispute between the pilots and the Airlines to an end. The pilots had not broken their contracts of employment - as would have been the case, for example, if they had gone on strike, or terminated their employment otherwise than in accordance with the terms of their contracts and of the relevant awards. Nor had they been "locked out" by their employers. Instead, they had chosen, on the basis of independent legal advice, to resign from their employment. In the course of their damages action against the Federation and six of its officers, the Airlines had argued that this decision to resign en masse constituted a conspiracy to injure at common law. This argument was rejected by the Supreme Court of Victoria in its judgment of 23 November 1989. The Court did, however, determine: (i) that the meetings which authorised the Federation to proceed with the "9 to 5 campaign" were not convened in accordance with its own rules; (ii) that the "9 to 5 campaign" was unlawful by virtue of section 312 of the Industrial Relations Act, which makes it an offence to engage in certain conduct which is intended to incite "boycotts" of awards; and (iii) that implementation of the campaign involved breaches of the contracts of employment of the members of the Federation. These factors provided the basis for findings that the Federation and its officers had: (a) engaged in an "unlawful means conspiracy"; (b) unlawfully interfered with the "trade or business" of the Airlines; and (c) unlawfully interfered with contractual relations between the Airlines and their pilots, and between the Airlines and other persons. They were, therefore, liable in damages in respect of the losses incurred by the Airlines in consequence of their unlawful acts.
9. 232. The Committee has always considered that the right to strike is one of the essential means through which workers and their organisations may promote and defend their economic and social interests (see Digest of decisions and principles of the Freedom of Association Committee, 3rd edition, 1985, para. 363). It follows that in order to determine whether there has been any breach of the principles of freedom of association in the present instance it is necessary to determine whether the "9 to 5 campaign" and the mass resignations of members of the AFAP constituted legitimate exercises of the right to strike as a means of promoting and defending the economic and social interests of the pilots.
10. 233. As concerns the "9 to 5 campaign", the Committee considers that in the circumstances of the present case it cannot be so regarded. In reaching this conclusion the Committee recalls that Article 8(1) of Convention No. 87 requires that in exercising their rights under the Convention "workers and employers and their respective organisations ... shall respect the law of the land", whilst Article 8(2) stipulates that "the law of the land shall not be such as to impair, nor shall it be so applied as to impair the guarantees provided for in this Convention". In the present case the AFAP had initiated its campaign in direct defiance of the directions of a tribunal (the AIRC) to whose jurisdiction it had voluntarily submitted. It had also, in the opinion of the Supreme Court of Victoria, contravened section 312 of the 1988 Act. This latter provision appears to the Committee to be a legitimate means of seeking to protect the integrity of the processes of conciliation and arbitration which are set out in that Act. It follows that in terms of Article 8, the Federation had failed to "respect" laws which themselves were compatible with the guarantees provided in the Convention. This, inevitably, deprives the "9 to 5 campaign" of the character of a legitimate exercise of the right to strike.
11. 234. The fact remains, however, that the AFAP and six of its officers have been found liable to pay a very substantial sum of damages in respect of what would, in other circumstances, be regarded as a legitimate exercise of the right to strike. It does not possess that character in this instance. The Committee nevertheless recalls that it has always considered that the development of harmonious industrial relations could be impaired by an inflexible attitude being adopted in the application of severe sanctions, especially penal sanctions to workers who participate in strike action (Digest, op. cit., para. 440). The Committee considers that in the present case it would be consonant with the spirit of this principle if the Airlines were to accede to the Government's suggestion that they do not enforce the award of damages against the Federation. It notes that no steps have in fact been taken to enforce the damages award in this instance. It calls upon the Government to continue its efforts to persuade the Airlines to maintain this position.
12. 235. The Committee notes that in the course of its detailed judgement, the Supreme Court of Victoria referred to the work of a number of academic commentators who had suggested that the scope of the tort of interference with contractual relations is such that it would render all Australian unions and their officials who call their members out on strike liable to actions for damages and injunctions at common law. The court observed that "whether this is a good thing or a bad, is not my concern but if it is undesirable then the remedy must lie with Parliament".
13. 236. The Committee cannot view with equanimity a set of legal rules which: (i) appears to treat virtually all industrial action as a breach of contract on the part of those who participate therein; (ii) makes any trade union or official thereof who instigates such breaches of contract liable in damages for any losses incurred by the employer in consequence of their actions; and (iii) enables an employer faced with such action to obtain an injunction to prevent the commencement (or continuation) of the unlawful conduct. The cumulative effect of such provisions could be to deprive workers of the capacity lawfully to take strike action to promote and defend their economic and social interests (see Digest, op. cit., para. 363). Accordingly, the Committee considers that it would be appropriate to draw this aspect of the case to the attention of the Committee of Experts on the Application of Conventions and Recommendations.
14. 237. As regards the mass resignations of pilots, the Committee is of the clear view that in appropriate circumstances mass resignations of workers can constitute a legitimate exercise of the right to strike as guaranteed by the principles of freedom of association. However, in the particular circumstances of the present case the Committee considers that the resignations of pilots on 24 August 1989 cannot properly be regarded as an exercise of the right to strike for purposes of the application of those principles.
15. 238. The Committee notes that the pilots resigned in accordance with the terms of their contracts of employment on the basis of independent legal advice. Upon resignation, they claimed, and received, their full superannuation entitlements. They had evinced a clear intention to work for the Airlines only on the basis of new contracts of employment, on their own terms. The Committee considers that these factors impel the conclusion that the pilots regarded their employment with the Airlines as at an end. It is not for the Committee to determine whether this was a prudent course for them to adopt in either legal or industrial terms. But that they did indeed intend to terminate their employment is quite clear.
16. 239. It is equally clear that the Airlines also regarded the pilots' employment as at an end. They paid superannuation entitlements in full, at the request of the pilots. They immediately began to look for replacement pilots, both in Australia and overseas. It is true that they offered to re-employ pilots who were prepared to contract on an individual basis, and that they actually did so in certain instances. However, this situation was qualitatively different from that which prevails in a "normal" strike situation where the contracts of employment of the workers concerned may be "suspended" or breached as a consequence of the strike, but where both the employer and the workers assume that in due course the strikers will return to work on the basis of their former contracts of employment (possibly with amendments to reflect the strike settlement). It is also qualitatively different from situations where an employer dismisses workers as a penalty for going on strike or taking other industrial action.
17. 240. It follows from the foregoing that the response of the employers and of the Government to the mass resignations of the pilots did not constitute a breach of the principles of freedom of association relating to the right to strike. Rather, it consisted of an attempt to minimise the social, industrial and economic impact of the pilots' actions.
18. 241. The complainant has not provided any evidence in support of its assertion that the pilots' decision to resign was partly motivated by the fear of criminal prosecution. The Government denies that it had threatened prosecutions at any time. In the circumstances the Committee considers that this allegation does not call for further examination.
19. 242. The complainant has also failed to adduce any evidence in support of its allegation that certain pilots were threatened that they would not receive their full superannuation payments after their resignation. The Government indicates that a number of pilots have commenced, or are contemplating, legal action against their former employers in relation to disputed superannuation entitlements. These actions seem to be quite specific to the circumstances of the individuals concerned, and do not appear to be part of any systematic attempt to exert pressure upon the Federation or its members through the withholding of superannuation payments. Accordingly, the Committee considers that this aspect of the case does not call for further examination.
20. 243. In its communication of 11 December 1990 the complainant alleges that there is increasing evidence that the Government has been victimising the AFAP by threatening to withdraw the Australian landing rights of foreign airlines if they offer employment to former members of the AFAP. The complainant has not made any of this evidence available to the Committee, and the Government has denied its existence. In the circumstances, the Committee can only conclude that this aspect of the case does not call for further examination.
21. 244. The complainant has also made further submissions relating to the original reasons for the dispute, the immigration of foreign pilots and the refusal of the Airlines to recognise the AFAP as representing the interests of pilots. The Government has provided detailed observations on all of these submissions. The Committee considers that these submissions, and the Government's observations thereon, clearly demonstrate that the AFAP is now able fully to participate in the system of conciliation and arbitration established by the Industrial Relations Act 1988, but that its membership base has been considerably eroded as a consequence of events since August 1989. However, none of the additional matters raised by the complainant appear to the Committee to disclose any breach of the principles of freedom of association.
22. 245. Finally, the Committee notes that although no action has yet been taken to enforce the awards of damages and of costs against the AFAP and certain of its officers, the decision of the Supreme Court of Victoria in November 1989 still stands. It further notes that the AFAP has lodged an appeal against this decision. Accordingly, it asks the Government to keep it informed as to future developments in relation to this aspect of the complaint. It also asks the Government to keep it informed as to the outcome of the various proceedings before the AIRC in which the AFAP is presently involved: in particular the application by the Airlines under section 118 of the Industrial Relations Act 1988 to have the Federation deprived of the right to represent the industrial interests of pilots employed by them.