Monday, April 02, 2012

Watchdog acts over Jetstar's New Zealand pilots

Qantas offshoot Jetstar could face hefty fines if allegations are proved that it hired trainee pilots from New Zealand on individual contracts but did not pay them superannuation and charged them for training in Australia.

The Fair Work Ombudsman launched legal action yesterday against Australian companies Jetstar Airways Pty Ltd and Jetstar Group Pty Ltd and New Zealand entity Jetstar Airways Limited.

Ombudsman Nicholas Wilson alleges Jetstar Airways Limited breached workplace laws when it hired the trainee pilots on individual contracts in New Zealand, when it was foreseeable they would work predominantly in Australia.

The six pilots were recruited between October 2010 and January 2011 and given six months training in Australia under the airline's cadet programme, according to documents lodged in the Federal Court.

The trainees were told their employment was governed by New Zealand laws, not Australian laws, during the cadet training period and were engaged on individual employment contracts, the ombudsman alleges.

But he claims the trainee pilots were covered by the 2010 Australian Air Pilots Award while working exclusively in Australia.

The papers lodged with the court say the six were asked by Jetstar to repay the cost of their training, despite this being prohibited under the Air Pilots Award.

The trainee pilots allegedly reimbursed Jetstar a total of $22,000 ($AU17,500) between June and September 2011 before the practice ceased and the money was returned to them in November 2011.

It is also alleged Jetstar failed to pay the pilots superannuation during the training period.

"Multinational companies with wholly or partly owned overseas enterprises need to exercise caution and care if they engage workers under those entities and then have them work in Australia," Wilson said in a statement.

"To do so can expose the companies to potential penalties and liabilities, particularly if those arrangements persist for a period of time and the terms and conditions their employees are engaged under are less than provided for by Australian law."

The Fair Work Ombudsman is alleging multiple breaches and is seeking penalties.

Each company faces a maximum penalty of $41,000 ($AU33,000) for each breach.

The case is set down for a directions hearing in the Federal Court in Sydney on April 27.

Wilson said Fair Work inspectors were continuing to investigate allegations that Jetstar Airways Pty Ltd was underpaying foreign crew working on Australian domestic flights.

The Australian and International Pilots Association (AIPA) has welcomed the news.

"Circumventing Australia's system by using offshore jurisdictions to establish contracts is a slippery slope indeed," AIPA President Captain Barry Jackson said in a statement.

"The Fair Work Ombudsman has shown Jetstar's management they will not be able to get away with this as easily as they might have originally hoped."

Jetstar issued a statement about the allegations on Monday night.

"Jetstar will defend claims it was required to apply Australian workplace law while cadets employed through its New Zealand business trained with experienced pilots in Australia," the airline said.

Jetstar said the claims relate to lower employer superannuation contributions in New Zealand compared with Australia.

"As a goodwill gesture, Jetstar has already paid cadets any shortfall between New Zealand and Australian superannuation contributions," the company said.


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