Australian Institute of Marine and Power Engineers v Swire Pacific Ship Management (Australia) Pty Ltd

[2013] FWC 4080

[2013] FWC 4080

FAIR WORK COMMISSION

DECISION

AND

REASONS FOR DECISION

Fair Work Act 2009
s.739 - Application to deal with a dispute

Australian Institute of Marine and Power Engineers
v
Swire Pacific Ship Management (Australia) Pty Ltd
(C2012/1473)

COMMISSIONER CLOGHAN PERTH, 19 JULY 2013

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

[1] On 23 November 2012, the Australian Institute of Marine and Power Engineers (Applicant or AIMPE) made application for Fair Work Australia, now the Fair Work Commission (Commission) to deal with a dispute in accordance with a Dispute Settlement Procedure (DSP).

[2] The application has been made in accordance with s.739 of the Fair Work Act 2009 (FW Act).

[3] AIMPE is in dispute with Swire Pacific Ship Management (Australia) Pty Ltd (Employer”).

[4] The dispute was referred to the Commission in accordance with subclause 50.8 of the Swire Pacific Ship Management (Australia) Pty Ltd Australian Institute of Marine and Power Engineers Enterprise Agreement 2010 (2010 Agreement).

[5] The application was the subject of conciliation conferences on 12 and 19 December 2012. The dispute was unable to be resolved and on 3 January 2013, AIMPE requested the matter be referred for arbitration.

[6] Following the agreement of the parties, the application was set down for hearing on 19 April 2013.

[7] At the hearing, AIMPE was represented by Mr P Olsen, WA Branch Secretary and evidence was given on behalf of AIMPE by Mr H Christiansen, Federal Secretary.

[8] The Employer was represented by Mr M Wakelin, Principal Employee Relations Consultant, Australian Mines and Metal Association (AMMA) and evidence was given on behalf of the Employer by Mr M Llewellyn, Managing Director, Strategic Industrial Relations and formerly Industrial Relations Manager for Programmed Total Marine Services Pty Ltd (PTMS).

[9] Having considered the documentation provided as a result of the procedural directions, evidence and submissions of the parties, this is my decision and reasons for decision.

THE DISPUTE

[10] Mr A Howell is an Engineer Cadet with the Employer. Mr Howell’s terms and conditions of employment are regulated, in part, by the 2010 Agreement.

[11] Mr Howell lives in Helena Valley and was attending college in Fremantle, Western Australia.

[12] Fremantle is Mr Howell’s home port.

[13] Mr Howell made a claim for travel and meals in accordance with subclause 23.7 of the 2010 Agreement. The Employer has rejected the claim.

RELEVANT ENTERPRISE AGREEMENTS

[14] The previous enterprise agreement to the 2010 Agreement was the Swire Pacific Ship Management Pty Ltd - Australian Institute of Marine and Power Engineers Union Collective Agreement 2006 (2006 Agreement).

[15] Subclause 23.7 of the 2006 Agreement provides for Trainee Engineers.

[16] Subclause 23.7 of the 2010 Agreement provides for Trainees/Cadet Engineers.

[17] The Employer is also party to the Swire Pacific Ship Management (Australia) Pty Ltd and Australian Maritime Officers Union Offshore Oil and Gas Enterprise Agreement 2010 (which will be referred to as the 2010 AMOU Agreement). The 2010 AMOU Agreement provides for “expenses” of $100 per week while a Cadet is attending college at their home port.

RELEVANT STATUTORY FRAMEWORK

[18] There is no dispute between the parties that the dispute can be dealt with by the Commission pursuant to s.739 of the FW Act.

RELEVANT PROVISIONS OF THE VARIOUS ENTERPRISE AGREEMENTS

[19] 2010 Agreement

Clause 23 - Training

23.7 Training Agreement - Trainees/Cadets

The parties have reached agreement on the employment of a number* of Junior (Engineer-in-Training) Engineers and/or Cadet (Degree-course) Engineers, who will undertake mutually agreed courses of study which are in compliance with standards prescribed by Australian Flag State:-

...

● Cadet Engineers will undertake a mutually-approved Cadetship which shall include - all subjects for the attainment ( once qualifying sea service is at cumulated to obtain the Engineer Class 1 Certificate of Competency and, subject to satisfactory performance, shall be entitled to the following:

(i) Payment of all college fees/costs, all travel to attend the college, and provision of meals & accommodation (accommodation via college-residence); and

(ii) ...

(iii) ...

(iv) ...

(v) Payment of all short course fees/costs, all travel to attend the short courses, and provision of meals & accommodation at student-level lodgings agreed between the parties.

[20] 2006 Agreement

Clause 23 - Training

23.7 Training Agreement - Trainee Engineers

23.7.4 ...

23.7.5 Entitlements

During the term of their traineeship, Trainee Engineer Officers will be entitled to the following:

23.7.5.1 Payment of all college fees and costs, requisite short course fees and costs, including technical books as required associated with approved courses.

23.7.5.2 Payment of travel and accommodation (if studying away from his / her home port) costs associated with attendance at college.

[21] 2010 AMOU Agreement

Clause 13 - Recruitment, Salaries, Education and Training

Training and Recruitment

13.5. Conditions for Cadets and Advanced Standing Cadets.

13.5.1. If not residing in their home port $300 per week living allowance whilst at college, unless the Employer elects to provide accommodation and meals at the college or in its vicinity in lieu of the allowance and in their homeport $100 per week (or pro rata) expenses.

SUBMISSIONS

AIMPE Submission

[22] The AIMPE submit that bargaining for the 2010 Agreement existed within the context of an “industry” umbrella with all offshore employers either participating or being represented by AMMA.

[23] The principal objective for the two officer unions (AIMPE and AMOU) was “that neither any of the employers or the unions wanted to see any agreements diverging wildly from a common outcome” 1.

[24] Despite the intended common objective, “in early May [2010] AIMPE became aware that the AMOU agreement was going out for a ballot” 2.

[25] The proposed AMOU enterprise agreement for ballot contained provisions which had not been raised or discussed in the joint negotiations. In particular, Mr Olsen submitted that the proposed AMOU enterprise agreement provided for “an allowance of $300 per week for a cadet attending college not in their home port...There was an allowance of $100 per week if attending college in the home port...we approached the employers with a view to producing that outcome and seeking payments for cadets which had appeared in the AMOU Agreement. Therein lies the basis of this disputation” 3 (my emphasis).

[26] AIMPE do not dispute that their claim for equity with the AMOU cadets was rejected 4. However, AIMPE disputed and continues to dispute the reasons advanced by the employer at the time. The Employer’s reasons related to a comparison of remuneration between AMOU and AIMPE cadets. Based upon the comparison, Mr Olsen submits the employers formed the view AIMPE “didn’t require or deserve an allowance”5.

[27] Following rejection of AIMPE’s claim for an allowance, the Applicant submits that the parties discussed further arrangements.

[28] The outcome of those discussions is contained in the following:

“Cadet Engineers will undertake...and subject to satisfactory performance shall be entitled to the following:

(i) ...

(ii) ...

(iii) ...

(iv) ...

(v) Payment of all short course fees/costs, all travel to attend short courses, and provision of meals and accommodation at student-level lodgings agreed between the parties” 6 (emphasis of the AIMPE).

[29] AIMPE submit that the word “shall” should be treated in the imperative.

[30] As a consequence of the provisions in subclause 27.3 of the 2010 Agreement, AIMPE submit that it is mandatory or obligatory for the Employer to “enter into negotiations with the Applicant regarding Mr Howell’s claims” 7.

[31] Finally, AIMPE submit that because the Employer rejected the $300 and $100 per week claims, the Commissioner should not consider that was the end of the matter from its perspective, or that it was prepared to leave such payments at the discretion of employers. “The long history of the AIMPE’s involvement in negotiating Awards and Agreements and not agreeing to discretionary allowance provisions ought to be a fact for consideration in this matter” 8.

Employer’s Submission

[32] The Employer’s primary submission is that Mr Howell was studying at his home port and, “as such, he is not entitled to any allowance for transport, accommodation or food” 9.

[33] In support of its position, the Employer relies upon subclause 23.7 of the 2010 Agreement which relevantly provides:

“Cadet Engineers...shall be entitled to the following:

(i) Payment of all college fees/costs, all travel to attend the college, and provision of meals and accommodation (accommodation via college-residence)” 10.

[34] The Employer asserts that the words “accommodation via college residence” implies that the payment of fees/costs, travel and accommodation “are to be interpreted in the context of an Engineer Cadet who is studying somewhere other than their home port” 11.

[35] Secondly, the Employer relies upon the fact that the AIMPE, in the later stages of bargaining, sought a similar provision to the AMOU for a “home port expense allowance [and therefore] is evidence that the subclause in its current form did not provide such an allowance” 12.

[36] The claim by AIMPE for a home port expenses allowance was rejected by Mr Llewellyn’s former employer, PTMS, and reflective of the collective negotiations that were occurring with AIMPE leading up to the 2010 Agreement.

[37] The rejection of the claim and the eventual wording of subclause 23.7 of the 2010 Agreement should be seen in “stark contrast [to] the Respondent’s AMOU...enterprise agreement [which] provides clear and unambiguous words in the provisions relating to home port expenses allowance...” 13.

[38] Shortly put, the 2010 Agreement, in its final terms, does not provide a home port allowance, nor does it provide an obligation for the Employer to negotiate such an allowance for an Engineer Cadet.

[39] Thirdly, in response to AIMPE’s assertion that an allowance is being paid by other employers with similar agreements, the Employer submits that is a matter for those employers and at their discretion whether to make over award payments.

PRINCIPLES OF INTERPRETATION

[40] The Applicant referred me to Deputy President Ives’ summary in The Australian Workers Union v Visy Board Pty Ltd t/as Visy Specialties (PR963418) (Visy) at paragraph 12:

“[12] Among the general principles to be followed in the interpretation of awards and certified agreements are these:

(a) if the terms of an industrial instrument are clear and unambiguous, then the industrial instrument must be interpreted in accordance with that clear and unambiguous meaning;
(b) the words used in an industrial instrument should not be interpreted in a strict, technical fashion, because those who framed the industrial instrument are often non-lawyers drafting words in the context of custom and practice in an industry or particular enterprise;
(c) each clause should be interpreted within its context, that is, the meaning of particular words should be read in the context of the industrial instrument as a whole and in the context of the clause/section in which it falls;
(d) the court or tribunal should strive to give effect to the intention of the authority which made the award (or, presumably, in the case of an agreement, the intent of the parties to the agreement), provided that the words appearing in the instrument can reasonably be interpreted to mean that which the authority/parties intended them to mean;
(e) the court or tribunal's recourse to extrinsic material in the interpretation of industrial instruments is not dependant upon the existence of ambiguity in the industrial instrument.” (footnotes excluded)

[41] The Applicant contends that the words in the 2010 Agreement ought to be treated as in (b) and (c) in Visy.

[42] In Cape Australia Holdings Pty Ltd T/A Total Corrosion Control Pty Ltd v Construction, Forestry, Mining and Energy Union (Cape) [2012] FWAFB 3994, the Full Bench of Fair Work Australia set out the key principles of interpreting enterprise agreements in paragraph [7] as follows:

“[7] As to the general approach to the construction of enterprise agreements the observations of French J, as he then was, in City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union (Wanneroo) are apposite:

“[53] The construction of an award, like that of a statute, begins with a consideration of the ordinary meaning of its words. As with the task of statutory construction regard must be paid to the context and purpose of the provision or expression being construed. Context may appear from the text of the instrument taken as a whole, its arrangement and the place in it of the provision under construction. It is not confined to the words of the relevant Act or 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’. It may also include ‘....ideas that gave rise to an expression in a document from which it has been taken’ - Short v FW Hercus Pty Ltd (1993) 40 FCR 511 at 518 (Burchett J); Australian Municipal, Clerical and Services union v Treasurer of the Commonwealth of Australia (1998) 80 IR 345 (Marshall J).”

[43] In Wanneroo, French J (citing Pickard v John Heine & Son Limited (1924) 35 CLR 1 stated that:

“Ambiguity, if any may be resolved by a consideration, inter alia, of the history and subject matter of the award.”

[44] For the purposes of this application, I have considered the provisions in the 2010 Agreement and its predecessor, the 2006 Agreement.

CONSIDERATION

[45] An enterprise agreement is made at the enterprise level and provides, amongst other matters, the terms and conditions of employees to whom it applies.

[46] In bargaining for an enterprise agreement, employees have the right to be represented by bargaining representatives.

[47] For the 2010 Agreement, the Employer’s bargaining representative was AMMA and for the employees, AIMPE. Consequently, in many respects, this application is a dispute between AMMA and AIMPE as to what the outcome of bargaining was in the 2010 Agreement regarding what a Cadet Engineer is entitled to when studying at their home port.

[48] The argument between AMMA and AIMPE is a familiar one and consists of “text” and “context”.

[49] I turn to “context” first.

[50] The 2006 Agreement includes at Clause 23 - Training.

[51] Subclause 23.7 of the 2006 Agreement specifically refers to a Trainee Engineer Officer Training Scheme. Presumably this is the same as the Trainee Engineer Officer Scheme. However, in subclauses 23.7.1.2 and 23.7.1.3, reference is made to “Trainee/Cadet Engineers”. In the remainder of 23.7, the provision refers to Trainee Engineers only.

[52] The 2006 Agreement specifically provides at 23.7.5.2 that:

“23.7.5 Entitlements

During the term of their traineeship, Trainee Engineer Officers will be entitled to the following:

23.7.5.1 Payment of all college fees and costs, requisite short course fees and costs, including technical books as required associated with approved courses.

23.7.5.2 Payment of travel and accommodation (if studying away from his / her home port) costs associated with attendance at college.”

(my emphasis)

[53] In my view, the plain and ordinary meaning of subclause 23.7.5.2 is that Trainee Engineer Officers were only entitled to payment for travel and accommodation when studying away from their home port.

[54] I now turn to the 2010 Agreement and consider the context of Clause 23.7 Training Agreement - Trainees/Cadets. While there are no formal subclauses with the exception of three dot points and terms (i) to (v) underneath two of them, I shall endeavour to give some structure to the conditions contained within 23.7.

[55] The first dot point relates to Trainee Engineers who undertake the Engineer Watch keeper Certificate of Competency. A Trainee Engineer is entitled as follows:

“Junior (Trainee - Engineer) Engineers will...undertake mutually-approved training to obtain the Engineer Watch keeper Certificate of Competency and subject to satisfactory performance, shall be entitled to the following:

(i) Payment of all college fees/costs, all travel to attend the college, and provision of meals and accommodation at student-level lodgings agreed between the parties.”

[56] With respect to “short courses” for Trainee Engineers, the 2010 Agreement provides:

“(v) Payment of all short course fees/costs, all travel to attend the short Courses, and provision of meals & accommodation at student-level lodgings agreed between the parties;”.

[57] In the case of Cadet Engineers, the text is similar but not identical to Trainee Engineers. When studying the Engineer Class 1 Certificate of Competency, a Cadet Engineer is entitled as follows:

“Payment of all college fees/costs, all travel to attend the college, and provision of meals and accommodation (accommodation via college-residence)” (my emphasis).

[58] With respect to short courses for Cadet Engineers, it is identical to the provision of Trainee Engineers, and for certainty, I set out the subclause again:

“(v) Payment of all short course fees/costs, all travel to attend the short Courses, and provision of meals & accommodation at student-level lodgings agreed between the parties;”.

[59] In the case of Trainee Engineers where he or she is studying the Certificate of Competency, the introductory noun of “payment” appears to indicate that recompense will be made to employees for fees/costs, travel, meals and accommodation as “agreed between the parties”. I cautiously use the word “appears” as this provision was not the source of the dispute. An alternative interpretation may be that the word “and” is not meant to be used cumulatively but disjunctively and “agreement of the parties” only refers to “meals and accommodation”.

[60] With respect to Cadet Engineers, there is no involvement or required agreement of the parties, with respect to payment when a person is undertaking a certificate of competency and residing at college accommodation.

[61] The 2010 Agreement distinguishes between Trainee Engineers and Cadet Engineers. Trainee Engineers. When undergoing a Watch keeper’s Certificate of Competency, the Trainee Engineer is expected to be housed in student type accommodation. Whereas, Cadet Engineers are accommodated in accommodation attached to the relevant college. Further, it is necessary, pursuant to the 2010 Agreement, for Trainee Engineers to reach agreement on the appropriate payment for “student level lodgings” - that is not necessary for Cadet Engineers, as they are in “college residence”.

[62] With respect to employees attending “short courses”, the entitlements for Trainee and Cadet Engineers are identical. It is notable that both occupational groups are expected to be accommodated in “student-level lodgings” and one interpretation is that payment for all designated costs is by agreement “between the parties”.

[63] In summary, within the provisions of subclause 23.7 of the 2010 Agreement, Trainee and Cadet Engineers are treated differently for the purposes of accommodation when undertaking a certificate of competency. With respect to attendance at short courses, there is no difference between the two classes of engineers.

[64] Mr Olsen submits that in bargaining AIMPE sought to align “engineer cadets with deck cadets and introduce the $100 per week allowance for engineer cadets as was agreed by the industry for deck cadets” 14. Mr Olsen further submits, “following rejection of AIMPE’s claim for cadet engineers allowances when studying at either their home port or some other port the parties discussed alternative arrangements”15.

[65] AIMPE submit that “it was agreed between the parties that on each occasion of an engineer cadet studying either in his/her home port or not at their home port that the parties would discuss and agree on an appropriate allowance to be paid” (my emphasis). AIMPE assert that the outcome of those discussions was agreed and reflected in the Clause 23.7, dot point three, at placitum (iv) as set out in paragraph [28].

[66] While Mr Olsen has emphasised the word “shall” and “agreed between the parties”, it overlooks the words “short courses” and “provision of meals and accommodation at student-level lodgings”.

[67] An examination of the subclause referred to by Mr Olsen can be deconstructed as follows:

● the circumstances where payment and accommodation takes effect is when the employee is attending a “short course”; and

● if the employee is attending a “short course”, what is the effect? The effect is that they are entitled to: payment of all fees and costs associated with the short course; payment of travel to attend the short course and meals and student level lodgings as agreed between the parties.

[68] If I interpret the effects cumulatively, it means that the parties agree on the costs of short courses, travel and the payment for student level lodgings. The alternative disjunctive interpretation is that only the issue of meals and accommodation is by agreement between the parties.

[69] When examining subclause 23.7.5 Entitlements of Clause 23.7 Training Agreement - Trainee Engineers in the 2006 Agreement, it is readily observable that, 23.7.5.1 and 23.7.5.2 have been disaggregated in terms of studying for a certificate of competency and short courses in the 2010 Agreement.

[70] In the 2010 Agreement, payment for fees and costs associated with the two courses of study are disaggregated into the certificate of competency and short courses.

[71] In relation to payment of travel and accommodation, the provision in the 2006 Agreement (“if studying away from his/her home port)” is deleted and replacement with “(accommodation via college-residence)” in the 2010 Agreement. Despite the greater clarity in the 2006 Agreement, I am satisfied that collapsing of course costs, travel, meals and accommodation into subclause 23.7 (i) in the 2010 Agreement for the certificate of competency with “(accommodation via college residence)” means that meals, travel and accommodation is only applicable when the Cadet Engineer is in college residence and away from their home port.

[72] I now turn to the provisions relating to “short courses”. In this context, the 2006 Agreement provided:

“23.7.5.1 Payment of all college fees and costs, requisite short course fees and costs...”

[73] I interpret the term in the 2006 Agreement the parties agreed that the Employer paid all fees and costs associated with attending approved courses - it did not distinguish between certificate of competency and short courses.

[74] With respect to travel and accommodation in the 2006 Agreement, the term provides:

“23.7.5.2 Payment of travel and accommodation (if studying away from his/her home port) costs associated with attendance at college.”

[75] I interpret this term in the 2006 Agreement to mean that the parties agreed that the employee would receive payment of travel and accommodation only when an employee was away from their home port when at college.

[76] What are the provisions in the 2010 Agreement for short courses for Cadet Engineers? To restate, they are:

“Payment of all short course fees/costs, all travel to attend short courses, and the provision of meals and accommodation of student level lodgings agreed between the parties”.

[77] In my view, the parties have taken the previous terms in 23.7.5.1 and 23.7.5.2 in the 2006 Agreement and reduced these provisions to the above term in paragraph [76] as it relates to short courses. The reduction has not affected the requirement of the Employer to make payment for all costs associated with the course itself.

[78] However, the express requirement for the Employer to make payment associated with travel and accommodation has been modified in two respects. First, the quality of the meals and accommodation has been specified as “student-level lodgings”. Lodgings is generally taken to mean a room in a house rather than a hotel. Secondly, the cost of travel and accommodation are not automatically paid on production of a receipt(s) but as “agreed between the parties”. Finally, while the words “if studying away from his/her home port” has been deleted, I consider it reasonable to conclude that the words “at student level lodgings” to indicate that the employee is away from their home.

[79] Having concluded that the employee is away from their home, they are not studying at their home port. Travel was combined with accommodation in 2006 and while disaggregated in the 2010 Agreement, I consider that it relates to travel to and from “student level lodgings” while a person is studying away from their home port on a short course. It was not intended to be for employees who attend short courses in their home port.

[80] Having considered the text and context of the relevant provisions of the 2006 and 2010 Agreements, I turn to the AIMPE submission that although the Employer rejected its claim of parity with the provision in the 2010 AMOU Agreement, I should consider the AIMPE’s long history of not agreeing to employer discretion in such matters.

[81] While AIMPE may have a long history of not agreeing to employer discretion in such matters, the issue in this dispute relates to circumstances where an employee is not studying away from their home port and required to travel to their place of study. AIMPE has not agreed to giving the Employer discretion in relation to travel because there is no discretion to exercise - the employee is not entitled to payment for travel. The only discretion, which the Employer has, is to make a payment above and beyond the 2010 Agreement. That discretion is always available to employers irrespective of AIMPE history of enterprise agreement negotiations or its view on this issue generally.

[82] Indirectly related to the issue of discretion was the AIMPE submission that other employers in the industry make payment to employees studying at their home port. While I did not receive any direct evidence relating to this matter, Mr Wakelin’s submission is that is a matter for other employers and not a factor which I should consider in determining the meaning and application of the subclause in the 2010 Agreement; I agree.

[83] Finally, I refer to Mr Olsen’s submission that the basis of this dispute lies in the fact the employers industry “umbrella” negotiations reached an agreement with the AMOU which provided for $100 per week for employees in the 2010 AMOU Agreement studying at their home port and not for AIMPE employees. Mr Olsen is most probably right. However, that does not change the meaning of terms agreed upon in the 2010 Agreement which I have discussed above.

[84] While the basis of the employers rejecting the AIMPE claim for the $100 per week parity with AMOU Agreement employees studying at their home port may have been flawed, as asserted by Mr Olsen, that does not alter what was finally agreed upon as the terms of the 2010 Agreement.

CONCLUSION

[85] For the above reasons, I conclude that the meaning and application of subclause (v) under the second dot point in subclause 23.7 Training Agreement - Trainees/Cadets in the 2010 Agreement does not apply to Mr Howell as he is studying at a home port facility and not having to travel to that facility from student level lodgings which would provide meals and accommodation.

[86] In accordance with this Decision and Reasons for Decision, the application will be dismissed.

COMMISSIONER

Appearances:

P Olsen for the Applicant.

M Wakelin from AMMA for the Respondent.

Hearing details:

2013:

Perth,

19 April.

 1   Transcript PN20

 2   Transcript PN26

 3   Transcript PN29

 4   Transcript PN31

 5   Transcript PN31

 6   Exhibit A1

 7   Exhibit A1

 8   Exhibit A1

 9   Exhibit R5

 10   Exhibit R5

 11   Exhibit R5

 12   Exhibit R5

 13   Exhibit R5

 14   Exhibit A1

 15   Exhibit A1

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