Australian Institute of Marine and Power Engineers v Smit Lamnalco Towage Australia Pty Ltd T/A Smit Lamnalco Towage Australia

[2023] FWC 2003

[2023] FWC 2003

FAIR WORK COMMISSION

REASONS FOR DECISION

Fair Work Act 2009

s.739—Dispute resolution

Australian Institute of Marine and Power Engineers
v

Smit Lamnalco Towage Australia Pty Ltd T/A Smit Lamnalco Towage Australia

(C2022/6471)

VICE PRESIDENT ASBURY BRISBANE, 10 AUGUST 2023

Alleged dispute about any matters arising under the enterprise agreement and the NES; [s186(6)]

Background

1. The Australian Institute of Marine and Power Engineers (AIMPE) applies to the Fair Work Commission (the Commission) pursuant to s. 739 of the Fair Work Act 2009 (the Act) for the Commission to deal with a dispute under the dispute resolution procedure in the Smit Lamnalco Towage (Australia) Pty Ltd and the AIMPE Gladstone Enterprise Agreement 2022 (the Agreement). The Respondent is Smit Lamnalco Towage Australia Pty Ltd T/A Smit Lamnalco Towage Australia (the Respondent/Company), the employer covered by the Agreement.

1. The Respondent provides towage services at the Port of Gladstone. The AIMPE covers engineers employed on tugboats at that Port. The Agreement was approved by the Commission on 31 August 2022 and commenced operation on 7 September 2022. The AIMPE was a bargaining representative for the Agreement and is covered by the Agreement. Clause 22 of the Agreement requires the Company to “bear the expense of maintaining the Employee’s Certificate of Competency to its present level”. Appendix 2 of the Agreement states that revalidations will be provided by the Company to the current qualification level.

1. The dispute arose when the Company advised that it would not reimburse expenses incurred by its Class 3 Engineers for revalidating a Certificate of Safety Training (COST). The AIMPE contends that Class 3 Engineers are required to complete a COST as part of receiving their Certificate of Competency (CoC) and are therefore entitled to be reimbursed for the expenses incurred, pursuant to Appendix 2 and clause 22 of the Agreement.

1. The Company contends that clause 22 and Appendix 2 of the Agreement relate to revalidation of an engineer’s CoC and any course required to obtain it and that a COST is not required for the purposes of obtaining a CoC and therefore not required to be revalidated under either clause 22 or Appendix 2 of the Agreement.

2. The dispute was not resolved at Conciliation before the Commission. It is not in issue that the Commission is empowered to arbitrate the dispute in accordance with the dispute resolution procedure in clause 8 of the Agreement. The parties have agreed on the following question for arbitration:

“On a proper construction of the Smit Lamnalco Towage (Australia) Pty Ltd and the AIMPE Enterprise Agreement 2022, what are the entitlements under clause 22.2 and Appendix 2 for engineers revalidating their Certificates of Safety Training?”

Procedural History

1. Directions were issued requiring that the parties file and serve written submissions and statements of evidence outlining the evidence of each witness to be called at the hearing. The Respondent’s material was also required to respond to the material filed by the AIMPE and the AIMPE was directed to provide any further material in reply. The AIMPE provided an outline of submissions on 18 January 2023 and submissions in reply on 14 February 2023. No statement of evidence was filed by the AIMPE.

1. The Respondent provided an outline of submissions on 6 February 2023. In support of its case, statements of evidence were provided by Mr Peter Sedgwick, General Manager for the Respondent, and Mr John Kavanagh. Mr Kavanagh is a qualified Master Mariner, Senior Executive at Maritime Safety Queensland, Lieutenant Commander in the Royal Australian Navy reserve, Lecturer in Maritime Law and Policy at the Australian Maritime College and a legal practitioner in private maritime law practice. Mr Kavanagh gave evidence in his capacity as an expert in the maritime industry and in the field of maritime regulatory framework in Australia.

1. On 14 February 2023, the AIMPE advised the Commission that, subject to the Respondent’s agreement, it did not seek an oral hearing in this matter and was content for me to determine the matter based on the material filed by the parties. On 16 February 2023, the Respondent indicated that it was agreeable to the matter being determined on the papers without an oral hearing and permission was granted to the Respondent to file a one-page submission in reply to the material filed by the AIMPE. As a result, the witnesses for the Company were not required for cross-examination and their evidence was not contested.

1. On 7 August 2023, I issued a Decision[1] answering the question for determination by finding that: the Company is required to bear the expense of maintaining Engineers’ current COSTs and to backpay outstanding claims to employees and to pay out training days on an employee’s return to work after revalidating a COST. These are my reasons for that Decision.

The background to the dispute

1. The dispute arose from a refusal by the Company to reimburse the expenses incurred by its Class 3 Engineers for revalidating their COST. On 20 August 2020, the Company issued a Regional Memo (20-GDL-51) advising employees in the Gladstone crews in relation to issues of reimbursement for expenses associated with the revalidation of their engineers’ CoC or Certificate issued by the Australian Maritime Safety Authority (AMSA).[2] Relevantly, the Memo stated:

“The company will reimburse the costs for employees to revalidate their primary CoC or Certificate only and refer to the amsa.gov.au for the revalidation requirements. Below is the company’s position on revalidation reimbursements, dependent on the department you are employed in.

…
Engineers

Engineers will be reimbursed the cost of the revalidation on their main Certificate of Competency, being either an Engineer Class 1, Engineer Class 2 or Engineer Class 3. No other certificate or certification will be paid (for example Certificate of Safety Training, a masters certificate, watchkeepers certificate etc).

For Engineer Class 1 or 2 CoC, the company will continue to pay for the required additional short courses that may be required to revalidate the CoC.”

1. On 16 September 2022, the Company issued another Regional Memo (22-AUS-07), addressed to all its crews, regarding crew revalidation and reimbursement matters.[3] The Memo dated 16 September 2022 similarly stated:

“The company will reimburse the costs for employees to revalidate their primary AMSA CoC or Certificate only. Please refer to the AMSA website for the revalidation requirements.

Below is the company’s position on revalidation reimbursements, dependent on the department you are employed in.
…

ENGINEERS

Engineers will only be reimbursed the cost of revalidation on their main CoC. No other certificate or certification will be reimbursed (for example Certificate of Safety Training, a Masters certificate etc).

·STCW Engineer Class 1, Engineer Class 2,

Full revalidation costs and other associated courses.

·NSCV Engineer Class 3 NC

Full revalidation costs and any other associated courses.

·NSCV MED 1, MED 2 and MED 3

Revalidation fee only.”

1. STCW is the abbreviation for the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers. NSCV is the abbreviation for National Standard for Commercial Vessels. The AIMPE contends that the COST is a necessary component in the revalidation of a Class 3 Engineer qualification and accordingly, the obligation of the Company under clause 1 of Appendix 2 of the Agreement to cover expenses associated with revalidating engineers’ qualifications applies to the expenses incurred by a Class 3 Engineer for revalidating their COST.

1. The AIMPE contends that holders of Engineer Class 3 CoC are required to complete or revalidate a COST as part of receiving their Class 3 certification issued by the Australian Maritime Safety Authority (AMSA). AMSA is the regulatory authority responsible for regulating and overseeing the safety of Australian shipping fleets and managing Australia’s international maritime obligations.[4] The AIMPE states that the COST is issued under Maritime Order 70 (Seafarer certification) 2014 made pursuant to the Navigation Act 2012 and is recognised by AMSA.

1. In addition, the AIMPE contends that up until 2020, the Company reimbursed its Class 3 Engineers for the expenses of revalidating their COST, but this practice ceased following the issue of the Regional Memos. It is asserted by the AIMPE that a COST is a relevant and current qualification for Class 3 Engineers and accordingly, the Company is required by clause 1 of Appendix 2 of the Agreement to reimburse its engineers for the expenses associated with the COST.

1. In support of its case, the AIMPE relies on the decision of the Commission in Australian Maritime Officers’ Union v Smit Lamnalco[5] (the AMOU Decision) and contends that an almost identical dispute regarding reimbursement for revalidation of a Master’s Global Maritime Distress and Safety System (GMDSS) qualification was dealt with in the AMOU decision and the Commission found that the Company was liable to reimburse costs associated with revalidating that qualification for a Master in Gladstone in accordance with the provisions of Appendix 2 under the Smit Lamnalco Towage (Australia) Pty Ltd and AMOU Gladstone Enterprise Agreement 2016 (AMOU Agreement). It is contended that Appendix 2 in the AMOU Agreement is similar to the Appendix 2 in the AIMPE Agreement[6] and that I should follow the AMOU Decision in determining the present dispute.

1. In its initial response to the application, the Company stated that AMSA prescribes the necessary qualifications for different positions held within the maritime industry and requires all engineers employed by the Company to hold a CoC in accordance with the Marine Safety (Domestic Commercial Vessel) National Law Act 2012. A CoC under the Agreement is either a Class 1, 2 or 3. The Memo of 20 August 2020 notified Gladstone employees that the Company would only reimburse the cost of revalidating each employee’s main CoC. The Company contends that while Class 1 or Class 2 Engineers may require continued competency courses, which may include a COST, to maintain their Class 1 or Class 2 certification, a COST is not a required component for the certification of Class 3 Engineers. For Class 1 and Class 2 engineer employees, the Company states that it has continued to pay for competency training, including the COST, where it is required. As to the Memo of 16 September 2022, the Company states that this was a national Memo issued to all its Australian employees and it included some additional certificates of competency which are relevant in other ports operated by the Company for other classes of vessels, but which are not applicable within Gladstone.

1. In response to the contention that the Company has ceased the practice of reimbursing its engineers for the expenses of revalidating the COST, the Company states that it reinstated payment of the COST for all engineers during negotiations for an enterprise agreement, on an interim basis and as a gesture of good faith, in accordance with a Recommendation made by the Commission on 21 October 2021.[7] However, this was subject to the parties reaching a new enterprise agreement and no agreement was reached at that time. The Company maintains that it has no obligations under the 2022 Agreement to reimburse the cost of training that is not required for the CoC and the request by the AIMPE for the revalidation of additional qualification amounts to an “extra claim”, contrary to clause 2.7 of the Agreement and s. 739(5) of the Act.

Relevant Provisions of the Agreement

1. Clause 2 of the Agreement deals with its title and application. Relevantly, clause 2.6 provides that: “the parties acknowledge that there is no other agreement, written or unwritten, between the parties relating to harbour towage unless filed with this agreement.” In relation to the contention by the Company that the issue of reimbursement for the expenses of the COST is an “extra claim”, Clause 2.7 of the Agreement provides:

“2.7       The parties agree that up to the nominal expiry date of this Agreement, the Engineers, the Unions, and the Company will not pursue any extra claims relating to wages or changes in conditions of employment or any other matters related to the employment of Engineers, whether dealt with in this Agreement or not.”

1. Clause 22 of the Agreement deals with study leave, revalidation and training, as follows:

“22          STUDY LEAVE, REVALIDATION AND TRAINING

22.1      Study Leave

22.1.1     An Engineer may apply to enrol in study that is relevant to his/her job. The Company will consider each application and approve applications for study at its discretion giving consideration to the relevance of the study to the Engineer’s job or future job and to the Company’s operational needs. The Engineer will advise the Company of the scheduled cost of the course when applying.

22.1.2     An Engineer who is approved to undertake study leave in accordance with 22.1.1 above will be entitled to:

a)          Payment for the time taken for study and in lieu of their normal fortnightly payments;

i. in the case of a Permanent Engineer, 75% of the appropriate weekly rate (75% of the appropriate salary set out in this agreement divided by 52);

ii. in the case of a Part Time Engineer, 75% of the average weekly rate since the commencement of employment with the Company, excluding allowances and superannuation.

b)          The cost of the course (in whole or in part) as previously approved, will be reimbursed to the Engineer by the Company upon successful completion of the course.

22.1.3 Engineers who accept the benefits outlined above will be required to enter into a written undertaking with the Company that he/she agrees to remain in the Company’s employment for a period of at least one year after he/she have completed the study and that they will reimburse the Company for the course cost if he/she leaves employment with the Company within that one year.

22.2      Revalidation

22.2.1     The Company will bear the expense of maintaining the Employee’s Certificate of Competency to its present level regardless of the level of qualification required to perform his/her duties. The Company will pay for college tuition fees, examination fees, travel and accommodation (but only to the nearest practical location).

22.2.2     Should an Engineer fail for any reason to achieve revalidation when it is due, the Company will not be liable to meet the cost as defined in 22.2.1.

22.2.3     Where possible, courses will be undertaken during the Engineer’s leave for which the Engineer will receive one day of frozen leave for each day of study undertaken throughout the duration of this Agreement.

22.2.4     Engineers who accept the benefits outlined above will be required to enter into a written undertaking that he/she agrees to remain in the Company’s employment for a period of three months after he/she has been revalidated, and that he/she will reimburse the Company for the course costs if he/she leaves employment with the Company within that period.

22.3      Operational Training and Certification

22.3.1     The Company may direct an Engineer who is rostered on duty to participate in “on-board operational” and critical equipment training.

22.3.2     Engineer (attending voluntarily) on leave shall be paid in terms of Clause 17.

22.3.3     Where the Company requires an Engineer to undertake training or certification other than “on-board operational” training, then the Company will meet the cost of such training, including tuition fees, travel, accommodation, and reasonable personal expenses.

22.4      Further Training

22.4.1     The Parties recognise the importance of training and development of Engineers to improve the operational performance of the Company’s services. The Company is committed to assessing the training needs of the operation, particularly in respect of ISM compliance, and implementing appropriate training programmes that meet those needs, specifically:

·training is to be based on operational, maintenance and technical requirements;

·training should reinforce existing skills of Engineers and develop new skills where required;

·training needs will be assessed and training programmes will be developed to comply with statutory and company policy.

22.4.2     The Company will consult with Engineers in the development of its training programmes to ensure compliance with ISM and any other relevant maintenance requirements necessary for engineers to carry out their duties and responsibilities. The Company will take into account any recommendations put forward by the Engineers.

22.4.3     The Engineers will cooperate with and participate in the Company’s on- going training programmes. Further training is optional to Employees during periods of rostered leave, however if required by the business any days spent undertaking further training will attract a frozen leave day.”

1. The dispute centres upon the proper construction of Appendix 2 of the Agreement. In the main body of the Agreement, the only reference to Appendix 2 appears at the final page of the Agreement, as follows:

“APPENDIX 2

ADDITIONAL CONDITIONS”

1. Clause 1 of Appendix 2 (the only clause in Appendix 2) is entitled “Training” and provides as follows:

“1. Training

Engineers are to be provided with the following Technical Engineer Training Program, for completion within the term of this agreement, with a maximum of 7 Engineers to be trained per year:

·Main Engine

·Thruster/Control Systems

·Winches

Such training shall be OEM training or equivalent group training.

Engineers will provide a minimum of 5 Technical Training days per year, with an additional 5 optional days to also be provided per Engineer, for the purpose of participating in the Technical Engineer Training Program. Where technical training is undertaken during rostered leave, Engineers will be re-credited their leave for those days. Where technical training is undertaken during rostered work time, Engineers will be paid their usual salary.

All Engineer training shall be compensated for as follows:

·Revalidation (training days will be paid out on return to work, treated as per Clause

·22)

·Formal Engineer specific (technical training days apply as above)

·Company operational (will not be technical training days, treated as per Clause 22)

Revalidations will be provided by the company to the current qualification level held by the employee and any outstanding claims will be back paid.”

Approach to construction of enterprise agreements

1. The cases dealing with the approach to the task of construing an enterprise agreement were distilled into principles and set out in a Decision of a Full Bench of the Commission in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) v Berri Pty Ltd (Berri),[8] as follows:

“1.           The construction of an enterprise agreement, like that of a statute or contract, begins with a consideration of the ordinary meaning of the relevant words. The resolution of a disputed construction of an agreement will turn on the language of the agreement having regard to its context and purpose. Context might appear from:

(i) the text of the agreement viewed as a whole;

(ii) the disputed provision’s place and arrangement in the agreement;

(iii) the legislative context under which the agreement was made and in which it operates.

2.          The task of interpreting an agreement does not involve rewriting the agreement to achieve what might be regarded as a fair or just outcome. The task is always one of interpreting the agreement produced by parties.

3.          The common intention of the parties is sought to be identified objectively, that is by reference to that which a reasonable person would understand by the language the parties have used to express their agreement, without regard to the subjective intentions or expectations of the parties.

4. The fact that the instrument being construed is an enterprise agreement made pursuant to Part 2-4 of the FW Act is itself an important contextual consideration. It may be inferred that such agreements are intended to establish binding obligations.

5. The FW Act does not speak in terms of the ‘parties’ to enterprise agreements made pursuant to Part 2-4 agreements, rather it refers to the persons and organisations who are ‘covered by’ such agreements. Relevantly s.172(2)(a) provides that an employer may make an enterprise agreement ‘with the employees who are employed at the time the agreement is made and who will be covered by the agreement’. Section 182(1) provides that an agreement is ‘made’ if the employees to be covered by the agreement ‘have been asked to approve the agreement and a majority of those employees who cast a valid vote approve the agreement’. This is so because an enterprise agreement is ‘made’ when a majority of the employees asked to approve the agreement cast a valid vote to approve the agreement.

6.          Enterprise agreements are not instruments to which the Acts Interpretation Act 1901 (Cth) applies, however the modes of textual analysis developed in the general law may assist in the interpretation of enterprise agreements. An overly technical approach to interpretation should be avoided and consequently some general principles of statutory construction may have less force in the context of construing an enterprise agreement.

7.          In construing an enterprise agreement it is first necessary to determine whether an agreement has a plain meaning or it is ambiguous or susceptible of more than one meaning.

8.          Regard may be had to evidence of surrounding circumstances to assist in determining whether an ambiguity exists.

9.          If the agreement has a plain meaning, evidence of the surrounding circumstances will not be admitted to contradict the plain language of the agreement.

10.        If the language of the agreement is ambiguous or susceptible of more than one meaning then evidence of the surrounding circumstance will be admissible to aide the interpretation of the agreement.

11.        The admissibility of evidence of the surrounding circumstances is limited to evidence tending to establish objective background facts which were known to both parties which inform the subject matter of the agreement. Evidence of such objective facts is to be distinguished from evidence of the subjective intentions of the parties, such as statements and actions of the parties which are reflective of their actual intentions and expectations.

12.        Evidence of objective background facts will include:

(i) evidence of prior negotiations to the extent that the negotiations tend to establish objective background facts known to all parties and the subject matter of the agreement;

(ii) notorious facts of which knowledge is to be presumed; and

(iii) evidence of matters in common contemplation and constituting a common assumption.

13. The diversity of interests involved in the negotiation and making of enterprise agreements (see point 4 above) warrants the adoption of a cautious approach to the admission and reliance upon the evidence of prior negotiations and the positions advanced during the negotiation process. Evidence as to what the employees covered by the agreement were told (either during the course of the negotiations or pursuant to s.180(5) of the FW Act) may be of more assistance than evidence of the bargaining positions taken by the employer or a bargaining representative during the negotiation of the agreement.

14.        Admissible extrinsic material may be used to aid the interpretation of a provision in an enterprise agreement with a disputed meaning, but it cannot be used to disregard or rewrite the provision in order to give effect to an externally derived conception of what the parties’ intention or purpose was.

15.        In the industrial context it has been accepted that, in some circumstances, subsequent conduct may be relevant to the interpretation of an industrial instrument. But such post-agreement conduct must be such as to show that there has been a meeting of minds, a consensus. Post-agreement conduct which amounts to little more than the absence of a complaint or common inadvertence is insufficient to establish a common understanding.”

1. These principles were also set out by the Full Court of the Federal Court in Workpac Pty Ltd v Skene[9] as follows:

“The starting point for interpretation of an enterprise agreement is the ordinary meaning of the words, read as a whole and in context: City of Wanneroo v Holmes (1989) 30 IR 362 at 378 (French J). The interpretation “… turns on the language of the particular agreement, understood in the light of its industrial context and purpose …”: Amcor Limited v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241 at [2] (Gleeson CJ and McHugh J). The words are not to be interpreted in a vacuum divorced from industrial realities (Holmes at 378); rather, industrial agreements are made for various industries in the light of the customs and working conditions of each, and they are frequently couched in terms intelligible to the parties but without the careful attention to form and draftsmanship that one expects to find in an Act of Parliament (Holmes at 378–9, citing Geo A Bond & Co Ltd (in liq) v McKenzie [1929] AR(NSW) 498 at 503 (Street J)). To similar effect, it has been said that the framers of such documents were likely of a “practical bent of mind” and may well have been more concerned with expressing an intention in a way likely to be understood in the relevant industry rather than with legal niceties and jargon, so that a purposive approach to interpretation is appropriate and a narrow or pedantic approach is misplaced: see Kucks v CSR Limited (1996) 66 IR 182 at 184 (Madgwick J); Shop Distributive and Allied Employees’ Association v Woolworths SA Pty Ltd [2011] FCAFC 67 at [16] (Marshall, Tracey and Flick JJ); Amcor at [96] (Kirby J).” (citation omitted)

1. In AMA (Victoria) Ltd and Australian Salaried Medical Officers Federation v The Royal Women’s Hospital[10], a Full Bench of the Commission also distilled the principles relevant to the construction of enterprise agreements from the Full Court of the Federal Court majority in James Cook University v Ridd[11] as follows (with citations removed and some paraphrasing):

·     The starting point is the ordinary meaning of the words, read as a whole and in context.

·     A purposive approach is preferred to a narrow or pedantic approach – the framers of such documents were likely to be of a practical bent of mind. The interpretation turns upon the language of the particular agreement, understood in the light of its industrial context and purpose.

·     Context is not confined to the words of the instrument surrounding the expression to be construed. It may extend to the entire document of which it is a part, or to other documents with which there is an association.

·     Context may include ideas that gave rise to an expression in a document from which it has been taken.

·     Recourse may be had to the history of a particular clause where the circumstances allow the court to conclude that a clause in an award is the product of a history, out of which it grew to be adopted in its present form.

·     A generous construction is preferred over a strictly literal approach but agreements should make sense according to the basic conventions of the English language.

·     Words are not to be interpreted in a vacuum divorced from industrial realities but in the light of the customs and working conditions of the particular industry.

1. In CFMEU v Endeavour Coal Pty Ltd T/A Appin Mine[12] a Full Bench of the Commission held that the context of an agreement provision is significant. In this regard, the Full Bench set out the explanation of this point by the NSW Court of Appeal in Mainteck Services Pty Ltd v Stein Heurtey SA[13] emphasising the following matters:

·   Until a word or phrase is understood in the light of the surrounding circumstances, it is rarely possible to know what it means[14] and there is always some context to any statement;[15]

·   Language considered in its context will often have a clear meaning and context will often not displace that meaning – “but not always”;[16]

·   To state that a legal text is clear reflects the outcome of an interpretation process and means that there is nothing in the context that detracts from the ordinary literal meaning and cannot mean that context can be put to one side;[17]

·   The phrase “if the language is ambiguous or susceptible of more than one meaning”[18] does not mean that the susceptibility of the language to more than one meaning must be assessed without reference to the surrounding circumstances and in order to determine whether more than one meaning is available it may be necessary to turn to context;[19] and

·   Context has also been described as surrounding circumstances and the meaning of terms normally requires consideration not only of the text, but of the surrounding circumstances known to the parties and the purpose and object of the transaction[20]

1. In principle 15 in Berri the Full Bench dealt with the relevance of post-agreement conduct to the construction of the terms of an enterprise agreement citing the judgment of Gray J in ALHMWU v Prestige Property Services Pty Ltd[21] in which his Honour observed that:

“I am prepared to accept that the construction of an award can be affected by a common understanding of the parties to it about a particular state of affairs. If such a common understanding existed when the award was made, it should not be departed from when the Court comes to construe the award at a subsequent time. Care must be taken however, to distinguish a common understanding from common inadvertence ... In order to have an understanding, it is necessary that there be a meeting of minds, a consensus. There can be no meeting of minds, no consensus, if no one has thought about the issue.”[22]

1. In that case Gray J then went on to observe that the case he was dealing with was not one where a party had changed its mind and gone back on a common assumption but rather, was a case where no common assumption ever existed.[23]

1. I have applied these principles in determining the matters in dispute.

Evidence

Overview of Australian Maritime Regulatory Framework

1. Mr Kavanagh gave evidence in relation to the Australian Maritime Regulatory Framework, including the criteria for the issue of a COST by AMSA. His evidence was not contradicted by the AIMPE. Mr Kavanagh explained that AMSA is enacted under the Australian Maritime Safety Authority Act 1990 (Cth) and is responsible for implementing and enforcing various maritime safety legislation, which includes:

a)the Marine Safety (Domestic Commercial Vessel) National Law 2012 (Cth) (National Law) which governs the certification, construction, equipment, design and operation of domestic commercial vessels (DCVs) inside Australia’s exclusive economic zone; and

b)the Navigation Act 2012 (Cth) (Navigation Act) which governs international ship and seafarer safety, where it relates to seafarers in Australian waters. This includes regulating Australian vessels voyaging overseas, being Regulated Australian Vessels (RAVs).

1. As part of its obligations, AMSA is responsible for issuing all Australian Seafarer CoCs. All Australian CoCs are issued under either the National Law or the Navigation Act and the relevant Maritime Orders made under each of these enactments respectively. Mr Kavanagh explained that whether a seafarer is required to have a CoC issued under the National Law or the Navigation Act will depend on whether they will be working on a vessel entirely within Australia’s exclusive economic zone as a DCV or internationally as a RAV.

1. In relation to the Respondent’s Gladstone operations, Mr Kavanagh said that it only involves the operation of DCVs inside Australia’s exclusive economic zone, such that its business, its employees, and its vessels are governed by the National Law. To operate on a DCV, engineers must possess a CoC issued under the National Law, or hold an equivalent qualification recognised under Marine Order 505 (Certificates of competency – national law) 2022 which is made pursuant to the National Law. A copy of Marine Order 505 is annexed to Mr Kavanagh’s witness statement. Applicable CoCs issued under the National Law include:

a)Marine Engine Driver (MED) Grade 3;

b)MED Grade 2;

c)MED Grade 1; and

d)Engineer Class 3 Near Coastal CoC (Class 3 CoC).

1. Mr Kavanagh stated that the safety training required to operate on a DCV is incorporated into the AMSA Mandated Practical Assessment (AMPA) which is prescribed under s. 4 in schedule 7 of Marine Order 505 and includes learning units such as:

a)Abandon Ship;

b)Fire Procedures;

c)Health and Safety; and

d)Survival at Sea in a Survival Craft.

1. AMPA units are a prerequisite course for the issue of a MED Grade 2 or 3 and other entry level Certificates under the National Law. The integrated AMPA safety courses do not expire and are incorporated competencies for the issue of subsequent National Law certificates, such as MED Grade 1 and then Class 3 CoC. The syllabus issued by AMSA for a Class 3 CoC is publicly available on AMSA’s website and includes the following competencies:

a)survival at sea;

b)fire prevention and firefighting:

c)personal safety and social responsibility; and

d)security awareness

1. Mr Kavanagh said that a separate certificate for these competencies is not required for the purpose of being issued or revalidating a Class 3 CoC under the National Law, although a seafarer must also hold a certificate of medical fitness, provide evidence of sea service or an alternative method of continuing competence such as an approved final assessment (a 75- to 90-minute oral examination) and hold a valid HLTAID011 First Aid Certificate or equivalent.

1. Under Marine Order 505, Mr Kavanagh explained that some engineer CoCs issued under the Navigation Act for RAVs are considered equivalent to a Class 3 CoC for service on a DCV. This includes an Engineer Class 1 and 2 CoC issued under the Navigation Act for RAVs which are recognised by Marine Order 505 as being equivalent or corresponding to an Engineer Class 3 CoCs issued under the National Law for DCVs. This allows RAV qualified engineers (with Engineer Class 1 or 2 CoCs issued in accordance with the Navigation Act) to work on DCVs as engineers. Mr Kavanagh said that based on his knowledge and understanding of the legislative requirements for operating DCVs, engineers employed to work on the Respondent’s vessels must possess at least a Class 3 CoC under the National Law or an equivalent qualification, such as a Class 1 or Class 2 CoC issued under the Navigation Act.

Certificate of Safety Training (COST)

1. In relation to the COST, Mr Kavanagh explained that the Navigation Act provides the legislative power for Australia to implement international maritime treaties, including the STCW. Relevantly:

a)Marine Order 70 (Seafarer certification) 2014 sets out the eligibility requirements and training courses to give effect to the STCW; and

b)Marine Order 72 (Engineer officers) 2014 sets out the eligibility requirements and training courses required to become qualified as an engineer under the Navigation Act.

1. Mr Kavanagh stated that the COST is a training course prescribed under Marine Order 70 and is issued under the Navigation Act. A copy of Marine Order 70 is annexed to Mr Kavanagh’s witness statement. The COST is the mandatory minimum requirement for any seafarer to serve on board vessels in international waters, and includes the following competencies:

a)personal safety and social responsibilities (STCW Reg VI/1 Code A–VI/1 Table A–VI/1–4);

b)personal survival techniques (STCW Reg VI/1 Code A–VI/1 Table A–VI/1–1);

c)fire prevention and firefighting (Basic) (STCW Reg VI/1 Code A–VI/1 Table A–VI/1–2);

d)elementary first aid (STCW Reg VI/1 Code A–VI/1 Table A–VI/1–3); and

e)security awareness training (STCW Code Section A-VI/6 para. 4).

1. In addition, Mr Kavanagh made reference to s. 7(4) of Marine Order 70, as follows:

“…
(4) AMSA may issue more than 1 seafarer certificate to a person only if:

(a)    all of the duties or functions permitted by 1 of the seafarer certificates are not included in the duties or functions permitted by another seafarer certificate held by the person; or

(b)    there is no other seafarer certificate that includes all of the duties and functions permitted by all of the seafarer certificates to be issued.

Example for paragraph (a)

1 A person may hold a certificate of competency as deck officer and a certificate of competency as engineer officer.

2 A person cannot hold a certificate of competency as Master and a certificate of competency as Master < 3000 GT.

Example for paragraph (b)
A person cannot hold both an Engineer Class II (Steam) and an Engineer Class II (motor) if the person is eligible for an Engineer Class II (Steam and Motor).”[24]

1. Based on his understanding of s. 7(4) of Marine Order 70, Mr Kavanagh said that AMSA is only permitted to issue a COST to a person who is not otherwise eligible to hold another RAV seafarer certificate that includes all of the duties and functions of the COST. This means a person who holds a Class 1 or Class 2 CoC under the Navigation Act cannot be issued with a COST by AMSA, because the competencies of the COST are incorporated into the Engineer Class 1 and 2 CoC. Mr Kavanagh said that one of the reasons for this is because the ‘basic’ STCW competencies required for a COST are exceeded by the ‘higher-level’ competencies required by a seafarer to hold an Engineer Class 1 or 2 CoC. By ‘higher-level’, Mr Kavanagh said he meant that the COST STCW competencies are the basic entry-level competencies given to new entrants to the international marine industry. In contrast, a Class 1 or 2 CoC entitles the holder to be a Chief Engineer with management and supervision responsibilities for a range of matters, including firefighting and survival at sea, and the relevant competencies are therefore at the higher-level of “management” as distinct from “basic”.

1. Mr Kavanagh’s analysis of the National Law and Marine Order 505 was that there is no reference to the STCW or the COST at all. Therefore, his view is that the COST is not recognised as a corresponding certificate for the purpose of the National Law. Based on his knowledge of the National Law and experience in the maritime industry, Mr Kavanagh said that the COST does not qualify any seafarer, including engineers, to perform any function whatsoever on a DCV.

1. In addition, in preparing his witness statement, Mr Kavanagh prepared a table comparing the competencies of the Class 3 CoC issued under Marine Order 505 and those under the COST issued under Marine Order 70. In his view, a COST (whether initial or revalidation) does not provide any additional skills or competencies for seafarers who already hold an Engineer Class 1, 2 or 3 CoC and a current first aid qualification. Further, a COST cannot be issued by AMSA to the holders of an Engineer Class 1 or 2 CoC, and the holders of an Engineer Class 3 CoC must already satisfy the competencies of a COST to qualify for its issue. The holder of an Engineer Class 3 CoC does not require a COST to serve on a DCV and does not require a COST to qualify for issue or revalidation of a Class 3 CoC.

1. Mr Sedgwick is the General Manager for the Company and manages its operations in the Port. His main duties include overseeing the provision of towage services at the Port in a safe and efficient manner. Mr Sedgwick stated that the tugs operated by the Company at the Port are Domestic Commercial Vessels (DCVs) as defined by the National Law. This is because they are not used for overseas voyages and do not leave Australia’s exclusive economic zone. As the Company only operates DCVs at the Port, its operations are governed by the National Law, which covers all aspects of operating a DCV, including the certifications required to work on a DCV.

1. Mr Sedgwick stated that AMSA is responsible for issuing all CoCs, including those under the National Law and the Navigation Act, after verifying a person’s qualifications, medical fitness, sea service and otherwise assessing their skills. The Navigation Act governs vessels and seafarers involved in overseas voyages, including the operation of Regulated Australian Vessels (RAVs).

1. To undertake certain duties and functions on DCVs, the National Law and related regulations require an individual to hold a CoC of a particular kind. For engineers, the highest CoC under the National Law is an Engineer Class 3 Near Coastal CoC (Class 3 CoC). In order to obtain a Class 3 CoC, an individual must:

a)be medically fit for the duties, including eyesight;

b)hold a Marine Engine Driver Grade 1 NC qualification, an Engineer Watchkeeper seafarer certificate issued under the Navigation Act, or a workshop skills equivalent qualification;

c)provide evidence of the requisite sea service accrual on a DCV. The period of qualifying sea service that is required depends on whether the individual has an AMSA approved task book, and which of the qualifications set out in subparagraph (b) above is held by that individual; and

d)complete the Engineer Class 3 course at diploma level and pass the final assessment.

1. Mr Sedgwick gave evidence that the Respondent currently employs 24 engineers who possess a Class 3 CoC at its Gladstone operation. Each of these employees has completed the mandatory safety training for operating on a DCV in obtaining the Class 3 CoC. The National Law also recognises some CoCs issued under the Navigation Act as being equivalent to a Class 3 CoC. In this respect, Class 1 and Class 2 CoCs issued under the Navigation Act are the only qualifications recognised as being equivalent or corresponding to a Class 3 CoC under the National Law. Thus, if an engineer holds an Engineer Class 1 or 2 CoC under the Navigation Act which allows them to perform certain duties on RAVs, they are also permitted to work and perform certain duties as engineers on DCVs under the National Law.

1. Further, Mr Sedgwick noted that the Respondent currently employs at its Gladstone operation 9 engineers who possess a Class 1 CoC and 9 engineers who possess a Class 2 CoC issued under the Navigation Act. Mr Sedgwick stated that the Respondent covers the cost of engineers revalidating their CoC (whether it be a Class 1, 2 or 3) and provides engineers with frozen leave days (i.e. paying engineers a normal day’s pay and not deducting their accrued leave) for completing any study required for the revalidation of their CoC. To the extent that any Class 1 or Class 2 CoC holder is required to hold separate certificates or undertake additional study before being eligible to revalidate the CoC, the Respondent also covers the cost.

1. In addition to the CoC, Mr Sedgwick said that the Respondent also requires all its employees, including engineers, to hold a valid first aid certificate at all times. A valid first aid certificate is also a requirement for revalidation by a seafarer of Class 1, 2 or 3 CoCs under the National Law. As it is a requirement to hold a valid first aid certificate to revalidate a CoC, Mr Sedgwick said that the Respondent covers the cost of the first aid training course and ongoing revalidation of that qualification and allows employees to take one frozen leave day to complete the training course. However, Mr Sedgwick noted that the Respondent does not require or pay for the cost of its engineers to maintain any other qualification or certificate separate to their CoC, including any additional safety training or other maritime qualifications.

1. In relation to the COST, Mr Sedgwick stated that the Certificate is an entry-level safety training course issued under the Navigation Act which covers basic firefighting and fire prevention skills, elementary first aid and survival techniques, and the COST is not recognised under the National Law, nor is it a relevant qualification for engineers operating on a DCV. Mr Sedgwick’s understanding is that a COST is only considered a valid qualification for catering personnel who work on a DCV but do not ordinarily have any other maritime qualification and are unlikely to have undertaken other relevant safety training. Based on his experience and understanding of the syllabus for a COST, Mr Sedgwick stated that holding a COST does not provide a Class 3 CoC holder (or equivalent) with any additional skill or qualification because, as a pre-requisite to obtaining the Class 3 CoC, relevant safety training for a DCV is already required to be completed. Once a Class 3 CoC or equivalent is obtained, revalidation of that CoC exceeds the requirements of a COST.

1. Mr Sedgwick further noted that all crew members, including engineers, are required to complete practical safety training drills each year, which are facilitated by the Master of a vessel and are similar to the topics covered in the courses required to obtain a COST. These drills include:

a)fire and abandon every 3 months;

b)person overboard every 3 months;

c)medical emergency every 3 months;

d)collision and flooding every 6 months;

e)grounding and flooding every 6 months;

f)main engine failure every 6 months;

g)electrical failure every 6 months;

h)shipboard oil pollution every 6 months;

1. master incapacitated every 6 months;

j)loss of steering every 6 months; and

k)adverse weather every 6 months.

1. It is Mr Sedgwick’s understanding that AMSA is not permitted to issue or revalidate a COST for any person who holds a Class 1 or Class 2 CoC under the Navigation Act, as the duties and functions permitted by the COST are included in the higher CoC qualifications. In his position as General Manager, he is aware that the Company does not require any of its engineers to hold a COST to perform any duties or functions on a DCV, nor is the holding of a COST a requirement to maintain their CoC qualifications.

Background to the dispute

1. Mr Sedgwick gave evidence of issuing a member in August 2020, in relation to reimbursement of costs for revalidation of qualifications. Mr Sedgwick stated that it is his understanding that under the 2016 Agreement, the Company had an obligation to cover the cost of revalidating employees’ CoCs, and in some cases, additional qualifications required for the performance of an employee’s duties. Since the commencement of his employment with the Company in 2017, Mr Sedgewick said he had always understood that this obligation only extended to qualifications that were required to maintain an engineer’s CoC and relevant to the performance of their duties. In this regard, Mr Sedgwick said he issued a Regional Memo to all employees who work at the Port of Gladstone on 20 August 2020, clarifying the relevant qualifications to obtaining revalidation of a particular CoC that would be covered by the Company in accordance with its obligations under the 2016 Agreement. The 2020 Memo was said to clearly confirm that a COST was not a relevant qualification that would be revalidated for engineers, and neither the 2020 Memo nor the Company’s interpretation of its obligations under the 2016 Agreement in respect of revalidation of relevant qualifications, were escalated as a dispute in accordance with the dispute resolution procedure under the 2016 Agreement.

1. As to the bargaining process for the present Agreement, Mr Sedgwick stated that for more than two years, the Company and the AIMPE engaged in negotiations for a new enterprise agreement to replace the 2016 Agreement. Mr Sedgwick was one of the bargaining representatives for the Company throughout the negotiations for the 2022 Agreement along with Mr Laughlin, IR Manager for the Company. The AIMPE participated in the bargaining on behalf of engineers and was represented by Mr Greg Yates (Senior National Organiser for the AIMPE), Mr Kerry Mann, Mr Andrew Leeson and, later, Mr Brett Langridge (delegates of the AIMPE). As part of its claims throughout the negotiations, the AIMPE sought that the Company agree to revalidation of additional qualifications, including the COST.

1. Mr Sedgwick said that as a bargaining representative for the Company, he did not want to agree to expand the qualifications to be revalidated under the new enterprise agreement to include the revalidation of a COST because such a qualification is not relevant or required for the performance of the role as engineer. Additionally, Mr Sedgwick noted that the cost of revalidating a COST can be up to $1,700 per person plus an engineer’s leave day(s) at a cost of approximately $1,450 per day which is an unnecessary expense for the Company. Mr Sedgwick recalled the Company opposing the claims by the AIMPE on the inclusion of revalidations for COST during initial bargaining negotiations.

1. Throughout the period between March and October 2021, Mr Sedgwick recounted that the Company received over 35 notices of protected action from the AIMPE in respect of employees for whom it was a bargaining representative. The notices each stated that the employees would be engaging in notified protected industrial action to advance claims raised during negotiations, one of which was the inclusion of the revalidation of COST qualifications. Mr Sedgwick stated that while he did not consider there to be any need for or any benefit to engineers maintaining a COST, due to the disruption and cost of engineers taking protected action and in the interest of reaching agreement on the terms of a replacement enterprise agreement, the Company was prepared to agree to this claim subject to certain other concessions being made in the negotiations. The Company’s intention to agree to such a claim was recorded in a Recommendation issued by the Commission on 21 October 2021, which was made in an application for the Commission to deal with a bargaining dispute concerning the negotiation for a replacement agreement.

1. Notwithstanding the Recommendation, Mr Sedgwick recounted that the parties were unable to reach agreement as to the terms of a replacement enterprise agreement. In particular, the Company did not agree to amend clause 22 or Appendix 2 of the 2016 Agreement so as to include the revalidation of an engineer’s COST. In or around March 2022, Mr Sedgwick recalled that the AIMPE first proposed to the Company that the parties agree to a roll-over of the 2016 Agreement subject to pay increases. The Company ultimately agreed to a roll-over with pay increases of 0%, 1% and 1% over the term of the agreement. The rollover of the 2016 Agreement was proposed without any significant changes or redrafting of ambiguous clauses to clarify the intention of the parties.

1. At the time of agreeing to the rollover of the 2016 Agreement, Mr Sedgwick said he felt the interpretation of the revalidation obligation under Appendix 2 was clearly understood by the parties not to include the revalidation of an engineer’s COST. In Mr Sedgwick’s view, this was because:

a)this interpretation had been confirmed in the 2020 Memo which had not been subject to dispute;

b)the practice of the Company at that time was not to revalidate engineers’ COST qualifications;

c)it was discussed extensively throughout negotiations and formed part of the AIMPE’s claims, which were not ultimately agreed to; and

d)in offering the roll-over proposal, the AIMPE did not press its claim or seek to amend the entitlement for revalidations as it had been expressed in the 2016 Agreement.

1. Mr Sedgwick maintained that had the AIMPE’s proposal included an expansion to the Company’s revalidation obligations under Appendix 2 to include the revalidation of engineers’ COST qualification, the Company would not have agreed to a rollover of the 2016 Agreement. In this regard, Mr Sedgwick reasoned that this would have committed the Company to additional costs for a qualification that would have no practical utility or benefit to the Company in running its operations, while the Company was not offered any other cost-saving or benefit in exchange. A summary of the changes to the 2016 Agreement in the 2022 Agreement, which was provided to employees during the access period, was annexed to Mr Sedgwick’s witness statement. He stated that none of the changes to the 2016 Agreement altered the Company’s position in relation to the revalidation of relevant qualifications for engineers, including the COST, as set out in the 2020 Memo or the practice at that time. As the General Manager for the Company and based on his involvement in the negotiation of the enterprise agreement, Mr Sedgwick said that he was aware that the Company entered into the 2022 Agreement on the basis of its understanding that neither clause 22 nor Appendix 2 of that Agreement required the Company to reimburse engineers for the cost of revalidation of any COST.

1. Following the approval of the 2022 Agreement, Mr Sedgwick said he received an email from Mr Kerry Mann (Engineer and AIMPE delegate) seeking confirmation as to whether the Company’s position as set out in the 2020 Memo would continue to apply. Mr Sedgwick responded to Mr Mann’s email confirming that was the case. Following this, Mr Sedgwick was informed by Mr Mann that the matter was in dispute and would be escalated. A copy of this email chain is annexed to Mr Sedgwick’s witness statement. Mr Sedgwick said he was surprised by Mr Mann’s email and the notification of a dispute as the 2020 Memo had not been escalated as a dispute in the two years since it had been issued, and the Company’s position as set out in that Memo was well understood by the bargaining representatives on behalf of engineers when agreeing to a rollover of the 2016 Agreement and prior to voting on the 2022 Agreement.

1. Mr Sedgwick said he felt that by raising the dispute after the approval of the 2022 Agreement, the AIMPE and some engineers were attempting to make a claim for extra benefits that they were not successful in obtaining during bargaining for the 2022 Agreement. On 16 September 2022, after being informed that the engineers were disputing the operation of the relevant provisions under the 2022 Agreement, Mr Sedgwick noted that the Company issued a Regional Memo on 16 September 2022 to all the Company’s employees, including those who work at the Port of Gladstone, to again clarify the qualifications that are relevant to employees’ duties which would be revalidated by the Company in accordance with its obligations under the various enterprise agreements.

Submissions

AIMPE

1. On 20 August 2020, the Company issued an internal Memo (20-GLD-51) to its Gladstone tug crews titled Crew Revalidation stating that the Company would not reimburse the cost of revalidation of the COST qualification for engineers employed in its Gladstone operation. The AIMPE stated that the Memo was disputed by its delegates in Gladstone at the time. More recently on 6 September 2022, and following the approval of the current Agreement, Mr Sedgwick exchanged email correspondence with an AIMPE delegate as to the status of the 2020 Memo. The AIMPE delegate enquired as to whether the Company was still intending to maintain its position as stated in the 2020 Memo with respect to revalidations of the COST qualification. The AIMPE recounted that Mr Sedgwick’s reply was that the Company continued to rely on the terms of the 2020 Memo in relation to revalidations under the Agreement. A copy of that email exchange is attached to the written submissions of the AIMPE.

1. Shortly after the exchange of correspondence, the Company circulated a further Memo (22-AUS-07) on 16 September 2022 replicating its Memo of August 2020 and indicating that engineers would not be reimbursed for revalidating their COST qualification. This was again disputed by AIMPE delegates which led to the AIMPE notifying the Commission of the present dispute on 23 September 2022.

1. The AIMPE noted that the current Agreement is a roll-over of the previous 2016 Agreement, which expired on 31 December 2020, and replicated the same terms and conditions of employment as the 2016 Agreement, including Appendix 2. The AIMPE stated that the Memos had been the subject of a disagreement on the basis that they conflicted with Appendix 2 of the Agreement with respect to reimbursement of costs associated with the revalidation of engineer qualifications. According to the AIMPE, this was effectively an attempt by the Company to amend an agreed provision of the Agreement. In addition, the AIMPE argued that if the Company is found liable for reimbursement, another issue would arise which concerns the application of Clause 22.2.3 of the Agreement in relation to the freezing of leave days where the revalidation course is conducted during a period of leave.

1. The AIMPE submitted that Appendix 2 imposes an obligation on the Company to reimburse costs associated with the revalidation of Engineer qualifications including the COST qualification held by Engineers employed in the Gladstone operation. This obligation is contrary to the position adopted by the Company in the Memos circulated on 20 August 2020, and again on 16 September 2022. The AIMPE submitted that the relevant text of the words in Appendix 2 of the EA is important and states: “Revalidations will be provided by the company to the current qualification level held by the employee and any outstanding claims will be back paid”.

1. Taking into consideration the text of Appendix 2, AIMPE submitted that the provision is not limited to revalidations for Certificates of Competency as contemplated by Clause 22 of the Agreement. Appendix 2 is broader in scope and specifically refers to revalidations being provided to the “current qualification level held by the employee”. It was submitted that there is no reference within the clause to revalidations of qualifications being limited to Certificates of Competency. Further, the AIMPE stated that the main body of the Agreement references Appendix 2 as “ADDITIONAL CONDITIONS”, contending that the provisions contained within Appendix 2 are in addition to the terms contained within the rest of the Agreement. In this regard, the AIMPE submitted that the words in Appendix 2 of the Agreement have previously been the subject of an arbitrated dispute before the Commission in the AMOU Decision[25], and the Commission previously made a finding with respect to the correct interpretation of the words of Appendix 2, as follows:

“[76]       The primacy of the text of the Agreement itself must always be kept in mind. Appendix 2, on its face, obliges the Respondent to provide revalidations to the “current qualification level held”. This clause does not refer to the current certificate of competency level so is on one reading, broader than clause 22.2, which is limited to maintaining the “Employee’s Certificate of Competency to its present level regardless of the level of qualification required to perform his/her duties”. Clause 22.2, in the words just extracted, refer to a certificate of competency as a “qualification”. So, on one view, the reference to qualification in Appendix 2 might be read as a reference to certificate of competency. I am satisfied that the Agreement is capable of more than one meaning.

[77]       Both parties have sought to give their subjective views and recollections as to the meaning to be attributed to Appendix 2. They have been of limited assistance, given that the subjective views of the parties are in conflict.

[78]       It is important that Appendix 2 records an “other agreement” and Appendix 2 is called “ADDITIONAL CONDITIONS” by the main body of the Agreement. From this, Appendix 2 is ‘additional’ to those terms contained in the Agreement. In my view, this is significant. On the Respondent’s interpretation, Appendix 2 does not add anything to what is already contained in the Agreement at clause 22.2. Both clauses, on the Respondent’s interpretation, require the Respondent to maintain the level of employee’s current certificates of competency. On the Applicant’s interpretation, Appendix 2 imposes the additional obligation to provide “current qualification level”, which is all current qualifications.”

1. The AIMPE submitted that that case concerned an almost identical dispute with the Company, regarding reimbursement for revalidation of a Master’s Global Maritime Distress and Safety System (GMDSS) qualification. The Commission found that the Company was liable to reimburse costs associated with revalidating this qualification for a Master in its Gladstone operations, in accordance with the provisions of Appendix 2 of the AMOU Agreement. The AMOU Agreement covers employees engaged as Masters in the Company’s Gladstone operations and likewise contains an Appendix 2. Appendix 2 of the AMOU Agreement contains the same provision as that in Appendix 2 of the AIMPE Agreement.

1. It was further submitted that like the current AIMPE Agreement, the AMOU Agreement is a rollover of the 2016 AMOU Agreement and contains substantially similar terms and conditions as the AIMPE Agreement, save for differences in classifications, qualifications required to commence employment, and specific employment duties relevant to the particular classifications. In the AMOU Decision, the Commission reached the following conclusion:

“[80]       Therefore, taking this and all of the circumstances of the matter into account, the interpretation of Appendix 2 means that the Respondent is obliged to maintain the current levels of qualifications, as at the time the Agreement was ‘made’. Appendix 2 is additional to the obligation in clause 22.2 to maintain present levels of certificates of competency. If Appendix 2 was not additional to clause 22.2 it would, have no work to do, but rather would be an unnecessary poorly worded restatement of clause 22.2.”

1. The AIMPE submitted that the principles established in Berri regarding the correct approach to enterprise agreement interpretation were considered and applied by the Commission in reaching that conclusion, which has not been challenged or appealed by the Company in the period since the matter was determined. In this regard, the AIMPE submitted that the factual matrix of the current matter for determination, and the matter for determination in the AMOU Decision, are substantially similar, save for the different qualification seeking to be reimbursed. Similarly, the relevant applicable provision of the industrial instrument seeking to be enlivened – Appendix 2 of the Agreement – is identical in its construction both in this Agreement and the AMOU Agreement. Thus, it was submitted that the AMOU Decision should be followed, and the Commission should find that the Company is liable under Appendix 2 of the Agreement to reimburse the costs associated with revalidation of the COST qualification for Engineers.

1. In addition, the AIMPE stated that should the Commission determine that the Company is liable to reimburse the cost of revalidating the COST qualifications, a separate matter would arise with respect to how an engineer’s leave is to be treated if they participated in the revalidation course during a period of leave. The AIMPE contended that Clause 22.2.3 of the Agreement would apply in this respect such that an engineer is entitled to have their leave frozen for each day on which the course is undertaken. The AIMPE reasoned that Appendix 2 of the Agreement makes specific reference to the conditions contained within clause 22 as being applicable to revalidations carried out under Appendix 2, as follows:

“All Engineer training shall be compensated for as follows:

·Revalidation (training days will be paid out on return to work, treated as per Clause 22)

·Formal Engineer specific (technical training days apply as above)

·Company operational (will not be technical training days, treated as per Clause 22)”

1. The AIMPE stated that the first bullet point is applicable to answering the question of whether or not engineers are entitled to have their leave frozen under Clause 22.2.3 of the Agreement when carrying out revalidations of qualifications in accordance with Appendix 2. It specifically refers to “revalidations” in the broader context of “compensation” and it follows that engineers revalidating their qualifications under Appendix 2 are entitled to some form of compensation under the Agreement. The AIMPE submitted that this provision is specifically applicable to revalidations under Appendix 2.

1. Further, there is no other reference contained in Appendix 2 as to what entitlements are applicable to revalidations. The only reference to applicable entitlements (i.e. compensation) in relation to revalidations under Appendix 2 is the reference to Clause 22 of the Agreement. The use of the words, “treated as per Clause 22”, is said to imply that the entitlement is comparative in nature and the use of this comparative language confers a separate entitlement, albeit the same substantive entitlement, as found within Clause 22 of the Agreement, which consequently applies to revalidations under Appendix 2.

1. The AIMPE submitted that the words of the clause have a plain meaning and speak for themselves. The conclusion to be drawn from a plain reading of the term is that Clause 22 of the Agreement will apply for the purposes of revalidations that are undertaken in accordance with Appendix 2. In the AIMPE’s view, this interpretation would be most consistent with the finding in the AMOU Decision that Appendix 2, as a whole, provides “additional conditions” to those contained within the body of the Agreement. If an alternate interpretation was given to these words, the text of Appendix 2, would be nugatory. The AIMPE, therefore, submitted that the Commission should be satisfied that Clause 22.2.3 of the Agreement applies for revalidations carried out under Appendix 2 and an order to that effect should be made.

Company

1. In its submissions, the Company accepted that the correct approach to the interpretation of an enterprise agreement was set out by a Full Bench of the Commission in Berri[26]. Applying the approach and principles set out in Berri, the Company summarised its position as follows:

a)clause 22.2 only relates to revalidations of an engineer’s CoC;

b)to the extent that Appendix 2 of the Agreement provides that revalidations will be maintained to the current qualification level, the term ‘qualification’ is a reference to a CoC and any course required to obtain that CoC. Appendix 2 does not provide an entitlement for revalidation in respect of additional qualifications; and

c)a COST is not required for the purpose of obtaining a CoC and not required to be revalidated under either clause 22.2 or Appendix 2 of the Agreement.

1. In relation to clause 22.2, the Company stated that the clause is headed ‘Revalidation’ and clauses 22.2.1 to 22.2.4 go on to set out the entitlements and obligations that apply where an engineer is required to revalidate their CoC. Those entitlements and obligations include the following:

a)the Company will bear the expense of the revalidation, including college tuition fees, examination fees, travel and accommodation (but only to the nearest practical location);

b)should the engineer fail to achieve revalidation when it is due, the Company will not be liable to meet such costs;

c)where an engineer undertakes courses during their leave, they will receive a ‘frozen leave day’, being a paid day without deduction of any leave accrual; and

d)in accepting the revalidation benefits described above, the engineer will provide an undertaking to the Company confirming that they agree to remain in the Company’s employment for a period of at least one year after they have completed the study and will otherwise reimburse the Company those benefits if leaving their employment within that year.

1. It was submitted that clause 22.2 is not ambiguous and the text of clause 22.2 clearly pertains only to the revalidation of the CoC. In this respect, the Company stated that clause 22.2 of the Agreement has a plain meaning in the sense described by Principle 9 in Berri [27] and the AIMPE does not dispute the interpretation of clause 22.2, but rather, it claims that revalidation entitlements which purportedly arise under Appendix 2 are to be applied consistent with clause 22.2.3.

1. In relation to Appendix 2, the Company noted that Appendix 2 is one of the confidential appendices filed with the Agreement. While Appendix 2 is not referred to in the body of the Agreement, it is accepted as being a relevant “agreement” for the purpose of clause 2.6 of the Agreement. Central to the issues in this proceeding is the last sentence in the provision in Appendix 2, which reads: ‘Revalidations will be provided by the company to the current qualification level held by the employee and any outstanding claims will be back paid’ (Disputed Provision).

1. The Company accepted that the Disputed Provision does not have a plain or unambiguous meaning, as “qualification” could relate to a variety of different certificates or courses. Consistent with Principles 1 and 7 in Berri, it is necessary to begin “with a consideration of the ordinary meaning of the relevant words… having regard to its context and purpose”[28] and a first step in construing an enterprise agreement is to ascertain whether an agreement “has a plain meaning or [whether] it is ambiguous or susceptible of more than one meaning”[29]. In the present case, the Company stated that while it is accepted by the parties (and the Commission should find) that the Disputed Provision is ambiguous or susceptible to more than one meaning, it remains necessary to consider the Agreement as a whole, taking into account the context in which the Disputed Provision appears. In this regard, the Company submitted that the following context is relevant to the Disputed Provision:

a)clause 22 comprehensively sets out the entitlements and obligations that arise in respect of the following:

i.clause 22.1 – general study leave;

ii.clause 22.2 – revalidations of Certificates of Competency;

iii.clause 22.3 – operational and company-directed training; and

iv.clause 22.4 – further training

b)the Disputed Provision is placed at the end of Appendix 2, which relevantly:

i.provides details of a supplemental training program not otherwise set out in clause 22, being the ‘Technical Engineer Training Program’. This includes that only a maximum of 7 engineers will participate in the additional technical training per year, that it is to cover certain technical equipment and that technical training days will be provided for the purpose of completing the training. The Technical Engineer Training Program is not referred to elsewhere in the Agreement;

ii.the remainder of Appendix 2 restates where an entitlement to a training day will apply for other types of training and study already set out in the Agreement. Appendix 2 states: “All Engineer training shall be compensated as follows: Revalidation (training days will be paid out on return to work, treated as per Clause 22); Formal Engineer specific (technical training days apply as above); Company operational (will not be technical training days, treated as per Clause 22)”, which relevantly corresponds with:

·  the entitlement for frozen leave days for study required to revalidate an engineer’s Certificate of Competency under clause 22.2;

·  the entitlement for training days to undertake engineer-specific training being the Technical Engineer Training Program set out earlier in Appendix 2; and

·  the provisions relating to operational training at the Company’s direction under clause 22.3, which provides that the Company will only direct employees to undertake such training while rostered on duty, and that any engineer who attends voluntarily on leave shall be paid in terms of clause 17 of the Agreement;

c)the Disputed Provision provides that employees will be entitled to back payment of any outstanding revalidations, which is not already provided for in clause 22.2; and

d)aside from clause 22.2 and Appendix 2, there is no other reference to ‘revalidations’ of any other ‘qualification’.

1. The Company submitted that having regard to the above, it is the Company’s position that reading Appendix 2 as a whole and in the context of the Agreement:

a)the substantive purpose of Appendix 2, is to set out an additional type of technical training that will be provided to engineers, being the Technical Engineer Training Program, which is not otherwise provided for in the body of the Agreement;

b)to the extent that Appendix 2 refers to training days to be provided for revalidations, this is no more than a restatement of the entitlement provided under clause 22.2.3. It is apparent from reading Appendix 2 as a whole that the purpose for restating this entitlement is to clarify the treatment of training days for different types of training provided for in the Agreement, in circumstances where Appendix 2 introduced an entitlement to training days to undertake the Technical Engineer Training Program;

c)the Disputed Provision, to the extent it states “revalidations will be provided by the company to the current qualification level held by the employee”, relates to the qualifications required to maintain the engineer’s Certificate of Competency (including any applicable short courses required to be revalidated), and is not a reference to any other qualification; and

d)the Disputed Provision introduces an entitlement for employees to be back-paid for the cost of any revalidation of their CoC incurred prior to the Agreement taking effect.

1. On the basis that the COST is not required for the purpose of maintaining an engineer’s CoC, or otherwise for performing the duties of an engineer at the Company’s Gladstone operation, the Company contended that it is not a qualification required to be maintained under clause 22.2 or Appendix 2 of the Agreement. It was further submitted that this position is supported by the history of the negotiations for the Agreement, noting that the current Agreement is largely in identical terms to its predecessor, the 2016 Agreement. Relevantly, Mr Sedgwick’s evidence is that:

a)in or around August 2020, the Company issued a Memo to the workforce confirming that under the 2016 Agreement, the Company would not revalidate any qualification for an engineer other than the CoC and any course required to obtain a revalidation of the CoC (2020 Memo)[30];

b)the revalidation of qualifications not required for the revalidation of a CoC (such as the COST) formed part of the AIMPE’s claims in bargaining for the present Agreement[31];

c)the Company would not agree to this claim without further concessions from the AIMPE, which was not accepted. Accordingly, the claim to cover the expense of revalidation for the COST was rejected[32];

d)the AIMPE offered a rollover of the 2016 Agreement without any change to the Disputed Provision, which was accepted by the Company[33]; and

e)the interpretation of the Disputed Provision was understood by engineers to be covered by the Agreement prior to voting on it, by reason of the interpretation of the corresponding clause in the 2016 Agreement as confirmed in the 2020 Memo, and the Company’s position clearly expressed throughout negotiations[34].

1. The Company submitted that it was well understood by the negotiating parties and the employees to be covered by the Agreement, at the time it was voted on and made, that the Disputed Provision would not give rise to an entitlement for the cost of revalidating a COST. Having regard to the above submissions and the evidence of Mr Sedgwick, the Company submitted that the Commission would prefer its interpretation of Appendix 2 including the interaction between Appendix 2 with clause 22.2.

1. As to the Company’s operation and the relevance of a COST, it submitted that it is necessary for the Commission to have regard to what a COST is and the effect of holding such a qualification in the context of the Company’s business operations. In this regard, the Company stated that it operates DCVs and is therefore subject to the National Law. DCVs are distinct from RAVs which are registered and entitled to proceed on overseas voyages. The operation of RAVs is subject to the Navigation Act.

1. The Navigation Act provides for various classes of seafarer to perform certain functions and duties on RAVs[35]. Marine Order 70 sets out general provisions for seafarers to be qualified under the Navigation Act and its purpose is to give effect to the STCW.[36] The STCW does not, in and of itself, have any application to the duties or responsibilities of an Engineer employed at the Company’s Gladstone operations. Relevantly:

a)engineers operating on the Company’s vessels (being DCVs), must hold a CoC recognised under the National Law;

b)AMSA is the governing agency that issues all Australian Seafarer CoCs. However, the Navigation Act provides for the regulation of Engineer Class 1 and 2 CoCs for RAVs,[37] and the National Law provides for Engineer Class 3 CoCs (and lesser engineering qualifications) for DCVs[38];

c)some CoCs for working on a RAV are acceptable qualifications for DCVs. A table of ‘corresponding’ qualifications is referenced in Marine Order 505 at Schedule 2 which identifies that Engineer Class 1 and 2 CoCs issued under the Navigation Act for RAVs ‘correspond’ with Engineer Class 3 CoCs issued under the National Law for DCVs[39]. The Company employs approximately 18 engineers at its Gladstone site who hold Class 1 or Class 2 CoCs issued under the Navigation Act[40];

d)the COST is one of the classes of certificates prescribed by Marine Order 70, and is issued under the Navigation Act once certain STCW competencies have been obtained. However, once a seafarer achieves a higher qualification under the Navigation Act, AMSA can no longer issue the lower qualification if it covers the same duties or functions[41]. Accordingly, once an engineer holds a Class 1 or Class 2 CoC, AMSA is not permitted to issue that engineer a COST, and revalidation of such a qualification would be impossible;

e)a COST is not recognised by AMSA for engineers working on DCVs under the National Law[42];

f)for CoCs issued under the National Law, the required safety training forms part of the AMSA Mandated Practical Assessment (AMPA) which must be completed as a pre-requisite for a Marine Engine Driver (MED) Grade 2 or 3. Once the integrated AMPA safety courses have been completed, they do not expire and are considered ‘assumed knowledge’ for higher certificates, such as a MED 1 or Engineer Class 3 CoC. As it does not expire, such qualification or assessment cannot (and is not required to be) be revalidated; and

g)a COST does not provide any additional skills or competencies to those of a Class 3 CoC.[43]

1. As such, the assertion by the AIMPE that ‘holders of Engineer Class 3 Certificates of Competency are also required to complete a Certificate of Safety Training (COST) as part of their receiving a Class 3 certificate’ is, in the Company’s view, incorrect at law. A COST is not recognised under the National Law, nor is it a “corresponding” qualification for Class 1 and 2 CoCs issued under the Navigation Act for RAVs. Further, in circumstances where it was clear at the time the Agreement was made that Appendix 2 would not give rise to an obligation on the Company to revalidate engineers’ COST qualification, the interpretation proffered by the AIMPE is said to be an ‘extra claim’ and a finding that the Disputed Provision in Appendix 2 extends the revalidation entitlement to include a COST qualification would be inconsistent with clause 2.7 and therefore, s 739(5) of the Act.

1. The Company submitted that the AMOU Decision, should not be followed on the basis of distinguishing factors. Firstly, the Decision involved interpretation of Appendix 2 to the AMOU Agreement. While the AMOU Agreement is, in large parts, identical to the Agreement, subject of this dispute, Appendix 2 to the AMOU Agreement is not the same. Notably, Appendix 2 to the AMOU Agreement:

1. I do not accept the Company’s submission that the substantive purpose of Appendix 2 is to set out the additional technical training that will be provided to Engineers, being the Technical Engineer Training Program. That is the purpose of the first part of Appendix 2. Nor do I accept that training for the purpose of revalidation, in the second part of Appendix 2, refers only to training to revalidate Certificates of Competency.

1. Firstly, the term “Revalidations” used in the last sentence of Appendix 2, on which the AIMPE relies, is plural, while the second part of the sentence refers to the current qualification level held by an “employee”. It is clear from the evidence of the Respondent’s witnesses and the submissions of both parties, that a single Engineer could not claim reimbursement for the cost of revalidating more than one Certificate of Competency. The use of the plural in the disputed provision, indicates that there may be more than one qualification that an employee holds, for which the employee can claim expenses associated with revalidation, and that such qualifications are not restricted to Certificates of Competency.

1. Secondly, there is no reference to Certificates of Competency in Appendix 2. Revalidation of Certificates of Competency is dealt with comprehensively in clause 22 of the Agreement. If the first dot point in the latter part of Appendix 2 and the last sentence, deal only with Certificates of Competency, they are superfluous, on the basis that all matters related to training for the purpose of revalidating a Certificate of Competency, are dealt with comprehensively in clause 22 of the Agreement.

1. In this regard, it is also necessary to consider Appendix 2 in the context of the Agreement read as a whole. The parties agree that Appendix 2 is a written agreement, consistent with clause 2.6 of the Agreement. Accordingly, Appendix 2 has operation as an “agreement” because it is not excluded by the application clause of the Agreement. It is also the case that the Agreement does not contain a general rule dealing with inconsistency between the Agreement and Appendices. Consistent with the general rules applying to the construction of enterprise agreements, it is necessary to give effect to every clause. Clause 22 of the Agreement deals with Study Leave, Revalidation and Training. Clause 22.1 provides for Engineers to apply to enrol in study that is relevant to their jobs. The Company has discretion to approve applications for such study considering its relevance to the Engineer’s job or future job and the Company’s operational needs. Payment for time taken to study courses of this kind, is at 75% of the Engineer’s normal fortnightly payments (with a formula for part-time Engineers) and the cost of the course (in whole or in part) is reimbursed as agreed before the Engineer commences the study, upon the successful completion of the course. This study is not necessarily required for the Engineer’s current position.

1. Clause 22.2 deals with the subject of revalidation. Clause 22.2.1 requires that the Company bear the expense of maintaining an employee’s CoC to its present level, regardless of the level of qualification that the employee requires to perform his or her duties and prescribes the expenses that are to be reimbursed. Clause 22.2.2 provides that the Company is not required to meet the costs defined in clause 22.2.1 if the Engineer fails to achieve revalidation when it is due. Clause 22.2.3 provides for courses to be undertaken during leave where possible and that the Engineer will receive one day of frozen leave for each day of study undertaken throughout the duration of the Agreement. Clause 22.2.4 requires that an employee who accepts the benefit of the clause enter into an agreement to remain in employment for three months after revalidation or to reimburse the course costs if he or she leaves employment during that period.

1. Clause 22.3 deals with Operational Training and Certification which encompasses the Company directing employees rostered on duty to participate in on board operational and critical incident training or other required training. Clause 22.4 is a commitment to further training and development, consultation, and training needs assessment. Clause 22 is comprehensive, and Appendix 2 adds nothing to the entitlements under clause 22. This is particularly the case in relation to revalidation of CoCs which is dealt with entirely in clause 22. Because clause 22.2 comprehensively provides for reimbursement of costs related to revalidating CoCs, to construe the first point in the second part of Appendix 2 as also referring only to CoCs would give the provision no work to do. Similarly, clause 22.2 deals with revalidation in the context of maintaining an employee’s CoC to its present level while the last sentence in Appendix 2 refers to revalidations to the current qualification level. This supports the view that Appendix 2 provides for additional entitlements to compensation for revalidation of qualifications, to those in clause 22, and refers to revalidations of qualifications other than the CoC held by an employee.

1. It is also relevant that the requirement for the Company to bear the expense of revalidation of CoCs applies with respect to those presently held by an Engineer rather than to the level required to be held for the Engineer to perform his or her duties. Given the broad operation of revalidation provisions concerning CoCs in clause 22, there is no basis for construing the last sentence of Appendix 2 as being limited to qualifications required to be used by an Engineer to perform his or her role, rather than to qualifications held by the Engineer. Accordingly, the last sentence in Appendix 2 requires the Company to provide revalidations to the current qualification level held by an employee, and for training days for such revalidations to be treated as per clause 22. In this regard, all provisions of clause 22.2 apply including the entitlement to receive one day of frozen leave for each day of study undertaken during leave and the undertaking in clause 22.2.4 being required. Further, should an engineer fail for any reason to achieve revalidation, the Company will not be liable to meet the cost.

1. The context in which Appendix 2 operates in the Agreement read as a whole, is contrary to the Company’s submission that because COST is not required for the purpose of maintaining an Engineer’s CoC, or otherwise for performing duties of an Engineer for the Company, Engineers are not entitled to be provided with revalidation and the benefit of training days being treated in the same way as such days are treated in clause 22. The obligation to reimburse the cost of revalidation of an Engineer’s CoC under clause 22 is not limited to a CoC that is relevant to or required for the performance of duties by an Engineer, and I see no basis for such a restriction to apply to revalidations under Appendix 2, neither in the text of Appendix 2 or the Agreement.

1. I do not accept that Mr Sedgwick’s evidence supports the Company’s position. Mr Sedgwick was employed by the Company in August 2017. At that time the 2016 Agreement was in effect and included Appendix 2 and clause 22 in the same terms as they are in the current Agreement. Mr Sedgwick’s understanding when he commenced employment was that the obligation of the Company under the 2016 Agreement with respect to qualifications, required only that the qualifications relevant to a particular CoC would be revalidated by the Company. The Memo issued by Mr Sedgwick on 20 August 2020, was intended to “clarify” this point, and according to his evidence also “confirmed” that a COST was not a relevant qualification that would be validated for Engineers. Further, Mr Sedgwick did not contradict the assertion in the AIMPE’s submissions that prior to the August 2020 Memo, the Company was reimbursing Engineers for the COST and that the August 2020 Memo changed that position. The AIMPE submissions were filed in advance of the Company’s submissions and I consider this submission to be in the nature of an assertion from the bar table about a substantive matter that was not contradicted by the Company.

1. The AIMPE opted not to cross-examine Mr Sedgwick and his evidence was not contested. However, taking that evidence at its highest, the fact that Mr Sedgwick felt the need to clarify and confirm the Company’s position, with reference to the COST, makes it more probable than not that the position of the Company with respect to reimbursement of the cost of revalidation, had changed and that the change was at least being questioned by Engineers. That the Memo of 20 August was not disputed at the time it was issued, does not mean it was accepted. The facts in the present case do not support a finding that there was a common understanding to the effect that Engineers were not entitled to reimbursement of expenses and frozen days in accordance with clause 22 of the Agreement in relation to revalidating their COST.

1. The distinction between common understanding and inadvertence, was considered by Tracey J in Transport Workers’ Union of Australia v Linfox Australia Pty Ltd (Linfox).[51] In summary, that case involved a claim based on the provisions of an award, which read literally, rendered day workers as shift workers, who were entitled to a paid crib break, because they were working between the span of hours specified in the award for day shift. The TWU made a claim for paid crib breaks for employees Linfox had designated as day workers, for a total period between 4 September 2007 and 15 May 2011, on the basis that those employees were working on five consecutive days each week within the day shift span of hours as defined in the award.

1. His Honour extensively considered the history of the award provision relating to day shift, concluding that during the course of successive award changes where the same provision was incorporated with the agreement of the parties, and the provision had been consistently applied by Linfox in the manner it contended, were matters supporting the argument that a common understanding existed, which should inform the construction of the relevant provisions. Further, his Honour observed that the relevant provisions were incorporated in successive instruments during a period in which changes to awards and agreements were constrained by principles restricting the granting of wage increases and additions to the cost of labour.[52] His Honour also doubted that the Commission’s imprimatur would have been forthcoming had it been informed that successive amendments to the award had the effect of converting the bulk of the workforce into shift workers, with attendant financial and other consequences and concluded that:

“[95]     This review supports the conclusion that, between the advent of the 1983 Award and, in particular, since the introduction into it in 1987 of the shift work provisions, and March 2012, the parties had, by their conduct, demonstrated that they held a common understanding that the provisions relating to crib time applied only to shift workers and that the large majority of workers who were treated as “day workers” were not “day shift” workers within the meaning of the award. In such circumstances the literal construction of Clause 26 must give way to the common understanding, over almost a quarter of a century, of the parties whose conduct it regulated.”

1. The facts in the present case can readily be distinguished from those in Linfox. The evidence establishes the probability that Engineers were being reimbursed for expenses related to revalidating their COST, prior to Mr Sedgwick commencing in his role and that the Memo of 20 August 2020, implemented a change in this practice. The fact that Mr Sedgwick (or some other Company representative) determined that the 2016 Agreement did not require that Engineers be reimbursed for expenses relating to revalidating their COST or to have leave days while attending training dealt with in accordance with clause 22, does not establish a common understanding. Despite Mr Sedgwick not being cross-examined, his evidence merely establishes his own understanding and the position of the Company. That understanding was always subject to the right of the AIMPE or individual Engineers, to challenge the Company’s position via the dispute resolution term of the Agreement.

1. The position adopted by the Company in negotiations for the current Agreement does not establish that the AIMPE or its members agreed or conceded that they were not entitled to be reimbursed for current qualifications. Further, Mr Sedgwick’s evidence in relation to the Recommendation issued on 21 October 2021, by the Commission as presently constituted, does not establish any concession on the part of the AIMPE or Engineers that there was not an entitlement under the 2016 Agreement to be compensated for revalidation of existing qualifications such as the COST. Relevantly, the Recommendation stated that:

“[4]         As a gesture of good faith, the Officials and Delegates of the AMOU and the AIMPE have agreed, at the request of the Commission, that notices of industrial action planned for Tuesday 26 October 2021 will be withdrawn and industrial action will not be taken or notified in the period up to and including 4 November 2021.

[5]        As a gesture of good faith, SLT has agreed, at the request of the Commission, that it will apply arrangements under the Smit AMOU Agreement and the Smit AIMPE Agreement in relation to Revalidation for payment of tuition fees, examination fees, travel, accommodation and frozen leave, to employees undertaking training to revalidate or renew their Certificate of Safety Training.”

1. The Recommendation simply sought that both parties take certain action, with the objective of finalising an enterprise agreement to replace the 2016 Agreement. The 2016 Agreement reached its nominal expiry date on 31 December 2020, and the parties had been bargaining at least since that date. Ultimately the Recommendation did not resolve the dispute and subsequently, the parties gave up their attempts to negotiate new terms and conditions of employment and agreed to roll over the 2016 Agreement. Mr Sedgwick’s view that the Company’s interpretation of the 2016 Agreement with respect to revalidation of an Engineer’s COST, was clearly understood by the parties, and does not establish acceptance by the AIMPE or Engineers of the validity of that interpretation. The fact that the AIMPE may have sought clarification of the Company’s position in relation to this matter or that the Company agreed to revalidating Engineers’ COST conditional on reaching agreement on a replacement to the 2016 Agreement, establishes nothing more than that the parties were prepared to compromise their positions about the proper construction of the 2016 Agreement, to finalise a replacement for the 2016 Agreement. When those concessions did not result in agreement being reached, the parties subsequently agreed to roll over the 2016 Agreement, without resiling from their positions in relation to the application of the provisions of Appendix 2 to revalidation of Engineers’ COST.

1. Mr Sedgwick’s statement that the Company would not have agreed to a rollover, had the AIMPE’s proposal included that the obligation to revalidate qualifications be expanded to include an obligation to revalidate Engineers’ COST qualifications, is not to the point. The AIMPE had never accepted that its position was an expansion of the 2016 Agreement provisions and had not resiled from the position that the revalidation of Engineers’ COST qualification was an entitlement under the 2016 Agreement. If the Company believed otherwise when it entered into the current Agreement, it has not established that the AIMPE, its members or Engineers agreed with or acquiesced in that position, so that there was a common understanding or intention. The views of Mr Sedgwick are not objective background facts. At best, there was mutual inadvertence in relation to this matter, of the kind described by Grey J in ALHMWU v Prestige Property Services Pty Ltd[53]. The reality is that neither party had compromised its position, and notwithstanding, they agreed to roll over the 2016 Agreement, including a disputed provision, in circumstances where the Company knew, or should reasonably have known, that the dispute settlement procedure in the Agreement would provide for a dispute to be raised about the proper construction of Appendix 2.

1. This is also not a case where either party has by its conduct, demonstrated a common understanding of the provisions of Appendix 2. While there has not been a long running history of disputation about the provisions relating to revalidation of qualifications, there has been a lack of agreement about this matter under the predecessor Agreement – the 2016 Agreement.[54] Notwithstanding Mr Sedgwick’s surprise at the communication from Mr Mann after the current Agreement was approved, the evidence does not establish a common understanding in relation to the Respondent’s position. If the Company agreed to roll over the 2016 Agreement based on a misunderstanding of the position of the AIMPE, its members and Engineers employed by the Company, Mr Sedgwick’s evidence does not go far enough to establish that there was no meeting of the minds in relation to the current Agreement. If the Company seeks to advance a position that the Agreement was not properly made or is invalid on this basis, the Fair Work Commission is not the appropriate forum to do so.

1. The construction of Appendix 2 of the Agreement I favour, is also supported by other relevant contextual matters. In this regard, the predecessor to the Agreement – the 2016 Agreement – contained clause 22.2 in identical terms to the clause in the 2022 Agreement. Appendix 2 of the 2016 Agreement was also in identical terms to those in Appendix 2 of the current Agreement. In the 2015 and 2012 Agreements, the revalidation provisions in clause 22.2 while providing for the same entitlements in terms of expenses to be reimbursed, applied only to a “qualification” that the Company required the Engineer to maintain as a condition of ongoing employment. Clause 22.2.3 did not provide for frozen days and stated that where possible, courses would be taken during the Engineer’s leave. Further, the 2015 and 2012 Agreements did not contain Appendix 2 and there were no equivalent or similar provisions in either the 2015 or 2012 Agreements to those later included in Appendix 2.

1. This history indicates that the 2016 Agreement brought about a change in the approach to the treatment of revalidations. Prior to the 2016 Agreement, the obligation extended only to qualifications that the Company required Engineers to maintain as a condition of employment. The 2016 Agreement expanded the scope of qualifications covered by the reimbursement obligations, to include qualifications that were held at the time the 2016 Agreement was made. This expanded obligation is reflected in clause 22.2 in relation to Certificates of Competency and in Appendix 2 in relation to revalidation of other qualifications held by employees. Further, when the scope of the qualifications subject of the reimbursement obligation was expanded it was also agreed that Engineers would receive a day of frozen leave, for each leave day on which study was undertaken.

1. The fact that Appendix 2 of the 2016 Agreement states that “any outstanding claims will be back paid” is a further indication that the matter was the subject of claims when the 2016 Agreement was made. That wording was incorporated in the 2022 Agreement as part of the roll over.

1. The simple answer to the unchallenged evidence of Mr Kavanagh, that AMSA will not issue a COST to holders of certain CoCs is that if an Engineer does not obtain a revalidation of an existing qualification, nothing in Appendix 2 or the Agreement, requires the Company to reimburse any costs associated with an attempt to obtain revalidation. For the reasons set out above, if the Engineer holds the COST and revalidates it, the Company is obligated to reimburse the related expenses in accordance with the Agreement.

1. Finally, there is no realistic prospect that this Decision will be a precedent for Engineers to claim costs associated with renewing their driver’s licence or any other licence that they may hold, which has never been required or related to their work for the Company as Engineers and has not previously been the subject of reimbursement. Any such claim would not succeed on the basis that it would be an extra claim, outside the scope and application of the Agreement and the Marine Towage Award 2010 with which the Agreement operates in conjunction. The construction advanced by the AIMPE is correct and Engineers are entitled to the benefits of Appendix 2 and clause 22, under the terms of the Agreement. Accordingly, I do not accept that the AIMPE is advancing an extra claim, in contravention of clause 2.7 of the Agreement.

Conclusion

1. For these reasons, I answered the question for arbitration as follows:

Question:

On a proper construction of the Smit Lamnalco Towage (Australia) Pty Ltd and the AIMPE Enterprise Agreement 2022, what are the entitlements under clause 22.2 and Appendix 2 for engineers revalidating their Certificates of Safety Training?

Answer

The entitlements of employees under the Smit Lamnalco Towage (Australia) Pty Ltd and the AIMPE Enterprise Agreement 2022 revalidating their Certificates of Safety Training are:

1.   The Company is required to bear the expense of maintaining Engineers’ current Certificates of Safety Training and to backpay outstanding claims to employees.

2.   The Company is required to pay out training days on an employee’s return to work after completion of training related to revalidating a Certificate of Safety Training, as per clause 22 of the Smit Lamnalco Towage (Australia) Pty Ltd and the AIMPE Enterprise Agreement 2022.

VICE PRESIDENT

Final written submissions:

The Applicant, 14 February 2023.
The Respondent, 17 February 2023.

[1] [2023] FWC 1962.

[2] AIMPE Submissions, Annexure 3.

[3] AIMPE Submissions, Annexure 5.

[4] Form F10 Application dated 23 September 2022.

[5] [2020] FWC 2537.

[6] AIMPE Submissions at [25].

[7] Recommendation issued on 21 October 2021 in B2020/861.

[8] [2017] FWCFB 3005 at [14].

[9] [2018] FCAFC 131 at [197] (per Tracey, Bromberg and Rangiah JJ).

[10] [2022] FWCFB 7.

[11] [2020] FCAFC 123, 298 IR 50 at [65] per Griffiths and SC Derrington JJ at [65]; see also WorkPac Pty Ltd v Skene [2018] FCAFC 131, 264 FCR 536 at [197]

[12] [2017] FWCFB 4487.

[13] [2014] NSWCA 184 at [71] – [85].

[14] Manufacturers’ Mutual Insurance Ltd v Withers (1988) 5 ANZ Ins Cas 60-853 at 75-343.

[15] Kirin-Amgen Inc v Hoechst Marion Roussel Ltd [2004] UKPC 6; [2005] 1 All ER 667 at [64].

[16] Project Blue Sky v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355 at [78].

[17] Charter Reinsurance Co Ltd v Fagan [1997] AC 313 at 391 per Lord Hoffman, approved in Campbell v R [2008] NSWCCA 214; 73 NSWLR 272 at [48] (Spiegelman CJ, Weinberg AJA and Simpson J agreeing)

[18] Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337.

[19] Franklins Pty Ltd v Metcash Trading Ltd [2009] NSWCA 407; 76 NSWLR 603 at [17] cited in Mainteck Services Pty Ltd v Stein Heurtey SA (2014) 310 ALR at [71] – [85].

[20] Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; 219 CLR 165 at [40].

[21] [2006] FCA 11.

[22] Ibid at [44].

[23] Ibid at [46]

[24] Mr John Kavanagh’s witness statement dated 6 February 2023, Annexure JK-2.

[25] [2020] FWC 2537.

[26] Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers Union(AMWU) v Berri Pty Limited[2017] FWCFB 3005 at [114], (2017) 268 IR 285 at 310; Workpac Pty Ltd v Skene [2018] FCAFC 131; (2018) 280 IR 191 at [197].

[27] Berri at [114].

[28] Berri at [114], Principle 1.

[29] Berri at [114], Principle 7.

[30] Statement of Peter Sedgwick dated 6 February 2023 (Sedgwick Statement) at [32]-[34] and PS-1.

[31] Sedgwick Statement at [35]-[40].

[32] Sedgwick Statement at [41]-[43].

[33] Sedgwick Statement at [44].

[34] Sedgwick Statement at [45]-[49].

[35] Navigation Act 2012 (Cth) s 29(1).

[36] Marine Order 70 (Seafarer certification) 2014 made under the Navigation Act.

[37] Marine Order 70 and Marine Order 72 (Engineer officers) 2014; see also Definition of ‘regulated Australian vessel’; Navigation Act 2012 (Cth) s 15.

[38] Marine Order 505 (Certificates of Competency – National Law) 2022.

[39] Marine Order 505 s 7, sch 2.

[40] Sedgwick Statement at [18].

[41] Marine Order 70, s 7(4).

[42] Marine Order 505 s 7, sch 2.

[43] Statement of Mr John Kavanagh dated 6 February 2023 at [21]-[22] and JK-3.

[44] Australian Maritime Officers’ Union v Smit Lamnalco[2020] FWC 2537 at [80].

[45] [2020] FWC 2537 at [76].

[46] Respondent’s Outline of Submissions, at [20]-[22], [37]-[49].

[47] Ibid at [38].

[48] (1893) 6 R 67.

[49] Marine Order 505 s 7, sch 2.

[50] Kavanagh Statement at [17] and Marine Order 70 s 7(4)).

[51] [2014] FCA 829.

[52] Ibid at [94].

[53] [2006] FCA 11.

[54] Compare Transport Workers’ Union of Australia v Linfox Australia Pty Ltd (2014) 318 ALR 54, [2014] FCA 829.

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