Construction, Forestry, Maritime, Mining and Energy Union v DOF Management Australia Pty Ltd T/A DOF Management
[2023] FWC 2014
•11 AUGUST 2023
| [2023] FWC 2014 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.739 - Application to deal with a dispute
Construction, Forestry, Maritime, Mining and Energy Union
v
DOF Management Australia Pty Ltd T/A DOF Management
(C2022/7599)
| DEPUTY PRESIDENT BINET | PERTH, 11 AUGUST 2023 |
Alleged dispute about any matters arising under the enterprise agreement and the NES;[s186(6)]
The Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) has filed an application (Application) pursuant to section 739 of Fair Work Act 2009 (Cth) (FW Act) with the Fair Work Commission (FWC). The Application sought that the FWC deal with a dispute between the CFMMEU and DOF Management Australia Pty Ltd trading as DOF Management (DOF) in accordance with the dispute resolution procedure contained in Clause 10 of the DOF Management Australia Pty Ltd Maritime Offshore Oil and Gas Industry Enterprise Agreement 2017 (Agreement).
DOF engages employees who are covered by the Agreement to perform work on various vessels including the Skandi Darwin. The Agreement provides for different rates of pay for employees depending on the vessel the employee is assigned to work. The parties are in dispute as to the appropriate rates of pay for the work performed by employees of DOF on the Skandi Darwin in or around September 2022.
On 5 December 2023 the parties participated in a conciliation, but the issues in dispute could not be resolved.
Directions for the filing of materials in advance of a hearing were issued to the parties on 12 December 2023 and amended on 18 January 2023 (Directions). The Application was listed for hearing in person in Perth on 29 March 2023 (Hearing).
Permission to be represented
The Directions invited the parties to make submissions as to whether the FWC should grant permission to the parties to be represented. A determination of this issue is necessary to ensure that the manner in which any hearing is conducted is fair and just.[1]
DOF sought permission to be represented at the Hearing.
Having considered the submissions of the parties, leave was granted to DOF to be represented pursuant to section 596(2)(a) of the FW Act on the grounds that it would enable the matter to be dealt with more efficiently taking into account the complexity of the matter.
At the Hearing Ms Samayyah Sayed a solicitor employed by the CFMMEU appeared on behalf of the CFMMEU and Mr Ronan Boothman of Corrs Chambers Westgarth (Mr Boothman) appeared on behalf of DOF.
Evidence
In advance of the Hearing the CFMMEU filed witness statements of the following witnesses setting out their evidence in chief:
a.Mr Nick Brown (Mr Brown) – Mr Brown has been employed by DOF on the Skandi Darwin since 3 December 2022 as a Chief Steward. From September 2022 to December 2022 he was employed as a Cook.[2]
b.Mr Shaun Stewart (Mr Stewart) – Mr Stewart has worked on the Skandi Darwin for the last three years as an Integrated Rating. His duties include the operation of a ‘Walk to Work Gangway’.[3]
c.Mr Jarrod Carolan (Mr Carolan) – Mr Carolan has been employed on the Skandi Darwin by DOF since July 2022 as Chief Cook.[4]
DOF chose not to cross examine any of the CFMMEU witnesses.
In accordance with the Directions DOF filed a witness statement of Mr Clinton John Rhodes (Mr Rhodes) setting out his evidence in chief.[5] DOF were given leave to file a Supplementary Witness Statement by Mr Rhodes detailing the work undertaken by the Skandi Darwin during the relevant period.
Mr Rhodes is Managing Direction of DOF. Mr Rhodes was cross examined at the Hearing by Ms Sayed.
The parties jointly prepared and filed a digital court book containing the evidence and submissions of the parties which was admitted at the Hearing and marked as an exhibit (DCB).
The CFMMEU were granted orders in PR761956 and PR762983 for the production of documentation detailing activities conducted on the Skandi Darwin during the relevant period.
Written closing submissions were filed by DOF on 13 April 2023 and by the CFMMEU on 7 July 2023. DOF filed written closing submissions in reply on 12 July 2023.
In reaching my decision I have considered all the submissions made and the evidence tendered by the parties, even if not expressly referred to in these reasons for decision.
Background
DOF provide a range of offshore services, including ship management and ship operation. DOF have 55 vessels in its fleet including subsea vessels, anchor handling tug supply vessels and platform supply vessels. Five of these vessels are currently operating in Australian waters. One of these five vessels is the Skandi Darwin. [6]
Every vessel in DOF’s fleet is capable of accommodating persons on board (POB) but none were constructed for the primary purposes of providing accommodation.[7]
The Skandi Darwin is one of 29 subsea vessels in DOF’s fleet. It has been engaged as a multi purpose support vessel in Australian waters since 2017. As a multi purpose support vessel the Skandi Darwin performs multiple tasks offshore including remotely operated underwater vehicle (ROV) support, inspection, maintenance, repair, crane and survey work.[8]
The Skandi Darwin has been modified since its construction to enable it to serve more purposes. In 2017, a 70 tonne subsea crane and two Work Class ROVs were added. The same year additional office space was added and the POB capabilities were increased from 60 POB to 68 POB. In 2022 the Skandi Darwin was modified to include a ‘walk to work’ gangway (Gangway) and a helideck.[9]
On 11 August 2022, the Skandi Darwin commenced a long-term full time contract to assist ESSO with their decommissioning program for their assets in the Bass Strait. Those assets that form part of the decommissioning program are non operational and are either unmanned (and therefore have no accommodation facilities) or if they were previously manned and accessible by helicopter the helipads are no longer serviceable so the only way to access them is via an offshore vessel such as the Skandi Darwin (Facilities).[10]
The Charter Agreement for the Skandi Darwin requires DOF to provide accommodation for up to 35 ESSO personnel[11]
The modifications to the Skandi Darwin allow ESSO’s personnel to walk from the Skandi Darwin onto the Facilities and perform their tasks and then return to the Skandi Darwin to perform their administrative tasks, eat, rest and sleep.[12] DOF’s personnel do not perform any tasks on the Facilities and perform all their tasks, eat, rest and sleep on the Skandi Darwin.[13]
The galley on the Skandi Darwin operates 24 hours per day and serves up to 150 meals in a 24 hour period. All meals are served in the Mess Room. Depending on the number of POB there are up to three Cooks of whom two are rostered on day shift and one on night shift. Depending on the POB there are up to three Stewards two rostered on days shift and one rostered on night shift.[14]
The Skandi Darwin also has a number of recreation facilities including lounge rooms, smoking rooms, tv room and a gymnasium.[15]
The evidence of the CFMMEU witnesses is that there are no other accommodation vessels where the ESSO personnel could be accommodated and that they have been told that if the walk to work gangway is not operational then the Skandi Darwin will go offhire.[16]
Esso have described the function of the Skandi Darwin on their website as follows:[17]
“The MPSV provides a floating support asset that will allow us to complete abandonment operations on our non producing facilities which do not have accommodation based on them. “The MPSV hosts the workforce and means we don’t have to fly workers in and out of the area each day.”
The Charter Agreement pursuant to which the work performed by the Skandi Darwin occurred reveals that functional capabilities required of the Skandi Darwin by ESSO included:[18]
a.Emergency standby duties
b.Cargo supply and rig tender operations
c.Dynamic positioning capabilities.
d.Personnel transport and transfer.
e.Walk to work gangway.
f.Subsea inspection repair and maintenance
g.Oil spill containment.
h.Fire fighting.
It is not disputed that the CFMMEU complied with the provisions of the dispute resolution procedure found at clause 10 of the Agreement before filing the Application.
Consideration
The Agreement commenced operation on 16 June 2017 and covers employees of DOF employed in the classifications of Provisional Integrated Ratings, Integrated Ratings, Chief Integrated Ratings, Chief Cook, Cook, Bosun’s Mate, Chief Steward and Steward (Employees).
The Employees are, or are eligible to be, members of the Maritime Union of Australia Division of the CFMMEU.
The Maritime Union of Australia is covered by the Agreement.
The Agreement provides for different rates of pay for the Employees depending on the Vessel upon which they are assigned to work. The parties are in dispute as to the appropriate rates of pay for the work performed by employees of DOF on the Skandi Darwin.
The power of the FWC to deal with disputes is set out in section 595 of the FW Act. Section 595 provides that the FWC may only deal with a dispute if it is expressly authorised to do so under, or in accordance with, a provision of the FW Act.
The Application was made pursuant to section 739 of the FW Act.
Section 739 of the FW Act allows the FWC to deal with a dispute about an agreement if the agreement includes a term containing a dispute resolution procedure.
The Agreement contains a dispute resolution procedure of the nature contemplated by section 739 at clause 10. Clause 10 provides as follows:
“10.1 If a dispute relates to:
(a) A matter arising under this Agreement; or
(b) The NES,
this clause sets out the procedure to resolve the dispute.Step 1: Where a matter arises when the Employee/s are on board a Vessel, the matter will in the first instance be discussed between the Employee/sand the Master. Where a matter arises when the Employee/s are not on board a Vessel, the matter will in the first instance be discussed between the Employee/s and the Employer's nominated representative. If the matter remains unresolved:
Step 2: The matter will be referred for discussion between the Employee, the Employee's Union delegate or other nominated representative and the Master and/or Employer. If the matter remains unresolved:
Step 3: The matter will be referred for discussion between the appropriate Federal Union Branch Official or other nominated representative and the Employer's nominated representative. If the matter remains unresolved:
Step 4: In the event that the preceding steps have failed to resolve the matter and/or dispute, by agreement of the parties, any person bound/covered by this Agreement including Union or nominated other representative may refer the dispute to the FWC for conciliation and/or arbitration pursuant to Section 739 and Section 595 of the Fair Work Act.
10.2 Where the matter remains unresolved, the FWC may deal with the dispute in two stages:
(a)The FWC will first attempt to resolve the dispute as it considers appropriate, including by mediation, conciliation, expressing an opinion or making a recommendation; and
(b)If the FWC is unable to resolve the dispute at the first stage, and the parties agree, the FWC may then:
(c)
(i) Arbitrate the dispute; and
(ii) Make a determination that is binding on both of the parties.
10.3 While the parties to the dispute are trying to resolve the dispute using the procedures in this clause:
(a)An Employee must continue to perform his or her work unless he or she has a reasonable concern about an imminent risk to his or her health or safety; and
(b)An Employee must comply with a direction given by the Employer to perform other available work at the same workplace, or at another workplace, unless:
(i) The work is deemed not safe; or
(ii) Applicable occupational health and safety legislation would not permit the work performed.
10.4 The parties to the dispute agree to be bound by a decision made by the FWC in accordance with this clause, but note that a decision of a single member of the FWC can be appealed to a full bench of the FWC.
10.5 An Employee who is party to the dispute or the Employer may appoint another person, organisation or association to accompany and/or represent them for thepurposes of the procedures in this clause.”
The FWC may deal with a dispute only on application by a party to the dispute.[19] The CFMMEU is named as a party to the Agreement and is covered by the Agreement.
There is no dispute, and I am satisfied, that the issues in dispute between the parties fall within the scope of clause 10 of the Agreement.
There is no dispute[20] and I am satisfied that the CFMMEU has complied with the procedural steps contained in clause 10 of the Agreement.
I am satisfied that the CFMMEU has standing to make the Application and that I have the jurisdiction to determine the dispute.
In dealing with the dispute the FWC can not exercise powers limited by the term.[21] If, in accordance with the term, the parties have agreed that the FWC may arbitrate (however described) the dispute, the FWC may do so. The FWC must not make a decision that is inconsistent with the FW Act or the Agreement.[22]
When arbitrating a dispute under the dispute settlement procedure the FWC is not exercising judicial power, but a power of private arbitration.[23] As a private arbitrator the FWC is authorised to make decisions as to the legal rights and liabilities of parties to whom the enterprise agreement applies.[24]
In Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v ALS Industrial Australia Pty Ltd [25] the Full Federal Court said at [70] to [71] that the powers and functions of the FWC identified in sections 577, 578, 590, 593, 595, 677 and 678 of the FW Act are available to the FWC when conducting a private arbitration.
Relevantly sections 577 and 578 of the FW Act provide as follows:
“s.577 Performance of functions etc. by the FWC
The FWC must perform its functions and exercise its powers in a manner that:
(a) is fair and just; and
(b) is quick, informal and avoids unnecessary technicalities; and
(c) is open and transparent; and
(d) promotes harmonious and cooperative workplace relations.”
“s.578 Matters the FWC must take into account in performing functions etc.
In performing functions or exercising powers, in relation to a matter, under a part of this Act (including this Part), the FWC must take into account:
(a) the objects of this Act, and any objects of the part of this Act; and
(b) equity, good conscience and the merits of the matter; …”
DOF have classified the vessel as a ‘Support Vessel’ as defined in the Agreement.
The MUA have disputed this classification and maintain that the vessel is a ‘Specialist Vessel’ because it was vessel modified to be used for accommodation.
A ‘Support Vessel’ is defined in clause 3.1 of the Agreement as:
“… a Vessel designed and equipped to perform anchor handling tug support that is engaged in or in association with offshore oil and gas operations and provides any or all related services such as anchor handling, towage, carriage of cargo, underwater inspection, seabed clearance, ROV operations, pipe reel operations, etc.”
A ‘Specialist Vessel’ is defined in clause 3.1 of the Agreement as:
“… a Vessel engaged on a specialist task for more than half a day that is, free span corrections on new pipelines, new subsea installations using a crane or saturation diving from a DP2 Vessel; or any of the following types of Vessels:
• Floatel and/or self-propelled semi-submersible accommodation barge;
• Pipe laying Vessel performing pipe laying;
• DP2 or DP3 dive support Vessel performing saturation diving;
• Rock dumping Vessel performing rock dumping; or
• Self-propelled cable laying Vessel performing cable laying (not including a seismic Vessel)
unless otherwise classified under this Agreement.”
A Floatel is defined in clause 3.1 of the Agreement as:
“… a purpose – built accommodation vessel or a vessel converted or modified to be used for the primary purpose of accommodation.”
DOF submit that the Skandi Darwin is not a floatel and therefore not a specialist vessel because it was not modified to be used for the primary purpose of accommodation. DOF say the purposes of the modifications was simply to enable the Skandi Darwin to undertake a broader range of work. DOF submit that the Skandi Darwin is correctly classified as a support vessel because it is engaged to undertake support activities and during the relevant period gangway operations made up a small portion of the vessel’s scope of work.
The Full Bench, in Princess Linen Services Pty Ltd v United Workers’ Union[26] at [15] and [16] of its decision, recently confirmed the principles of interpretation of enterprise agreements as follows:
“The most succinct expression of the correct approach is that articulated by the Federal Court Full Court in WorkPac Pty Ltd v Skene as follows (citations omitted):
“[197] The starting point for interpretation of an enterprise agreement is the ordinary meaning of the words, read as a whole and in context. The interpretation “… turns on the language of the particular agreement, understood in the light of its industrial context and purpose…”. The words are not to be interpreted in a vacuum divorced from industrial realities; rather, industrial agreements are made for various industries in the light of the customs and working conditions of each, and they are frequently couched in terms intelligible to the parties but without the careful attention to form and draftsmanship that one expects to find in an Act of Parliament. To similar effect, it has been said that the framers of such documents were likely of a “practical bent of mind” and may well have been more concerned with expressing an intention in a way likely to be understood in the relevant industry rather than with legal niceties and jargon, so that a purposive approach to interpretation is appropriate and a narrow or pedantic approach is misplaced.”
The Full Court observations are consistent with the approach taken by the Full Bench of this Commission in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers Union (AMWU) v Berri Pty Limited (Berri).”
It is justifiable to read an agreement to give effect to its evident purpose, having regard to such context, despite mere inconsistencies or infelicities of expression which might tend to some other reading. A Court or Tribunal should not adopt a narrow or pedantic approach to the interpretation of enterprise agreements.[27]
It is not in dispute that:
a.The Skandi Darwin is not a purpose built accommodation vessel.
b.The Skandi Darwin has been modified to add office space, to increase POB capabilities to “… allow for client representatives to work from the vessel”[28] and to the Gangway.
c.The modifications increased the POB capabilities 13% beyond what was necessary for the vessel to operate as a Support Vessel at construction.
d.The purpose of the modifications is “To make the Skandi Darwin more attractive to clients to because it would be capable of serving more purposes”[29]
e.The purpose of the Gangway in particular is to provide safe access for ESSO personnel to ‘walk to work’ and return to Skandi Darwin.[30]
f.The ESSO personnel eat and sleep on the Skandi Darwin.[31]
g.There is no alternative accommodation for the ESSO personnel other than the Skandi Darwin. The Facilities are no longer accessible by helicopter to permit the ESSO personnel to commute to the Facilities by air.[32]
DOF submit that the modification of the Skandi Darwin by the addition of a gangway does not constitute a modification for the primary purpose of accommodation because the purpose of Gangway is simply a method to board or disembark from a Vessel.
The Skandi Darwin was constructed and deployed as a support vessel well before the Gangway was added. The Gangway clearly was not a necessary element for the Skandi Darwin to perform functions as a Support Vessel. The evidence in these proceedings is that the Gangway was added to allow the Vessel to provide other services than simply the services for which the Vessel was constructed. The Gangway allows for personnel to ‘walk to work’ from accommodation, meals and rest areas located on the Skandi Darwin. It allows the Skandi Darwin to provide services in addition to those typically delivered by a Support Vessel.
The Gangway is not the only modification to the Skandi Darwin. The modifications also include increased POB capacity. The very nature of such modifications is to allow the Vessel to provide additional accommodation beyond that what was considered necessary for the vessel to operate as a Supply Vessel. The modification to increase POB capacity sheds light on the purpose for the addition of the Gangway. The modifications permit the vessel to provide accommodation for personnel not working on the vessel rather than just accommodate the crew operating the vessel as a Supply Vessel.
The modifications to the Skandi Darwin allow it to used for the primary purpose of accommodation as opposed to being used primarily as a Supply Vessel. It is a question of fact whether it was in fact used in this manner.
DOF submit that the Schedules of the Agreement set the rates of pay by reference to the type of Vessel “… irrespective of the assignment or scope of service DOF actually provides to its clients”.
It is clear from the language of the definition clause that the classification of a vessel as a Specialist Vessel is not determined exclusively by reference to the type of vessel because the definition provisions contain specific references to not only vessel type but also expressly refers to the tasks being performed. For example, a Specialist Vessel is defined to include Pipe laying Vessel performing pipe laying and DP2 or DP3 dive support Vessel performing saturation diving.Similarly, the definition of Flotel speaks to the purpose for which the vessel is to be used.
The different rates of pay in the Agreement reflect different demands of work. Interpreting the agreement with a practical bent of mind the designation of a vessel must proceed by reference to what a vessel actually does rather than simply what it is capable of doing or is contracted to do. Otherwise DOF could simply avoid the higher rates of pay associated with Specialist Vessels by deploying a Support Vessel using the POB capacity solely or accommodation purposes for personnel working off the vessel and not for simply for accommodating crew providing support services.
The evidence filed by the parties revealed that the provision of the Gangway and accommodation facilities and services was an important element of the services to be provided by the Skandi Darwin.[33] It is also revealed that the ESSO personnel used the Vessel for the purposes of accommodation and without those accommodation facilities and services the ESSO personnel could not have performed their daily duties given the helipad was not serviceable.
However, there was limited evidence filed by the parties of what work was actually performed on the Skandi Darwin during the relevant period such that a view might be reached as to whether the vessel was in fact operating as a Supply Vessel or a Specialist Vessel.
On this basis I invited the parties at the conclusion of the Hearing to provide further evidence as to work performed by the Skandi Darwin during the relevant period.
DOF filed a Supplementary Witness Statement by Mr Rhodes which explained that 0000hrs to 2400hrs on four dates in September the Skandi Darwin performed a variety of offshore support services such as dynamic positioning operations, ROV visual survey work and inspection work and emergency drills. Mr Rhodes conceded that on each of the dates in question there Skandi Darwin also provided accommodation services and facilities to the ESSO personnel.
In their Closing Submissions DOF cite Mr Rhodes Supplementary Witness Statement in support of its submission: “The evidence is that from 0000 to 2400hrs each day during the relevant period the vessel performed a variety of tasks …there is no material before the Commission which permits a finding that the Vessel’s primary purpose during the relevant period was accommodation.”
I note that Mr Rhodes Supplementary Witness Statement deals with only four dates in the relevant period not the entire period.
In order to provide further evidence in support of the Application the CFMMEU made a number of applications for production orders. After the production applications were determined I convened a conference between the parties on 28 June 2023 to determine the further programming of the Application. DOF submitted that it was appropriate that the parties be directed to file their closing submissions. DOF did not seek a further Hearing to challenge admission of the documents produced and were invited to file Closing Submission in Reply to address the evidence contained in the produced documents. I note however in their Closing submissions in Reply now DOF object to the admission of these documents. I am satisfied that the documents are relevant to the proceedings, should be admitted and that DOF was provided with procedural fairness in relation to the admission of the documents.
The CFMMEU relied on the materials produced in accordance with the production orders as evidence that during the period from 11 August 2022 to 10 November 2022 the number of DOF employees on board the Skandi Darwin was exceeded by the number of Essso personnel on 36 dates. The CFMMEU submit that as the number of ESSO personnel exceeded the number of DOF employees on board that the vessel’s primary purpose was as an accommodation vessel and consequently is properly characterised for the purposes of payment as a Specialist Vessel.
I am not satisfied that the primary purpose for which the vessel was used or how the vessel should be characterised can be determined solely by reference to the number of non DOF personnel on board as opposed to the number of Employees on board. Such evidence must be considered in the context of what work was performed on the dates in question. The CFMMEU have not identified in its submissions evidence that the primary purpose of the work performed on the Skandi Darwin on the dates in question was the provision of accommodation as opposed to the performance of duties associated with the operation of the Skandi Darwin as a Supply Vessel such that the Skandi Darwin should have been classified as a Specialist Vessel.
DEPUTY PRESIDENT
Appearances:
Ms S Sayed, for the Applicant.
Mr R Boothman, for the Respondent.
Hearing details:
2023
PERTH
30 MARCH
Final written submissions:
Applicant’s final written submissions filed 7 July 2023.
Respondent’s final written submissions filed 12 July 2023.
[1] Warrell v Walton (2013) 233 IR 335, 341 [22].
[2] Digital Court Book (DCB) 54-55.
[3] Ibid 56-57.
[4] Ibid 58
[5] Ibid 70-72.
[6] Ibid 65.
[7] Ibid 65.
[8] Ibid 65.
[9] Ibid 56.
[10] Ibid 66.
[11] Ibid 30.
[12] Ibid 54-55, 66.
[13] Ibid 54-55, 66.
[14] Ibid 54-55.
[15] Ibid 57.
[16] Ibid 56-58.
[17] Ibid 17.
[18] Ibid 24.
[19] Ibid; Fair Work Act 2009 (Cth) (FW Act) s.739(6).
[20] Ibid cl 10.
[21] FW Act (n 18) S.739(3).
[22] Ibid S.739(5).
[23] Linfox Australia Pty Ltd v TWU [2013] FCA 659 at [38]; TCL Air Conditioner (Zhongshan) Co Ltd v Judges of the Federal Court of Australia [2013] HCA 5; 251 CLR 533 [75] to [79]; AMWU v ALS Industrial Australia Pty Ltd [2015] FCAFC 123 at [34]-[36].
[24] CFMEU v AIRC (2001) 203 CLR 645 at [32]; Linfox Australia Pty Ltd v TWU (n 23) at [19]-[24]; AMWU v ALS Industrial Australia (n 23).
[25] [2015] FCAFC 123; 235 FCR 305.
[26] [2021] FWCFB 1903.
[27] See Kucks v CSR Ltd (1996) 66 IR 182, 184; WorkPac Pty Ltd v Skene [2018] FCAFC 131 at [197]; Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union' known as the Australian Manufacturing Workers Union (AMWU) v Berri Pty Ltd[2017] FWCFB 3005 at [114].
[28] DCB (n 2) 66.
[29] Ibid 66.
[30] Ibid 14.
[31] Ibid 66.
[32] Ibid 17.
[33] Ibid 17, 30.
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