Construction, Forestry, Maritime, Mining and Energy Union v Smit Lamnalco (Towage) Australia Pty Ltd T/A Smit Lamnalco

[2020] FWC 1115

[2020] FWC 1115

FAIR WORK COMMISSION

DECISION

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

Construction, Forestry, Maritime, Mining and Energy Union
v
Smit Lamnalco (Towage) Australia Pty Ltd T/A Smit Lamnalco
(C2019/6161)

The Australia Institute of Marine and Power Engineers
v
Smit Lamnalco (Towage) Australia Pty Ltd T/A Smit Lamnalco
(C2019/6178)

The Australian Maritime Officers’ Union
v
Smit Lamnalco (Towage) Australia Pty Ltd T/A Smit Lamnalco
(C2019/6184)

DEPUTY PRESIDENT ASBURY BRISBANE, 28 FEBRUARY 2020

Section 739 Applications for Commission to deal with disputes in accordance with dispute settlement procedures in enterprise agreements – Whether enterprise agreement can provide for variation other than in the manner provided for in Part 2 – 4 Division 7 – Finding that enterprise agreement may provide a mechanism for its own variation.

OVERVIEW

[1] The Australian Institute of Marine and Power Engineers (AIMPE), Australian Maritime Officers Union (AMOU) and the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) (collectively the Unions) have each applied under s. 739 of the Fair Work Act 2009 (the Act) for the Fair Work Commission (the Commission) to deal with disputes in accordance with dispute settlement procedures in the following Agreements:

•  Smit Lamnalco Towage (Australia) Pty Ltd and AIMPE Gladstone Enterprise Agreement 2016 (the Smit/AIMPE Agreement);

•  Smit Lamnalco Towage (Australia) Pty Ltd and AMOU Gladstone Enterprise Agreement 2016 (the Smit/AMOU) Agreement; and

•  Smit Lamnalco Towage (Australia) Pty Ltd and MUA Gladstone Enterprise Agreement 2016 (the Smit/CFMMEU Agreement). (Collectively the Agreements)

[2] The three Agreements are in substantially identical terms. The present disputes relate to a roster change notified by Smit Lamnalco (Towage) Australia Pty Ltd (Smit) pursuant to clause 12 of the Agreements to take effect from 5 November 2019 (roster change disputes). The roster change disputes as articulated by the Unions require determination of some threshold/jurisdictional issues concerning the interaction between clause 12 of the Agreements, which deal with Hours of Work and Related Matters (including changes to rosters), and clause 8 which provides for a Dispute Resolution Procedure.

[3] Clause 12.8 of the Agreements state that employees who object to a proposed roster change may “make an application in accordance with the Dispute Resolution Procedure” and stipulates that where such application is made the status quo will remain until the matter is settled. The Dispute Resolution Procedure in clause 8 of the Agreements has 5 steps with Step 5 providing for any person bound or covered by the relevant Agreement to refer an unresolved dispute to the Commission for conciliation and/or arbitration. It is important to note that Smit has accepted that if a dispute is brought by the Unions pursuant to clause 12.8 of the Agreement it is required to maintain the status quo by not implementing its proposed rosters.

[4] The threshold issue advanced by the AIMPE and the AMOU in directions conferences and written submissions in relation to their roster change dispute applications is based on the assertion that Smit has asked the Commission to deal with the roster change disputes under clause 12 without following the steps in the dispute resolution procedure. 1 The AIMPE and the AMOU submit that their applications are, in effect, a jurisdictional objection to the Commission dealing with the roster change disputes absent the necessary procedural steps being followed. It is submitted that in dealing with the AIMPE and AMOU applications, the Commission should determine that “any dispute about proposed roster changes under clause 12 of the Agreements is required to proceed through all of the steps of the Dispute Resolution Procedure in clause 8 before it can reach the apex of that Procedure, being the Fair Work Commission”.2

[5] At the hearing a variation of this argument was advanced. The legal representative for the AIMPE and the AMOU, Mr Tiley, stated that the Unions did not rely on clause 12.8 of the Agreements and that the applications were brought pursuant to clause 8. It was also asserted that Smit relied on clause 12.8. 3 The AIMPE and the AMOU maintained that the proposed roster change cannot proceed to Step 5 of the Dispute Resolution Procedure in clause 8 of the Agreements because Steps 2, 3 and 4 have not been complied with. I put to Mr Tiley during the hearing that the effect of this submission is that the AIMPE and the AMOU have made applications, which they contend that the Commission does not have jurisdiction to deal with. I also observed that if the applications were not made pursuant to clause 12.8 of the Agreements, then it is arguable that there is no requirement for Smit to maintain the status quo with respect to proposed roster changes. In response Mr Tiley conceded that if the submissions of the AIMPE and the AMOU are accepted, their applications are liable to be dismissed. Mr Tiley also submitted that the question of whether the status quo was required to be maintained was a matter for another day.4

[6] The CFMMEU in its roster change dispute application raised a broader issue, contending that the rosters proposed by Smit are substantial variations to rosters prescribed in the Smit/CFMMEU Agreement (which are identical in all three Agreements) and that such variations can only be made in accordance with Part 2-4, Division 7 of the Act dealing with variations to enterprise agreements. The CFMMEU further contends that clause 12 of the Smit/CFMMEU Agreement relied on by Smit as allowing for roster variations essentially ousts the operation of the Act in relation to variations to enterprise agreements and is an impermissible provision, which is of no effect. The CFMMEU filed an application seeking an interim order to maintain the status quo in relation to the implementation of the roster pending the hearing and determination of its threshold/jurisdictional issue. That application was subsequently not pressed by the CFMMEU on the basis that Smit accepted that clause 12.8 of the Agreements requires that it maintain the status quo if employees object to the proposed roster change and make an application in accordance with the dispute settlement procedure. The CFMMEU supported the argument advanced by the AIMPE and AMOU as an alternative to its primary position.

[7] It is important to note that Smit did not make an application in relation to the roster disputes either under clause 8 or clause 12.8. In relation to the threshold/jurisdictional issue raised in the CFMMEU roster dispute application, Smit maintains that roster arrangements can be varied during the life of the Agreements and that the mechanism for the variation of roster arrangements is provided by clause 12 of the Agreements, which deal with Hours of Work and Related Matters and in particular the processes provided for in subclauses 12.5 to 12.8 of each Agreement. In relation to the AIMPE/AMOU roster dispute applications Smit maintains that where a dispute over a proposed roster change exists at the stage provided for in clause 12.8 of the Agreement, that dispute is to be progressed by the disputing employees/Union making an application to the Commission pursuant to s. 739 of the Act, in accordance with step 5 of the Dispute Settlement Procedure rather than the parties being required to commence the process at an earlier step.

[8] Notwithstanding my concerns about arguments advanced by the AIMPE and the AMOU and the manner in which those arguments developed over the course of dealing with the matter, at the conclusion of the hearing all of the parties requested that the Commission determine the threshold/jurisdictional issues raised by the AIMPE and the AMOU. Despite being given an opportunity after the hearing to agree on the question that I would be determining no agreement was reached. As articulated at the hearing the issues for determination require a construction of clause 12 Hours of Work and Related Matters and clause 8 Dispute Resolution and whether in the present circumstances the disputes as articulated by the AIMPE and the AMOU in their roster dispute applications have reached Step 5 in the Dispute Resolution Procedure in clause 8.

[9] After considering the parties’ views I determined to conduct a hearing. Evidence in support of the AIMPE Application was given by Mr Greg Yates, Senior National Organiser. Evidence in support of the AMOU application was given by Ms Tracey Ellis, Queensland Organiser. At the hearing the CFMMEU was represented by Mr Norris. The AIMPE, the AMOU and Smit sought and were granted permission to be legally represented on the basis that I was satisfied that the matters in dispute involved complexity and would be more efficiently dealt with if permission was granted. The AIMPE and the AMOU were represented by Mr Tiley of Hall Payne Lawyers. Smit was represented by Mr Brotherson of Counsel instructed by Mr Dearden of Hall & Wilcox Lawyers.

THE BACKGROUND TO THE ROSTER CHANGE DISPUTES

[10] There was some controversy about the manner in which the roster change disputes were before the Commission. The roster change disputes followed earlier applications seeking that the Commission deal with disputes by certain employees who are members of the Unions for conversion of their casual employment (the casual conversion disputes). The casual conversion dispute applications were made on 15 July 2019 (AMOU) 5; 4 September 2019 (CFMMEU)6; 4 September 2019 (AIMPE)7. A conference in relation to the AIMPE application was scheduled for 9 August 2019 but was cancelled at the request of one of the parties due to availability issues. Conferences in relation to all three of the casual conversion disputes were conducted on 9 September 2019 and 3 October 2019.

[11] On 9 September 2019, at 1.36 pm (in advance of a conference scheduled for 3.00 pm on that date) Smit’s legal representative emailed the parties and the Commission setting out its position in relation to the casual conversion disputes. In that correspondence Smit stated that on 2 September it had notified the Port Consultative Committee (PCC) of a proposed roster change in accordance with clause 12.6 of the Agreements and that meetings had occurred in relation to this proposal, and more were scheduled. The correspondence went on to state that one of the effects of the proposed roster changes would be the establishment of new positions and that consideration of the casual conversion disputes could not proceed without the roster changes being finalised. The correspondence went on to state that if the Unions pressed their respective casual conversion applications, the Company’s position was that a day be set aside for conciliation at an early opportunity.

[12] The potential impact of the proposed roster changes was discussed at the conferences in relation to the casual conversion disputes on 9 September and 3 October. It was apparent that the Unions opposed the proposed roster changes and at the conference on 3 October 2019 a process was discussed for dealing with both the casual conversion disputes and the likely disputes in relation to roster changes. That process was discussed in a context in which any resolution of the casual conversion dispute would be impacted by the proposed roster changes to the extent that they would likely affect the numbers of employees required by Smit and its capacity to agree to conversion on business grounds. The Unions did not object to the process discussed at the conference, albeit they did not unequivocally accept it. The process was set out in an email from Smit’s legal representative to the Unions on 3 October 2019, sent after the conference concluded. The terms of the email are as follows:

1. The Company will proceed to appoint a suitable candidate for the one current vacant master position.

2. Without prejudice to the Company’s position it will not appoint any other permanent employees pending the Commission Conference in Gladstone on 30 October 2019. In so doing the Company does not accept status quo applies to claims for casual conversion to prevent appointment to vacant permanent positions. The Company does however agree not to add any additional casuals to its business in Gladstone pending the further Commission conference on 30 October 2019. With respect to this commitment the Company will issue an email to the Unions confirming the names of the current casuals and their departments by Friday 4 October 2019.

3. On Friday 4 October 2019, the Company will issue a notice pursuant to clause 12.7 of the respective enterprise agreements confirming it intends to proceed with the implementation of the roster change.

4. The Unions should by no later than 5.00 pm on Wednesday 9 October 2019 file any dispute notification with the Commission (with a copy to the Company), regarding the proposed roster change. In the event the dispute notices are not filed the Company will file its own notice of dispute.

5. All disputes (ie. both the casual conversion claims and the roster change) will be dealt with together by the Commission including in the conciliation before Deputy President Asbury in Gladstone on 30 October 2019.

6. By no later than 4.00 pm 15 October 2019 the Unions will set out in writing to the Commission (and copy to the Company) their respective objections to the roster, including an explanation as to why they object to the roster change.

7. The Company will provide a reply document (with reasons) to the respective positions of the unions by 4.00 pm 22 October 2019.

[13] The casual conversion dispute filed by the AIMPE was formally withdrawn on 3 October 2019 when that Union filed a Form F50 Notice of discontinuance. The AMOU has advised that it has withdrawn its casual conversion dispute other than in relation to one member. The position of the CFMMEU in relation to its casual conversion dispute is not clear.

[14] Consistent with the deadline in point 4 of the process, by 5.00 pm on 9 October 2019 each of the Unions applied under s. 739 of the Act seeking that the Commission deal with disputes arising under the Agreement relevant to each Union in relation to the proposed roster changes. Also consistent with the process, Smit did not file an application in relation to the proposed roster changes.t

[15] The Form F10 application filed by AIMPE on 8 October 2019 states at item 1.4 that the dispute relates to clause 8 Dispute Resolution. At item 2.1 the AIMPE states that the dispute is about the following matters:

1. A dispute conference was held before Deputy President Asbury on 3 October 2019 regarding a refusal by Smit for casual conversion under matter 2019/5468.

2. This dispute conference was heard concurrent with disputes lodged by the AMOU and the CFMMEU.

3. During conference proceedings the Deputy President adopted a process proposed by the Company representatives to deal with a proposal to change rosters under clause 12 of the Agreement.

4. The Company proposal fails to comply with the dispute settlement procedure steps 2, 3and 4 and instead asks the Commission to deal with a dispute under step 5 of clause 8.

5. AIMPE is of the view that whilst there is disagreement about proposed roster changes, AIMPE is of the view that the steps in clause 8 have not been allowed to deal with the changes to the roster as per clause 12 deferring to clause 8. (sic)

[16] At item 2.4 of the AIMPE application it is stated that the following steps have already been taken to resolve the dispute under the dispute resolution procedure:

1. AIMPE received correspondence on 3 October 2019 presuming an “agreed” process and sets out the Company position/understanding. (sic)

2. There has been no consultation or involvement of a local AIMPE Delegate, Local AIMPE official and/or a National AIMPE Official to deal with the dispute at steps 2, 3 and 4 of clause 8 respectively.

3. It is AIMPE’s position that those steps need to be exhausted before a proposal to deal with a dispute that may or may not exist.

4. If the steps are followed it may or may not be necessary to trigger step 5 of clause 8.

[17] The relief sought by the AIMPE as stated in item 3.1 of the Form F10 Application is that steps 2, 3 and 4 of clause 8 be followed.

[18] The AMOU Form F10 Application filed on 9 October 2019 states at item 1.4 that the dispute relates to both clause 8 Dispute Resolution and clause 12 Hours of Work and Related Matters in the AMOU/Smit Agreement. In relation to what the dispute is about, the AMOU states at item 2.1 of its Form F10 Application that:

1. On 15 July 2019 the AMOU lodged a casual conversion dispute in the FWC.

2. In approximately late August 2019 Smit proposed a new roster.

3. On 30 September 2019, masters unanimously voted to the Company’s roster because what was proposed changes the hours of work and operational standards beyond the bounds of the EA. The masters also had concerns about the viability of the proposal.

4. On 1 October 2019 Smit asked Deputy President Asbury to join the Casual Conversion dispute and the Roster dispute for conciliation.

[19] In relation to steps already taken to resolve the dispute under the dispute resolution procedure, the AMOU states at item 2.4:

1. In approximately late August early September, Smit discussed a possible roster change with the Port Consultative Committee.

2. On 3 September 2019, AMOU Delegate … notified Smit that the masters unanimously voted no to the Company’s roster and that any attempt to implement the roster would see the parties in dispute.

3. The Company did not engage in any discussions with the employees, or their representatives, to attempt to resolve the dispute.

4. On 1 October 2019 Smit sought the assistance of the Fair Work Commission to deal with the roster dispute.

[20] I assume that the reference to 1 October is an erroneous reference to the email sent by Smit on 3 October 2019. The relief sought by the AMOU is stated in item 3.1 of the Form F10 as follows:

1. The roster sought by Smit be abandoned. Or;

2. The dispute resolution procedure be followed with status quo to remain in an attempt to resolve the problems in the roster before implementing it.

[21] The CFMMEU Form F10 Application also states that the dispute relates to clause 12 Hours of Work and Appendix 1 – Rosters. At item 2.1 of the F10 Application the CFMMEU states that the dispute is about Smit giving notice of a roster change to its workforce and failing to recognise and deal with full time officials of the Union appointed by members under the Model Consultation Clause of the CFMMEU Agreement. The CFMMEU further states that it objects to the roster change on the grounds that:

1. Appendix 1 of the Agreement is a term of the Agreement and can only be altered by following the provisions of Part 2-4 Division 7, Sub-division A of the Act; and

2. During the negotiations for the Agreement the CFMMEU and its members forwent several claims in order to maintain the existing number of prime tugs now sought to be reduced in a manner that is “effectively a repudiation of an agreement reached in order to secure the current enterprise agreement”.

[22] In relation to steps taken to resolve the dispute the CFMMEU states that matters have been discussed between the employees and the Port Manager and that Officials of the Queensland Branch of the Union have had discussions with senior management of the Company which have not resolved the dispute. The Relief sought by the CFMMEU is that the proposed new roster be abandoned or in the alternative – if it is decided that Smit may introduce the new roster notwithstanding the terms of the Act – that Smit restart the consultation period complying with clauses 3 and 4 of the Model Consultation Term.

RELEVANT AGREEMENT PROVISIONS

[23] The provisions of the Agreements on which the disputes centre are set out below. Given that the three Agreements are in substantially identical terms, it is only necessary to set out the provisions of one Agreement. As I intend to deal first with the CFMMEU’s contentions I set out the relevant provisions of the Smit/CFMMEU Agreement.

[24] The dispute settlement procedure in clause 8 of the Agreement is in the following terms:

“8. DISPUTE RESOLUTION

8.1 In the event of any matter, breach and/or dispute arising under this Agreement, and/or in relation to the interpretation or application of this Agreement or the National Employment Standards, or any matter arising in the course of employment, the following procedure will apply.

Step 1: The matter will in the first instance be discussed between the Employee/s (and their representative if requested) and the immediate supervisor involved.

If the matter remains unresolved-

Step 2: It will be referred for discussion between the Union delegate or other employee representative, and the local supervisor.

If the matter remains unresolved-

Step 3: It will be referred for discussion between the local representative and appropriate Union official or other employee representative and the Gladstone Manager.

If the matter remains unresolved-

Step 4: It will be referred for discussion between the local representative and appropriate National Union official or other employee representative and the nominated Smit Lamnalco Towage (Australia) Pty ltd national management official.

If the matter remains unresolved-

Step 5: In the event that the preceding steps have failed to resolve the matter and/or dispute, any person bound/covered by this Agreement or the Company may refer the dispute to Fair Work Commission (FWC) for conciliation and/or arbitration.

8.2 Fair Work Commission may deal with the dispute in two stages:

8.2.1 Fair Work Commission will first attempt to resolve the dispute as it considers appropriate, including by mediation, conciliation, expressing an opinion or making a recommendation; and

8.2.2 If Fair Work Commission is unable to resolve the dispute at the first stage, Fair Work Australia may then:

(i) arbitrate the dispute; and

(ii) make a determination that is binding on the parties.

8.3 The parties to the dispute agree to be bound by a decision made by Fair Work Commission in accordance with this clause.

8.4 Work shall continue without change or interruption pending determination of any matter or dispute in accordance with the above procedure, except in circumstances where an employee holds a reasonable concern about an imminent risk to his or her health and safety.”

[25] Clauses 12 of the Agreements deals with hours of work and related matters and provides as follows:

“12. HOURS OF WORK AND RELATED MATTERS

12.1 The parties have established Rosters of Work and Operational Standards which are appended is Appendix 1.

12.2 The Parties agree that the Rosters of Work and Operational Standards are subject to change because of changes to service, operational and port requirements. Changes to the Rosters of Work and Operational Standards will not constitute a variation to this Agreement.

12.3 The fundamental objective of any Rosters of Work And Operational Standards is to ensure that sufficient Employees are available to satisfy customer's requirements on no more than 30 minutes' notice, and that the tugs are maintained to a standard as required by the Company's Planned Maintenance Program.

Rosters of Work and Operational Standards to be made available

12.4 The Rosters of Work will be made available to every new Employee before the new Employee commences employment with the Company, and acceptance, including acceptance of the possibility of change under this Clause, will be a pre-condition of employment.”

Changes to rosters

12.5 Rosters of work may be varied from time to time. Any proposed changes to existing rosters of work will be subject to consultation between the Company and the Employees. For the purposes of this clause, the Port Consultative Committee will be the consultative body for the Employees.

12.6 The Company will notify the Port Consultative Committee of any proposed changes to the rosters of work in writing, together with the reasons for the proposed change. Consultation will then commence within 7 days of notification.

12.7 If after 28 days from notification no agreement has been reached regarding the changes to the rosters of work, the Company may give the Port Consultative Committee 28 days' written notice of its intention to implement the change.

12.8 If the Employees still object to the proposed changes, they may make application in accordance with the Dispute Resolution Procedure. If such application is made, the status quo will remain until the matter is settled.”

[26] Clause 32 provides:

“32. REDUCTION CESSATION OR GROWTH IN BUSINESS

32.1 The parties have entered into this Agreement in the expectation that its terms will apply for the life of Agreement.

32.2 However, if circumstances affecting the business will or could lead to a reduction, cessation or growth of the business, the Company and the unions will confer in an attempt to resolve any issues arising from the change in circumstances. The parties will attempt resolution of such issues by, if necessary, using the Dispute Resolution procedures contained within the Agreement, including a request to FWC determine the reasonableness of any proposals addressing the changed circumstances. Where found to be reasonable by FWC, the Company proposals will be implemented.

32.3 In the event of substantial changes to the competitive environment, roster arrangements, or other relevant circumstances, the parties agree to review, and, where necessary, adjust salaries referred to in Clause 15 of the Agreement.

32.4 If, as a result of the proposals or review referred to above, it is necessary to vary this Agreement before its normal expiry date, then the parties agree to take such steps as are required by the Act to vary this Agreement accordingly.”

[27] The Agreements each contain an Appendix 1 dealing with Rosters and Operational Standards. These Appendices are subject of a confidentiality Order under s. 594(1) of the Act. Among other matters, Appendix 1 in each of the Agreements sets out crew rosters and vessel rosters. The Appendices also state that: “Changes to the roster will be implemented in accordance with Clause 12.5 – 12.8”.

APPROACH TO CONSTRUCTION OF AGREEMENTS

[28] The issues raised in both the AIMPE/AMOU applications and the CFMMEU application concern the proper construction of clauses of the Agreements. The approach to this task was most recently set out in a Decision of a Full Bench of the Commission in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) v Berri Pty Ltd 8 as follows:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

12. Evidence of objective background facts will include:

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

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

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

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

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

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

[29] I have applied these principles in determining the matters in dispute.

CFMMEU ISSUE

[30] The issue raised by the CFMMEU is a broad one and if determined in favour of the Union, that is the end of the matter. Accordingly, I deal first with the contentions advanced by the CFMMEU. The CFMMEU submits that Clauses 5.1 and 5.2 of Appendix 1 of the Smit/CFMMEU Agreement are part of the agreement and that the proposals to implement new rosters are radical variations to those terms. This, according to the CFMMEU, brings a fundamental question into play: can the terms of an enterprise agreement be varied as simply as the Respondent appears to be pursuing? The CFMMEU submits that when examining the statutory provisions of Part 2-4, Division 7, Sub-division A of the Act, which deal with variations to Enterprise Agreements, the complexity is notable. In this regard reference was made to the Decision of Bromberg J in Teys Australia Beenleigh Pty Ltd v AMIEU (No.2) 9where his Honour stated in relation to those provisions of the Act:

“My purpose in setting out the requirements is to demonstrate that the task that the legislature has invested in the Commission is a complex one, with many moving parts, calling for careful assessment and the exercise of discretion and judgment. Essentially the same tasks face the Commission on a variation application. It is difficult to accept that, where so careful and structured a protective and supervisory role has been given to the Commission, the legislature would also intend that that role could be avoided, or that its intended outcome could be eroded. whether easily or at all.” 10

[31] According to the CFMMEU that is the end of the matter and the purported variation is not permissible unless the Act is complied with. The CFMMEU submits that the parties have set out extensive provisions in Appendix I dealing with rosters. These are fixed and immutable arrangements. They have not been derived from an extensive set of disassociated rules normally found in awards and agreements dealing with rostering, such as a span of hours, minimum and maximum engagements and prescribed breaks.

[32] The CFMMEU also points to further authority for the proposition that variations of this kind are impermissible in the judgment of Ryan J in Kilpatrick Green Pty Ltd v CEPU 11. In that matter Ryan J was asked to consider the effect of the following provisions of a certified agreement:

"This Enterprise Agreement . ... will apply . ... except in the following circumstances:

1.1 Where a site agreement signed by the CEPU (Electrical Division) exists that provides better wages and conditions than those contained in this Agreement.

1. 2 Where the company undertakes to do work at a specific site or project with a total project value in excess of $56.2m the parties may negotiate a specific site agreement in excess of this agreement provided that the site agreement will take precedence over this enterprise agreement. Every endeavour will be made by the parties to negotiate the specific site agreement prior to the close of tender by the electrical contractor.”

[33] His Honour determined (amongst other things) that the above subclauses operated to the effect that:

“ .... the areas of work designated in subclauses 1.1 and 1. 2 are excepted from the application of the certified agreement upon the existence of one or other of the circumstances specified in those subclauses, there is no question of the certified agreement’s ‘unilateral’ termination. ... It is as if the certified agreement never had any application to the excepted area of work.”

[34] In the matter before his Honour the applicant had argued that on the existence of one (or more) of the circumstances in subclauses 1.1 or 1.2 was to effect the termination or variation of the agreement in a way not consistent with the Act. Ryan J observed that:

“Similarly, on this construction, there can be no suggestion that the Commission, in certifying an agreement in the present form, has countenanced the possibility of its being varied, perhaps very substantially, without such a variation being certified as required by s.170MD(2) of the Act. Such a suggestion would, I consider, implicate the Commission in an improper delegation or abdication of its duty of certification.”

[35] The CFMMEU submits that s. l70MD(2) was the then equivalent of Part 2-4, Division 7, Sub-division A of the present Act. The Union relies heavily on the above comment of Ryan J to support its contention that to take any cognizance of clause 12.2 of the Agreement in its present form would implicate the Commission in an improper delegation or abdication of its duties under the Act.

[36] The CFMMEU submits that the last sentence of clause 12.2 has “a guilty ring” about it, as if it was known that there was a danger in changing agreed rosters. Be that as it may, it has no effect in curing the problem. The CFMMEU also submits that clause 12.2 purports to oust the Act and is not a valid provision. Further, the CFMMEU submits that clause 12.2 purports to allow new terms to be created by variation, which have not been subject to the rigorous scrutiny imposed on the Commission by the Act nor subjected to the rigorous scrutiny required to effect a valid variation under the Act. As a result, there was no way for the Commission to know at the time of approval that clause 12.2 may be used to impose rosters that are inconsistent with the Marine Towage Award 2010 and therefore result in the Agreement not passing the better off overall test.

[37] It is also contended by the CFMMEU that clause 12.2 of the Agreement is so vague it is difficult, even in the unlikely event it was given some validity, to give grammatical effect to. It is said that roster changes are triggered when there is a need for changes to service, operational and port requirements. In one sense the phrase could be read cumulatively, meaning all three factors must be demonstrated, which has not occurred to date. Further, the CFMMEU contends that even giving the drafting a remedial effect by reading it disjunctively, none of the three triggers is defined and are of such broad meaning it is incumbent on the Respondent to provide a meaning as to what phrases such as “changes to services” mean. Clauses 5.1 and 5.2 cannot be varied other than following the procedure in Part 2-4, Division 7, Sub-division A of the Act. The proposed rosters are an invalid variation. Clause 12.2 is an impermissible ouster of the Act and is so vague no sensible meaning can be given to it.

[38] The relief sought by the CFMMEU is that the proposed new roster be abandoned or in the alternative, if it is decided that Smit may introduce the new roster, that Smit restart the consultation period as provided in clauses 3 and 4 of the model consultation term which is a term of the Smit/CFMMEU Agreement.

[39] Evidence in support of Smit’s position was given by Mr Peter Sedgwick, Operations Manager. 12 Mr Sedgwick states that on or around 9 August 2019 he and Glenn Wetters (General Manager) prepared a memo to all employees at the Port of Gladstone noting that the Company had identified the current roster was not achieving desired service levels in an efficient manner and the Company would be proposing a roster change at the next PCC meeting on 2 September 2019. A copy of this memo was placed on the Employee bulletin board in the Port of Gladstone on and from 9 August 2019 and was also emailed to all employees of the Port of Gladstone. That memo was tendered by Mr Sedgwick and proposed a 12-month trial of a new roster.13

[40] On 2 September 2019 Mr Sedgwick attended the scheduled PCC meeting and provided all members of the PCC with a written notification of the proposed roster change and other documentation. That documentation, also tendered by Mr Sedgwick, summaries the change and the reasons for it and sets out detailed changes to rosters of work and operational standards with tracked and highlighted changes. 14 Mr Sedgwick states that further PCC meetings were held on 9 and 18 September 2019. As a result of questions raised during the 2 and 9 September 2019 meetings, further documentation was emailed to the PCC on 13 September 2019 for discussion during the 18 September 2019 meeting. A copy of this email and documentation relevant to the proposed roster change was also tendered by Mr Sedgwick.15

[41] Mr Sedgwick said that separate to the consultation in relation to the proposed roster change, the Company was involved with an ongoing dispute with each of the AMOU, AIMPE and MUA, in the Commission relating to various requests for casual conversions. On or around 9 September 2019 the casual conversion disputes were listed for conference before me. Prior to the conference starting, the Company instructed Hall & Wilcox to write to my Associate and each of the union representatives to notify them of the Company’s roster change proposal, which had been put before the PCC on 2 September 2019 and confirming the roster change was subject to further consultation in accordance with clause 12 of the Agreements. 16

[42] At approximately 2:22pm on 23 September 2019 Mr Sedgwick received an email from Mr Miners (CFMMEU Official) forwarding a copy of an email from the MUA’s Delegate confirming the roster proposal is formally in dispute and that Mr Miners would “file in the commission next week”. 17 On 27 September 2019 Mr Sedgwick attended a further PCC meeting to discuss the proposed roster change. As a result of the consultation during that meeting a number of PCC members raised concerns about the proposal that Prime shifts would conduct their own start-ups. Following the meeting, Mr Wetters and Mr Sedgwick made some revisions to the proposed roster changes. At approximately 1:48pm on 27 September 2019 Mr Sedgwick sent an email to the members of the PCC committee attaching a copy of the revised roster change proposal and requesting each department let the Company know whether they agreed to the proposed change or not by 4 October 2019.18

[43] At approximately 10:37am on 30 September 2019, Mr Sedgwick was copied into an email from Mr Miners to Ms Holdsworth confirming the CFMMEU was disputing the removal of two primary tugs under the proposed roster change. Mr Miners’ email complained there had been no consultation with the union in relation to the proposed roster change on one hand and on the other hand stated “you’re well aware of [the union’s] issues because I’ve discussed them with you”. 19

[44] At approximately 2:55pm on 4 October 2019, Ms Holdsworth sent an email to all staff employed at the Port of Gladstone attaching a letter providing notice of the Company’s intention to implement the roster changes from 5 November 2019. Attached to that correspondence was a copy of the proposed roster changes. That documentation was also tendered by Mr Sedgwick. 20

[45] In its written submissions, Smit made some general observations about various provisions of the Agreements, which are relevant to both the CFMMEU issue and the AIMPE/AMOU issue. Smit submitted that the Full Bench Decision in Berri makes plain that the construction of an enterprise agreement “begins with the ordinary meaning of the relevant words”. In the present case, central to this issue are clause 12, Hours of Work and Related Matters and Appendix 1 Rosters of Work and Operational Standards. Smit also submitted that the meaning of those provisions begins with clause 12, which relevantly:

•  confirms the existence of Appendix 1 as representing the roster and operational standards “established” at the time of making the Agreement (12.1);

•  expressly states that those arrangements “are subject to change because of changes to service, operational and port requirements” and that a change “will not constitute a variation” to the Agreements (12.2);

•  clauses 12.4 and 12.5 re-affirm that rosters may change, including that acceptance of the possibility of such change is a “pre-condition of employment” for new employees (12.4);

•  clauses 12.5 to 12.8 provide a specific process for roster changes, including consultative arrangements, notice for implementation and progression of disputes.

[46] This includes that:

•  The PCC is the consultative body for roster changes (clause 12.5);

•  The Company is to notify the PCC of proposed change, and consultation starts within 7 days of that notice (clause 12.6)

•  In the present case notice to the PCC was issued on 2 September 2019 and consultation started within the requisite 7 days;

•  Where there is no agreement on roster change 28 days after notification (i.e. in this case by 30 September) the Company can give “28 days’ written notice of its intention to implement the change” (clause 12.7);

•  In this case that notice was given by the Company on 4 October 2019, for the change to take effect on 5 November 20194;

•  where having been given notice in accordance with clause 12.7, employees remain opposed to the change, they can make application in accordance with the DSP (clause 12.8).

[47] Smit contends that there is nothing ambiguous in the terms described above and that the only dispute seems to relate to the meaning of clause 12.8. A number of critical factors emerge from a proper consideration of the Agreements, which also defeat the particular CFMMEU claim that roster changes cannot be made, including:

•  The arrangements in Appendix 1 of the Agreements are those that were put in in place at the time of making the Agreement, but subject to change as provided for in clause 12;

•  Appendix 1 (cl 4.3) also provides that rosters may change, and states that the process for that is in accordance with clauses 12.5 to 12.8;

•  The rosters of crews and vessels in Appendix 1 are plainly not fixed for the life of the Agreements; and

•  Vessel rosters are simply reflections of crew rosters and it is not to the point that those initial arrangements identify a certain number of primary and secondary tugs.

[48] That roster change, including potentially substantial change, is permissible under the Agreements and in accordance with the processes provided for, is further confirmed by clause 32. Relevant to any necessary consideration of context, the model consultation clause that also forms part of the Agreements provides for “change to the regular roster or ordinary hours of work”. Further, the Agreements operate in conjunction with the Marine Towage Award 2010, which also does not exclude roster change.

[49] Smit submits that the construction of the Smit/CFMMEU Agreement (and the Agreements generally) proposed by the CFMMEU is untenable and that it simply ignores a plain reading of the Agreements and has no foundation. Smit also submits that if the Agreements were to operate to exclude roster change there would need to be a clear statement to that effect, and there is not. Indeed, the Agreements have clear provisions to the contrary. Smit also points to the fact that the AMOU/AIMPE accept roster change can occur, even though there may be a dispute as to the extent of that change.

[50] Smit contends that clauses 12.5 to 12.8 of the Agreements provide a specific process for roster changes, including consultative arrangements, notice for implementation and disputes. A proper consideration of the Agreements defeats the CFMMEU claim that roster changes cannot be made, including:

•  The current roster arrangements in Appendix 1 of the Agreements are subject to change as provided for in clause 12; and

•  Appendix 1 (cl 4.3) also provides that rosters may change, and importantly states that the process for that is in accordance with clauses 12.5 to 12.8.

[51] Smit also submits that the CFMMEU makes no mention of clause 32 of the Agreements and given the wording of clause 12 and Appendix 1, there would be no need to activate clause 32.4 for the purpose of the proposed roster changes. For clarity Smit states that it does not accept the submission that the roster change involves “radical variations”. The change provided for in clause 12 is not unusual in enterprise agreements and allows for on-going flexibility in arrangements in accordance with agreed processes.

[52] In relation to reliance by the CFMMEU on Kilpatrick Green Pty Ltd v CEPU, Smith submits that itis misguided and of no relevance. That case dealt with the question of whether an enterprise agreement applied to particular employees in the context of industrial action. There is no argument in the present case that the Agreements apply, and surrounding circumstances are only to be considered where there is ambiguity in the language. In the present case no ambiguity exists. The CFMMEU has not filed any evidence and relies on a submission.Subject to what is said elsewhere as to the relevance of much of the evidence filed by the AMOU and AIMPE, their witnesses accept that change can occur.

[53] It is also material that at the time of approval by the Commission of the Smit/CFMMEU Agreement on 6 February 2017, the CFMMEU made application to be covered by the Agreement. In this respect the CFMMEU had been a bargaining representative for the making of the Agreement. To that extent, the further issues raised at [10]-[13] of the CFMMEU Submission commencing with the suggestion “that the last sentence of clause 12 has a guilty ring about it…”, ignore its own role in the making and approval of the Agreement, and take its principal argument no further. The better construction of that last sentence of clause 12.2 is that plainly the rosters provided for in the Agreement could be varied by the processes provided for within the Agreement. At the time of approval of the Agreement the Model Consultation Term was included as a term, yet there is no evidence of any common understanding of the parties at that time, or any later time, that such change was not to arise under the Agreements, or even that the CFMMEU ever raised such a concern.

AMOU/AIMPE ISSUE

[54] Ms Ellis’ evidence was that she was not involved in the negotiations for the AMOU/Smit Agreement, as it was before she commenced her role with the Union. The AMOU was represented by its delegates in the negotiations. Mr Chris Nieberding was the responsible AMOU Industrial Officer at the time. Ms Ellis gave evidence about a dispute in relation to casual conversion. Ms Ellis said that after initiating the dispute it was not able to be resolved at the local level and Ms Ellis lodged a Form F10 in relation to that dispute on 15 July 2019. In correspondence, Smit asserted that the AMOU had not followed the dispute settlement procedure in the AMOU/Smit Agreement in relation to that dispute.

[55] A telephone conference was conducted by the Commission on 9 August in relation to the casual conversion dispute. Also on 9 August 2019, Smit notified crews of a roster change via memo. 21 It is Ms Ellis’ understanding that discussions were thereafter had between the company and the PCC in September and Smit put out a new roster for consideration. Ms Ellis states that the Unions are not formally a part of the PCC – it is aseparate process. A delegate of the AMOU attended one meeting of the PCC to fill-in but does not hold an ongoing position on the PCC.

[56] Ms Ellis states that at 1:36pm on 9 September, ahead of the 3:00 pm teleconference before the Commission regarding the casual conversion dispute, Smit submitted to the Commission its plans for a new roster. At the Conference, Smit’s solicitor requested that the Commission deal with the Casual Conversion and Roster disputes together, despite no party having filed a Form F10 in relation to the Roster dispute. The Commission listed the matter for an in-person conference on 3 October 2019 to deal with that issue.

[57] Ms Ellis also states that on 30 September 2019, an AMOU delegate notified Smit, on behalf of the Union, that the masters unanimously voted “no” to the Company’s proposed roster and that the proposal changed the hours of work and operational standards beyond what had been negotiated and that any attempt to implement the roster would see the parties in dispute. 22 Ms Ellis said that the AMOU has not agreed to skip the steps in the disputes procedure in relation to the rostering dispute and the dispute has remained at Step 2 of the Dispute Settlement Procedure since the 30 September email.

[58] In relation to the Conference on 3 October 2019, Ms Ellis states that the AMOU and the other Unions submitted that “the disputes should be separated” [ie. the casual conversion dispute and the roster dispute]. Smit argued against this proposition. In response to the Commission attempting to hold discussions about the disputes the Unions stated that they could not participate in such discussions as there were no members from the PCC present; the Officials at the Conference were not aware of the content of the PCC discussions; and the Officials needed those persons in the room to assist with any discussions about the detail of the roster.

[59] Ms Ellis states that because the PCC members were unavailable to discuss the rosters, the Commission listed the matter for a full day Conference in Gladstone on 30 October 2019 so that all could attend. On 3 October 2019, after the Conference, Smit’s legal representative sent all parties his version of what was agreed to at the Commission that day. 23 Item 4 of the summary included the statement that: “The unions should by no later than 5.00pm Wednesday 9 October 2019 file any dispute notification with the Commission (with a copy to the Company), regarding the proposed roster change. In the event dispute notices are not filed the Company will file its own notice of dispute.”24 Ms Ellis said:

“In light of this, and to ensure that there was no doubt that the status quo would remain to preserve the current rostering arrangements, on 9 October 2019 I lodged a Form F10 which sought for the company to follow the disputes procedure regarding the proposed roster changes.” 25

[60] On or around 15 October each union withdrew its Casual Conversion dispute, save for the AMOU which is awaiting a response in relation to one member. To Ms Ellis’ knowledge, none of the steps in the Dispute Resolution Procedure have been taken by Smit to resolve the Roster dispute. Ms Ellis understands that Smit is contending that it does not need to follow the steps in the Dispute Resolution Procedure in relation to a roster change because of the words in clause 12. This is the first time Ms Ellis has heard Smit contend that the word “application” in clause 12 of the Agreement means an application to the Commission.

[61] Ms Ellis has not been contacted by Smit management for any meetings or conversations regarding the rosters or roster dispute since lodging the casual conversion dispute on 9 August 2019. Given the company’s approach, the AMOU has not had the chance to consult with Smit about the roster change, and have a meaningful discussion about what has been proposed, why it has been proposed and action that might be taken to deal with the issue. The AMOU also has not been able to obtain more detailed feedback from members about the proposal. As a result, the AMOU has been inhibited from performing its representative role for its members. Ms Ellis’ view is that discussions at the workplace level should be exhausted prior to the Commission being involved, and this is what the disputes procedure contemplates.

[62] Ms Ellis also points to the fact that Smit has previously been critical of the AMOU for lodging a dispute in the Commission without following the disputes procedure and referred to a previous matter that the AMOU had withdrawn on the basis that it had not followed the dispute settlement procedure.

[63] Under cross-examination Ms Ellis agreed that she is responsible for members employed at Smit in Gladstone and liaises regularly with such members in relation to what is happening at the Port. Ms Ellis agreed that the notice about a proposed roster change issued to Gladstone employees on 9 August 2019 was provided to her by a member or Delegate either on that date or shortly thereafter and that she knew about the proposed roster change at that time. Ms Ellis also agreed that the memo was referred to in the email sent by Mr Dearden on 9 September and that the roster change proposal was no surprise to her at that time. Ms Ellis said that she had probably held discussions with members and Delegates about the proposed roster changes by that date.

[64] Further, Ms Ellis agreed that she was copied into the email of 30 September 2019 in which the AMOU Delegate told the Manager of Smit in Gladstone that the Masters had unanimously voted “no” to the proposed roster changes. Ms Ellis did not agree that AMOU members were in dispute with Smit prior to receiving notice on 4 October from Smit of its intention to implement the roster changes. Ms Ellis said although members had voted to reject the proposed changes, Smit may have withdrawn or amended its proposal. Ms Ellis also rejected the proposition that the dispute had reached Step 3 of the Dispute Settlement Procedure at that point on the basis that she had not had the time or the necessary information to get the dispute to that Step. Ms Ellis agreed that she knew what the roster change proposal was and that AMOU members had rejected it.

[65] Mr Yates’ evidence is that he has had direct involvement in the negotiations for three of the four enterprise agreements that cover Engineers at Smit’s operations in Gladstone. The first such Agreement was the Smit Marine and Australian Institute of Marine and Power Engineers Greenfields Agreement 2011. The second agreement was negotiated with the assistance of Commissioner Booth and was known as the Smit Marine and Australian Institute of Marine and Power Engineers Enterprise Agreement 2012.

[66] In relation to negotiations for the Smit/AIMPE Agreement provisions regarding rostering, Mr Yates said that those clauses in the present Agreements relating to changes to rosters were inserted in the 2012 Agreement. Since that time the specific clauses at 12.1 to 12.8 have not been changed. The Company (then Smit Marine) was represented in the negotiations for the 2012 Agreement by Clay Frederick, Frederik Rutgers and Andrea Wilkinson. During bargaining, on 13 May 2012, Mr Frederick sent Mr Yates an email attaching a word document which was the company response to the AIMPE claims. 26 In that document the following statement is set out:

“1.4 Total captivity

a. Manned duty (“captivity”) will be as specified in the rosters detailed in the Operational Standards. For the time being, and until proper consultation has taken place, the current rosters will be incorporated into the Operational Standards. If the company wishes to change these rosters, it must comply with the consultation and agreement procedures specified in 12.6 to 12.9 of the draft Enterprise Agreement.

b. Until resolution through these procedures has been achieved, there will be no change to the rosters. The status quo will prevail.

1.5 Rosters / swings

a. Swings will be 21 days, with 3-day segments as defined in the Operational Standards.

b. This arrangement will be changed only after consultation and agreement between the company and employees.

c. Rosters, see 1.4.”

[67] Mr Yates said that this document reflects his understanding of what was agreed, being that any roster changes would be properly consulted with the workforce and the unions, and an effort to reach consensus made. The roster arrangement would only be changed after consultation and the agreement procedures had been followed. This is also evidenced by a letter dated 25 June 2012 sent by the Company to Mr Yates during bargaining for the 2012 Agreement that states:

“Improving consultation procedures, including a commitment to stay with the status quo if proposed roster changes are objected to, while going through a clearly defined disputes resolution procedure.” 27

[68] On 20 July 2012, Mr Frederick emailed Mr Yates a draft of the enterprise agreement. 28 Clause 12 of that document was the proposed wording by the Company at that time. It reflected the agreement reached between the parties that changes to the roster would only be made after consultation and agreement, or after the application of the disputes resolution procedure if no agreement could be reached. That can be seen in clause 12.5 of that draft. Mr Yates also said that from the track changes embedded in the draft sent on 20 July 2012 it can be seen that clause 12.5 was inserted by Mr Frederick on 11 July 2012 and that Clauses 12.8 to 12.11, which are the existing Clauses 12.5 to 12.8, were inserted by Mr Frederick on 22 April 2012. The draft Clause 12.5, from the 20 July 2012 version, was later taken out as it was a repeat of the roster change process steps already inserted on 22 April 2012.

[69] Mr Yates said that even though there was much further discussion about wages and other conditions during those negotiations for the 2012 Agreement, Clauses 12.5 to 12.8 of the 2016 Agreement reflect what was agreed in principle in the 2012 negotiations. The agreement reached was that any dispute about any proposed roster change would need to proceed through the entire dispute resolution procedure. Mr Yates also said that there was never any agreement by AIMPE to bypass the local resolution steps 2, 3 and 4 in Clause 8 prior to notification of a dispute to the Commission about a roster change. This was never suggested by the Company during the 2012 negotiations to be the way clause 12 would operate.

[70] It is also Mr Yates’ recollection and understanding from bargaining for the 2012 Agreement that:

•  The roster change clauses were only to be activated when the trigger in clause 12.2 was met; that is, changes can be initiated “because of changes to service, operational and port requirements”; and

•  Where there is a change to service, operational and port requirements, such issues are also dealt with under Clause 32, which deals with Reduction Cessation and Growth.

[71] The 2012 Agreement was approved on 23 November 2012 and expired on 31 December 2014. The third agreement (the “2015 Agreement”) operated from 1 January 2015 to 30 June 2016. It was a short-term agreement to cover a transition period in the port when the three LNG export facilities were commissioned and became operational. The number of tugs in the port increased during that period from five (5) tugs plus one (1) spare tug to ten (10) tugs plus one (1) spare tug. Clauses 8 and 12 remained the same in the 2015 Agreement.

[72] Mr Yates said that there was a significant increase in towage work during this period due to trials of the new operations and the long duration of the LNG tow jobs. In addition, the new tugs had technical faults that contributed to tug outages or not being capable of the LNG work. According to Mr Yates, the parties agreed that the experience during the transition period would lay the foundation for the next Agreement. Mr Yates’ understanding was that the reasoning was that none of the parties wanted to lock in work arrangements without operational experience of the port.

[73] According to Mr Yates, the current AIMPE/Smit Agreement was negotiated and settled in a much shorter time frame to the 2012 Agreement. Smit representatives, Ms Holdsworth, Mr Milne and Mr Rutgers who also attended some meetings, urged a quick resolution on the basis that Smit was preparing for the tender process and did not want to risk prolonged discussions and be exposed to the option of exercising bargaining rights under the Act.

[74] Mr Yates said that the main headline benefits to Smit in the 2016 Agreement included extra “non- emergency” maintenance availability of two (2) hours Monday to Friday (excluding public holidays), plus wage restraint of 0%, 0%, 1% and 1% over a four year term. AIMPE members informed Mr Yates throughout that negotiation that they anticipated difficulties keeping up with planned maintenance due to the predicted increase in shipping at the time. This was discussed in bargaining and it was agreed with Smit that tugs would be put on a cycle where one would be rotated out for 3 days planned and other maintenance.

[75] At that time, and currently, there ordinarily are 10 tugs in the port plus a spare tug. The spare was to relieve the tug rotated out for maintenance. It was also agreed that depending on the maintenance required, that at least the tug’s rostered engineer would stay with the tug for maintenance otherwise other crew would remain as necessary. This was not reflected in words in the 2016 Agreement as it was believed that that practice was within the terms agreed in the 2016 Agreement. That is, the roster could accommodate the change in duties. Mr Yates said that the representatives of Smit who agreed to those matters were Mr Milne and Ms Holdsworth.

[76] Mr Yates also said that a key element to the agreement in principle with Smit for the AIMPE and its members was the increase in predictable 12-hour shifts. The agreement in principle increased the primary and secondary shifts from 2 primes and 8 secondaries to 4 primes and 6 secondaries. The term “prime” or “primary” tug means there is one 12-hour day shift and one 12-hour night shift per tug with 2 crews covering 24 hours and two crews rostered on “days free of duty”. These duty periods have predictable hours. The term “secondary tug” means that there is one flexible crew that can be rostered on a minimum 7- or 8-hour break per tug with one crew on leave. These duty periods have unpredictable hours.

[77] As a result of the new tug shift configuration, the crewing configuration of the port increased from 4 crews covering 2 prime and 8 secondary crew plus 12 crew on days free of duty, to 8 crew covering 4 prime and 6 secondary crew plus 14 crew on days free of duty. The total crews increased from 24 to 28 crews. This was reflected in Appendix 1 to the current Agreement. Mr Yates said that during discussions and meetings AIMPE members told him that this was an important factor in deciding whether to approve the 2016 Agreement. A number of members told Mr Yates that they were weighing that positive with the negative being the 2% wage increase over 4 years.

[78] Mr Yates also said that Smit representatives, including Mr Evan Milne and Ms Sasha Holdsworth, said repeatedly during the negotiations that the new crewing and rotating of tugs for maintenance would be paid for by the wage restraint under the proposed Agreement. There were also other elements to the proposed Agreement reflected in Appendix 2, which relates to training for engine technology and systems. Further, Mr Yates said that the 2016 AIMPE/Smit Agreement was approved by the slimmest of majorities and was later approved by Commissioner Roe in January 2017, expiring 31 December 2020.

[79] The 2012 Agreement, 2015 Agreement and 2016 Agreement all include an Appendix 1, which details Rosters of Work and Operational Standards. During the approval proceedings for each of the Agreements the Commission has approved that the Appendix/Appendices are to be kept from public publication on the Commission agreement database but remain as part of the approved enterprise agreement. Mr Yates said that Appendix 1 to the Current Agreement reflects the agreed tug configuration made during bargaining. It was agreed by AIMPE during bargaining that this tug configuration would remain in place, and in exchange members would accept what is effectively a wage freeze.

[80] Mr Yates also said that it was understood by the AIMPE during bargaining that the roster changes referred to in clause 12 would be to matters like amendments to start and finishing times, the pattern of the number of weeks on/off and the like. The current changes proposed to Appendix 1 by Smit and rosters attached to it go beyond what was ever envisaged by Clause 12 as a simple change to a roster.

[81] According to Mr Yates, the proposal substantially varies conditions of employment by expanding availability to work additional hours of between 2 to 5 hours per day by changing the prime tugs 3 and 4 to secondary tugs. This will have the effect of reducing the availability for engineers and crews to fulfil their maintenance obligations. It will also have the effect of reducing the overall size of the workforce and predictable hours worked that was subject of the agreement in principle for the 2016. Further, there has also been no acknowledgement by Smit management that opening up and shutting down of tugs are work or duty hours counted for fatigue and other entitlements. Smit are in effect seeking to reinstate previous tug configurations of 2 primary tugs and 8 secondary tugs, outside of bargaining.

[82] In relation to the current dispute, Mr Yates said that he has not been made aware of any notification of changes to service, operational and port requirements in Gladstone that trigger Clause 12.2 nor has there been notification by Smit management that would characterise a reduction, cessation or growth in business in the port under Clause 32. Mr Yates said that if there was a trigger to change rosters, the 2016 Agreement requires the matter to be first addressed by the PCC.

[83] The purpose and composition of the PCC is stated at clauses 7.5 and 7.6 of the AIMPE/Smit Agreement, which outlines that it can make recommendations about “operational and implementation matters”. Mr Yates maintained that the PCC does not address industrial issues and is not integrated as part of the Dispute Resolution Process at Clause 8. That is, the PCC is not a group that is included in the steps in Clause 8 where a dispute about the agreement can be raised or addressed.

[84] Further, Mr Yates said that the AIMPE does not participate nor does it have a role in the PCC. The Engineer members of the PCC are separately elected by the Engineers. It is not a position that is automatically held by the AIMPE Delegate. Mr Yates’ understanding is that one of the current PCC members is Mr Des Bull who is also a member of AIMPE. The AIMPE Delegate, Mr Kerry Mann, was nominated without opposition to ordinarily participate on the PCC but has not been allowed to do so due to being unfit for work following shoulder surgery. Gladstone management have told Mr Mann to stay off site whilst not fit for work.

[85] Mr Bull was previously an AIMPE delegate but stood down from that role in January 2019. Mr Yates states that he was advised by Smit legal representatives on 9 September 2019 that the PCC had been advised that Smit were seeking a roster change. This advice preceded a conference before me regarding an application for casual conversion. The roster changes were raised again during a conference at the Commission about the casual conversion dispute on 3 October 2019.

[86] During that conference a process was proposed to deal with the roster changes. Following the conference, AIMPE engaged in consideration of that proposal and consultation with its members and decided that the Union did not agree for the matter to proceed in that way as the steps of the dispute procedure had not been followed.

[87] Mr Yates said that Mr Mann told him that the only formal communication that he has had about the change to rosters with Smit in his role as delegate was when he informed Gladstone management that the Engineers disagreed with the roster change proposal and that a dispute in relation to that proposal existed. The notification of the dispute was done in an application by email sent on 4 October 2019 by Mr Mann to Smit in accordance with Clause 8 of the Dispute Resolution Procedure. 29

[88] The casual conversion dispute notification was discontinued by the AIMPE and since that time, Smit has not taken any steps in accordance with the Dispute Resolution Procedure to advance the dispute. There has been no involvement of an Official of the AIMPE in any roster change discussions with Smit under the dispute resolution procedure steps since the application in accordance with the dispute resolution clause was made by Mr Mann in early October 2019.

[89] In relation to roster changes generally, Mr Yates’ experience in dealing with local port operations procedures or rosters of work and operational standards is that agreement and disagreement regarding changes is best first dealt with locally, without intervention of third parties. This is so because the systems in place and the issues arising in the dispute can be complex. Further, in Mr Yates’ experience, it is useful for extensive discussions at a local level to occur first, which often has the effect of refining the issues in dispute. Mr Yates said that to bypass steps 2, 3 and 4 at Clause 8 of the AIMPE/Smit Agreement is not in the interests of the Port or crews and the opportunity to implement agreed changes is lost.

[90] Further, Mr Yates pointed to the fact that at the time the matter was heard, the 2016 Agreement only had 7 months to run before negotiations commence for a replacement and Smit’s extra claims are more appropriate to be made in a formal renegotiation process. Addressing extra claims by Smit would be filtered out during the escalation process in steps 2, 3 and 4 of Clause 8.

[91] Under cross-examination Mr Yates agreed that the notice of 9 August 2019 issued to employees by Smit was forwarded to him at some time in the week it was issued. Mr Yates also agreed that he received telephone calls from Delegates expressing concerns about the roster changes. Further, Mr Yates agreed that a member of the Union (Mr Bull) was sitting on the PCC at the relevant time and informed Mr Yates about what was going on with respect to the roster change proposal. Mr Yates was referred to an email sent by the AIMPE Delegate Mr Mann to Mr Wetters, at 3.49 am on 4 October 2019. Mr Yates said that Mr Mann is a member of the PCC, which had the responsibility of dealing with the views of members about the roster proposal. Mr Yates said that Mr Mann had the delegation to notify the dispute to Mr Wetters of Smit. Mr Yates agreed that when a proposal is rejected by members it ends discussion at that Step of the Dispute Settlement Procedure and that it moves to another stage.

[92] The AIMPE and AMOU submits that the Commission should, in dealing with the two applications, determine that any dispute about proposed roster changes under clause 12 of the Agreements is required to proceed through all of the steps of the dispute resolution procedure before it can reach the apex of the dispute resolution procedure, the Commission.

[93] In support of this submission, the AIMPE and AMOU referred to s.739 of the Act, which sets out the Commission’s powers to deal with disputes. The AIMPE and AMOU rely on the Full Bench decision in AWU v MC Labour Services Pty Ltd 30in support of its submission that the Commission’s function in dealing with a dispute depends on the terms of the relevant enterprise agreement, which may limit the structure or role of the Commission, and where the pre-conditions for the Commission to deal with a dispute are not met, the Commission may not deal with the dispute, and has no discretion to do so.

[94] It was submitted that the principle issue for the Commission to determine is whether a dispute under clause 12.8 must be progressed through steps 2 - 4 of the dispute settlement procedure in the Agreement to which that Union is a party before the Commission can conciliate/or arbitrate that dispute. If this issue is determined in the Unions’ favour, that is the end of the matter.

[95] In considering that question, AIMPE/AMOU submit that the Commission will need to consider the meaning of the words in clause 12, and notably clause 12.8 of the Agreements which include the expression: “make application in accordance with the Dispute Resolution Procedure”which is found in clause 8 of the Agreements. Clause 8.1 provides that “in the event of any…dispute arising under this Agreement”the disputes procedure will apply. That procedure is then constituted by 5 clearly defined steps. The AIMPE and AMOU submit that there is no capacity in clause 8 to skip steps, whether by mutual agreement or otherwise.

[96] At present, all that has occurred is that the Respondent has proposed the relevant roster changes, and each union has advised that the matters are in dispute. Accordingly, that dispute remains at Step 2 of the Dispute Resolution Procedure in clause 8 and the Commission is not seized with any power to deal with it. Only when the steps outlined in clause 8.1 have been followed, and a party makes an application to the Commission, may the Commission have that jurisdiction.

[97] Further, the AIMPE and AMOU assert the Respondent sought to “jump the gun” and fast-track its proposed changes by attempting to link this dispute to an unrelated dispute about casual conversion. It has done so in the absence of following the proper process bargained by the parties and provided for by the Agreements. That approach should not be accepted. The respondent contends that clause 12.8 of the Agreements should be read to mean that, in the event of a dispute about proposed roster changes, an application can be made directly to the Commission without following the Dispute Procedure. This contention cannot possibly be accepted for at least three reasons.

[98] First, in the event that it was indeed the intention of the parties for clause 12.8 to be read in the limited way contended for by Smit, one would expect there to be clear words to that effect in the Agreements. There are not. There is no reference to the Commission in clause 12.8 at all, nor to step 5 of the Dispute Procedure. The words in clause 12.8 refer to an application in accordance with the Dispute Procedure. Read in a common-sense way, that is to the dispute being processed through the Dispute Procedure as a whole. Further, clause 8 is in tolerably clear terms. It provides that any dispute arising will be dealt with in accordance with steps 1 to 5. There is no exception for roster disputes, nor any other words that might be capable of supporting the construction advanced by the respondent.

[99] Second, Smit’s contention that the term “application” in clause 12.8 must mean an application to the Commission, ignores the remaining words of the provision, including “in accordance with”. This is a reference to the Procedure as a whole, not a reference to one step in that Procedure. On Smit’s construction, the words “in accordance with…the…Procedure” would have no work to do.

[100] Third, and in any event, even Smit’s construction was accepted (which is not conceded), Smit has not made any application that would allow the Commission to conciliate or arbitrate the matter, and even further, clause 12.8 only provides for the employees to make the necessary application. On that basis, the Commission can safely conclude that the meaning of clause 12.8 is as contended by the AMOU and the AIMPE, and that a roster dispute must proceed through all of the steps in the dispute resolution procedure. There is no ambiguity.

[101] The AIMPE and the AMOU further submit in the alternative, that should clause 12.8 be susceptible to more than one meaning, the following evidence is of the kind contemplated in the authorities as an admissible aide to interpretation on the basis that it constitutes the very kind of objective background facts known to both parties and a common intention as to the meaning of the provision.

•  A document provided by the respondent on 13 May 2012 which states that any change to rosters must comply with the procedures in clause 12 and that there would be no change until resolution was reached between the parties;

•  A letter dated 25 June 2012 from the respondent which states ‘a commitment to stay with the status quo if proposed roster changes are objected to, while going through a clearly defined disputes resolution procedure’; and

•  A draft agreement provided by the respondent on 20 July 2012 which provides at then proposed clause 12.5:

“The Parties agree that the Rosters of Work and Operational Standard are subject to change in the light of changes to service and operational requirements. Such changes will only be made after consultation and agreement between the Employees (as represented by the Port Consultative Committee) and the Company, or after the application of the Disputes Resolution Procedure if no agreement can be reached…”

[102] The AIMPE and the AMOU contend that the meaning of “application” in clause 12.8 urged upon the Commission by Smit involves an overly technical and narrow interpretation that the authorities cited above expressly disavow. It would lead to a perverse outcome, in that it would allow Smit to refuse to engage with the employees and the unions at the enterprise level and refuse to apply the status quo, unless an application to the Commission is made. This cannot possibly have been intended by the parties, particularly in the absence of any words in the Agreement to that effect.

[132] In considering the issues in dispute Justice Bromberg analysed the statutory framework for the making and variation of enterprise agreements. In doing so his Honour noted that the rigorous scrutiny required of the Commission by the legislative provisions dealing with the making and approval of agreements made it inconceivable that it was not intended that conformity should be maintained throughout the term of the agreement but noted that Parliament had enacted s. 257 which makes clear that enterprise agreements may incorporate material in force both at a particular time and from time to time. 31 The effect of incorporating material which can change from time to time is that the terms of the relevant agreement may be varied from time to time without recourse to the provisions in Division 7 Part 2 – 4 of the Act. His Honour observed that the incorporation of terms that are fixed creates no tension with those legislative provisions as the content of such terms is not susceptible to variation other than via Division 7.32

[133] In relation to what he described as the tension between the incorporation of variable terms and the legislative scheme for variation of enterprise agreements his Honour observed:

“However, to my mind, the potential for tension is reconcilable. It is reconciled in the realisation that, just as the incorporation of fixed terms is subject to the full rigour of the Div 4 provisions, so too is the incorporation of variable or post-approval terms. It is the Commission, through its Div 4 and Div 7 scrutiny, that, in my view, is given the function of ensuring that t+he inclusion of variable terms or post-approval terms does not and will not undermine the genuine approval, BOOT or content requirements of the FW Act for an enterprise agreement while in operation.” 33

[134] His Honour went on to observe that the nature of the material which is to be incorporated may of itself provide a sufficient safeguard. Further, there may be restrictions in terms of subject matter or limitation to the extent of alterations or boundaries of various kinds. There may also be fall back entitlements to ensure that there is no overall disadvantage to the employees covered by the agreement with the nature and extent of such limitations being dependent on the subject and extent of any potential for alteration. 34

[135] These observations are in my view also relevant to provisions of an enterprise agreement which allow for variations to particular terms in a manner provided for in the agreement. In the present case the Agreements subject of the disputes were approved pursuant to the provisions in Division 4 of the Act. Accordingly, the Agreements passed the better off overall test and other requirements for approval were met. The CFMMEU did not dispute this at the time of approval. If the Agreements provided for an impermissible variation that was intended to oust the terms of the Act then they did so at the time of approval and it is to be expected that the CFMMEU would have raised this issue at the relevant time and/or that it would have been raised by the Member of the Commission who approved the Agreement.

[136] In relation to the safeguards identified by Bromberg J the scope for variation to the terms of the Agreements in the present case is limited to rosters and operational standards. Such changes are conditioned by changes to service, operational and port requirements. Smit is required to consult in relation to roster changes. Employees have the right to dispute roster changes and to invoke the status quo while a dispute is resolved. The Commission is empowered to conciliate and arbitrate a dispute in relation to roster changes.

[137] In addition to safeguards of the kind identified by Bromberg J, there is an additional safeguard associated with the fact that the dispute settlement provisions in the Agreements in the present case empower the Commission to conciliate and arbitrate in relation to a dispute including a dispute about roster changes. In exercising its powers to conciliate and arbitrate a dispute arising under an enterprise agreement, the Commission would be guided by the considerations upon which approval of the agreement was based. It is unlikely that the Commission would determine a dispute in a manner that undermines the genuine approval of the Agreements at the point they were made, or would cause the Agreement to fail the BOOT or would be inconsistent with the content requirements of the Act.

[138] Accordingly, I reject the submissions of the CFMMEU. In doing so I note that there are issues raised by the CFMMEU in relation to the proposed roster changes such as whether they exceed the scope of changes permitted by the Agreements or whether the change process has been undertaken in a manner that is consistent with the terms of the Agreements, which have not been determined and which are matters for another day. I turn now to consider the issues raised by the AIMPE and AMOU.

The AIMPE/AMOU issues

The issues for determination

[139] There have been inconsistencies in the articulation of the AIMPE/AMOU argument. At the outset the argument appeared to be about whether a dispute about proposed roster changes arising under clause 12.8 was required to be dealt with at Step 5 of the Dispute Resolution Procedure or whether it should be dealt with first under Steps 1 to 4. Later the Unions asserted that such a dispute should commence to be dealt with at Step 2. In their written submissions made on 6 November 2019 the AIMPE and the AMOU asserted that the Commission should determine that any dispute arising under clause 12 of the Agreements is required to proceed through all the steps of the Dispute Resolution Procedure.

[140] At the hearing, the AIMPE and AMOU contended that the applications for the Commission to deal with the roster dispute were made under clause 8 of the Agreement and that clause 12.8 had not been invoked in their roster dispute applications. Mr Tiley for the AIMPE and the AMOU also submitted that the Unions were not able to make an application under clause 12.8 on the basis that only employees could make such an application. As previously noted, Mr Tiley conceded that if the arguments advanced by the Unions were right their applications were liable to be dismissed. Mr Tiley further accepted that if the argument was correct the AMOU and the AIMPE could not make an application under Step 5 of the Dispute Resolution Procedure but may have been able to make an application under Step 5 asserting that Steps 2 – 4 had not been complied with.

[141] In response to the proposition that if clause 12.8 was not invoked in the present dispute, then the applications made by the AIMPE and the AMOU could not have been made because Steps 1 – 4 of the Dispute Resolution Procedure had not been followed, Mr Tiley said that the parties wanted the matter resolved and the distinction was one without difference. In response to a question from me about why I would proceed to resolve a dispute about the interaction between clauses 12.8 clause 8 of the Agreement in circumstances where clause 12.8 had not been enlivened, Mr Tiley – after taking instructions – said that the essential issue is: what Step has been reached in the Dispute Resolution Procedure in relation to a dispute about proposed roster changes.

[142] In relation to the issue for determination, Mr Tiley said:

“12.8 hasn't been invoked.  And in light of the very proper concessions that have been made about the status quo, the fact that 12.8 hasn't been formally invoked this stage, in my respectful submission is a matter that need not trouble you.  It's interpreting clause 8 with an eye, of course, on what is said in clause 12.8; as opposed to an application under clause 12.8.” 35

[143] In response, Mr Brotherson said:

“Your Honour, what Mr Tiley has put is entirely the agreed position, and it has been put forward on the basis that there is a live issue here, and the live issue relates to a very important matter, and that's the proposed roster changes.  I submit that I don't think it really matters for the purpose of proceeding.  We're not asking for an advisory ruling.  There is a live dispute.

The applications that have been made - and the one thing I probably disagree with what my friend said, but it doesn't alter, I think, the substance of what we had agreed to - we do say that the applications that have been filed by the two unions, AMOU and AIMPE, arose from 12.8.  But be it 12.8 or clause 8, as they're saying, it does get us to the one point, and that is there's a dispute over a roster change where we say we've come into that at step 5; the unions are saying, 'We're not at step 5 for the purposes of the roster change, but we're there for the purposes of the disputes procedure because you won't talk to us and we think you should.'

I would submit that is a dispute that the Commission can rule on, and it's a live dispute within the - even if one looks at the dispute notifications, I think the AMOU one probably looks very much like an application under - well, we say 12.8.  The AIMPE one does interestingly seek relief, which is steps 2, 3 and 4 of clause 8 be followed.  So they had actually identified that.” 36

[144] Mr Brotherson and I then had the following exchange:

THE DEPUTY PRESIDENT: Yes. That's what I was getting at, they're actually differently framed, the two applications.

MR BROTHERSON:  Framed.  And I think what we've tried to agree to find a practical way through this, because the alternative is, if the parties walk away today, are not really particularly productive. 37

[145] As previously noted, after the hearing the parties attempted without success to agree on a question or questions for determination. In correspondence to the Commission the AIMPE and the AMOU articulated the question for arbitration as follows:

“The Company has proposed a change to rosters under clause 12 and Employees have objected to it (Roster Change Dispute). In those circumstances:

1. is the Roster Change Dispute required to be progressed in accordance with Steps 1 to 4 of clause 8 before it can proceed to the Commission under Step 5 of clause 8?

2. if so, which steps have not been complied with?”

[146] The questions for arbitration posed by the Respondent are:

1. To pursue that objection to the Roster Change are employees required to make application to the Commission as per step 5 of clause 8 as claimed by the Company; or

2. Does the dispute revert to step 1 of clause 8 as claimed by the AIMPE/AMOU on behalf of employees, although those unions say the remaining required steps are in fact now steps 2-4 before it can proceed to the Commission under step 5 of clause 8?  and

3. If the proper position is determined to be as claimed by AIMPE/AMOU is the correct step of clause 8 for commencement of further discussions now step 2 as contended by AIMPE/AMOU or step 3 or 4 as contended by the Company?

[147] I accept that Mr Tiley was not involved in the matter from the outset. I further accept that the manner in which the roster change disputes came to be before the Commission may have contributed to the changes in position of the AMIPE and the AMOU. Before I turn to deal with the issues for determination, I make the following observations.

[148] The proposed roster changes were raised by Smit with the PCC in or around August 2019. At the point that conferences were conducted by the Commission in relation to the casual conversion disputes all the Unions were aware that roster changes had been proposed and were being discussed at PCC level. The roster change proposal was clearly relevant to the casual conversion dispute because it was likely to impact on the ability of Smit to accommodate claims for casual conversion. It was entirely reasonable for Smit to have raised the roster change proposal in the proceedings in relation to the casual conversion dispute. Had the Company not raised this issue the Unions could rightly complained of lack of bona fides on the part of Smit with respect to the casual conversion dispute for failing to alert the Commission to an issue which would impact on the Company’s ability to resolve the casual conversion dispute.

[149] All three Unions participated in a Conference before the Commission on 9 October at which the fact that the roster change proposal had been made was discussed. It was clear that the roster change proposal was or would be disputed by the Unions and that such dispute would be linked to the casual conversion disputes and impact on their resolution. It was in this context that the proposal as set out in Mr Dearden’s email to the Unions of 9 October 2019 was discussed at the conference. It suffices to say that the proposal was not a unilateral one made by the Company and neither was it imposed on the parties by the Commission.
[150] The Unions did not specifically agree to the proposal and were entirely within their rights to subsequently advise that they did not wish the matters in dispute to proceed on the basis set out in the proposal. However, in the interim they each filed applications disputing the proposed roster changes – the applications that are the subject of this Decision. The Unions also raised threshold or jurisdictional points in relation to these applications. It is important to note that Smit has not raised a dispute or made an application to the Commission about the propose roster changes. The only applications before the Commission in relation to the roster change disputes are those made by the Unions. The casual conversion dispute applications have been withdrawn other than by the AMOU, which has not indicated its final position in relation to one member. In short if the disputes cannot currently be at Step 5 then there is no dispute to refer back to the earlier steps and the AIMPE and AMOU roster dispute applications must be dismissed.

[151] On 1 November 2019 I issued a Statement and Directions 38 for the purposes of progressing the roster change dispute applications. In that Statement I made a number of observations about the basis of the disputes and the issues for determination including:

“[10] The roster disputes notified by the AIMPE and the AMOU concern the proper construction of clause 8 Dispute Resolution and clause 12 Hours of Work and Related Matters, of the Smit/AIMPE Agreement and the Smit/AMOU Agreement. Essentially the AIMPE and the AMOU’s position is that when a proposed roster change is put into dispute in accordance with clause 12.8 of the Agreements, the processes in steps 2, 3 and 4 of the dispute settlement procedure must be followed before the Commission can deal with a dispute as provided in step 5. The CFMMEU reserves its position in relation to whether it wishes to be heard in relation to this construction of the Agreements.

…

[25] Smit accepts that clause 12.8 requires that it maintain the status quo with the effect that it cannot implement a roster change if employees object to the proposed change and make an application in accordance with the dispute settlement procedure.

[26] My provisional view is that this is the effect of clause 12.8 and that if the applications made by the Unions are made pursuant to clause 12.8 then the status quo is to be maintained by Smit not introducing its proposed roster while the dispute is dealt with in accordance with the dispute settlement procedure. I also have a provisional view that clause 8.4 of the dispute settlement procedure does not require the status quo as it existed before the proposed roster change to be maintained. Accordingly, it is arguable that if the status quo is to be maintained then the Unions must utilise clause 12.8 of the Agreement to raise a rostering dispute.

[27] However, the question raised by the AIMPE and the AMOU is whether the making of an application under clause 12.8 places the dispute at step 5 of the dispute settlement procedure so that the Commission is empowered by that procedure to conciliate and/or arbitrate the dispute or whether the making of an application under clause 12.8 means that steps 2 – 4 of the procedure must be completed before the Commission is empowered to conciliate and/or arbitrate. Smit maintains that an application made pursuant to clause 12.8 of each of the Agreements is to be dealt with at step 5 by the Commission conciliating and/or arbitrating the dispute.”

[152] The material filed by the parties in response to the Statement and Directions referred to clause 12 of the Agreements. Smit maintained the status quo on the assumption that clause 12.8 had been invoked. It was only in oral submissions that the AIMPE and the AMOU stated that they did not invoke clause 12.8 in relation to their disputes. Rather, the AIMPE and the AMOU submitted that I should construe clause 8 of the Agreements having regard to clause 12. Given the manner in which the AIMPE and AMOU disputes have developed, and the views of the parties about what the issue for determination is, I intend to determine this matter by setting out my views about the manner in which clauses 8 and 12 operate with respect to disputes about roster changes.

The construction of clauses 8 and 12 of the Agreements

[153] The AIMPE and AMOU applications in relation to the roster disputes relate to the introduction of a change to rosters under each Agreement and clause 12 deals specifically with the subject matter of hours of work and related matters. While I accept that the legal maxim to the effect that general provisions do not derogate from specific provisions may have limited operation in the context of the construction of enterprise agreements, it is also not entirely irrelevant and is a matter to which regard may be had in such a task. A principle whereby a general provision is assumed not to derogate from a specific one is also consistent with the principle that all provisions of an agreement should be given effect and have some work to do.

[154] Clause 12.1 states that the parties have established “Rosters of Work and Operational Standards which are appended as Appendix 1”. There is no indication that the Rosters of Work and Operational Standards are set in stone – to the contrary clause 12.2 specifically states that the parties agree that Rosters of Work and Operational Standards are subject to change because of changes to service, operational and Port requirements. The parties have also agreed that changes to Rosters of Work and Operational Standards will not constitute a variation to the Agreement. For reasons given in relation to the CFMMEU issue the parties were at liberty to agree that certain provisions of the Agreements could be varied in accordance with a process in the Agreements without the need to access the provisions in Part 2 – 4 of Division 7 of the Act.

[155] The ability to change Rosters of Work and Operational Standards is further indicated by the terms of clause 12.3 which provides that any Rosters of Work and Operational Standards must be to ensure the matters in that clause. The term “any” is clearly a reference to both the Rosters of Work and Operational Standards in Appendix 1 and any amendments to them. In addition, clause 12.4 provides that acceptance of Rosters of Work and Operational Standards and the possibility of change under “this clause” (clause 12) is a pre-condition of employment for new employees.

[156] Sub-clauses 12.5 – 12.8 are under a heading “Changes to rosters”. Clause 12.5 again states that Rosters of work may be varied from time to time. That clause further states that proposed changes to existing rosters will be subject to consultation and that for the purposes of “this clause” the Port Consultative Committee will be the consultative body for each of the groups of employees covered by the Agreements. Clause 12.6 sets out various notification requirements in relation to changes to Rosters of Work proposed by the Company. Clause 12.7 provides that if no agreement has been reached in relation to changes proposed by the Company to Rosters of Work, the Company may give 28 days’ notice to the Port Consultative Committee of its intention to implement the change.

[157] Clause 12.8 provides that:

“If the employees still object to the proposed changes they may make application in accordance with the Dispute Resolution Procedure. If such application is made, the status quo will remain until the matter is settled.”

[158] One of the questions which initially arose in the present matters is the Step in the Dispute Resolution Procedure that a dispute about a proposed roster change has reached at the point clause 12.8 is activated. I intend to answer that question notwithstanding that the AIMPE and the AMOU maintain that they have not invoked clause 12.8 on the basis that those Unions have conducted themselves on the basis that clause 12.8 has been invoked all the way to the point at which the matters were heard.

[159] In order to answer that question, it is necessary to consider the Dispute Resolution Procedure in clause 8 of the Agreement. The Dispute Resolution Procedure in clause 8 prescribes 5 steps. It is notable that none of the 5 steps refer to an application being made. It is also notable that each of the steps between 2 and 4 provide for a matter to be referred to persons at various levels within the Company and the relevant Union. At Step 5 the Dispute Resolution Procedure provides that any person bound or covered by the Agreement or the Company “may refer to the dispute to the Fair Work Commission for conciliation and/or arbitration.”

[160] In my view it is significant that the only entity referred to in the Dispute Resolution Procedure to which an “application” could be made is the Fair Work Commission. If a dispute in relation to an enterprise agreement is “referred to the Commission” it must be referred by the party or person seeking to have the Commission deal with the dispute completing a Form F10 Application.

[161] It is also the case that at the point the factual scenario described in clause 12.8 of the Agreements is reached, the roster changes have been proposed, reasons have been provided, consultation has occurred and notice of the Company’s intention to implement the proposed change has been provided. At that point the proposed roster change is not a dispute that is amenable for discussion between an employee (and their representative if requested) and the immediate supervisor as provided in Step 1. I note that the AIMPE and the AMOU do not assert that an objection to a proposed roster change would be dealt with at Step 1 but rather argue that it must be dealt with at Steps 2 – 4 before it can be said to have been referred to the Commission under Step 5.

[162] On the plain language of the provisions in clause 8 setting out those Steps, the dispute is not a dispute of the kind that is amenable for discussion at Steps 2, or 3, given the stages that discussions about proposed roster changes have progressed through under clause 12. The Composition of the Port Consultative Committee makes it probable that the same persons involved in the discussions in that forum are referred to in Steps 2 and 3. It may be that the dispute is amenable for discussion at Step 4 given the reference to National Union and Management officials. However, it is straining the language of clause 12.8 to infer that a discussion of the kind referred to in Step 4 is the result of an “application”.

[163] It is also the case that there is no clear indication that an objection to a roster change in respect of which an “application” is made “in accordance with the Dispute Resolution Procedure” should be assumed to start at any of the Steps between 2 and 4 of that Procedure and I have no basis to select one of those steps to resolve the construction issue, other than to make an arbitrary choice. This is the approach that the AIMPE and AMOU urge given their position that I should find that the roster disputes are at Step 2.

[164] In contrast, to decide that an application under the Dispute Resolution Procedure from employees who object to a proposed roster commences to be dealt with at Step 5, which includes a reference to the only entity in the Dispute Resolution Procedure to which an application can be made, does not strain the language of clause 12.8 or the Steps in the Dispute Resolution Procedure.

[165] If the parties intended that an objection by employees to proposed roster changes raised under clause 12.8 of the Agreement would revert to Step 1 when the objection was raised it would have been simple for them to say so. Instead they used the term “application.” A further matter which tells against the proposition that an “application” made pursuant to clause 12.8 commences to be dealt with at some Step between Steps 2 – 4 of the Dispute Resolution Procedure, is the fact that clause 12.8 specifically maintains the status quo until the matter is “settled”.

[166] This means that the Company having given notice of its intention to implement the proposed roster change is prevented from doing so until the matter is “settled”. The only entity mentioned in the Dispute Resolution Procedure with power to “settle” a dispute is the Fair Work Commission. The status quo provision in clause 12.8 can be contrasted with the terms of clause 8.4 in the Dispute Resolution Procedure which provides that:

“Work shall continue without change or interruption pending determination of any matter or dispute in accordance with the above procedure, except in circumstances where an Employee holds a reasonable concern about an imminent risk to his or her safety.”

[167] In TWU v Linfox Australia Pty Ltd 39Senior Deputy President Harrison considered whether a clause in an enterprise agreement operated so as to freeze in time the status quo prior to a dispute arising. The relevant clause under consideration in that case was in the following terms:

“Until the matter is resolved by agreement, conciliation or arbitration, work will continue in accordance with the status quo. No party is to be prejudiced as to the final settlement by the continuance of work in accordance with this procedure.” 40

[168] In concluding that the clause did not operate so as to freeze in time the circumstances prior to the dispute arising her Honour said:

“[26] I first make a general observation about the absence in clause 22.3 of words that expressly provide for the type of freeze in time for which the TWU contends. I am aware of clauses which contain words to the effect the status quo “means the circumstances existing immediately prior to the change or action which has caused the disagreement” or that provide that “work must continue in accordance with the existing situation or practice that existed immediately prior to the subject matter of the grievance or dispute occurring”. Clause 22.3 is to be contrasted with these types of clauses.

[27] I turn to a consideration of the opening words of clause 22. I first note the scope of the matters covered by the settlement of disputes procedure. It describes a very broad scope of disputes or grievances which can be dealt with. It covers “any dispute or grievance that arises at the workplace between an employee and Linfox about the Agreement or the employment relationship ...”. It is against that broad scope of disputes or grievances that agreement has been reached that it is only “work” which will continue in accordance with the status quo. The reference only to “work” is significant. The clause does not provide that everything that existed prior to the dispute arising is to remain in place. The clause does not read, for example, “until the matter is resolved by agreement, conciliation or arbitration, the status quo shall remain”.

[28] I am persuaded that the better construction to place on “work” in clause 22.3 is that it means the activity of employees involving mental or physical effort, their job, duty, task or undertaking. In this context it is used as part of the expression “work will continue”, that is work is to be something that is capable of continuing. It is something which is to be carried on and not stop.”

[169] In the present case, clause 8.4 does not refer to a “status quo” position. The only such reference is in clause 12.8 which deals specifically with disputes about roster changes proposed by Smit. This indicates that there is no requirement that the status quo be maintained while a dispute is being dealt with under all of the steps of clause 8. Such a requirement only operates in relation to a dispute about a roster change when an application is made under clause 12.8. In my view, the fact that clause 12.8 maintains the status quo until the dispute is “settled” is an indicator that when an application is made under that clause, it is an application to the Commission pursuant to Step 5 of the Dispute Settlement Procedure. Clause 12 can also be contrasted with clause 32 of the Agreement which refers to the dispute resolution procedures in the Agreements including an application to the Fair Work Commission being used to deal with issues arising from a change in the circumstances of Smit’s business.

[170] As the Full Bench held in Berri, regard may be had to evidence of surrounding circumstances to assist in determining whether an ambiguity exists. I do not accept that any of the matters raised by Mr Yates establish a relevant ambiguity in relation to how the Dispute Resolution Procedure in clause 8 interacts with the provisions in clause 12. Rather, Mr Yates’ evidence goes to the scope of the roster changes and whether the terms of the Agreements allowing for roster changes encompass changes of the kind proposed by Smit. Nor do I accept the evidence of Mr Yates about the capacity of the PCC to deal with roster changes. The terms of the Agreements are clear. The parties to the Agreements agreed that for the purposes of clause 12 – which encompasses roster changes – the PCC will be the consultative body. Rosters and hours of work are fundamentally industrial matters and I do not accept that it was not intended that the PCC deal with such matters. To find otherwise would contradict the plain words in clause 12.5 in a manner which is not permissible when the principles of construction dealing with evidence of surrounding circumstances are applied. It is also clear from the evidence that there are members of the Unions who are members of the PCC and that at various times Delegates have been members of the PCC.

[171] That the PCC is not integrated into clause 8 is not the point. Clause 12.8 operates when employees object to a roster change that has been proposed and notified to the PCC and discussed and consulted about through that Committee. It is the fact that employees object to roster changes which have been dealt with using the process involving the PCC in clause 12, that allows an application to be made in accordance with the Dispute Resolution Procedure. The terms of clause 8 in relation to Step 5 also indicate that a person bound or covered by the Agreement may refer the dispute to the Commission. If the AMOU and the AIMPE maintain that they cannot make an application to the Commission under clause 12.8 the same could be said of referring the matter to the Commission under Step 5.

[172] The better view is that an application under clause 12.8 may also be made by the Union bound by the relevant Agreement as a representative of employees. This is because an application within the meaning in clause 12.8 is made in accordance with the dispute resolution procedure which provides for representation at each step. Step 5 – the Step at which an application to the Commission is made – provides for any person bound/covered by the Agreement to refer the matter to the Commission. The Unions are covered by the respective Agreements and it is not suggested that they are not able to make an application to the Commission pursuant to Step 5 of the Dispute Resolution Procedure as representatives of employees. An application for the purposes of clause 12.8 is an application under Step 5 of that Procedure and may be made by an employee or employees or a representative on their behalf.

[173] For these reasons, when an application is made pursuant to clause 12.8 the status quo requirement is activated, and the dispute is dealt with by the Commission at Step 5. I do not accept that an application made to the Commission that invokes clause 12.8 is dealt with by the parties commencing discussions at Step 2 of the Dispute Resolution Procedure. When a dispute is being progressed through the Steps in clause 8 in circumstances where clause 12.8 has been specifically disavowed by the moving party, there is no requirement for the status quo prior to the dispute arising to be maintained.

[174] In my view, any dispute involving an objection to a proposed roster within the meaning in clause 12.8 is a dispute about the substance of the roster in terms of the requirements it places on employees in terms of availability, rest periods, time off and similar issues. Such a dispute is required to be raised in accordance with clause 12.8. It is clear from that clause that the Company cannot make an application under clause 12.8.

[175] I also accept the possibility that an application may be made by the Unions under clause 8 for a dispute in relation to a proposed roster change to be dealt with by the Commission in accordance with clause 8 without invoking clause 12.8. For example, a dispute relating to whether a proposed roster change is permitted under the provisions of the Agreements dealing with roster changes or is within the scope of such provisions is arguably a dispute about the interpretation or application of the Agreements rather than an objection by employees to the particular roster that has been proposed. A dispute about whether the process in clause 12 for roster changes has been followed, is a dispute about the interpretation or application of the Agreements. A dispute about whether there are pre-requisites which must be met in order for Smit to propose a roster change and whether these have been met is also a dispute about the interpretation or application of the Agreements.

[176] If an application is made at Step 5 in clause 8, without invoking clause 12.8, there is no requirement that the status quo be maintained while such a dispute is dealt with. If the Unions make such an application, Smit may decide that it will maintain the status quo as a matter of prudence in the event that its arguments in relation to such a dispute do not succeed, but it is not required by the terms of clause 8 alone, to do so.

[177] I also accept that an application which does not invoke clause 12.8 cannot be made until Steps 1 – 4 of the Dispute Resolution Procedure have been followed. Smit is also able to make an application under clause 8 seeking that the Commission deal with a dispute in accordance with the Dispute Settlement Procedure in that clause.

CONCLUSION

[178] The roster dispute applications raise matters that are capable of being dealt with by way of an application under clause 12.8 in conjunction with clause 8 or by an application made pursuant to either provision. It is also the case that regardless of the precise nature of the disputes and the Step they have currently reached, all roads lead to Step 5 of the Dispute Resolution Procedure.

[179] The Unions made an oral submission at the hearing in relation to these matters disavowing that the applications invoked clause 12.8. If the Unions do not invoke clause 12.8 and maintain that the applications are made under Step 5 of clause 8, then on their own case the applications are incompetent on the basis that earlier required Steps in the Dispute Resolution Procedure have not been followed. I am also of the view that as a result of a lack of clarity about what the issue in dispute is, neither dispute has passed Step 3, and I determine accordingly.

[180] If the AIMPE and the AMOU seek to invoke clause 12.8 as they appeared to do in the applications as originally pleaded, then they may file fresh applications making this clear. This will allow conciliation to proceed before the Commission as originally planned as provided in Step 5 of clause 8. If clause 12.8 is invoked then the status quo applies so that the proposed rosters may not be implemented until the disputes are settled.

[181] The jurisdictional objection advanced by the CFMMEU in C2019/6161 is dismissed. The applications by the AIMPE and the AMOU in C2019/6178 and C2019/6184 respectively, are also dismissed. Orders to that effect [PR717146] will issue with this Decision.

DEPUTY PRESIDENT

Appearances:

Ms L.Norris on behalf of the CFMMEU.

Mr L.Tilley on behalf of the AIMPE and the AMOU.

Mr K.Brotherson on behalf of Smit.

Hearing details:

2019.

15 November.

Brisbane

Printed by authority of the Commonwealth Government Printer

<717144>

 1   Outline of Submissions of the AMOU and AIMPE 8 November 2019 at paragraphs 4.

 2   Ibid at paragraphs 5 and 6.

 3   Transcript of proceedings 15 November 2019 PN509.

 4   Ibid PN517.

 5   C2019/4288.

 6   C2019/5478.

 7   C2019/5468.

 8   [2017] FWCFB 3005 at [14].

 9 [2016] FCA 2.

 10 Ibid at [66].

 11   _{[1998] 559 FCA, 28.05.98 (unreported).}

 12   Exhibit 3 Statement of Peter Sedgwick.

 13   Exhibit 3 Annexure “PS-1”.

 14   Exhibit 3 Annexure “PS-2”.

 15   Exhibit 3 Annexure “PS-3”.

 16   Exhibit 3 Annexure “PS-4”.

 17   Exhibit 3 Annexure “PS-5”.

 18   Exhibit 3 Annexure “PS-6”.

 19   Exhibit 3 Annexure “PS-7”.

 20   Exhibit 3 Annexure “PS-8”.

 21   Exhibit 1 Annexure “TE-5”.

 22   Exhibit 1 Annexure “TE-6”.

 23   Exhibit 1 Annexure “TE-7”.

 24   Ibid.

 25   Ibid paragraph 25.

 26   Exhibit 2 Annexure “GY-2”.

 27   Exhibit 2 Annexure “GY-3”.

 28   Exhibit 2 Annexure “GY-3”.

 29   Exhibit 2 “GY-8”.

 30   [2017] FWCFB 5032

 31 [2016] FCA 2 at [78].

 32 Ibid at [79].

 33   Ibid at 95.

 34 Ibid at [98].

 35   Transcript of proceedings PN602.

 36   Transcript of proceedings PN607- PN609.

 37   Transcript of proceedings PN610- PN612

 38   Annexure 1 to this Decision.

 39   [2012] FWA 2045.

 40 Ibid at [4].

Annexure 1