[2015] FWC 6627

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185 - Application for approval of a single-enterprise agreement

Broadsword Marine Contractors Pty Ltd
v
Maritime Union of Australia, The and Others
(AG2015/2708)

DEPUTY PRESIDENT GOSTENCNIK

MELBOURNE, 5 OCTOBER 2015

Application for approval of the BMC WA Enterprise Agreement 2014.

Introduction

[1] Broadsword Marine Contractors Pty Ltd (Applicant) has applied under s.185 of the Fair Work Act 2009 (Act) for approval of an enterprise agreement titled the ‘BMC WA Enterprise Agreement 2014’ (Agreement). The Maritime Union of Australia (MUA), the Australian Institute of Marine and Power Engineers (AIMPE) and the Australian Maritime Officers Union (AMOU) (collectively ‘the Objectors’) were each relevantly a bargaining representative for the Agreement. Each Objector has given notice pursuant to s.183 of the Act that it wants to be covered by the Agreement, 1 however the Objectors oppose the approval of the Agreement on a number of grounds. The Applicant maintains that the statutory criteria to which regard must be had have been satisfied and the Agreement must be approved.

Background

[2] The Applicant initiated bargaining for a proposed agreement on or about 1 August 2014. 2 Between 1 and 5 August 2014, the Applicant issued a Notice of Employee Representational Rights (NERR) to employees who were employed by it at the notification time and who would be covered by the proposed agreement.3 The NERR gives notice that the Applicant ‘is bargaining in relation to an enterprise agreement (BMC WA Enterprise Agreement 2014) which is proposed to cover employees that are engaged by Broadsword Marine Contractors Onshore Maritime Operations or project work within Western Australia and who were intended to be covered by the Agreement’.4

[3] On 20 October 2014, employees employed at the time who would be covered by the proposed agreement were asked to approve the Agreement. 5 A majority of employees who voted in the ballot voted to approve the Agreement. An application to the Fair Work Commission (Commission) was subsequently made,6 but was later discontinued by the Applicant because the Applicant had during the access period, changed the method of voting that was used on 20 October 2014 from that which had earlier been notified to the employees.7

[4] In or about January 2015, the Applicant again asked employees employed at the time who would be covered by the proposed agreement to approve the Agreement. 8 On this occasion a majority of employees who cast a valid vote, voted not to approve the Agreement.9

[5] Between early January 2015 and early April 2015 the Applicant variously corresponded and met with the MUA about the proposed agreement and the MUA applied for but later did not pursue bargaining orders directed to the Applicant. 10

[6] In early April 2015 the Applicant decided that it would again ask employees to approve the proposed agreement. 11 On or about 23 April 2015, the Applicant prepared a list of employees who should be notified of the vote and who would be asked to approve the proposed agreement.12 Twelve employees were identified as being employed by the Applicant who would be covered by the proposed agreement.13

[7] During April 2015, the Applicant took various steps to explain the terms and effect of the proposed agreement to various employees who would be covered by the proposed agreement and to provide those employees with a copy of the proposed agreement. These steps are set out in the witness statement of Mr Clarence Paul 14, Industrial Relations Advisor, and in the statutory declaration that the Applicant has filed in support of the application to approve the Agreement.15 The various steps taken are not reproduced here.

[8] On 23 April 2015 an email was sent by the Applicant to the 12 employees advising each of them that they would be asked to approve the proposed agreement on 1 May 2015 and that the vote would be conducted by an independent third party between the hours of 9:00am and 6:00pm by way of an electronic ballot. 16 A copy of the proposed agreement was attached to the email.17

[9] The ballot that was subsequently conducted on 1 May 2015 resulted in nine employees casting a valid vote and seven employees voting to approve the Agreement. 18

[10] The application to approve the Agreement was lodged by the Applicant on 14 May 2015.

Consideration of grounds for objection

Notice of employee representational rights – s.173

[11] The Objectors submitted 19 that an enterprise agreement in substantially similar terms and with the same coverage provisions as the Agreement was made, pursuant to s.182(1) of the Act, between the Applicant and eight employees on 20 October 2014, and that bargaining had concluded when that agreement was made. The Applicant applied to the Commission for that agreement to be approved, as is required by s.185(1) of the Act.

[12] The Objectors submitted that the NERR was given to the employees in relation to bargaining for that agreement. A further NERR was required in respect of bargaining for the Agreement which was made on 1 May 2015.

[13] This submission cannot be accepted. Whilst a NERR provides employees with important information about the nature of an enterprise agreement and the employees’ right to appoint a bargaining representative to assist them in bargaining for an agreement or in a matter before the Commission about bargaining for an agreement, it is tolerably clear that a NERR is to be given within a defined period and only to those employees who will be covered by a proposed agreement and who are employed at the notification time, relevantly the time when the employer initiates or agrees to bargain for a proposed agreement. 20

[14] It also seems clear from the structure of the provisions of the Act relating to agreement making that ‘those who are provided with a copy of the agreement and are requested to vote, on the one hand, need not be the same as those who were, at some previous point, notified of their representational rights, on the other hand.’ 21

[15] There is nothing in the provisions of Part 2-4 of the Act to suggest that an employer that desires to bargain for an agreement which will ultimately come into operation once it is approved by the Commission, must issue a new NERR if an earlier agreement, though apparently approved by or made with employees is not approved by the Commission, whether because the Commission was not satisfied the statutory requirements were met or because the employer identifies a flaw in the preapproval processes and therefore discontinues the application. In my view, the agreement that was ‘made’ on 20 October 2014, was not one that could be approved by the Commission because the voting method notified to employees as required by s.180(3) of the Act was not the voting method that was ultimately deployed by the Applicant when it asked employees to approve the agreement by voting for it. Self-evidently, the voting method used was not one that was notified to employees by the start of the access period. It follows that the Commission could not have been satisfied, as required by s.188(a)(i), that the Applicant had complied with s.180(3). Consequently, the Commission could not have been satisfied that the agreement had been genuinely agreed to by the employees covered by the agreement as required by s.186(2)(a) of the Act.

[16] In my view, on a proper construction of the agreement making provisions of the Act, if an employer has given a valid NERR, the making of an agreement with the employees and the subsequent inability to have that agreement approved by the Commission, either by reason of a discontinuance of the application for approval or because the Commission does not approve an agreement, does not prevent an employer seeking to have the same or another agreement approved by employees and by the Commission without the employer being required to issue another NERR, provided the employer is doing no more than continuing to seek to make an agreement with employees that is identified in the NERR and proposes to cover the same class of employees identified that notice.

[17] AIMPE also relied on a statement of Mr Paul Arnison, 22 who was not available to be cross-examined as a basis to submit that the Applicant had not complied with s.173 of the Act. Mr Arnison’s statement indicates that he did not receive a NERR. However, the statement does not assert that Mr Arnison was employed at the time the Applicant initiated bargaining or that he would be covered by the proposed agreement. This is simply not known and the Applicant’s witnesses were not cross-examined on this point. AIMPE asserted that Mr Arnison was on workers’ compensation at the time. This assertion was the subject of an objection and Mr Arnison’s statement does not make the assertion.23 Again, the Applicant’s witnesses were not cross-examined about this. Mr Arnison’s statement is of no assistance and I give it no weight.

[18] AMOU submitted that the Notice of Discontinuance filed by the Applicant in 2014 should not have been accepted as an Applicant cannot discontinue an application to approve an enterprise agreement. This submission must be rejected. It runs counter to the clear words in s.588 of the Act which provides:

A person who has applied to the FWC may discontinue the application in accordance with the procedural rules if any and whether or not the matter is settled.

[19] There is no reason to suppose that s.588 does not apply to an application made under s.185 of the Act. Lest there be doubt, in CEPU v CJ Manfield Pty Ltd 24 a Full Bench of Fair Work Australia upheld a conclusion by Sams DP that the applicant for the approval of an enterprise agreement could discontinue its application.

[20] The MUA also submitted in the alternative, that the Commission cannot be satisfied that the Applicant took all reasonable steps to give the NERR to all employees of the Applicant who were engaged on ‘Project Work’ within Western Australia.

[21] Mr Paul gave the following evidence during cross-examination:

‘So he had a view about whether or not the scope of the proposed agreement would cover project work separate to inshore maritime work, but he is not giving evidence today, is he?---I can't say what Mr Wakelin had thought at that time.

I think that is the problem I am identifying. You can't say what he thought and you can't say what is in his mind and he is not giving evidence here to tell us those things. So is it fair to say that you took no steps to identify employees engaged on project work at the time you issued the NERR?---No, that's not fair.

So can you tell me what steps you did take?---Well, I sought information from Mr Munyard and Ms Cobb about employees engaged at Point Samson and Exmouth performing inshore maritime work and any work that was considered inshore maritime work and project work.

You don't say anything about project work, though, do you, in your witness statement?---No, I don't.

You are just coming up with this now in response to my questions?---Yes, clarifying it.’ 25

[22] The Objectors did not lead any evidence from any person who could be identified as an employee of the Applicant who was engaged on project work at the time the NERR was issued. I accept Mr Paul’s evidence.

[23] On the basis of the material before me, I am satisfied that the Applicant issued a NERR as required by s.173 of the Act and that that notice remained valid to support the making of the Agreement when employees voted for it on 1 May 2015.

Incorporated materials – s.180(2)

[24] The Objectors submitted that employees who will be covered by the Agreement were not given a copy of material incorporated by reference intothe Agreement. Specifically, Clause 7.1 is said to incorporate job descriptions, Clause 25.1 is said to incorporate occupational health and safety policies and procedures, Clause 26.4 is said to incorporate the fitness for work policies and procedures, Clause 27 is said to incorporate a smoke free workplace policy and Clause 28 is said to incorporate an equal opportunity and harassment policy.

[25] It was submitted that:

● Clause 7.1 incorporates job descriptions that provide for the duties and responsibilities that employees are required to perform; and

● Causes 25.1, 26.4 and 28 are expressed in mandatory language, the plain and ordinary meaning of which is that the employees ‘shall comply’ or ‘must comply’ with the policies and procedures referred to therein or they will contravene a term of the Agreement.

[26] The question whether the policies referred to in each of the abovementioned clauses of the Agreement are incorporated into the Agreement by reference may, for present purposes, be answered by asking whether the provisions of these clauses of the Agreement impose any obligation on employees who are covered by the Agreement to comply with the policies to which reference is made.

[27] Turning then to each of the provisions of the Agreement which are said to incorporate material. Clause 7.1 of the Agreement does no more than require the Applicant to outline an employee's duties and responsibilities in a job description. Neither the job description nor the duties and responsibilitiesthat might be contained therein are incorporated by reference into the Agreement.

[28] Clause 25.1 provides that ‘it is a condition of employment that Employees shall comply with all Occupational Health and Safety policies and procedures’ of the Applicant. This clause does no more than advise employees that compliance with occupational health and safety policies and procedures is a condition of their employment. It does not render the policies and procedures a term of the Agreement. The policy is not in my view incorporated by reference.

[29] Clause 26.4 of the Agreement on its face appears to create an obligation under the Agreement that employees must comply with particular fitness for work policies. It follows that those policies including those of ‘relevant Client(s)’ are incorporated by reference.

[30] Clause 27 merely alerts an employee to the fact that the Applicant’s policy specifies that the Applicant’s controlled areas are smoke free. It is not a term of Clause 27 that employees comply with the policy. Clause 27 advises employees of no smoking areas and that a breach of the policy constitutes a ground for valid disciplinary action but does not in terms create an obligation under the Agreement to so comply. The policy is not, in my view, incorporated by reference.

[31] Clause 28 creates an obligation under the Agreement to comply with the Applicant’s equal opportunity and harassment policies. These are therefore incorporated by reference.

[32] The requirement in s.180(2) of the Act is not one expressed in absolute terms. Rather, it is a requirement that an employer must take all reasonable steps to ensure, relevantly that material incorporated into an agreement is given to employees during the excess period or that employees have access to the material throughout the access period.

[33] Mr Paul’s evidence was that copies of the policies referred to in the Agreement were viewable at the workshops in Port Samson and Exmouth, and on each of the vessels, and that copies of the policies were provided to each employee during induction. 26 Mr Paul was not cross-examined about this evidence. Mr Paul’s evidence relates to all of the policies referred to in the Agreement. I accept his evidence.

[34] To the extent that certain policies have been incorporated by reference, it seems apparent from Mr Paul’s evidence that employees had access to those policies throughout the access period as they had been provided with all of the policies during induction. The policies were also accessible at the workplace. These are policies with which the employees are expected to be familiar and comply during their employment with the Applicant. That is why they are given copies during induction. In the circumstances, I do not think it reasonable that the Applicant be separately required to provide employees with another copy of these policies.

[35] On the basis of the material before me I am satisfied that the Applicant has complied with s.180(2) of the Act.

Date, place and method of voting – s.180(3)

[36] The Objectors submitted that the Applicant did not notify all employees who would be covered by the Agreement of the date and place at which the vote was to occur, and the voting method to be used, as required by s.180(3) of the Act. As earlier indicated, 12 employees were sent an email on 23 April 2015 which contained this information. The evidence of the Applicant was that these employees were the only employees employed at the time who would be covered by the Agreement. No evidence was led by any Objector to show that the Applicant employed any employees other than the 12 who would be covered by the Agreement. The Objectors’ reliance on the employees engaged to perform work on the Lanpan 29 vessel is misplaced as the evidence establishes that employment of employees on the Lanpan 29 vessel did not commence until after 1 May 2015, the date on which the Agreement was approved by a majority of employees. 27

[37] I am satisfied on the material that the Applicant complied with s.180(3) of the Act.

Employees not requested to vote or given opportunity to vote

[38] The Objectors submitted that the Commission cannot be satisfied that employees who will be covered by the Agreement who were employed at the time were requested to vote and given an opportunity to vote, in particular casual employees and employees performing traditional offshore oil and gas work that will now be covered by the Agreement, if approved.

[39] Section 181(1) provides that an employer that will be covered by a proposed agreement may request the employees employed at the time who will be covered by the agreement to approve the agreement by voting for it. Section 182(1) provides relevantly that if employees of the employer that will be covered by a proposed single enterprise agreement that is not a Greenfields agreement, have been asked to approve the agreement under s.181(1), the agreement is made when a majority of those employees who cast a valid vote approve the agreement.

[40] The meaning of the phrase ‘employed at the time’ was recently explained by the full Federal Court in National Tertiary Education Industry Union v Swinburne University of Technology. 28

[41] According to the statutory declaration filed by the Applicant in support of the application, the Applicant employed 12 employees at the time who would be covered by the Agreement; 11 of these were employed as casual employees. 29 Each of the 12 employees were given an opportunity to vote, nine employees cast a valid vote and seven employees voted to approve the Agreement.30 I accept the evidence given by Mr Paul that two other persons who were initially identified by the Applicant as being covered by the proposed agreement were ultimately not given an opportunity to vote because these persons were no longer employed by the Applicant.31 As I have earlier indicated, no evidence was led by any Objector to show that the Applicant employed any employees other than the 12 employees who would be covered by the Agreement. Again, the Objectors’ reliance on the employees on Lanpan 29 vessel is misplaced for the reason earlier given.

[42] I am satisfied on the material that all employees who are entitled to vote to approve the Agreement received an opportunity to vote.

Reasonable steps to explain the terms and effect of the Agreement

[43] The Objectors submitted that the Commission cannot be satisfied that the Applicant took all reasonable steps to ensure that the terms of the Agreement and the effect of those terms were explained to the relevant employees.

[44] According to the Objectors this is because the employees were given misleading and incorrect information throughout the bargaining and during the access period, particularly regarding the effect of Clauses 12, 13 and 15.4 of the Agreement. The Objectors submit that Clause 15.4 is uncertain because the method of calculating wage increases is unclear. As to Clauses 12 and 13, the Objectors submit that Clause 12 permits unilateral variation of the terms of the Agreement and when combined with Clause 13, will allow the Applicant to significantly alter the hours of work and the payments received by employees for the hours worked on major projects. They submit that the effect of these provisions was incorrectly explained by the Applicant to the employees.

[45] The Objectors submitted that the misleading and incorrect information given by the Applicant to the employees constituted a knowing and reckless false or misleading representation about a workplace right within the meaning of s.345 of the Act.

[46] Clause 12 of the Agreement provides the following:

‘12. Project Rates

12.1. Where the Company undertakes work on a major project this Agreement shall continue to apply.

12.2. Notwithstanding the above, the Company may provide for varied terms and conditions of employment (including remuneration) for Employees working on major projects.

12.3. Where varied terms and conditions of employment are to apply, the Company will:

12.3.1. confirm the varied terms and conditions in writing prior to the employee commencing work on the major project; and

12.3.2. ensure that the varied terms and conditions will not, overall, result in the employee being paid less than they would have had the terms and conditions of this Agreement been applied to their work on the major project.

12.3.3. Overall (e.g. not a "cherry picking" basis) and on a holistic measure of entitlements, the Employees are paid not less than the entitlements prescribed under this Agreement.’

[47] Clause 13 of the Agreement provides:

‘13. Roster Arrangements

13.1. The normal working arrangement will consist of an even time roster usually requiring Employees to work 28 days on duty and to have 28 days off duty at work.

13.2. Due to the operational requirements Employees may from time to time be required to remain on duty beyond their rostered arrangement.

13.3. The Employees agree that roster arrangements will vary from project to project (e.g. 35 days on duty and 35 days off duty roster may apply on specific projects) and flexibility in roster arrangements is required in order to meet the operational project requirements.’

[48] Clause 15.4 provides that:

‘The minimum salaries specified in the below table will increase on 1 July 2015, 1 July 2016 and 1 July 2017 according to Company and market performance, or the movement in the Consumer GS Price Index – All Groups – Weighted annual average of eight (8) capital cities as at the March quarter each year, whichever is greater.’

[49] Turning first to Clause 15.4 of the Agreement. That clause clearly and unambiguously establishes the minimum rate at which the salaries specified in the Agreement will increase at each of the intervals provided for in Clause 15.4. That the clause does not set out in detail how increases at a rate greater than the consumer price index (CPI) will be calculated does not detract from the certainty of the minimum salary increases that are to be provided for by Clause 15.4.

[50] Clause 12 of the Agreement is described by the Applicant as a provision which gives capacity for the Agreement to be ‘flexed up’. Mr Benjamin Matthews, the General Manager Employee Relations for the Skilled Group of which the Applicant is a member was cross-examined about the explanation of the effect of Clause 12 that was given to employees. His evidence was as follows:

‘I am asking you again. What did you tell the employees about clause 12 and project rates?---We told the employees that should there be a project requirement where there is a client imposed allowance or certain conditions which are generally more beneficial to the employees that would have the ability in the agreement to - and I think if you read that clause, I don't have it in front of me - to reach - to set down those terms as to where they are beneficial and apply them just to ensure we have got the flexibility to work on major projects like Gorgon. So it is quite clear in the agreement, it is quite clear to employees, that this agreement is able to be flexed up, if you like.

Is able to be flexed up, you say?---That's correct, yes.

So it can't be flexed down then, in your view?---That's correct.

So no conditions can be less than what is provided for in the agreement. They can only be more than what is provided for in the agreement?---Yes. I think you understand that particular clause.

That is what you explained to employees is that they can only be better than what is in the agreement, not worse?---Yes, that's correct. That is the intent of that clause.’ 32

[51] It seems to me this evidence about the explanation given to employees about the effect of Clause 12 is consistent with an ordinary reading of its terms. Clause 12.1 makes clear that the Agreement continues to operate when work on a major project is undertaken. Clause 12.2 allows for the variable terms and conditions of employment provided to the employees who are working on a major project and when combined with the provisions in Clause 12.3 ensures that any such variable terms cannot be less than the entitlements prescribed under the Agreement.

[52] It seems to me, that on an ordinary and proper reading, Clause 12 of the Agreementallows the Applicant to provide for terms and conditions in addition to those contained in the Agreement. Where the varied terms are differentin respect of work on a major project, Clause 12.3.3 would operate to ensure that the entitlements that flow from the varied terms would not be less than the entitlements under the Agreement. Thus, for example, if the variable hours of work outside those usually required of employees under the Agreement applied on a major project, the entitlements of an employee in relation to those hours would not be less than that which would have pertained to the employee if the employee had worked those hours performing work that was not on a major project.

[53] In my view, having regard to Mr Matthews’ evidence and the terms of Clause 12 of the Agreement, the contention that Clause 12 is uncertain and that the explanation given to employees was misleading or incorrect, must be rejected.

[54] As to Clause 13, the Objectors submitted that when read with Clause 12, Clause 13 could result in an employee working greater hours for the same pay and further that these clauses:

‘ . . . provides a mechanism for the employer to simply contract out of almost each and every part of the enterprise agreement; your classifications, your rates of pay, your meal and rest breaks, your training arrangements, occupational health and safety, travel and accommodation, everything else that's provided for could be contracted out of simply by operation of clauses 12 and 13 read together.’ 33

[55] This submission cannot be maintained. Firstly, Clause 13, according to its terms, allows for variable working hours beyond those that are usually required of employees by reason of operational requirements. 34 The entitlements that attach to the working of such variable hours are prescribed elsewhere in the Agreement. If, as a consequence of working on a major project, variable hours of work are required, the entitlements that will attach to those hours will either be prescribed by the Agreement, or by the varied terms and conditions of employment that apply to a major project as contemplated by Clause 12.2 of the Agreement. Where the variable terms that apply to the major project would be less than the entitlements for those variable hours under the Agreement, then Clause 12.3.3 makes clear that the employee will not be paid any less than the entitlement under the Agreement. Where there are no variable terms that apply to the major project then variable hours worked on the major project are paid in accordance with provisions of the Agreement. In either case, the employee will receive, as a minimum, the terms and conditions applicable to the variable hours under the Agreement. Further, there is nothing in the text of Clauses 12 and 13 which permits ‘contracting out of’ entitlements as prescribed in the Agreement. The provisions permit the Applicant to adapt to the variable terms which might apply on a major project whilst guaranteeing that employees will receive, as a minimum, their entitlements under the Agreement.

Essential terms are uncertain and unenforceable

[56] On a related theme, the Objectors submitted that the essential terms of the Agreement, including remuneration, roster arrangements and the mechanism for salary increases, are so uncertain, confusing and ambiguous as to render the entire agreement, or at least the relevant terms, unenforceable and invalid. 35 They submitted that:

There is no ‘commonly understood’ meaning of the words ‘major projects’ in clause 12;

Clause13 cannot be an agreed acknowledgement by the parties as to roster arrangements as there are no roster arrangements to be agreed. The clause provides for roster arrangements that will ‘vary from project to project’, with no definition of ‘project’.

The language used in clause 15.4 is imprecise and vague. It is not of ordinary usage or clear meaning.

[57] It follows, according to the Objectors, that it is not possible that an employee can ‘genuinely agree’ to an agreement the essential terms of which are uncertain, confusing and ambiguous.

[58] Whilst it is correct that the term ‘major projects’ in Clause 12 is not a defined term, it is clearly a confined term in that it can only refer to major projects carried out within the scope of the Agreement, that is work which is work on a major project undertaken by the Applicant in Inshore Maritime Work (as defined) within Western Australia. For the reasons earlier given, the Agreement will continue to apply to work on a major project and the terms and conditions of the Agreement will continue to be the minimum terms subject to the capacity of the Applicant to ‘flex up’ terms and conditions of employment to match those that might pertain to the major project.

[59] Clause 13 of the Agreement does not depend for its efficacy upon any agreed rostering arrangements. The relevant provision in Clause 13.3 is no more than an acknowledgement by employees that roster arrangements will vary from project to project, and flexibility in roster arrangements is required in order to meet the operational project requirements. There is nothing inherently uncertain or unambiguous about this provision.

[60] As to Clause 15, as I have earlier indicated, it clearly and unambiguously establishes the minimum rate at which the salaries specified in the Agreement will increase at each of the intervals provided for in Clause 15.4. Although the provision does not set out in detail how increases at a rate greater than the CPI will be calculated, employees covered by the Agreement know with certainty the method by which minimum salary increases are to be calculated under the Agreement.

Whether agreement inconsistent with the Act

[61] The Objectors submitted that Division 7 of Part 2-4 of the Act codifies and limits the way in which an enterprise agreement can be varied. Clause 12.2 of the Agreement provides that ‘the Company may provide for varied terms and conditions of employment (including remuneration) for Employees working on major projects’, subject to certain conditions in Clause 12.3. The Objectors submitted that where the legislature explicitly provides for a particular procedure to achieve something, other procedures are impliedly excluded. They submitted that it is not possible that an employee can ‘genuinely agree’ to an Agreement, the terms of which are inconsistent with the Act.

[62] Whilst the legal argument advanced by the Objectors is correct, the analysis of the effect of Clause 12 of the Agreement is not. Clause 12 does not vary the terms of the Agreement. Clause 12.1 makes clear that, in respect of work on a major project, ‘the Agreement shall continue to apply’. Clause 12.3 of the Agreement makes clear that the minimum terms and conditions provided for in the Agreement shall always be applied to employees working on a major project. As explained by Mr Matthews, the purpose of Clause 12 is to facilitate the ‘flexing up’ of terms and conditions of employment to ensure they are consistent with those applicable to work on the major project, and the terms and conditions of employment under the Agreement cannot, by reason of Clause 12, be flexed down. 36

Whether Applicant failed to bargain in good faith and undermined collective bargaining

[63] The MUA submitted that the Applicant gave employees a copy of the proposed agreement and notice of the time and place at which the vote would occur and the voting method that would be used, without giving notice of such to the MUA as bargaining representative, and while the MUA had bargaining proposals on foot that the Applicant had not given genuine consideration to or responded to. It was submitted that these actions were in breach of the good faith bargaining requirements and undermined collective bargaining, such that the employees could not be said to have genuinely agreed to the Agreement.

[64] To the extent that the MUA seeks to engage the requirements of s.187(2) of the Act, the submission is misconceived. Section 187(2) provides as follows:

‘Requirement that approval not be inconsistent with good faith bargaining etc.

(2) The FWC must be satisfied that approving the agreement would not be inconsistent with or undermine good faith bargaining by one or more bargaining representatives for a proposed enterprise agreement, or an enterprise agreement, in relation to which a scope order is in operation.’

[65] According to its terms, s.187(2) is confined to circumstances in which a scope order is in operation. To the extent that there is any doubt about this proposition, the Fair Work Bill 2008 Explanatory Memorandum makes this point clear and provides the following:

‘788. Subclause 187(2) provides for an additional approval requirement where a scope order is in operation in relation to a proposed enterprise agreement, or enterprise agreement. This subclause is intended to deal with the situation where a bargaining representative has made an application for FWA approval of an enterprise agreement that is not expressed to cover all the employees and employers specified in a scope order issued by FWA in relation to that agreement. FWA may approve an enterprise agreement in that situation provided that it is satisfied that the approval of the agreement would not be inconsistent with or undermine good faith bargaining by one or more of the bargaining representatives.

789. If (despite a scope order) the bargaining representatives have subsequently all agreed to make an agreement of a different scope, this may not undermine good faith bargaining. However, if the employer has obtained employee approval for an agreement despite a scope order against the wishes of a group of employees who should have been covered (or excluded) as a result of the scope order, then this clause is likely to be triggered.’ 37

[66] There is no scope order in operation in relation to the Agreement and so the requirements in s.187(2) of the Act are not engaged.

[67] To the extent that the allegation that there has been a breach of the good faith bargaining requirements by the Applicant is said to be a reasonable ground for believing that the Agreement has not been genuinely agreed to by employees, 38 the allegation is not made good by the evidence led by the MUA on this point. Mr George Gakis, who is an organiser with the MUA gave the following evidence:39

‘Third BMC inshore Enterprise Agreement

19. On or about 12 January 2015, the MUA contacted BMC requesting to bargain for an inshore enterprise agreement.

20. On or about 29 January 2015, George Gakis (MUA Organiser) and Kyle McGinn (MUA Organiser) attended a bargaining meeting with Mr Wakelin and Clarence Paul (Industrial Relations Adviser). Various issues were discussed including the MUA's concerns about the scope or the proposed enterprise agreement and its overlap with the Broadsword Marine Contractors Pty Ltd Integrated Ratings, Cooks, Caterers and Seafarers (0ffshore Oil and Gas) Enterprise Agreement 2010 (BMC Offshore Agreement).

21. On or about 28 February 2015, Mr McGinn attended a further bargaining meeting with Mr Paul.

22. Between 9 and 13 April 2015, Mr Paul and Mr McGinn exchanged emails regarding the proposed enterprise agreement (Attachment 7 of the Witness Statement of Clarence Desire Pascal Paul).

23. On or about 21 April 2015, Mr Wakelin was attending the MUA offices regarding another matter. He said to me words to the effect that BMC would be putting out another proposed enterprise agreement for the employees to vote on.

24. I said in response words to the effect that BMC should wait until other enterprise agreements in the industry were resolved as the outcome of that bargaining could affect BMC's business.

25. On 23 April 2015, I emailed Mr Wakelin a proposal for an alternative scope clause (see email chain attached and marked GGS).

26. Mr Wakelin responded that day rejecting the MUA's proposal. Mr Wakelin's correspondence appeared to suggest that the MUA's concern about the proposed scope overlapping with the BMC Offshore Agreement could be allayed by an Explanatory Memorandum· to the proposed enterprise agreement (see email chain at Attachment GG5). The Explanatory Memorandum said that the proposed enterprise agreement does not ·seek to cover work that is subject to the offshore industry agreement which is in relation to vessels that service and work within "offshore" oil and gas operations such as oil rigs, platforms and floating production facilities'.

27. On 24 April 2015. Elyane Palmer (MUA Industrial Officer) emailed Mr Wakelin, indicating that the Explanatory Memorandum was insufficient to address the MUA's concerns that the scope clause will overlap with existing enterprise agreement coverage, both with the MUA and other industry operators (see email chain at Attachment GGS). Ms Palmer proposed that the parties meet as soon as practicable to discuss changes that could be made to the scope clause to prevent overlapping coverage.

28. That day and on 28 April 2015 the parties exchanged further correspondence endeavouring to arrange a meeting (see email chain at Attachment GGS). No response was received to the MUA's most recent email proposing a meeting date.

29. At no point did BMC notify the MUA of the date of commencement of the access period or the date of the ballot. We were unaware that BMC had already commenced the access period.

30. On or about 28 April 2015, I received advice from a member that BMC intended to put the agreement out to ballot.

31. Ms Palmer sent Mr Wakelin a notice of concern that to put the agreement out to ballot would be in breach of the good faith bargaining requirements ins 228(1)(a), (c), (d) and (e) of the Fair Work Act2009 (Cth) and requesting that BMC not put the agreement out to ballot until it had met with the MUA about, and given genuine consideration to, its proposals regarding scope (attached and marked GG6).

32. Mr Wakelin responded that day stating that BMC had already given consideration to the MUA's proposals (attached and marked GG7). He said: 'I simply reiterate that the scope of the Agreement does not cover work contained within the scope of the Offshore Oil and Gas Industry Agreement and, can commit to making an undertaking along similar lines at the Agreement lodgement stage'.

33. On 29 April 2015, Ms Palmer replied to Mr Wakelin explaining the MUA's concerns with resolving the dispute by way of an undertaking and reiterating the MUA's request for a meeting and view that 'BMC will be in breacl1 of the good faith bargaining requirements if it is to commence the access period before this meeting occurs' (see email chain at Attachment GGS).

34. Later that day the MUA made urgent application to the Fair Work Commission for a bargaining order that BMC 'not commence the access period, or request that the employees approve the proposed enterprise agreement, until [BMC] has met with the [MUA] about its proposals regarding scope and giving genuine consideration to those proposals (including reasons for its response)' (Attachment 8 of the Witness Statement of Clarence Desire Pascal Paul).

35. On or about 30 April 2015 the MUA and BMC attended a conference before Commissioner Cloghan in respect of the MUA's application for bargaining orders. At the conference it became clear that BMC had already commenced the access period and that the ballot was to be held the following day.

36. On 30 April 2015. Mr Paul emailed BMC employees in relation to the proposed enterprise agreement (attached and marked GG8). In respect of scope, the email said that the BMC Agreement ' will be used for port to port towage and inshore coastal work, supply runs within coastal limits, harbour towage and tug work (for full detail please read the definition of "Inshore Maritime Work" in clause 3 of the proposed agreement)'.

37. In respect of the offshore oil and gas work, the email said: 'BMC has an offshore agreement that covers offshore oil and gas work, it applies to offshore oil and gas work despite being expired. It is called the Broadsword Marine Contractors Pty Ltd and MUA/AIMPE/AMOU Oil and GasAgreement 2010. It still applies to offshore oil and gas work which is in relation to vessels that service and work within "offshore oil and gas operations such as oil rigs, platforms and floating production facilities'.’ 40

[68] On the evidence given by Mr Gakis, the MUA was advised by the Applicant on 21 April 2015 that the Applicant intended to ask employees to approve the proposed agreement. Mr Gakis did not respond by putting any particular proposal for an agreement or seek any variation of the terms of the agreement that the Applicant sought its employees approve. All that Mr Gakis sent to the Applicant was that it should wait until other enterprise agreements in the industry were resolved. Thereafter, the Applicant and the MUA exchanged correspondence about the scope of the proposed agreement. The MUA had a particular view about the scope of the proposed agreement, and the Applicant had a different view. Propositions put by the MUA received a response from the Applicant. The MUA sought, but did not press, an application for bargaining orders. Thereafter, the Agreement was approved by a majority of employees who participated in the vote on 1 May 2015.

[69] Mr Gakis’ evidence does not provide a sufficient nor sound basis upon which it can be concluded that the Applicant did not meet or was not meeting the good faith bargaining requirements. It follows that on this ground there is no reasonable basis for concluding that the Agreement was not genuinely agreed to by the employees.

Whether Applicant deliberately structured its recruitment processes to deny new employees a vote

[70] The Objectors submitted that the Applicant did not begin recruiting for employees to work on the Lanpan 29 vessel until 2 May 2015, the day after the vote to approve the Agreement, despite its intention to apply the Agreement to this work. It was submitted that this delay was a deliberate strategy to deny the employees on the Lanpan 29 vessel an opportunity to vote on the Agreement and is contrary to the policy and purpose of the bargaining scheme in the Act.

[71] This submission does not find support in the evidence. During cross-examination Mr Matthews gave the following evidence:

‘Why did you choose to ballot again in April of this year? What precipitated that decision?---Well, we're always keen to get an agreement up for Broadsword. Really low utilisation rates, the company was struggling, so we just continued on with what we wanted to do in July 2014. Thus, we needed an agreement. We needed to win some work and with the tenders that we were putting in for, the clients were asking us what registered agreement we had in place to cover the work. So it was important.

So was there a particular project which precipitated your desire to have an agreement in place?---No, because back in July 2014 we were basing the needing an agreement on a number of a tenders that we were applying for.

No, no, sorry. I am talking about April 2015, this year. You made the decision that you wanted to put the agreement out to ballot again. You communicated that to Clarence Paul in April of 2015?---M'mm.

Was there a particular project on the books at that point in time that you needed an agreement for?---Yes, we had the Dockwise contract.

The which contract?---Dockwise.

Which one is that one?---That's involving the vessel, the LANPAN 29. So that's port to port towage between - largely between the Port of Dampier and the Port of Ashburton for Dockwise, yes.

That is the LANPAN 29?---Yes, that's right.

You currently have employees on the LANPAN 29, don't you?---Yes, we do. Broadsword have currently got 11 employees, I think it is on each site.

That work started in May of this year, didn't it?---The first day commenced 8 May 2015.

You started advertising for employees for that project on 2 May of this year; is that correct?---We started looking for employees earlier than that. I guess we feverishly started recruiting in and around May 2015 because we didn't get a confirmed start date, as you probably know what it's like in the industry, until later in the piece.

But you had won the contract earlier than May of 2015, though, hadn't you?---Yes, we were notified that we were successful.

When did they notify you of that?---It would have been - could have been around February/March, I think, 2015. Around about then, I think.

Did you have a certain group of employees in mind at that point in time to undertake that project?---No. We were looking at Broadsword employees. We were looking at any employees within the greater group that had the right tickets and were available at the time to perform the work.

So when did you start to identify particular employees to go onto that project?---Identified probably early May, just before the start date.

But you were aware before then that you needed employees on that project?---Well, we were aware that we needed employees for the project. We didn't have any specific start dates but there was already a fair bit of activity with respect to who we would be employing and we were obviously checking to see who was coming off other jobs, who was finishing up on various projects. But you don't push the button until you actually know when you have got a start date, which didn't happen until early May from recollection.

So did you have an idea in April that the start date was going to be at the start of May?---No.

You had no idea?---Had no idea when the exact start date was going to be in April. But we obviously knew it was coming up, yes.

You brought the vessel down, though, didn't you? You brought the LANPAN 29 down from Singapore, didn't you?---Yes.

So you knew that by the time the vessel got here it would be time to start?---No, it doesn't work that way. There is a lot of bridge to go under the water before you actually start. So there's a lot of things that have to occur, whether it's down in Henderson getting the vessel right for the project requirements, going through the OBIDs, going through the inspections, getting the go ahead from Dockwise who then get the go ahead from Bechtel. It's not a simple case of you get the vessel here that you start the next day.

So when did you bring the vessel down from Singapore?---Off the top, I can't recall the date. But it would have been roughly around mid to late April.

You started then. The employees started. Sorry, you started identifying employees on 2 May and the project started on 8 May; is that correct?---Well, they're your words. What I'm saying is we really started identifying employees to a greater extent when we got the word that we were going to commence roughly around 8 May. But we had been recruiting actively and looking at all different options for employment prior to that date, prior to the - prior to May.

You are applying this agreement to the work being undertaken by the LANPAN 29 employees, aren't you?---That's correct.

Even though this agreement isn't approved, you are still applying it to the work?---That's correct, yes.’ 41

[72] It is clear from Mr Matthews’ evidence, and from the history of this matter, that a proposed agreement covering the scope of the Agreement was first sought to be pursued by the Applicant in July or early August 2014. A vote of employees approving a proposed agreement was later obtained but for reasons earlier given, a subsequent application to the Commission for approval of that agreement was withdrawn. A further and unsuccessful vote of employees to approve an agreement was conducted in January 2015. The more recent vote of employees is a continuation of the process that was begun in mid-2014. This history cannot simply be discarded to suggest that there was some inappropriate rush to conduct a ballot of employees because of the impending commissioning of the Lanpan 29 vessel.

[73] Furthermore, the proposition advanced in the submissions by the Objectors was put to Mr Matthews and was rejected by him as set out in the following extract from the transcript:

‘MR EDMONDS: So the decision was made to at least commence the access period and to undertake a ballot because the LANPAN 29 was going to come online and you needed to have an agreement in place prior to that work starting?---The agreement would have gone ahead with the vote regardless, but there was a level of probably urgency from our client that we have a registered agreement in place which is under their IR contractual arrangements with Bechtel. But either way we would have gone ahead with the inshore agreement. We had had two go's at it. We weren't going to give up.

But the decision to do it at that particular time was to ensure you had an agreement in place before the LANPAN 29 project started?---Yes. Having said that, we would have gone ahead with it regardless around about that time.

But at some point you would have gone ahead with it because at the very least in April you were still talking to the objectors about the inshore agreement, weren't you?---I wasn't.

But Mark Wakelin was and Clarence Paul was, weren't they?---I understand Mark Wakelin out of courtesy responded to a number of emails from the union, yes.

I will put this to you. But for the LANPAN 29 project coming on board, you wouldn't have made a decision to go to ballot on 1 May; is that correct?---No.’ 42

[74] Given the Applicant’s desire to make an agreement covering the scope of work that is set out in the Agreement, which dates back to July 2014, I accept Mr Matthews’ evidence. Moreover, the Objectors did not lead any evidence which would contradict the evidence of Mr Matthews. Instead, they rely on a bare assertion combined with a coincidence in timing. In the context of the history of this matter, that is not enough to ground a reasonable basis for believing that the Agreement was not genuinely agreed to by the employees.

[75] Nor does the evidence establish that the Applicant manipulated the bargaining process in order to obtain a particular result or to lead to the unfair exploitation of employees to be covered by the Agreement, or to found a conclusion that the group of employees covered by the Agreement was not fairly chosen. 43

Whether the terms of the agreement contravene s.55

[76] The Objectors submitted that Clause 8.15 of the Agreement, which provides that an employee who is absent for more than three consecutive working days without notifying the Applicant is assumed to have abandoned their employment and their contract of employment will be deemed terminated effective from the last day of work attended, is detrimental to an employee when compared to s.107(2)(a) of the Act. Section 107(2)(a) provides that an employee must give notice of personal leave ‘as soon as practicable’ which may be a time after the leave has started. The Objectors submit that the practical effect of Clause 8.15 is that an employee’s employment may be terminated for an absence which would otherwise be authorised personal/carer’s leave in accordance with the National Employment Standards (NES).

[77] It seems to me that Clause 8.15 of the Agreement is concerned with unauthorised absences. Self-evidently, an absence which is consistent with the notification requirements set out in s.107(2)(a) of the Act is an authorised absence in relation to which Clause 8.15 does not and cannot operate. The submission is rejected.

[78] The Objectors also submitted that Clause 20.2 of the Agreement, which provides that an employee may be directed to take annual leave on the giving of four weeks’ notice, is a term that is detrimental to an employee when compared to s.88 of the NES. Section 88 provides that annual leave may be taken for a period agreed between an employee and his or her employer.

[79] The Applicant submitted that Clause 20.2 of the Agreementis ancillary or incidental to the operation of annual leave under the NES, or supplements the annual leave under the NES. It relied on the observations of a Full Bench of the Commission in its decision in the ‘4 yearly review of modern awards – Annual leave’. 44

[80] Clause 20.2 of the Agreement provides:

‘20.2 Annual leave may be taken as agreed between an Employee and the Company or, in the absence of agreement, as directed by the Company on the giving of four (4) weeks’ notice. Unless otherwise agreed, an Employee must give the Company four (4) weeks’ notice of his or her desire to take leave.’

[81] Section 55(4) of the Act permits an enterprise agreement to contain terms which are ancillary or incidental to the operation of an entitlement or that supplement the NES, but only to the extent that the effect of those terms is not detrimental to an employee in any respect. I very much doubt whether Clause 20.2 of the Agreement can properly be described as ancillary or incidental to the operation of the annual leave entitlement under the NES.

[82] It seems to me that Clause 20.2 of the Agreement must rely for its efficacy on ss.93(3) or (4), which provide as follows:

‘93 Modern awards and enterprise agreements may include terms relating to cashing out and taking paid annual leave

. . .

Terms about requirements to take paid annual leave

(3) A modern award or enterprise agreement may include terms requiring an employee, or allowing for an employee to be required, to take paid annual leave in particular circumstances, but only if the requirement is reasonable.

Terms about taking paid annual leave

(4) A modern award or enterprise agreement may include terms otherwise dealing with the taking of paid annual leave.’

[83] Clause 20.2 of the Agreement appears to me to engage s.93(3) of the Act rather than s.93(4). This is because it appears to me to be a term which requires an employee to take paid annual leave in particular circumstances, those circumstances being that the employee and the Applicant are not able to agree on when leave should be taken and the Applicant has given the employee four weeks’ notice. The question then becomes whether the requirement to take leave is reasonable.

[84] In Australian Federation of Air Pilots v HNZ Australia Pty Ltd 45a Full Bench of the Commission considered the operation of particular annual leave provisions of an enterprise agreement and their operation with the NES and s.55 of the Act. The Full Bench said:

‘[13] Section 88 of the Act provides as follows:

88 Taking paid annual leave

(1) Paid annual leave may be taken for a period agreed between an employee and his or her employer.

(2) The employer must not unreasonably refuse to agree to a request by the employee to take paid annual leave.’

[14] Section 88 of the Act provides for agreement between an employer and an employee about when annual leave is to be taken by the employee and the duration of that leave. Further, an employer must not unreasonably refuse to agree to a request by an employee to take paid annual leave. Self evidently clause 14.2.1(b) of the Agreement has the effect of denying a touring pilot the opportunity of reaching agreement with HNZ about when annual leave may be taken and the duration of leave. At the very least, the clause limits the days on which annual leave may be taken by agreement. There is no scope under clause 14.2.1(b) to reach agreement to take annual leave during any 21 day on duty period, nor is there any requirement that HNZ will not unreasonably refuse a request by a touring pilot to take paid annual leave during such a period.

[15] Counsel for HNZ submitted that under the equal time roster proposal, a touring pilot can take annual leave at any time provided it is during the ‘off period’. In effect counsel for HNZ was submitting that a touring pilot was not required to take only 2.7 days of annual leave during a 21 day off duty period. With respect, this is a distinction without a difference. On that submission, a touring pilot may only take annual leave during any window which is a 21 day off duty period. This has the effect of limiting the capacity of a touring pilot and HNZ to agree to another time when annual leave might be taken or the pilot making a request to that effect which may not unreasonably be refused. It also has the effect of allowing only a maximum of three weeks of annual leave to be taken as a block, with the effect of limiting the capacity to agree to or request a longer period of annual leave. In either case it seems to us that clause 14.2.1(b) provides for a system of taking of annual leave which is contrary to or limits the full benefit of s.88 of the Act.

[16] Section 55 of the Act contains interaction rules between the NES and relevantly, an enterprise agreement. Section 55(4) provides the following:

‘55 Interaction between the National Employment Standards and a modern award or enterprise agreement

. . .

Ancillary and supplementary terms may be included

(4) A modern award or enterprise agreement may also include the following kinds of terms:

(a) terms that are ancillary or incidental to the operation of an entitlement of an employee under the National Employment Standards;

(b) terms that supplement the National Employment Standards;

but only to the extent that the effect of those terms is not detrimental to an employee in any respect, when compared to the National Employment Standards.

Note 1: Ancillary or incidental terms permitted by paragraph (a) include (for example) terms:

(a) under which, instead of taking paid annual leave at the rate of pay required by section 90, an employee may take twice as much leave at half that rate of pay; or

(b) that specify when payment under section 90 for paid annual leave must be made.

Note 2: Supplementary terms permitted by paragraph (b) include (for example) terms:

(a) that increase the amount of paid annual leave to which an employee is entitled beyond the number of weeks that applies under section 87; or

(b) that provide for an employee to be paid for taking a period of paid annual leave or paid/personal carer’s leave at a rate of pay that is higher than the employee’s base rate of pay (which is the rate required by sections 90 and 99).

Note 3: Terms that would not be permitted by paragraph (a) or (b) include (for example) terms requiring an employee to give more notice of the taking of unpaid parental leave than is required by section 74.

. . .’

[17] We consider that clause 14.2.1(b) of the Agreement is a term that is not permitted by s.55(4) of the Act because it is detrimental to a touring pilot in the respect that we have already identified, namely that it denies the touring pilot the full benefit of s.88 of the Act.

[18] Clause 14.2.1(b) of the Agreement must therefore depend for its efficacy on it being a term of the Agreement permitted by s.93(3) of the Act. That section provides as follows:

93 Modern awards and enterprise agreements may include terms relating to cashing out and taking paid annual leave.

Terms about requirements to take paid annual leave

. . .

[19] The Deputy President dealt briefly with this question as follows:

[39] Having regard to the needs of both the employee and the employer’s business, and the other factors raised by the applicant, in my view clause 14.2.1 meets the requirements of the Act (including s.93), as does any employer direction under it. There is no detriment to employees within s.55(4), and no undue influence or pressure under s.344. The arrangement is consistent with the Act and other legislation, agreement and contract of employment, and is not otherwise harsh.

[20] HNZ submitted that in reaching his conclusion that clause 14.2.1(b) met the requirements of s.93(3) of the Act, the Deputy President had regard to the needs of the employees and the employer’s business, and the factors raised by the employee witnesses during the hearing and there was no error in this approach. It submitted further that to the extent that clause 14.2.1 of the Agreement required a touring pilot to take annual leave during the year as part of that touring pilot’s days off in the touring cycle, this requirement appears on the face of clause 14.2.1 itself and is therefore contained within the terms of the Agreement, which was approved by the AFAP. It submitted that the AFAP cannot now argue that the very requirement contained in an Agreement the approval of which it supported is an unreasonable requirement.

[21] HNZ also submitted that, in truth, the requirement to take annual leave under the 15-day on/13-day off duty cycle pursuant to clause 14.2.1(a) of the Agreement is as, if not more, prescriptive than the equal time duty cycle. Under clauses 13.1.2(a) and 14.2.1(a), annual leave must be taken in one blockcycle immediately after a block of 13 days off. It submitted that there was no provision for a touring pilot to take more than one block of annual leave in these circumstances. Conversely, so it was submitted, under the equal time duty cycle of 21-day on/21-day off pursuant to clause 14.2.1(b), touring pilots could take one 21 day block of annual leave plus a block of 7 days (to make up 28 days annual leave) or alternatively multiple blocks of annual leave, for example, three one week blocks of annual leave during their off cycles.

[22] We are not persuaded by these submissions. That the AFAP agreed to or approved the provision, or that another provision of the Agreement has the same or a greater deleterious effect is beside the point and says nothing about whether clause 14.2.1(b) is itself a term permitted by s.93(3) of the Act (or for that matter, s.55(4)).

[23] The essence of s.93(3) is that it permits terms to be included in an enterprise agreement which require an employee to take paid annual leave in particular circumstances if the requirement is reasonable, or which allow for an employee to be required to take annual leave in particular circumstances if the requirement is reasonable.

[24] Clause 14.2.1(b) is a clause that on its face requires a touring pilot to take annual leave during the year as part of the touring days off. Its effect is to limit the circumstances in which a touring pilot may take annual leave. We doubt that a clause in an agreement which limits the circumstances in which any employee may take annual leave can be said to be a clause which requires an employee to take paid annual leave in particular circumstances. However it is unnecessary for us to form a concluded view on this issue as in our view the requirement to take annual leave as part of a touring pilot’s touring days off is not reasonable.

[25] In assessing the reasonableness of the requirement, counsel for HNZ accepted that all relevant considerations needed to be taken into account including those which are set out in paragraph [382] of the Explanatory Memorandum to the Fair Work Bill 2008. Paragraph [382] provides the following:

382. In assessing the reasonableness of a requirement or direction under this subclause it is envisaged that the following are all relevant considerations:

● the needs of both the employee and the employer’s business;

● any agreed arrangement with the employee;

● the custom and practice in the business;

● the timing of the requirement or direction to take leave; and

● the reasonableness of the period of notice given to the employee to take leave.

[26] It is apparent that the nature of these considerations, so far as they concern an employee, is personal to the employee the subject of the direction. It follows that generalised assessments about the impact of a requirement on employees will be insufficient. Moreover, the reasonableness of a requirement is to be assessed at the time that the requirement is to be fulfilled because self evidently the factual circumstances which underpin any consideration will change, as for example, the needs of both the employer and the employee are subject to change.

[27] It seems to us that clause 14.2.1(b) of the Agreement fixes, for the duration of the equal time roster’s operation, the requirement that a touring pilot take annual leave in blocks no greater than 21 days and only during that touring pilot’s touring days off without any regard to the personal needs of the particular touring pilot or many of the other relevant considerations discussed above. Moreover the requirement compels a touring pilot to take annual leave only on days on which the touring pilot would not otherwise be working. Indeed the notion that a touring pilot should only take a period of annual leave on days on which the pilot is already not required to work seems to us to be plainly unreasonable. That the touring pilots are entitled to rostered days off, and hence receive a break from duty, does not render the requirement that annual leave be taken only during days off reasonable. To the extent that the Deputy President reached a contrary view, he was, with respect, in error.

[28] Section 93(3) permits an enterprise agreement to include terms requiring an employee (or allowing an employee to be required) to take annual leave in particular circumstances provided the requirement is reasonable. In considering whether a requirement is reasonable the term imposing the requirement must relate to particular circumstances in which annual leave will be required to be taken and must on its face be reasonable or enable the consideration of relevant considerations earlier identified before the requirement is imposed in relation to a particular employee. Our conclusion that clause 14.2.1(b) of the Agreement is not a term permitted by s.93(3) is based on the circumstances of this case and the text of clause 14.2.1(b). Issues such as the capacity for personal circumstances to be taken into account when imposing a requirement, the ability to take an annual leave entitlement as a block and the need to travel long distances to take a period of annual leave, amongst others, will be relevant in considering the reasonableness of a requirement to take annual leave in particular circumstances that may be contained in particular agreements.

[29] Section 55(1) of the Act prohibits an enterprise agreement excluding the NES or any provision of the NES. A provision of an enterprise agreement need not expressly exclude the NES in order to fall foul of s.55(1). A provision of an enterprise agreement which in its operation results in an employee not receiving the full benefit of the NES also contravenes the prohibition. Clause 14.2.1(b) has the effect of depriving a touring pilot working an equal time roster of the full benefit of s.88 of the Act.

[30] As clause 14.2.1(b) of the Agreement is not a term permitted by either ss.55(4) or 93(3) of the Act, it follows that it has no effect.’ 46[Endnotes omitted]

[85] In my view, Clause 20.2 of the Agreement suffers from the same flaw in that it denies employees the full benefit of s.88 of the Act. Moreover, it cannot be said that the requirement to take annual leave in the circumstances contemplated by the provision are on their face reasonable, and the clause does not make any provision requiring any refusal by an employee to agree to a request by an employer to take annual leave not be unreasonable.

[86] In the circumstances, I am not satisfied that Clause 20.2 does not contravene s.55 of the Act. Consequently, I am not satisfied as required by s.186(2) of the Act.

[87] I will give the Applicant an opportunity to provide an appropriate undertaking which can address my concerns and perhaps take into account the observations of the Full Bench in the HNZ case about the reasonableness of a requirement.

Whether group of employees covered by the agreement was fairly chosen

[88] The Objectors submitted that the Commission cannot be satisfied that the group of employees who will be covered by the Agreement was fairly chosen or is geographically, operationally or organisationally distinct. They submitted that:

the scope of the Agreement disrupts well-established enterprise agreement coverage in the maritime industry in respect of inshore work, towage work and offshore oil and gas work;

these sectors of the maritime industry have traditionally been covered by separate enterprise agreements;

this pattern of enterprise agreement coverage reflects the fact that the groups of employees performing these different types of maritime work are geographically, operationally and organisationally distinct;

the towage and offshore oil and gas enterprise agreements provide for remuneration and conditions that are specifically designed for that work;

the towage and offshore oil and gas enterprise agreements provide for remuneration and conditions that are superior to the Agreement; and

the approval of the Agreement will allow the Applicant to undercut its competitors and drive down wages and conditions across the towage and offshore oil and gas industries, contrary to the interests of the employees.

[89] These submissions do not with respect engage with the question of whether the employees were fairly chosen. These submissions are concerned only with dissatisfaction on the part of the Objectors that the Applicant has not made an agreement with its employees which is consistent with other enterprise agreements negotiated by the MUA, and others which may have a different scope of work coverage and different terms and conditions of employment. I accept, as set out in answer to question 2.2 of the Employer’s Statutory Declaration in support of an application for approval of an enterprise agreement, that the group of employees covered by the Agreement are geographically and operationally distinct.

[90] The Objectors also submitted that Clause 12 of the Agreement operates to exclude ‘employees working on major projects’ from its coverage and application, allowing the Applicant to unilaterally ‘opt-out’ of the Agreement in respect of those employees. It was submitted that ‘opt out’ provisions cannot meet the requirement of the ‘fairly chosen’ test in s.186(3) of the Act, and are contrary to the purpose, policy and objects of the Act.

[91] This submission must be rejected because it misconstrues the effect of Clause 12. For reasons earlier explained, Clause 12 does not allow the employer or any of the employees covered by the Agreement to opt out of the Agreement. The terms of Clause 12 itself make it clear that where the Applicant ‘undertakes work on a major project this Agreement shall continue to apply’. The Agreement at all times applies to employees of the Applicant working on major projects where such project otherwise falls within the scope of the Agreement.

[92] I am satisfied that the group of employees covered by the Agreement was fairly chosen.

Scope of agreement

[93] The scope of the Agreement is dealt with in Clause 4, which provides:

‘4. Scope and Application

This Agreement applies to the Company and to Employees employed in the Classifications contained in clause 15 of this Agreement, to undertake work by the Company in Inshore Maritime Work (as defined in clause 3) within Western Australia. This Agreement excludes any Award/s that would otherwise apply to Employees.’

[94] Clause 3 of the Agreement contains the following definitions relevant to the operation of Clause 4:

‘Company means Broadsword Marine Contractors Pty Ltd (ABN: 45 118 310 544).

Employee means employees employed by the Company in any of the Classifications contained in clause 15 of this Agreement, to undertake work in Inshore Maritime Work within Western Australia.

Employer means Broadsword Marine Contractors Pty Ltd.

Inshore Limits means the belt of water continuous to the territorial seas, the outer limit of which does not extend 24 nautical miles from the Australian territorial sea baseline. The zone is defined in the Australian Maritime Boundaries as the "Contiguous Zone".

Inshore Maritime Work means work commencing and terminating within Western Australian Waters Inshore Limits and, shall include but is not limited to: the operation of line boats, security patrols, navigation aids. maintenance, wharf maintenance and construction, pilot boat operations, personnel transfers and supply runs within Inshore Limits, delivery cargo, bunker barges, harbour survey, towage, accommodation vessels including accommodation support vessels, tug work, slipways assists and in-harbour maintenance. It also covers travelling between ports, but does not include work in, or in connection with, the dredging industry.’

[95] The Objectors submitted that the Agreement purports to be an inshore agreement and defines Inshore Maritime Work, however the Scope and Application of the proposed agreement overlaps with the Broadsword Marine Contractors Pty Ltd and Australian Institute of Marine and Power Engineers (AIMPE) Gorgon Greenfield Agreement 2013 47 and the Offshore Marine Services Pty Ltd Australian Institute of Marine and Power Engineers Enterprise Agreement 2010 (Offshore Marine Agreement 2010)48.

[96] It was submitted that the scope of work under the Agreement is that of the Maritime Offshore Oil and Gas Industry. The scope of the offshore agreements cover ‘employees in or in connection with Australian offshore oil and gas operations’.

[97] To make good this point it was submitted that the Lanpan 29 is an Anchor Handling Support Vessel involved in the Wheatstone Project. The vessel's role is to tow barges from Dampier to Barrow Island. The Maritime Offshore Oil and Gas Award 2010 (Maritime Offshore Award) 49 at 3.1 provides:

‘Vessels engaged in operations in the north-west shelf coastal areas means tugs, and shallow draught vessels, such as landing craft, utility vessels and multifunction vessels operated by an employer in or in association with oil and gas operations in the north-west shelf coastal areas:

• coastal areas and islands between North West Cape and Dampier Archipelago;
• coastal areas and islands enclosed by latitudes 20° and 22° south, longitudes 114°and 117° east, and
• coastal areas associated with Onslow and local oil and gas field developments (including Barrow, Thevenard, Airlie and Lowenda1 Islands).’

[98] It was submitted that the work of the Lanpan 29 falls within the above definition and is therefore covered by the Offshore Marine Agreement 2010 which is an agreement made under the Maritime Offshore Award.

[99] These arguments are, with respect, concerned with the question whether the Agreement applies to employees engaged by the Applicant on the Lanpan 29. This is not a matter that I need to decide. For the reasons given below, I accept that the Applicant, in relation to the work covered by the Agreement, is not engaged in or in connection with the maritime offshore oil and gas industry as described in Clause 4.1 of the Maritime Offshore Award.

[100] If, as asserted by the Objectors, and it was no more than an assertion, the Lanpan 29 and the Applicant’s employees engaged on it carry out work that falls within the maritime offshore oil and gas industry as described in Clause 4.1 of the Maritime Offshore Award, it would seem to follow that the Applicant in relation to those employees is also so engaged. In the result, those employees would not be covered by the Agreement in relation to that work. But that is not a basis for refusing to approve the Agreement.

[101] Furthermore, I agree with the Applicant’s submissions that the relevant enquiry is directed to employees who will be or are covered by the Agreement and not any employees who undertook work in a belt of water described in Clause 4 of the Agreement.

[102] Employees covered by the Agreement are identified by reference to the definition inClause 3, which describes them as: ‘employees employed by the company in any of the Classifications contained in clause 15 ... to undertake work in Inshore Maritime Work within Western Australia’.

[103] Therefore, employees who are covered by the Agreementare those employed to undertake Inshore Maritime Work.

[104] Inshore Maritime Work is work commencing and terminating within Western Australian waters extending to 24 nautical miles from the territorial sea baseline, examples of which work are given in the definition (the operation of line boats etc). It follows that an employee who would have been covered by the proposed agreement and who is covered by the Agreement is a person who is or was employed by the Applicant to undertake work of this kind.

[105] If an employee of the Applicant otherwise undertook work within Western Australian waters extending to 24 nautical miles from the territorial sea baseline that does not bring that employee within the scope of the Agreement because the employee is not employed to undertake Inshore Maritime Work as defined by the Agreement. So, for instance, a person employed to undertake work in the oil and gas industry who, on any given day, undertook work within Western Australian Waters extending to 24 nautical miles from the territorial sea baseline would not, by virtue of that geographical location alone, be employed to undertake Inshore Maritime Work as defined. In such a case the employee’s work would be quite different to the work within the scope of the Agreement namely. that employee would be undertaking work in the offshore oil and gas industry. That work is not covered by the Agreement.

[106] It was further submitted by the Objectors that reference in Clause 11.3 of the Agreement to a ‘rig shift’ indicates that the Agreement is intended to operate in respect of offshore operations. A rig shift can only have application to the offshore oil and gas industry. This was conceded in evidence given by Mr Paul. 50

[107] If it is accepted, and for the reasons given below I do accept, that the Applicant, in relation to the work covered by the Agreement, is not engaged in the maritime offshore oil and gas industry as described in Clause 4.1 of the Maritime Offshore Award, it does not matter that the Agreement in one clause refers to a particular function that cannot be carried out within the scope of the Agreement.

[108] For the avoidance of doubt, however, it may be appropriate for the Applicant to give an undertaking to the effect that the reference to ‘a rig shift’ in Clause 11.3 of the Agreement will be taken to be omitted from the Agreement.

Whether the agreement passes the better off overall test

[109] If the proposed agreement is to be approved by the Commission it must inter alia pass the better off overall test (BOOT). If the proposed agreement does not pass the BOOT, then the Applicant will need to persuade the Commission that because of exceptional circumstances the approval of the proposed agreement would not be contrary to the public interest.

[110] Section 193 of the Act deals with the BOOT and relevantly provides the following:

‘193 Passing the better off overall test

When a non-greenfields agreement passes the better off overall test

(1) An enterprise agreement that is not a greenfields agreement passes the better off overall test under this section if the FWC is satisfied, as at the test time, that each award covered employee, and each prospective award covered employee, for the agreement would be better off overall if the agreement applied to the employee than if the relevant modern award applied to the employee.

FWC must disregard individual flexibility arrangement

(2) If, under the flexibility term in the relevant modern award, an individual flexibility arrangement has been agreed to by an award covered employee and his or her employer, the FWC must disregard the individual flexibility arrangement for the purposes of determining whether the agreement passes the better off overall test.

. . .

Award covered employee

(4) An award covered employee for an enterprise agreement is an employee who:

(a) is covered by the agreement; and

(b) at the test time, is covered by a modern award (the relevant modern award) that:

(i) is in operation; and

(ii) covers the employee in relation to the work that he or she is to perform under the agreement; and

(iii) covers his or her employer.

Prospective award covered employee

(5) A prospective award covered employee for an enterprise agreement is a person who, if he or she were an employee at the test time of an employer covered by the agreement:

(a) would be covered by the agreement; and

(b) would be covered by a modern award (the relevant modern award) that:

(i) is in operation; and

(ii) would cover the person in relation to the work that he or she would perform under the agreement; and

(iii) covers the employer.

Test time

(6) The test time is the time the application for approval of the agreement by the FWC was made under section 185.

FWC may assume employee better off overall in certain circumstances

(7) For the purposes of determining whether an enterprise agreement passes the better off overall test, if a class of employees to which a particular employee belongs would be better off if the agreement applied to that class than if the relevant modern award applied to that class, the FWC is entitled to assume, in the absence of evidence to the contrary, that the employee would be better off overall if the agreement applied to the employee.”

[111] As earlier indicated, the application to approve the Agreement was lodged by the Applicant on 14 May 2015. That is the test time.

[112] Relevantly, the proposed agreement will pass the BOOT if the Commission is satisfied, as at the test time, that each award covered employee, and each prospective award covered employee, for the Agreement would be better off overall if the Agreement applied to the employee than if the relevant modern award applied to the employee.

[113] The application of the BOOT is not to be applied as a line by line analysis. Rather, it is a global test requiring consideration of advantages and disadvantages to award covered employees and prospective award covered employees. The application of the BOOT therefore requires the identification of terms of an agreement which are more beneficial to the relevant employees when compared to the relevant modern award, the terms of an agreement which are less beneficial and then an overall assessment of whether each relevant employee would be better off under the agreement. 51

[114] Critical to the proper application of the BOOT is the identification of the relevant modern award against which the proposed agreement is to be compared.

[115] The Objectors submitted that on the materials provided by the Applicant, the Commission cannot be satisfied that the Agreement passes the BOOT in respect of the Maritime Offshore Award. They further submitted that having regard to the more beneficial conditions contained in the Ports, Harbours and Enclosed Water Vessels Award 2010 (Port and Harbours Award) 52 and the Marine Towage Award 2010 (Towage Award)53, the Commission cannot be satisfied that the Agreement passes the BOOT in respect of those awards. In this regard, the Objectors say that the Agreement contains provisions that are disadvantageous to the employees and which are not imposed by the relevant awards.54

[116] The Objectors also submitted that the terms of Clauses 12, 13.3 and 15.4 mean that the Commission cannot be satisfied as to the actual terms and conditions (including remuneration and roster arrangements) of the Agreement. They also submitted that the Agreement does not guarantee that employees ‘working on major projects’ in accordance with Clause 12 of the Agreement will be better off overall.

[117] Turning first to the submissions summarised in the preceding paragraph, for the reasons earlier given, the minimum terms and conditions that will apply to employees under the Agreement are able to be identified and provide appropriate benchmarks against which the BOOT is to be applied. Clause 12 of the Agreement ensures that employees working on major projects will, as a minimum, receive the entitlements provided for in the Agreement. It is not necessary for the purposes of the application of the BOOT for me to know what additional benefits might apply to employees on major projects or what additional wage increases might be applied to employee wages beyond the CPI increases provided for in the Agreement.

[118] The Applicant identified the Portsand Harbours Award and the Towage Award as the relevant instruments for the purposes of the BOOT. Based on the comprehensive analysis contained in attachments 1 and 2 to the application for the approval of the Agreement and based on separate analysis conducted by the Commission, I am satisfied that these modern awards are the appropriate instruments for the purposes of the BOOT and that the Agreement passes the BOOT in relation to these two awards.

[119] However, the Objectors maintain that the appropriate reference instrument is the Maritime Offshore Award. Questions about the identification and application of the relevant modern award or awards which cover employees of the Applicant are central to the Objectors’ opposition to the approval of the Agreement.

[120] It is not sufficient, for the purpose of identifying a modern award in the application of the BOOT, to simply identify an employee is covered by, or a prospective employee who would be covered by, the Agreement, is or would be covered by a particular modern award. It must also be shown that the particular modern award also covers the employer.

[121] In this regard the Applicant made the following submissions:

‘Then finally the Maritime Offshore Award; the Maritime Offshore Oil and Gas Award 2010 has been put up by the objectors as being a relevant modern award. Adopting the same process, clause 3.1, I draw your attention, your Honour, to the definitions of "at sea". But then there is also a definition of "employee" and "employer". There is a definition of "floating production facility". There are definitions over the page of "import", "location". There's a definition of:

Maritime offshore oil and gas industry means the operation, utilisation, control, maintenance, repair and service of vessels as defined in or in connection with offshore oil and gas operations.

The word "vessels" is defined over the page. On page 6 there's a definition of "vessel". It's quite a long definition. It ends up with:

...or any other vessel used in offshore oil and gas operations.

There's a definition of:

Vessels engaged in operations of the North West Shelf coastal areas.

And going back up the page you will also see particular vessels defined such as seismic survey vessel, specialist vessel et cetera. When one goes to the coverage provision one will see that there it is stated that:

This industry award covers employers throughout Australia who are engaged in the maritime offshore oil and gas industry and their employees in the classifications listed in clause 13.

So it only applies to an employer who's engaged in the maritime offshore oil and gas industry. That's a defined term. Dropping the defined term into the operative term:

It applies to employers engaged in the operation, utilisation, control, maintenance, repair and service of vessels as defined in or in connection with offshore oil and gas operations.

And the vessels as I've already noted, your Honour, is a defined term in itself. Further, even if the employer is engaged in the maritime offshore oil and gas industry it only covers those employers and their employees in the classifications listed in clause 13. So to give an obvious example it doesn't cover the chief executive officer because that classification doesn't appear in clause 13. If one goes to clause 13 commencing on page 13 and then going over to 14 you will see that the classifications are set out by reference to particular things. The first paragraph (a), facilities. There's a bunch of classifications there and rates. Then:

(b) support vessels (c) supply vessels (d) standby utility vessels (e) self-propelled drilling vessels and thruster assisted vessels -

and so it goes, "seismic survey vessels" and as I've already noted, your Honour, some of these things are defined as well in clause 3. Now clause 4.3 of this award, similar to the other awards, also prescribes that the award covers an employer which supplies labour on an on-hire basis in the industry. But the first question is, "Well is the employer engaged in the industry?" In my submission there are two points to be made.

First, on the evidence that is before you this employer is engaged in doing the sort of work described in the definition of employees which in turn describes a definition of inshore maritime work, and the evidence is there particularly in the witness statement of Clarence Paul which I'll come to. The other point though is the converse of that. In my submission there is no evidence from which one can make a finding that this employer is engaged in the maritime offshore oil and gas industry as defined in this Offshore Award, and it's not for me to prove a negative, as it were, as my friend Mr Edmonds would have it when he submits that the burden is on me to prove that the Offshore Gas Award does not apply.

My submission is that on a plain reading of the award one then needs to ask what is the evidence which can support a conclusion that the award is attracted to this employer, and then particularly what is the evidence to support the conclusion that these employees of this employer are engaged in the classifications listed in clause 13 of this award. In my submission there's no such evidence and therefore one cannot make a determination that the Maritime Offshore Award covers these employees in the relevant sense for the purposes of the definition as at the test time, 13 May 2015 (sic).

Nor, moving on to the definition of a prospective award employee, can one make a finding that it would cover prospective award covered employees for the same reasons that there is no evidence of the employer being engaged in the industry as defined in this award and/or employees being engaged in these classifications. Now I've gone to some lengths in that analysis, your Honour, because it's of course plain from the objections that have been filed that one of the fundamental complaints by the objectors is their complaint about what is perceived to be an overlap between the work that can be done under the BMC Agreement and the work described in the Offshore Award in particular, and offshore agreements.

In that regard as I've already submitted, it's not where work is performed. One has to look at the object of the contract of employment in order to determine first whether a person is an employee as defined in the BMC Agreement.’ 55

[122] It seems to me that these submissions are manifestly correct. I am satisfied on the material before me that the Applicant is not engaged in the maritime offshore oil and gas industry as described in Clause 4.1 of the Maritime Offshore Award. It follows that that award is not the appropriate award for the purposes of determining whether the Agreement passes the BOOT.

[123] In the circumstances, I am satisfied that the Agreement passes the BOOT.

Nominal expiry date

[124] Clause 2 of the Agreement provides the following:

‘2 Commencement Date and Nominal Expiry

2.1 This Agreement shall commence operation from seven (7) days after the date of approval by the FWC and shall remain in force for four (4) years from the commencement date

2.2. This Agreement will operate after its nominal expiry date until terminated or replaced.’

[125] On one view, the reference to ‘commencement date’ in Clause 2.1 is a reference to the date on which the Agreement will commence to operate. That date will be seven days after the Commission approves the Agreement. If that is correct, the nominal expiry date of the Agreement is therefore four years and seven days after the Agreement is approved. Such a period that is not permitted by the Act.

[126] For the avoidance of doubt, the Applicant should provide an undertaking to the effect that reference to a commencement date in Clause 2.1 is to be treated for the purposes of the Agreement as a reference to the date on which the Commission approves the Agreement.

Dispute resolution provision and consultation

[127] The Objectors submitted that the dispute resolution procedure does not comply with s.186(6)(b) of the Act, because it only allows for the representation of employees covered by the Agreement for step four of the procedure and not for all purposes of the procedure. This submission is misconceived as the procedure, on its face, allows for representation at earlier stages.

[128] The Objectors also submitted that Clause 9.1 of the Agreement (which deals with redundancy) restricts the requirement to consult about changes likely to have a significant effect on employment arrangements to ‘as reasonably practicable’. It was said that this provision does not comply with s.205(1)(a) of the Act.

[129] This submission is also misconceived. Clause 31 deals with consultation about major workplace change. It contains all of the constituent elements of s.205 of the Act.

Flexibility term

[130] Section 202 provides that an enterprise agreement must contain a flexibility term that, inter alia, complies with s.203 of the Act.

[131] Section 203(6) provides that a flexibility term in an enterprise agreement must require the employer to ensure that any individual flexibly arrangement agreed under the term must be able to be terminated by either the employee or the employer giving written notice of not more than 28 days or by the employee and the employer at any time if they agree in writing to terminate the flexibility arrangement.

[132] Clause 30 of the Agreement contains provisions relating to individual flexibly arrangements. Clause 30.5 of the Agreement contains the termination of individual flexibility arrangements and provides, inter alia, that the Applicant or the employee may terminate individual flexibly arrangements by giving no more than 30 days written notice.

[133] Clearly, this aspect of Clause 30 does not comply with the requirements of s.203 of the Act.

[134] This is not a matter that may be cured by the giving of an undertaking because the undertakings provisions in s.190 of the Act only apply if the Commission has concerns that the agreement does not meet the requirements set out in ss.186 and 187 of the Act. There is nothing in those sections which requires satisfaction as to the mandatory terms of enterprise agreements set out in Division 5 of Part 2–4 of the Act. This is not surprising since the consequence of an agreement not containing a flexibility term in the required form or at all, is that the model flexibility term is taken to be a term of the agreement.

[135] If this Agreement is ultimately approved by me, the decision will record that pursuant to s.202(4) of the Act, the model flexibility term is taken to be a term of the Agreement.

Conclusion

[136] Save for the question of undertakings, I am otherwise satisfied that the statutory requirements for the approval of the Agreement have been met.

[137] As to undertakings, I will allow the Applicant to provide suitable undertakings to address the matters raised at [87], [108] and [126] of this decision within 14 days of the date of this decision. During that time, I require that the Applicant to consult with all known bargaining representatives for the Agreement about their views of any undertaking and to provide my Chambers with details about those views.

[138] In the event that the undertakings are in a form satisfactory to me and taking into account any views of any known bargaining representatives, I thereafter propose to approve the Agreement and I note that each Objector has given notice pursuant to s.183 of the Act that they want to be covered by the Agreement. Any subsequent decision that I make to approve the Agreement will carry the appropriate note.

DEPUTY PRESIDENT

Appearances:

T. Caspersz for Broadsword Marine Contractors Pty Ltd.

L. Edmonds for the Maritime Union of Australia.

N. Niven for the Australian Institute of Marine and Power Engineers.

J. Thomson for the Australian Maritime Officers Union.

Hearing details:

2015.

Perth:

September 14.

1 Statutory Declarations filed by MUA, AIMPE and AMOU in relation to an application for approval of an enterprise agreement dated 20 May 2015.

2 Employer’s Statutory Declaration in support of an application for approval of an enterprise agreement dated 13 May 2015.

3 Ibid; Exhibit 2 at [3]-[7]; Exhibit 4 at [17]-[25].

4 Exhibit 2, Attachment 1.

5 Transcript PN 120.

6 AG2014/9610.

7 Transcript PN 122-PN 124.

8 Transcript PN 438.

9 Ibid.

10 Exhibit 4 at [26]-[30].

11 Ibid at [32].

12 Ibid at [34], [44]; Transcript PN 557-PN 581.

13 Exhibit 1 (Confidential exhibit) and Exhibit 4, Attachment 15.

14 Exhibit 4 at [35]-[47].

15 Employer’s Statutory Declaration in support of an application for approval of an enterprise agreement dated 13 May 2015 at Q2.4, Q2.6 and Q2.7.

16 Exhibit 4, Attachment 17.

17 Ibid.

18 Exhibit 1 (Confidential exhibit).

19 MUA's amended outline of submissions [11]-[16]; Transcript PN 1011; AIMPE outline of submissions at [1].

20 Section 173.

21 National Tertiary Education Industry Union v Swinburne University of Technology [2015] FCAFC 98 at [24].

22 Exhibit 10.

23 Transcript PN 840-PN 844.

24 [2011] FWAFB 6845.

25 Transcript PN 415-PN 419.

26 Exhibit 4 at [48].

27 Transcript PN 143 - PN 156.

28 [2015] FCAFC 98 at [21]-[25].

29 Employer's Statutory Declaration in support of an application to approve an enterprise agreement, answers to question 2.10 and 4.3.

30 Ibid; Exhibit 1 (confidential exhibit).

31 Transcript PN 581 – PN 583.

32 Transcript PN 200 – PN 204.

33 Transcript PN 976.

34 Clause 13.2.

35 The Objectors point to clauses 12, 13 and 15.4 of the Agreement.

36 Transcript PN 202 – PN 203.

37 Fair Work Bill 2008 Explanatory Memorandum at [788] – [789].

38 See s.188(c).

39 Exhibit 6.

40 Ibid at [19]-[37].

41 Transcript PN 136 – PN 157.

42 Transcript PN 173 – PN 177.

43 See Construction, Forestry, Mining and Energy Union v John Holland Pty Ltd [2015] FCAFC 16 at [33]; Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia; Australian Manufacturing Workers’ Union v Main People Pty Ltd [2015] FWCFB 4467 at [32]-[33]; and Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia; Australian Manufacturing Workers’ Union v Sustaining Works Pty Ltd [2015] FWCFB 4422 at [24]-[27].

44 [2015] FWCFB 3406 at [91], [92],[139], [158]-[165] and [216]-[218].

45 [2015] FWCFB 3124.

46 Ibid at [13]-[30].

47 AE402699.

48 AE879573.

49 AM000086.

50 Transcript PN 664.

51 See Re: Armacell Australia Enterprise Agreement 2010[2010] FWAFB 9985; National Tertiary Education Industry Union v University of New South Wales[2011] FWAFB 5163.

52 AM000052.

53 AM000050.

54 The MUA identified the following provisions of the Agreement which are said to have this effect - Clauses 6, 10.1.1-10.1.7 and 26-28.

55 Transcript PN 1097 – PN1117.

Printed by authority of the Commonwealth Government Printer

Broadsword Marine Contractors Pty Ltd v Maritime Union of Australia, The

[2015] FWC 6627

5 OCTOBER 2015

DECISION

Introduction

Background

Consideration of grounds for objection

Conclusion