Application by Pacific Tug (Aust) Pty Ltd

[2016] FWCA 6229

[2016] FWCA 6229

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.222 - Application for approval of a termination of an enterprise agreement

Application by Pacific Tug (Aust) Pty Ltd
(AG2016/4945)

Dredging industry
COMMISSIONER SIMPSON	BRISBANE, 15 SEPTEMBER 2016

Application for termination of the Pacific Tug (Aust) Contract Tug Operations Union Collective Agreement 2012.

[1] On 5 August 2016 Pacific Tug (Aust) Pty Ltd (the Employer) filed an application pursuant to s.222 of the Fair Work Act 2009 (the Act)to terminate the Pacific Tug (Aust) Contract Tug Operations Union Collective Agreement 2012 (the Agreement).

[2] The Agreement covers the employer, its employees and also the Australian Maritime Officers’ Union (AMOU), The Maritime Union of Australia (MUA) and The Australian Institute of Marine and Power Engineers (AIMPE). The nominal expiry date of the agreement in accordance with clause 7 of the agreement was 30 June 2015, so the agreement passed that date over 14 months ago.

[3] The application was listed for a directions hearing and all parties covered by the agreement were provided with the listing. The MUA advised they were unable to attend the directions hearing. The AMOU did not appear. AIMPE advised the Fair Work Commission (the Commission) that it opposed the application. Issues concerning proper service of the application in accordance with Rule 26 of the Fair Work Commission Rules were identified at the directions hearing and the Employer undertook to address this issue and the matter was listed for hearing on Wednesday 14 September. The Directions issued required parties to file any submissions they wished to rely on by 5pm Monday 12 September 2016.

[4] AIMPE filed submissions in opposition to the application. On Tuesday 13 September 2016 the AMOU sent email correspondence to chambers advising it would not be appearing at the hearing and that it did not oppose the application on the basis of an undertaking given to it by the Employer that it would consult with the AMOU if it had any project work it was tendering for to discuss applicable rates and conditions of employment, and that appropriate provisions would be provided to its employees. The MUA did not file submissions and did not appear at the hearing on 14 September 2016.

[5] At the conclusion of the hearing on 14 September 2016 I advised the parties that I had reached a decision to grant the application to terminate the agreement, and would issue written reasons shortly thereafter. Set out below are the reasons for decision.

[6] The Employer said in its application that most of the employees employed under the agreement have been made redundant due to a downturn in work. It was said that the remaining six casual employees still working under the agreement are also due to be finished soon, have been consulted and have voted to terminate the agreement and this occurred on 5 August 2016. At the hearing on 14 September 2016 the Employer said that since the vote two more employees have been finished and paid redundancy. It is notable that despite all employees being casual the agreement provides for casual employees to be paid redundancy payments.

[7] The Employer advised the Commission in correspondence of 30 August 2016 that under the current rates in its agreement it has been unable to secure any new work.

[8] The Statutory Declaration filed with the application stated that discussions were held with the remaining employees over two weeks with regard to termination of the agreement and it was agreed to take a vote at the earliest opportunity to proceed with termination. Voting proceeded on 4 and 5 August 2016 and the six remaining casual employees voted unanimously to support termination of the agreement.

[9] The Employer gave an undertaking to the Commission in the course of the hearing on 14 September 2016 that in the event the remaining casual employees could no longer be employed they would be paid termination payments in the same manner as if they were still employed under the agreement.

[10] Section 223 of the Act provides for when the Commission must approve a termination of an enterprise agreement. The section states as follows:

“If an application for the approval of the termination of an enterprise agreement is made under section 222, the FWC must approve the termination if:

(a) The FWC is satisfied that each employer covered by the agreement complied with subsection 220(2) (which deals with giving employees a reasonable opportunity to decide etc) in relation to the agreement; and

(b) The FWC is satisfied that the termination was agreed to in accordance with whichever of subsection 221(1) or (2) applies (those subsections deal with agreement to the termination of different kinds of enterprise agreements by employee vote); and

(c) The FWC is satisfied there are no other reasonable grounds for believing that the employees have not agreed to the termination; and

(d) The FWC considers that it is appropriate to approve the termination taking into account the views of the employee organisation or employees organisations (if any) covered by the agreement.”

[11] AIMPE raised a number of objections to the application. AIMPE said that there is a significant difference in the rates of pay that would apply if the application was granted and that the Employer had not provided evidence that it explained the effect of the application to employees if granted. AIMPE did not call any witness evidence of its own. The Statutory Declaration states that the matters were discussed before the vote. The vote was unanimous. The Employer provided to the Commission a copy of an email sent to employees on 4 August 2016 referring to “recent discussions”, and setting out a process for a ballot of employees to determine whether they would support termination of the agreement. On the basis of the Statutory Declaration, the email and the submissions of Ms Griffiths that the proposal was discussed with employees, I am satisfied that the Employer has met the requirements of s.223(a) in that they complied with subsection 220(2), and s.223(b) and also s.221(1).

[12] For the same reasons as given in the preceding paragraph I am satisfied s.223(c) has been met as there are no other reasonable grounds for believing that the employees have not agreed to the termination.

[13] Section 223(d) provides that the Commission must take account of the views of the employee organisations covered by the agreement. The AMOU does not oppose the application on the basis of the undertaking it was given. The Employer said it was prepared to extend the same undertaking to AIMPE however AIMPE advised the Commission that the undertaking was insufficient to resolve its concerns. The MUA has taken no steps to participate in the proceedings despite being made aware of them.

[14] Other grounds AIMPE has put for opposing the application include:

“a) the difference in the pay rates in the agreement and the rates that would otherwise apply;
b) no undertakings from Pacific Tug in relation to maintenance of current rates,
c) uncertainty of the award coverage if the application were granted;
d) the agreement is “called up” in another agreement, namely the Pacific Tug (Aust) Regional Ports Harbour Towage Agreement 2015;
e) a failure on the part of Pacific Tug to genuinely attempt to bargain for a replacement agreement;
f) a weakening of the bargaining position of employees in the future; and
g) the arrangement would not reflect letters of appointment.”

[15] I have taken account of the views of the employee organisations covered by the agreement. One organisation consents to the application, one has not offered a view despite being offered the opportunity to do so, and one has opposed. I have considered each of the matters raised by AIMPE in opposition to the application. I accept there will be a significant difference in the rates of pay for the few remaining casuals should the application be granted, however the evidence discloses the practical effect of the decision will be minimal and short lived given most of the workforce has already been made redundant due to the Employer failing to secure any work and the few remaining casual employees (who supported the application unanimously in a ballot) are also likely to soon be made redundant. Further the Employer has undertaken to make redundancy payments as if the agreement continued to apply.

[16] AIMPE has raised a concern that there may be some argument over the coverage of certain industrial instruments should the application be granted. If such a dispute does arise in the future that is a matter that can be properly addressed at that time. There has been no suggestion that no industrial instrument, be it award or agreement would apply to any of the work that would otherwise have been covered by the agreement.

[17] I am also not concerned that references to the agreement in the Pacific Tug (Aust) Regional Ports Harbour Towage Agreement 2015 present an obstacle to the granting of the application. The references were primarily for the purpose of delineating coverage between the respective industrial instruments, and do not give rise to a further basis to conclude that employees may suffer some additional disadvantage on the basis of the termination of the agreement on account of the cross referencing referred to by AIMPE.

[18] None of the other matters raised by AIMPE are of such significance in the particular facts of this case that they would persuade me not to approve the application. Having considered each of the matters I am required to have regard to in s.223 I am satisfied that I must approve the termination of the agreement.

[19] In accordance with s.224 the termination will operate from 14 September 2016, which is the day the decision was issued in transcript.

COMMISSIONER

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