Esso Australia Pty Ltd T/A Esso v The Australian Workers' Union
[2019] FWC 6143
•5 SEPTEMBER 2019
| [2019] FWC 6143 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.225—Enterprise agreement
Esso Australia Pty Ltd T/A Esso
v
The Australian Workers’ Union; the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia; the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union
(AG2016/4853)
DEPUTY PRESIDENT GOSTENCNIK | MELBOURNE, 5 SEPTEMBER 2019 |
Application for termination of the Esso Offshore Enterprise Agreement 2011 - whether termination of the Agreement is not contrary to the public interest - whether termination of the Agreement is appropriate – application dismissed.
Chapters | Paragraph | |
1 | Background and context History of various proceedings Commercial and operational context Esso’s offshore workforce | [4] [4] [22] [35] |
2 | The competing claims in bargaining Roster cycle Removal of the overtime matrix The other disputed claims | [41] [41] [54] [62] |
3 | Undertaking | [80] |
4 | Relevant legislative provisions | [89] |
5 | Section 226(a): Whether termination of the Agreement is not contrary to the public interest | [96] |
6 | Section 226(b)(i): Views of Esso, the Unions and the employees covered by the Agreement | [145] |
7 | Section 226(b)(ii): Circumstances of and likely effect that termination would have on the employees Employees’ safety Family life and social inclusion Loss of pay and conditions Change in bargaining dynamic | [148] [149] [170] [179] [185] |
8 | Section 226(b)(ii): Circumstances of and likely effect that termination would have on Esso | [218] |
9 | Section 226(b)(ii): Circumstances of and likely effect that termination would have on the Unions | [240] |
10 | Is it appropriate to terminate the Agreement? | [249] |
11 | Conclusion | [251] |
[1] To say that bargaining and the litigation relating to it and to this application, which has been extensive, has been less than successful in delivering the commonly desired goal of all combatants – an enterprise agreement - is a litotes – an understatement. By an application under s.225 of the Fair Work Act 2009 (Cth) (the Act) lodged on 3 August 2016, Esso Australia Pty Ltd (Esso) seeks to terminate the Esso Offshore Enterprise Agreement 2011 1 (Agreement). The terms and conditions of employment of Esso’s employees working on the Gippsland Basin Joint Venture (GBJV) offshore platforms in the Bass Strait are governed by the Agreement. The Agreement was approved by Fair Work Australia, now the Fair Work Commission (Commission), on 10 January 2012 and commenced operation on 17 January 2012. The last wage increase under the Agreement of 5 per cent accrued to employees on 1 October 2013. The nominal expiry date of the Agreement is 1 October 2014 and it has long ago passed.
[2] Before turning to some background material, it is convenient to say something about the way in which the parties conducted the proceeding before me. As will be apparent shortly, before this application was heard, there had been an extensive case presented to a Full Bench of the Commission of which I was a Member, about the making of a workplace determination (WD Proceeding) following an order under s.424 purportedly terminating protected industrial action. The case was concluded, a decision reserved but for reasons later discussed, never delivered. All parties relied on some of the material adduced during the WD Proceeding and helpfully provided a 6 volume, 5,420 page Commission Book containing all relevant material on which the parties relied, including material by way of update or supplementation. Esso raised objections to some of the material. Attached to this decision is Schedule 1 which sets out Esso’s objections to particular evidence, a summary of the ground on which each objection is raised and my ruling on each.
[3] As to this application, I have decided that it is not appropriate at this stage to terminate the Agreement. Consequently, the application is dismissed. These are my reasons for that decision.
1. Background and context
History of various proceedings
[4] Since late 2014 and until 7 December 2016, The Australian Workers’ Union (AWU), the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) and the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) (collectively “the Unions”), as bargaining representatives had been bargaining with Esso for a proposed enterprise agreement or agreements that would replace, inter alia, theAgreement.
[5] During this period, the bargaining included bargaining for a proposed enterprise agreement or agreements to replace the Esso Gippsland (Longford and Long Island Point) Enterprise Agreement 2011 (Longford & LIP Agreement).
[6] In an endeavour to advance its bargaining claims, the AWU organised, and many of its members engaged in, various forms of industrial action directed against Esso commencing early in 2015. The AWU maintained that all such industrial action was protected industrial action under s.408(a) of the Act. Esso maintained that aspects of the AWU’s industrial action were not protected action. The other unions also organised protected industrial action to prosecute bargaining claims but the status of action organised and taken as protected industrial action was not disputed.
[7] The disputed industrial action which was taken by some employees covered by the Longford & LIP Agreement included bans on the performance of equipment testing, air freeing and leak testing. The AWU’s bans on these activities were imposed from 2 March 2015. Although the AWU had earlier issued a notice under s.414 of the Actadvising Esso of action in the form of a ban on the “de-isolation of equipment”, which had the effect of engaging the protected industrial action provisions in relation to the “de-isolation of equipment”, Esso maintained that bans on or a refusal to undertake equipment testing, air freeing and leak testing did not fall within the description “de-isolation of equipment” and therefore was not protected action.
[8] Esso obtained a number of orders from the Commission directed, inter alia, to the AWU stopping unprotected industrial action in 2015. 2 Clause 4.1 of an order Esso obtained on 6 March 2015 under s.418(1)3 (the Order) required the AWU (and its delegates, officers, employees and agents) to stop organising certain industrial action including any action constituting a ban, limitation or restriction on the performance of equipment testing, air freeing and leak testing. The Order also required AWU members covered by the Longford & LIP Agreement to stop the identified industrial action. The Order came into effect at 6.00pm on 6 March 2015 and ceased to operate at 6.00pm on 20 March 2015.
[9] In contravention of the Order, the AWU continued to organise the action, including a ban on air freeing and leak testing between 6.00pm on 6 March 2015 and 9.30am on 7 March 2015, and a ban on the manipulation of bleeder valves to facilitate air freeing and leak testing between 9.30am on 7 March 2015 and 17 March 2015. Consequently, Esso commenced proceedings in the Federal Court of Australia, pursuant to s.562 of the Act. In the proceedings Esso sought, inter alia, declarations that the AWU had contravened an order which applies to it in relation to the proposed agreement to which the proposed protected industrial action related, with the consequence that industrial action thereafter organised by the AWU in relation to the proposed agreement was not protected industrial action. An issue that required determination in the proceeding was the proper construction of s.413(5).
[10] In an earlier judgment in Australian Mines and Metals Association Inc. v The Maritime Union of Australia 4 (AMMA v MUA),Barker J held that s.413(5) of the Act did not apply without qualification to any contravention no matter when the contravention occurred.5 Rather, the focus is on contravention of orders that apply to the bargaining representative or employee at the time the industrial action is proposed.6 In Esso Australia Pty Ltd v The Australian Workers’ Union7 (Esso v AWU) Jessup J held that, despite his own view of the effect of s.413(5), His Honour could not say that AMMA v MUA was plainly wrong, and therefore he was bound to follow it.8 On that basis, the Court rejected Esso’s claim. I will say a little more about this later in the decision.
[11] Esso appealed to the Full Court of the Federal Court. The same Court also heard an appeal against the judgment in AMMA v MUA. Reasons for judgment in the two appeals were delivered on 25 May 2016. The Full Court dismissed both appeals. 9 On 21 June 2016, Esso filed in the High Court of Australia, an application for special leave to appeal particular orders of the aforementioned judgment of the Full Court. Esso contended, inter alia, that the Full Court had erred in its construction of s.413(5) of the Act.
[12] On 30 November 2016, the Unions served on Esso notices of intention to take protected industrial action pursuant to s.414 of the Act. Each union served two notices. The notices given by the Unions concerned industrial action that was to be taken by employees covered by the Longford & LIP Agreement and by employees covered by the Agreement.
[13] Subsequently, the Minister for Industrial Relations for the State of Victoria (Victorian Minister) applied for orders pursuant to s.424 of the Act to suspend or terminate protected industrial action. On 7 December 2016, Vice President Watson made an order 10 (s.424 Order) pursuant to s.424 of the Act purporting to terminate protected industrial action, of which notice had been given by the Unions and which was due to commence on 9 December 2016.
[14] Esso’s special leave application had not, at this stage, been heard. The High Court of Australia granted special leave on 16 December 2016. 11
[15] Following the making of the s.424 Order, the bargaining representatives for the Longford & LIP Agreement reached agreement prior to the end of the post-industrial action negotiating period and the Esso Gippsland (Longford and Long Island Point) Enterprise Agreement 2017 was approved by the Commission on 4 April 2017, commencing operation on 11 April 2017. 12 Esso and the Unions engaged in further negotiations during the post-industrial action negotiating period but were unable to agree on the terms of a new enterprise agreement to replace the Agreement. No application was made to extend the period. The post-industrial action negotiating period ended on 28 December 2016. A Full Bench was convened to deal with making an ensuing workplace determination as contemplated by s.266 of the Act. In this connection, the Full Bench heard and received lengthy evidence and submissions throughout 2017 in respect of a workplace determination that should be made. A decision was reserved.
[16] Prior to the Vice President making the s.424 Order, Esso lodged an application on 3 August 2016 under s.225 of the Act to terminate the Agreement.
[17] On 9 September 2016, Esso filed material in support of its s.225 application, consisting of an outline of submissions and eight witness statements. In October 2016, the Unions applied for orders for the production of documents by Esso. After a hearing before the Vice President, an order for the production of documents was made. 13 Once the s.424 Order was made Esso applied to adjourn the s.225 application, and on 8 December 2016, the Vice President adjourned the proceedings sine die with liberty to apply.14 On 6 December 2017, the High Court of Australia delivered judgment in Esso Australia Pty Ltd v The Australian Workers’ Union15 in which a majority of the Court allowed an appeal by Esso, holding that the industrial action organised by the AWU in relation to a replacement enterprise agreement or agreements for, relevantly, the Longford & LIP Agreement and the Agreement was not protected industrial action subsequent to the AWU’s contravention on 6 March 2015 of the Order. This was because it did not meet the common requirements provided in s.413(5) of Act.16 As to the effect of s.413(5), the majority said:
“[35]… Although the title of s 413(5) still makes reference to “Compliance with orders”, the change from “has complied with the order or direction so far as it applies to the organisation” (emphasis added), in the body of s 443(1) of the Workplace Relations Act, to “have [not] contravened any orders that apply to them” (emphasis added), in the body of s 413(5) of the Fair Work Act, bespeaks an explicit change in emphasis from a state of compliance with orders to a state of absence of past contravention of orders. And, so far as can be seen, the only reason for the change is to make clear, or possibly clearer, that the provision applies to past contraventions of orders.
…
[51]… For the reasons already given, the change in tense from the present tense in s 413(2) and (3), to the present perfect tense in s 413(4) and (5), followed by the change back to the present tense in s 413(6) and (7), read in context, leaves no room for doubt that the Parliament intended s 413(5) to apply to past contraventions of orders…” 17
[18] Esso next applied to the Commission under s.603 of the Act for an order revoking the s.424 Order. The Victorian Minister and the Unions opposed revocation. Esso’s application succeeded and the revocation order was made on 13 July 2018. 18 The Victorian Minister applied to the Federal Court of Australia for judicial review of the decision to revoke the s.424 Order on 10 August 2018.19 Judgment of the Full Court dismissing the application was delivered on 19 February 2019.20
[19] On 27 July 2018, Esso wrote to the Commission, seeking to progress its s.225 application. On 14 August 2018, the Unions wrote to the Commission indicating that they wanted a stay of the s.225 proceeding, in light of the then extant judicial review proceeding. On 3 September 2018, the Unions lodged a formal application seeking an order that the s.225 application be stayed until further order. I dismissed the application for a stay or adjournment of the s.225 application on 10 October 2018. 21 The application proceeded to hearing with further final submissions having been made by both Esso and the Unions in June 2019, after I allowed the Unions to re-open their case.22
[20] In summary, bargaining and bargaining related activities and litigation has included:
• 42 bargaining meetings prior to the filing of this application;
• two Employee All Sites Committee meetings;
• seven conciliations facilitated by the Commission;
• protected and unprotected industrial action;
• a picket at Longford from 30 July to 6 August 2015;
• several s.418 applications, including three that resulted in s.418 orders;
• an application by Qenos, a customer of Esso, to suspend the industrial action made on significant economic harm grounds;
• Federal Court litigation by Esso and by the Unions;
• a deed to suspend industrial action between August 2015 and January 2016;
• an “Intensive Bargaining Summit” in April 2016, chaired by former Commissioner Wayne Blair, which was a three day negotiation for all agreements;
• appeal proceedings in the Full Federal Court;
• proceedings under s.424 commenced by the Victorian Minister and consequent proceedings for a workplace determination;
• the High Court appeal;
• revocation proceedings in relation to the s.424 order;
• the bargaining representatives declining the invitation from the Full Bench of the Commission to view the content of the Workplace Determination that the Full Bench would have made;
• the judicial review proceedings commenced by the Victorian Minister challenging the revocation decision;
• ongoing action in the Federal Court for the hearing of final orders to the imposition of penalties on the AWU for the declared contraventions and for the recovery of compensation to remedy the effects of the contraventions; and
• since the decision to revoke the s.424 Order, there have been:
◦ five bargaining meetings;
◦ an application made by the Unions on 25 October 2018 for the Commission to deal with a bargaining dispute in relation to the proposed enterprise agreement; and
◦ more than six facilitated bargaining meetings before the Commission.
[21] As is evident from the brief history discussed above, in August 2016, after more than two years of bargaining, industrial action and legal proceedings, Esso lodged this application. The application lay dormant for another two years whilst other proceedings which might have resolved the bargaining issues were argued but were not concluded. It is now almost five years since the Agreement passed its nominal expiry date. There is still no agreement on making a replacement agreement.
Commercial and operational context
[22] A key issue and sticking point in bargaining has been that under clauses 19 and 20 of the Agreement, a roster of 7 days on and 7 days off is by default the only method of working shifts offshore for Esso’s employees covered by the Agreement. The roster may only be altered by agreement with the union delegates. This is an arrangement with which Esso had agreed, otherwise it would not be part of the fabric of the Agreement. Despite efforts, agreement of the delegates to alter the rostering arrangement has never been forthcoming. As part of its bargaining claims, Esso has sought to bargain for the removal of the provision and the employees have resisted. There are of course other important issues separating the bargaining parties.
[23] Esso say that unless the Agreement is terminated, the employees and the Unions will rely on the Agreement and the rostering restriction therein, for as long as the Agreement continues to operate.
[24] Esso says the circumstances have changed significantly and it needs to improve efficiency at many levels to meet significant challenges in its business. Esso says it faces major challenges to the sustainability of the GBJV operations. It needs further major capital investment from the joint venture partners, ExxonMobil and BHP. To compete for limited capital, Esso must improve its cost base, reliability and efficiency.
[25] Esso says that it has been seeking to negotiate a replacement agreement that will remove some provisions that it considers increase risks to the health and safety of its offshore workforce and pose barriers to productivity. It says these changes remain relevant to Esso’s business today, more than two years after it has made application to terminate the Agreement.
[26] The Unions are covered by the Agreement and are entitled to, and do, industrially represent many of Esso’s employees covered by the Agreement. The Unions and the vast majority of employees covered by the Agreement oppose Esso’s application for termination.
[27] Esso contends that termination of the Agreement is not contrary to the public interest and is an appropriate outcome in the circumstances. It says termination is more likely than the status quo to promote and balance the objectives of productivity and fairness, and to reinvigorate good faith bargaining. The Unions contend the opposite.
[28] Esso’s offshore operations in the Bass Strait comprise 11 staffed offshore oil and gas facilities, 7 unstaffed installations and 600km of underwater pipelines. 23 Its offshore operations extract gas and oil from reservoirs within Bass Strait. Some of its platforms have historically been its major gas producing platforms. Each produces gas from the crest of a large, high quality sandstone reservoir that is supported by a strong aquifer. More recently, production from these facilities has declined as the gas from these reservoirs is reduced.24
[29] Esso’s newer developments are major sources of gas production for the future to offset declining production from older fields. Several years ago, a significant investment was required to ensure some fields could be explored and developed. 25 Additionally, due to the high levels of CO2 in the produced gas, significant investment has been made in constructing the Longford Gas Conditioning Plant to remove excess CO2 prior to flowing into the main Longford gas plants.26
[30] In 2018, Esso approved investment in the West Barracouta field, the last discovered but undeveloped sweet gas (low CO2) field in Bass Strait. 27
[31] Esso’s platforms named Fortescue, Kingfish B, West Kingfish, Bream A&B, Snapper, Marlin, Tuna, West Tuna and Flounder produce crude oil. Crude oil is first separated from vapour and formation water, and then pumped into the offshore pipeline network for transfer to Longford. Once crude oil reaches Longford, it is processed at the Crude Stabilisation Plant (CSP). After processing through the CSP, the crude oil is piped to Long Island Point for sale. Gas produced from the oil at the CSP is recovered and piped back into the gas system. 28
[32] Production in the Bass Strait has been undergoing significant change. Esso’s production of oil in the Bass Strait operations has declined dramatically since peaking in the mid-1980s. In 1985, a significant part of Esso’s total revenue from the Bass Strait operations came from the oil producing facilities. 29 In 2017, oil production accounted for a much lower percentage of total revenue.30
[33] Oil reserves in the Bass Strait are also in decline. Many of Esso’s platforms are currently not producing oil, due to poor asset profitability performance, and/or operational limitations which could only be addressed by significant new investment. Several platforms are affected. 31 A number of other of Esso’s oil platforms are forecasted to reach end of field life in the next three years.32
[34] Gas sources in the Bass Strait are also changing. Since 2016, there has been a decline in production from a platform 33 which has historically been Esso’s largest and most reliable gas producer. This has resulted in an increased reliance on multiple gas sources to meet gas demand requirements.34 While gas is becoming more important for the GBJV operations, the decreases in oil production has an impact on Esso’s bottom line. Without further investment to find and develop new gas fields, Esso’s gas production is forecasted to reduce quite dramatically in a few years’ time.35 A current development36 will only provide a short reprieve from that decline. Hence, based on current gas prices and even assuming increased gas prices in the future, Gippsland revenues are forecasted to decline from 2022/2023 onwards.37
Esso’s offshore workforce
[35] It is uncontroversial that Esso’s offshore employees enjoy high wages and beneficial working conditions. An offshore operator’s annual average earnings is $285,000 (including superannuation) and an offshore maintenance technician’s annual average earnings is $240,000. These employees work offshore about 20 weeks per year. These working conditions have a long history.
[36] Esso say some of the working conditions date back to the 1970s. Then, Bass Strait oil was plentiful and there was little competition. It says that until the mid-1990s, the oil industry participants conducted their industrial arrangements as a ‘special industry’ working group, against a paid rates award backdrop.
[37] The production and maintenance work on Esso’s offshore platforms and installations is carried out by a combination of Esso’s offshore employees and contractors. Some platforms are continuously staffed, while others are irregularly or temporarily staffed. All offshore workers are transported to platforms by helicopters from Longford, operated by Esso.
[38] There are about 265 Esso employees working on Esso’s offshore platforms. About 210 of these employees are covered by the Agreement. These employees perform the roles of operator, maintenance technician and Platform Service Operators (PSOs). About 55 of the employees are employed in the supervisor and Offshore Installation Manager (OIM) roles, which are not covered by the Agreement. 38 The supervisors and OIMs work a 14 days on and 14 days off roster cycle (14:14 roster cycle). It is therefore a 28 day work cycle. Approximately 20% of Esso’s offshore employees work a 14:14 roster cycle. As already noted, Operations Technicians, PSOs and Maintenance employees covered by the Agreement and who comprise approximately 80% of the employees work a 14 day work cycle involving a 7 days on and 7 days off roster cycle (7:7 roster cycle).
[39] Most of the offshore workforce is engaged through contractors. In 2016, the Esso wages employees constituted 35% of the offshore workforce on any given day. 39 In 2018, the attrition of employees during that year was “more than offset” by the engagement of contractors.40 Employees of key maintenance and well-work contractors work a 28 day work cycle, with a 14:14 roster cycle. Many other employees of specialist contractors do not work to any roster cycle, instead travelling to offshore platforms as and when work is required.41
[40] Contractors engaged by Esso have been progressively implementing a 14:14 roster cycle for their offshore employees. For these employees and for Esso’s OIMs, a 14:14 roster cycle appears to have worked well for many years with no evidence of any detrimental impact on safety or health for those employees. 42 Approximately 40% of Esso's contractor employees are working offshore on a 14:14 roster cycle, and Esso had earlier estimated that at some stage during 2017 the percentage will increase to over 95% because of transitions to new contracts and contractor agreements which provide for 14:14 roster cycle arrangements.43 In any event, it seems uncontroversial that a significant proportion, if not the preponderance of Esso’s offshore workforce, works on a 14:14 roster cycle.
2. The competing claims in bargaining
Roster cycle
[41] Esso has sought changes to the Agreement which it says target increasing workforce efficiency, reducing risks to health and safety and reducing operating costs. The saving that would be made by introducing a 14:14 roster cycle for the Agreement covered workforce has been the subject of evidence. 44 It is uncontroversial that compared to the overall operating costs of Esso’s offshore operations, the projected saving is small. But it is apparent that cost savings, though not unimportant, is not the driving force behind Esso’s desire to bring about change.
[42] Pursuant to clause 20 of the Agreement, relevant employees work a 7:7 roster cycle, which may only be altered with the agreement of the union delegates. Esso’s claim in bargaining has been that it wants to move to a 14:14 roster cycle. It says that it wants to do so for reasons that include:
• the change will result in a reduction in the number of crew change handovers. Crew change handovers involve an element of risk to the health and safety of offshore workers. 45 A reduction in the number of crew change handovers will necessarily result in a reduction in the frequency with which the risk arises;
• the change will approximately halve the number of helicopter flights for employees, which will reduce a key identified risk for offshore workers; 46 and
• the change will lead to improvements in workforce productivity, including cost savings associated with reduced helicopter flights and less changeovers. 47
[43] The 7:7 roster cycle has been worked by Esso’s offshore employees since the 1970s. The Unions and employees have opposed any change to this roster pattern.
[44] Esso maintains that it has tried on many occasions over the years to persuade the Unions to agree to a change. Esso points to the fact that it has attempted industrial confrontation in the past (1996), as did its engineering subcontractors (2004). It says that it has tried collaboration and consultation at various times over the past decade to resolve this issue. It says that neither approach has worked. 48
[45] Esso says that the 7:7 roster cycle is an anomaly in the industry. There is some support for this view. It appears that the major offshore oil and gas producers in Australia, most of which are based in Western Australia and the Northern Territory, operate a minimum 14:14 roster cycle and there appears to be a trend towards longer shift swings. Most contractors in the Bass Strait work a 14:14 roster cycle. There are contractors who like Esso work a 7:7 roster cycle consistently with the provisions of the applicable enterprise agreements that apply. 49
[46] Esso’s desire to move towards the 14:14 roster cycle in Bass Strait reflects the practice in the offshore oil and gas operations in the North West Shelf and in the Northern Territory where the producers operate a minimum 14:14 roster cycle for operations and maintenance workers. 50 It also reflects the minimum swing length for offshore based sectors in Australia, for example in construction, drilling and vessel operators.51
[47] The Unions dispute the three reasons given by Esso for the roster change and state that the reasons are weak and unpersuasive.
[48] In relation to productivity, the Unions advance that the estimated cost benefit and reduction in working time is a minimal productivity gain from such a substantial change to a long-established workplace arrangement. They say that the roster proposed and the associated savings are wholly at the expense of the employees, resulting in reductions in the take home pay of employees of up to 4.1%. 52
[49] The Unions contend that the savings Esso has estimated in relation to reducing helicopter travel is overstated as Esso has double-counted the savings in employees’ wages. As such, the Unions contend that there will only be the savings associated with the cost of fuel for 312 hours’ of flying per year, equating to a very small percentage of the GBJV’s annual expenditure. 53
[50] The Unions say that Esso can only provide two examples where an inadequate handover has contributed to a safety incident and there have been no helicopter accidents at Esso over the last 35 years. Rather, the Unions say that a change to a 14:14 roster cycle may give rise to a higher risk of error in handover and employees would face a high risk during the hours spent working on platforms when compared to the level of risk when in the air. 54
[51] As to Esso’s submission that the 7:7 roster cycle is an anomaly in the offshore oil and gas industry, the Unions submit that the situation of those producers is distinguishable and a more legitimate comparator is the BassGas operation in Bass Strait where the 7:7 roster cycle is worked. The Unions say that any consideration of the roster arrangements of Esso’s contractors should be assessed by reference to the fact that Esso does not advert to its role in influencing those contractors in relation to rosters nor does it advert to the modus operandi of its contractors in making their respective enterprise agreements. 55
[52] The merits of the particular positions and claims of the bargaining parties about rostering arrangements are not matters which are relevant to an assessment of whether the Agreement must be terminated save to the extent that the contested consequence of the changes to rosters might be linked to the termination of the Agreement and therefore relevant to the assessment of the likely effect of termination of the Agreement on the parties. I set out the competing positions for context. The reasons for Esso’s pursuit of its claim appear to me to be rationally based. They are not confined to financial savings. Self-evidently, fewer helicopter flights means fewer risks. Consistent roster patterns across all of the offshore workforce will likely garner productivity and efficiency benefits as well as some modest financial saving. The desire to remove strictures on rostering so that change through consultation rather than agreement may occur is also readily understandable.
[53] As for the resistance, this too is understandable. Employees and particularly longer serving employees who have worked a particular roster cycle and have framed their personal commitments and responsibilities around the current arrangements will likely view a change as disruptive, undesirable and as having, or potentially having, a deleterious effect on the working conditions and their personal and family circumstances.
Removal of the overtime matrix
[54] Part B of the Agreement provides that Esso’s offshore employees are paid an annualised salary incorporating non-standard overtime of up to 75 hours per annum or 15 hours per trip. Under attachment 1 of the Agreement, Esso’s capacity to use the 75 hours bank is “limited to events described in the Offshore Overtime Work Selection Document.” There is an overtime selection matrix in the document, which requires particular steps to be taken before an employee may be required to work such overtime. It appears that under the matrix, employees are only required to work such overtime as a last resort.
[55] It is said that the practical effect of the provisions of the Agreement is that employees hardly work any of the 75 hours of overtime for which they are paid. It appears that on average employees work only between 2 to 10 hours overtime per annum. In the result, Esso says that critical operations and maintenance activities are deferred.
[56] Esso complains that its employees have the benefit of being paid for overtime they do not work, while Esso suffers the detriment of paying for overtime which is not actually being worked.
[57] Esso’s claim in bargaining is for the removal of the matrix so it can use the 75 hour bank more effectively. Instead of the matrix, Esso proposes to manage overtime work having regard to critical work requirements and existing fatigue management procedures. Esso considers this an important measure to improve continuous productivity and plant reliability.
[58] The Unions and employees dispute Esso’s claim for the removal of the matrix. The Unions say it is flawed for the following reasons:
• Esso is wrong to characterise the overtime matrix as a “bank” of pre-purchased overtime and is rather a “matrix” specifying the circumstances in which overtime can be directed at an annual cap of 75 hours; 56
• it is incorrect to say that the matrix only permits overtime as a “last resort” as it sets out different types of events which may give rise to the need for working overtime, some with guidelines to minimise unnecessary overtime work; 57
• Esso’s supervisor or superintendent in each case is to decide whether overtime is to be worked so if the complaint is that not enough overtime is being worked then that is a result of the supervisors’ discretion and Esso should raise that with the supervisors; 58
• the annualised arrangement reached in 2011 had the stated desire to reduce overtime working and allow decisions about overtime to be taken at the shop floor, so to seek to abolish the matrix suggests that Esso is complaining about successfully achieving its original goal; 59
• there is no requirement for employees to record overtime worked and as such figures of average overtime worked cannot be accepted as a true measure; 60 and
• the introduction of the matrix was a compromise reached by PSOs abandoning an industrial claim which was intended to be permanent and now should not be undone because Esso dislikes it. 61
[59] The Unions claim that the overtime matrix does not result in critical maintenance being affected as it only applies to Operations Technicians and PSOs. 62 The Unions say that if the overtime matrix is abolished then it will likely result in operators and PSOs working additional non-standard overtime for no additional pay.63 Further, the Unions say that Esso has not provided any probative evidence (such as specific cost figures) to demonstrate that the removal of the overtime matrix is a core productivity claim.64
[60] Again, the merits of the competing positions and claims are not particularly material to the assessment I need to make, save in the context previously noted. However, the summary of the competing positions highlights the difficulty associated with reaching an agreement in circumstances where the object and effect of the existing overtime matrix is in dispute. It is difficult to bargain a solution for a problem that is in dispute.
[61] The other disputed claims are discussed briefly further below.
The other disputed claims
[62] There can be little doubt that bargaining for the proposed agreement has been protracted. Esso says that little progress has been made during that time, and such progress as has recently occurred is only the consequence of Esso’s prosecution of this application and the prospects of the termination of the Agreement. Esso says that it is only recently, with the prospect of a hearing to deal with the application to terminate the Agreement looming, that the Unions have been prepared to engage in any meaningful discussions about a proposed replacement agreement with provision for a 14:14 roster cycle. It says that even then, the Unions have sought to attach several claims to any such roster, which Esso regards as unacceptable.
[63] There are several other key points that remain in dispute, including retrospectivity of wage increases, the overtime matrix and access to arbitration. Esso and the Unions have agreed to a process in which Esso will provide a copy of its proposed enterprise agreement to the Unions for review. 65
[64] Esso’s view on the state of bargaining is that even if a replacement agreement with provision for a 14:14 roster cycle might be able to be eventually negotiated with the Unions, the chances of that being voted up by the employees is remote unless the Agreement is terminated. 66
[65] The seven unresolved claims of the bargaining parties are or were as follows:
(a) Esso’s claims:
• mandatory 14:14 roster;
• removal of the overtime selection matrix;
• amendment to the catering and amenities clause;
• insertion of the step-up OIM clause; and
(b) the Unions’ claims:
• wage rates, term and operative date;
• inclusion of an arbitral step in the dispute settlement procedure; and
• a mechanism for adjusting the RAPHP for additional gazetted public holidays. 67
[66] Apart from the claims earlier discussed, the other unresolved issues may be summarised as follows.
(i) Catering and amenities clause
[67] Esso says that the current clause relating to catering and amenities is overly prescriptive and imposes an unreasonable burden on it. Currently, it requires a minimum of 2 catering personnel to attend and requires that Esso provide freshly prepared hot and savoury meals and morning tea on an a la carte basis or a choice of three meals even if a crew is travelling to a platform for a day to perform maintenance. Esso says it proposes a more flexible clause ensuring market competitive catering and camp services. 68
[68] The Unions say that the requirement to send 2 catering personnel only applies to staffed platforms and the proposed clause is vague and uncertain which will cause disputes. The Unions contend that Esso has made no sufficient case for the change. 69
(ii) Step-up OIM clause
[69] Esso seeks to insert a ‘Step-Up Supervision’ clause to allow it to ask employees and give the employees an opportunity to step up and perform the duties of OIM when there is an absence or staff shortage. It says that this will offer training and development opportunities for its employees. 70 The Unions support the opportunity for employees to step up but say that the proposed allowance of $100 per day is inadequate considering the additional duties which would need to be performed.71
(iii) Wage rates and retrospectivity
[70] Esso proposes a 3% annual wage increase, contingent upon the 14:14 roster cycle and other changes being introduced, whilst the Unions seek a 5% annual wage increase with back-pay and no roster change. 72 The Unions say that their position should be preferred taking into account the maintenance of existing wages, current wages of comparable workers, wage rises of comparable workers, wage increases under comparable instruments, work value considerations, “productivity” gains from implementing a 14:14 roster cycle, Esso’s windfall profits, executive pay and retrospectivity.
[71] The Unions justify a 5% annual wage increase by stating that due to consumer price inflation, a 2-2.5% annual wage increase is needed just to maintain purchasing power of employees’ wages. 73 Further, the Unions say the most comparable workers are those who work on the Yolla platform and earn around $290,000-$300,000 per annum, essentially earning up to 16-27% more than Esso employees in Bass Strait for doing the same type of work in a similar location.74 In addition, due to wage price index measures, the Unions say that increases of 3-3.5% are necessary so that Esso employees can maintain their position relative to other workers.75
[72] As to wage increases under comparable instruments, the Unions compare to Esso’s main competitor BassGas which has an enterprise agreement providing a 4.5% annual pay increase. They argue that in the private and public sector, the average annual wage increase under enterprise agreements is 3.2%. 76
[73] The introduction of a 14:14 roster cycle the Unions say justifies a significant increase in wages to compensate for the deterioration of work conditions, the psychosocial context, the possibility of working overtime and the isolation for a longer period. 77 To further this they say that all the productivity gains will flow to Esso and so in the interests of fairness some of the savings should flow to the workforce. Similarly, they say the windfall profits that Esso will experience from the increase in gas price means that a 5% annual increase can comfortably be awarded.78 Moreover, the increase in executive salaries of 25% is inconsistent with the claimed need to reduce costs and therefore a 5% increase for employees cannot be said to be too much. The Unions say that whatever the wage increase is it should be back paid since the nominal expiry date of the Agreement.79
[74] Esso rejects the Unions’ claim because:
• the wage claim is excessive having regard to the already high rates received by offshore employees;
• the wage claim is made without any productivity offset;
• the increase would well exceed the agreed wage increases in the Longford & LIP Agreement and the Esso Gippsland (Barry Beach Marine Terminal) Enterprise Agreement 2016, rewarding the offshore employees and their bargaining representatives for not having negotiated an enterprise agreement with Esso; and
• the wage claim is excessive compared to the general range of prevailing wage increases in the oil and gas industry and the broader community. 80
[75] Esso contends that a 3% increase over three years would ensure that offshore employees achieve a reasonable wage increase in return for Esso being able to pursue changes resulting in improvements to productivity and efficiency. Further, it says there is no merit for wage increases to operate retrospectively at least before February 2017 which was the end of the post-industrial action negotiating period. 81
(iv) Arbitration of disputes
[76] The Unions seek a new dispute resolution clause in the proposed agreement enabling workplace disputes to be referred to arbitration by the Commission and its merit would be to provide a circuit-breaker for intractable industrial disputes. 82 Esso’s concern is that the insertion of a compulsory arbitral step may give rise to an increase in the number of notified disputes and its concession to include such a clause in the Longford & LIP Agreement was because it was part of an overall negotiated package.83
(v) Regular Annual Public Holiday Payment (RAPHP) allowance
[77] Currently, the Regular Annual Public Holiday Payment (RAPHP) clause provides an annual allowance to employees in lieu of public holiday premiums and allowances otherwise payable and provides for an amount equal to 3.192 hours per week.
[78] The Unions claim an increase in the RAPHP allowance is justified as recently two new public holidays (Easter Sunday and Grand Final Eve) have been gazetted and therefore the formula needs to be updated to reflect this. They say that if the allowance is not granted, then under s.114 of the Act Esso may not be permitted to direct employees to work on the two new public holidays. 84
[79] Prior to the RAPHP allowance, employees were paid for work on public holidays on an incident basis, meaning that they would only receive public holiday penalties when the public holiday coincided with their rostered shift. Esso says that the current RAPHP costs Esso $2.2 million per annum but if the Unions claim was accepted it would increase that cost to $2.6 million. It says that it would be more cost effective for the company to eliminate the RAPHP and restore the previous regime. 85
3. Undertaking
[80] Esso has given an undertaking (the Undertaking) which, though directed to the Commission, is for all practical purposes an undertaking to employees covered by the Agreement that if the Agreement is terminated it will apply the terms and conditions of the Undertaking to each such employee for a period of six months unless a new enterprise agreement commences to operate in that time. The Undertaking maintains many of the terms and conditions for which the Agreement provides, reverts some (e.g. Dispute resolution and consultation) to those in the Hydrocarbons Industry (Upstream) Award 2010 (Hydrocarbons Award), and does not continue to apply some of the Agreement terms. The full text of the Undertaking is set out in Schedule 2 to this decision.
[81] The Undertaking does not prevent Esso from applying relevant provisions of the Hydrocarbons Award to change rostering and work cycle arrangements provided for in the Undertaking.
[82] However, any such changes must be consistent with the Hydrocarbons Award and the National Employment Standards (NES) and will not result in a reduction in the wage rates or allowances for which provision is made in the Undertaking whilst the Undertaking operates.
[83] A number of provisions of the Undertaking will only apply while Esso maintains the 7:7 roster cycle. These provisions deal with:
(i) Ordinary hours (clause 13(e) - second sentence);
(ii) Fixed cycle payments/rosters (clauses 14(a) and 14(c));
(iii) Fixed cycle payment (clause 14.2);
(iv) Roster crew change arrangements (clause 15);
(v) Annual leave – amount of leave (clause 18.1);
(vi) Personal leave (clause 19(d));
(vii) Long service leave (clause 21(d));
(viii) Offshore cycle hours (Schedule 2 to Part A);
(ix) Additional hours and additional compensation (clause 35); and
(x) Amended offshore cycle hours – dayshift and nightshift (Attachment A to Part C).
[84] The Unions criticise the Undertaking saying that the conditions provided in the Undertaking are less favourable than the Agreement as it does not contain the following entitlements:
• a right to access arbitration for certain disputes;
• a right to convert from full-time work to part-time work;
• rights to an appropriate retrenchment package and not just the NES minimum;
• rights to a fair grievance procedure, including the requirements for three warnings to be given before dismissal for underperformance;
• protections against overwork under the overtime matrix, including a cap on non-stand overtime, and default rules regulating the circumstances in which overtime may be required;
• the DPIC or “Designated Person in Charge” allowance, which is paid to maintenance technicians in charge of a shift;
• rights to a favourable standard of amenities; and
• rights to assistance from unions, including rights to participate in paid or unpaid communication meetings, and rights to be transported to/from stop work meetings which occur onshore. 86
[85] The Unions say if the 14:14 roster cycle is introduced during the transitional period, it will result in the loss of the following protections and conditions as a range of the Undertaking provisions will be “switched off”:
• rules about when offshore shifts begin and end, for the purposes of payment;
• the “multiplier” for calculating earnings in a work cycle, which multiplier in turn reflects decisions about which hours are to attract penalty rates and in what amount;
• rights to pay (at penalty rates) as well as meals and accommodation if flights to/from the platforms are delayed; and
• entitlements to annual leave (and entitlements to cash in lieu of an extra week’s annual leave for operators), sick leave, and long service leave. 87
[86] Further, they say that once the Undertaking expires, the following benefits which are found in both the Agreement and the Undertaking will be lost as they are not found in the Hydrocarbons Award:
• the benefit of the Oil Industry (Long Service Leave) Award 2000, including the right to be paid out accrued long service leave if employment ends after five (rather than the standard seven) years;
• the right to be paid for a minimum of 4 hours’ work if called out to perform non-continuous overtime;
• the right to a paid 30 minute meal break when working non-standard overtime;
• the right to paid jury leave;
• the right to a RAPHP allowance, representing 250% penalty payments for 5.5 public holidays per annum, irrespective of whether the employee works that many holidays in a particular year;
• the right to accident make-up pay to full earnings, not just Award earnings; and
• the right to 60 minutes’ paid breaks per shift, rather than 40 minutes under the Award. 88
[87] Esso responds that its Undertaking will operate for 6 months post termination unless a new agreement is reached. It says that the Unions have exaggerated the differences between the Undertaking and the Agreement. The basis for this contention is set out in a table in Schedule 3 to this decision. 89
[88] Esso’s Undertaking is as already noted in all practical respects given to the affected employees, rather than to the Commission. I accept that the Undertaking will not operate to provide for every beneficial term which is contained in the Agreement. Nonetheless, I am satisfied that it will provide for key terms, well above the minimum terms and conditions for which provision is made in the Hydrocarbons Award. It will however have the effect of minimising the financial impact on employees of the Agreement’s termination and will facilitate the introduction of a 14:14 roster cycle through consultation, if agreement to introduce the cycle is not reached through bargaining for a new agreement. That Esso has, or proposes to give the Undertaking, and the terms of the Undertaking, are matters that are relevant in the assessment whether it is appropriate to terminate the Agreement. 90 I propose to take the Undertaking into account for that purpose. The Undertaking will only operate if the Agreement is terminated, and presumably the period of operation of the Undertaking has been selected because Esso assesses that within that period it is reasonable to assume that with a changed bargaining dynamic, a new agreement containing more flexible provisions would be made.
4. Relevant legislative provisions
[89] The relevant legislative mechanism by which an enterprise agreement may be terminated is found in Division 7 of Part 2–4 of the Act. Subdivision D of Division 7 contains provisions which enable the termination of an enterprise agreement after the agreement has passed its nominal expiry date. These provisions are as follows:
“Subdivision D—Termination of enterprise agreements after nominal expiry date
225 Application for termination of an enterprise agreement after its nominal expiry date
If an enterprise agreement has passed its nominal expiry date, any of the following may apply to the FWC for the termination of the agreement:
(a) one or more of the employers covered by the agreement;
(b) an employee covered by the agreement;
(c) an employee organisation covered by the agreement.
226 When the FWC must terminate an enterprise agreement
If an application for the termination of an enterprise agreement is made under section 225, the FWC must terminate the agreement if:
(a) the FWC is satisfied that it is not contrary to the public interest to do so; and
(b) the FWC considers that it is appropriate to terminate the agreement taking into account all the circumstances including:
(i) the views of the employees, each employer, and each employee organisation (if any), covered by the agreement; and
(ii) the circumstances of those employees, employers and organisations including the likely effect that the termination will have on each of them.
227 When termination comes into operation
If an enterprise agreement is terminated under section 226, the termination operates from the day specified in the decision to terminate the agreement.”
[90] These provisions, and relevantly s.226, are to be construed in a manner that is consistent with the language and purpose of the provisions by reference to the language of the Act as a whole, and so the context, general purpose and policy of the provision are an important means by which the meaning and effect of a provision is to be ascertained. The operation of these provisions was considered in detail in Aurizon Operations Limited; Aurizon Network Pty Ltd; Australia Eastern Railroad Pty Ltd 91and by a Full Court of the Federal Court in Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Aurizon Operations Ltd92 and need not be repeated here.
[91] The nature of the exercise of power under s.226 was explained by the Full Bench in AWX Pty Ltd 93 as follows:
“We begin an examination of this aspect by noting that the application of s.226 of the Act is an exercise in discretion by the decision maker. The provision requires that an instrument must be terminated if the Commission is satisfied that it is not contrary to the public interest and after taking account of all the circumstances including the views of the employees, each employer, and each employee organisation (if any), covered by the agreement; and the circumstances of those employees, employers and organisations including the likely effect that the termination will have on each of them.” 94
[92] The Full Bench in AWX Pty Ltd referred to the following passage in Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission 95 in identifying that s.226 required the exercise of a discretion:
“"Discretion" is a notion that "signifies a number of different legal concepts". In general terms, it refers to a decision-making process in which "no one [consideration] and no combination of [considerations] is necessarily determinative of the result." Rather, the decision-maker is allowed some latitude as to the choice of the decision to be made. The latitude may be considerable as, for example, where the relevant considerations are confined only by the subject matter and object of the legislation which confers the discretion. On the other hand, it may be quite narrow where, for example, the decision-maker is required to make a particular decision if he or she forms a particular opinion or value judgment.” 96[Footnotes omitted]
[93] Section 226 involves the exercise of a “narrow” discretion of the type described in the last sentence of the passage above. However, it remains the case that the evaluative assessments required by s.226(a) and (b) allow a degree of latitude on the part of the decision-maker as to the conclusions to be reached. 97
[94] Section 226 requires the Commission to take particular matters into account in making its evaluative assessment. A statutory requirement that a matter be taken into account means that the matter is a ‘relevant consideration’ in the sense discussed in Minister for Aboriginal Affairs and Another v Peko-Wallsend Limited and Others (Peko-Wallsend), 98 that is, it is a matter which the decision maker is bound to take into account. The obligation to take into account “all of the circumstances including the matters in s.226(b)(i) and (ii) means that each of the matters must be treated as a matter of significance in the decision-making process.99 As Wilcox J said in Nestle Australia Ltd v Deputy Federal Commissioner of Taxation:100
“To take a matter into account means to evaluate it and give it due weight, having regard to all other relevant factors. A matter is not taken into account by being noticed and erroneously discarded as irrelevant.” 101
[95] The weight given to a particular matter is ultimately a matter for the Commission subject to some qualification. As Mason J explained in Peko-Wallsend: 102
“It follows that, in the absence of any statutory indication of the weight to be given to various considerations, it is generally for the decision-maker and not the court to determine the appropriate weight to be given to the matters which are required to be taken into account in exercising the statutory power. ... I say "generally" because both principle and authority indicate that in some circumstances a court may set aside an administrative decision which has failed to give adequate weight to a relevant factor of great importance, or has given excessive weight to a relevant factor of no great importance. The preferred ground on which this is done, however, is not the failure to take into account relevant considerations or the taking into account of irrelevant considerations, but that the decision is "manifestly unreasonable".” 103
5. Section 226(a): Whether termination of the Agreement is not contrary to the public interest
[96] A requirement to consider the public interest, and in this context whether something would or would not be contrary to the public interest “refers to matters that might affect the public as a whole such as the achievement or otherwise of the various objects of the Act, employment levels, inflation, and the maintenance of proper industrial standards.” 104 Though the content of the notion of public interest cannot be precisely defined, it is something that is distinct in nature from the interests of the parties.105 The public interest and the interests of the parties may be similarly affected however that fact does not diminish the distinction.106 A consideration of whether termination of the Agreement is not contrary to the public interest may, and often will, involve balancing countervailing public interests.107 In that assessment, all of the circumstances should be taken into account to determine where the public interest lies,108 and how countervailing considerations as to public interest should be balanced.
[97] In the context of s.226, a consideration of the public interest is plainly directed to the consequences of terminating the Agreement. 109 The question is whether the termination of the Agreement is not contrary to the public interest. In making that assessment, it is obviously not necessary to conclude that the termination is in the public interest. The public interest in a given case may be neutral and the subsection is satisfied. The relevant consequences of the termination of an agreement are those which are likely foreseeable.110
[98] Esso contends that the termination of the Agreement is not contrary to the public interest for the following reasons:
• there is no incompatibility with the scope and purpose of the Act as the legislative scheme does not presume that bargaining is only facilitated by terms and conditions in an expired agreement continuing in perpetuity; 111
• termination of the Agreement will better suit good faith bargaining as the continued operation of the Agreement is hindering rather than encouraging good faith bargaining due to employees being reluctant to forgo any legacy working conditions. Esso says that the bargaining process under existing dynamics has run its course, the parties would remain bound by the good faith bargaining requirements of the Act post termination and would be able to exert industrial pressure to bargain for a new agreement; 112
• termination of the Agreement will increase the likelihood of making an enterprise agreement as it will facilitate negotiation of a replacement agreement; 113 and
• termination of the Agreement will not undermine proper industrial standards as employees would continue to be covered by proper industrial standards being the Hydrocarbons Award and the NES. In addition, employees would continue to receive the existing wages and conditions for six months after termination under Esso’s Undertaking. 114
[99] Further, Esso contends there is a public interest in ensuring that its operations in Bass Strait continue to be a sustainable business for as long as possible to be achieved by allowing Esso to implement reasonable workplace changes to improve productivity and efficiency. 115
[100] The Unions contend that the termination of the Agreement is contrary to the public interest because of the impact of termination on:
• employees’ safety;
• the Gippsland economy;
• family life and social inclusion; and
• stagnant wages growth. 116
[101] These are discussed in more detail later in the decision and the concerns around safety and family life/social inclusion are also relied upon by the Unions in the assessment of the effect of the termination of the Agreement on employees.
[102] Esso says the Unions have failed to comment on s.171 of the Act and have not dealt with the analysis of the Full Bench in Aurizon 117 and Construction, Forestry, Mining and Energy Union v AGL Loy Yang Pty Ltd118.119Esso submits that the Unions have failed to draw distinctions between:
(a) the public interest and the interests of the parties; and
(b) the likely foreseeable consequences of terminating the Agreement and the consequences of the introduction of a 14:14 roster cycle and the removal of an overtime matrix. 120
[103] Esso submits that the Unions’ contentions about employees’ safety and family life/social inclusion invites the Commission to repeat that which the Full Bench found to be an error in Kellogg Brown & Root Pty Ltd and others v Esso Australia Pty Ltd 121(KBR) and as such no public interest issue arises from these concerns.122 The Unions argue that previous decisions do not deal with specifically whether disruption to the lives of family members is a public interest matter and they only stand for the propositions that public interest is to be identified with the interests of the public “as a whole” and considered separately to the interests of the parties.123 Further, the Unions say that “as a whole” does not mean that each and every person who forms part of the public has to be affected, but could be just part of the community.124 The Unions say that the potential impact on the families of employees engages the public interest because of weight of numbers that will be affected125 and the impact on the employees’ relationships with their partners and children.126
[104] As to the economy and wage growth issues, Esso says these go to the impact of termination on the income and employment of employees which are relevant to s.226(b) rather than to the issue of public interest as confirmed in KBR. 127
[105] As Esso has noted, the direct legal consequence of termination of the Agreement is that its terms and conditions contained would no longer apply. Instead, the provisions of the Hydrocarbons Award and the NES would apply as the minimum terms and conditions of employment. Plainly, Esso would no longer be prevented from seeking to make a change to rosters in the absence of the agreement of the union delegates and Esso could allocate reasonable overtime without being required to follow the steps in the overtime selection matrix.
[106] Thus, termination of the Agreement may allow Esso to implement particular changes to its existing 7:7 roster cycle and other working arrangements such as overtime, which it regards as inefficient and out of step, for example, with the roster cycle employed by many of its contractors. The merit of these and other proposed changes sought by Esso is not however within public interest inquiry, though the foreseeable effect or impact of the changes may be.
[107] There are other likely consequences of the termination of the Agreement.
[108] There can be little doubt that termination of the Agreement will disturb the current bargaining positions. The Unions and employees are presently bargaining from a position that the terms and conditions contained in the Agreement cannot be altered except through bargaining for a new agreement. Whilst ever there is no new agreement, the existing terms and conditions including those about which Esso complains remain in force. This will cease to be the case in the event the Agreement is terminated. Though the Undertaking proffered by Esso will preserve for a six-month period many of the terms and conditions in the Agreement, it will nevertheless allow Esso to prepare for and to proceed with implementation of its preferred 14:14 roster cycle unencumbered by the need to bargain for that change, albeit it remains willing to do so. In and of itself this consequence is not inconsistent with the object in s.171 of a fair framework enabling collective bargaining and facilitating good faith bargaining.
[109] Generally, collective bargaining will remain available to the bargaining parties. Esso and the Unions in their bargaining will continue to be required to meet the good faith bargaining requirements. Were it otherwise then it seems to me that it would always likely be contrary to the public interest to terminate an agreement where the pre-termination bargaining positions are disturbed by an agreement’s termination. But this is not the scheme of the Act.
[110] Esso maintains that it wants to reach an agreement that will give wage increases and change certain conditions contained in the Agreement and that it wants to resolve all the bargaining issues. I accept that this is so. Esso proffers an Undertaking which would operate from the date of the termination of the Agreement for a period of six months as the Undertaking would come into force from the date of termination. In proffering the Undertaking, Esso says that it has taken into account that the Hydrocarbons Award contains significantly less beneficial terms and conditions than the Agreement and thus if the Agreement is terminated, Esso proposes to preserve key terms and conditions by means of the Undertaking. I also accept that Esso is genuine in proposing the Undertaking and that it intends by the Undertaking to preserve for six months that which it describes as key terms and conditions. There are of course differences as earlier noted.
[111] However, the proffering of an undertaking is not to be treated as raising an automatic entitlement to the termination of an agreement or as satisfying some of the prescribed preconditions for termination. The proffering of an undertaking, its content and duration are matters to be weighed in assessing whether the Commission is satisfied of the matters in s.226(a) and (b) of the Act.
[112] Nevertheless, the Undertaking makes the immediate likely consequences of the termination of the Agreement much more certain. There will be no immediate dramatic shift in the wages and conditions under which the relevant employees are employed. There will be further bargaining and rostering changes implemented through, at least consultation, if not agreement. Esso proposes that within the period during which the Undertaking will operate, it will seek to negotiate a replacement agreement with the bargaining representatives that is approved by employees. The form of any such agreement will depend on the bargaining.
[113] As already noted, Esso wants any replacement agreement to make provision for a 14:14 roster cycle. Plainly, if a replacement agreement included such a term, the timing and process for its introduction and the benefits and detriments that are attached to it would depend on the result of the bargaining process.
[114] Esso seeks this change for several reasons, including to increase labour productivity by reducing the downtime and duplication that comes with crew changes; reduce operating costs by essentially halving helicopter travel costs; and improve safety risk management, particularly by halving the risks associated with helicopter transport and crew change handovers.
[115] The capacity of Esso to change the rostering system in the event the Agreement is terminated is to be assessed by reference to the manner in which Esso will seek to introduce the change in the event it is permitted to do so. This is important in assessing the likely consequence of the termination of the Agreement. As already noted, first and foremost Esso wants to negotiate an agreement so that its capacity to introduce a 14:14 roster cycle is not impeded in the manner currently set out in the Agreement. Whether through a new agreement or otherwise, Esso proposes to deal with the implementation of the 14:14 roster cycle in accordance with the consultation processes in the Hydrocarbons Award, 128 including consideration about the maximum weekly hours, rostering and ordinary hours of work clauses.129
[116] According to Esso, consultation will involve a notice period of 6 months before the introduction of the 14:14 roster cycle, a consideration of views, feedback and issues raised by employees; consideration of issues raised by employees’ representatives and if required, following standard risk assessments, consultation with relevant experts or consultants regarding appropriate risk control measures. 130 Esso maintained that the manner of introduction of the 14:14 roster cycle will take account of information drawn from the consultation process, together with health and safety considerations, and mitigating measures recommended by experts.131
[117] The manner in which Esso proposes to implement this change to rosters will likely have a mitigating effect on many of the potential consequences of the implementation of the roster alteration identified by the Unions.
[118] I also accept that termination of the Agreement will likely provide fresh cause or impetus for the employees and the Unions as their bargaining representatives to consider compromise, rather than pursuing the status quo vis-à-vis the roster and overtime alterations. As for Esso, there is also likely to be some incentive, if not imperative, to reach agreement over the changes because the alternative is to push through its change without support of the workforce. This would likely be disruptive, time-consuming and unproductive to maintaining, or perhaps in this case, attaining a harmonious industrial relations environment. However, if bargaining does not bring about then a change to rosters would be subject to the consultation processes in the Hydrocarbons Award and the employees will have access to the dispute resolution mechanism under that award.
[119] That said, I am not persuaded that bargaining has reached the point of impasse despite the protracted bargaining and the litigation that bargaining conduct has spawned. The summary of the positions of the parties discloses difficulty but not impossibility of an agreement being made. I do not accept as Esso contends, that even if agreement is reached with the Unions on a 14:14 roster cycle, that employees would not support such a change. There is no evidence to support the contention and it is speculative. Moreover, there are other bargaining tools available to the parties to narrow or eliminate differences. The parties have been utilising the Commission to facilitate bargaining. They could ask the Commission to make a recommendation or express an opinion about particular claims and how these might be resolved. The parties could agree in the context of the s.240 proceedings to an arbitration of one or more of the outstanding claims. Section 240 is part of the bargaining framework and intended to facilitate the resolution of bargaining disputes by mediation, conciliation and consent arbitration. The parties could also take up the course suggested by the Full Bench in Esso Australia Pty Ltd v AMWU and others 132 at [76], either as a whole or in respect of one or more particular issues.
[120] Esso also contends that the continued operation of the Agreement is hindering, rather than encouraging, good faith bargaining. It contends that there is a reluctance on the part of the Unions and employees to forgo that which Esso describes as legacy working conditions.
[121] It must be accepted bargaining thus far has not produced an agreement. There is also no suggestion in the evidence that an agreement is imminent. No doubt also there is a desire on the part of the employees to maintain existing working conditions particularly those concerning rosters and overtime. Similarly, Esso strongly desires that these existing restrictions be removed. There is nothing unusual in such a state of affairs. The existence of the Agreement might well have contributed to the state of affairs, but it does not follow that its existence is hindering good faith bargaining. The good faith bargaining requirements do not require concession to be made. Mechanisms are available under the Act to deal with a failure by a bargaining representative to comply with one or more of the good faith bargaining requirements. It is telling, in assessing the veracity of this contention that in the array of matters brought before the Commission related to bargaining and industrial action, only one has concerned an application for a bargaining order. That application was made early in the piece in 2014. No such application has since been made. Therefore, the submission that the Agreement’s existence is hindering good faith bargaining must be rejected since it implies that in order that good faith bargaining requirements be met a party is required, after a lengthy and perhaps protracted period of unfruitful bargaining, to make concessions, even reasonable concessions. That is not the case under the scheme of the Act. Hard bargaining is not inconsistent with good faith bargaining and that is what appears to have been occurring here, on both sides.
[122] I also reject Esso’s contention that the conditions that the Unions and employees seek to be retained in an agreement are legacy working conditions. It is doubtless the case that the current 7:7 roster cycle is out of kilter with the rostering cycle utilised by many of Esso’s contractors and Esso in respect of some of its offshore employees. But this was (although perhaps to a lesser degree) also the case when Esso freely entered into the Agreement. The constraint on change are those imposed by the agreement of those making the Agreement. 133 It is the package to which the bargaining parties last agreed.
[123] It is clear from the evidence given by employees that they do not regard the rostering arrangements under which they currently work as legacy conditions but rather an important feature of their employment around which many have made family and other personal arrangements. Just as Esso’s desire to have an altered rostering arrangement in operation should not be discounted merely because the cost savings it would generate are small, so to the employee’s desire to maintain existing arrangements around a known roster should also not be discounted by referring to such conditions as legacy conditions. The current rostering system was not one inherited by Esso but rather it was a system, including its inherent restrictions, which forms the package of employment arrangements for which it bargained and ultimately agreed. Moreover, unlike the “no forced redundancy” provisions in Aurizon which had the effect of continuing the employment of 69 employees who were not otherwise engaged in productive work, 134 employees of Esso are not inhibited in engaging in productive work by reason of the 7:7 roster cycle, even though it might be said that a 14:14 roster cycle would be more efficient and so more productive.
[124] I accept that Esso’s case of termination of the Agreement is not pre-emptory. The bargaining process under the existing dynamic has been extensive and has not produced an agreement. I also accept that termination of the Agreement is more likely than the status quo to facilitate a replacement agreement. This is because not only will the dynamic have changed but the industrial armoury available to the Unions or at least one of them and many of the employees is significantly diminished, a matter to which I will return when I consider the effect of termination of the Agreement on the employees.
[125] I also accept that if the Agreement is terminated the employees would continue to be covered by proper minimum industrial standards, namely the Hydrocarbons Award and the NES, and they retain the capacity to bargain collectively for better terms and conditions.
[126] Later I will deal with the effect on employees of the termination of the Agreement, particularly the roster changes proposed. I do not consider these matters affect my consideration whether the termination is not contrary to the public interest in the circumstances of this case. The deleterious effect or impact on various employees (particularly those relating to family life and social inclusion) of the proposed roster change, presupposes a causal connection between the termination of the Agreement and the implementation of a 14:14 roster cycle. For the purposes of considering whether a particular matter is relevant to assessing whether the termination of the Agreement is not contrary to public interest, it is necessary to understand that termination of the Agreement will not necessarily have the result that rosters will be altered. This is because firstly, Esso’s primary and preferred position is that it wants to continue to bargain for the change, albeit under a bargaining dynamic that has removed the Agreement as the mechanism regulating changes to rosters. Secondly, even absent an agreement, Esso is committed to and indeed must consult over the introduction of any proposed rostering alteration. It seems to me in the circumstances that it is just as likely that the implementation of a 14:14 roster cycle would occur as a consequence of making a new agreement rather than the termination of the existing one because of the changing dynamic that will be brought about by the termination of the Agreement.
[127] Moreover, the affected employees and their bargaining representatives will have the usual bargaining tools available to them, including protected industrial action, unless as is the case with the AWU, they have been disqualified from organising or taking protected industrial action by contravening the Act and orders of the Commission. Collective bargaining remains available to the parties. The parties will remain bound by the good faith bargaining requirements in the Act. They will be able to exert such legitimate industrial pressure as is available to them under the Act to bargain and reach agreement. The scheme of bargaining under the Act which gives effect to the objects in s.171, contemplates bargaining in good faith, agreement making, termination of an agreement that has passed its nominal expiry date, recourse to protected industrial action and limitations thereon in the event of conduct that contravenes certain kinds of orders of the Commission. The scheme allows access to the Commission for mediation, conciliation, making recommendations, expressing an opinion and consent arbitration. The scheme is replete with swings and roundabouts. That is part of the “balanced framework” contemplated by the object in s.3 and paragraph (f) thereof.
[128] I therefore do not consider that a change in the bargaining dynamic brought about by the termination of the Agreement, without more, to be a factor telling against a conclusion that termination of the Agreement is not contrary to the public interest. The change in bargaining dynamic is, in effect, contemplated by the scheme of the Act. Termination of an agreement during bargaining will likely have this result. But that is not to say that a change in bargaining dynamic is irrelevant. As will later be seen, the change in bargaining dynamic brought about by the termination of an agreement may be relevant in assessing the impact of termination on the various parties covered by an agreement.
[129] I also do not consider the contested risks to safety and the identified impact on affected employees’ family life and social inclusion as telling against such a conclusion. As to the former, I rely on the reasons I later give on the subject. As to the latter, I rely on reasons already set out.
SCHEDULE 2
SCHEDULE 3 | |
Unions’ claims | Esso’s response |
Loss of right to access arbitration for certain disputes | If the Agreement is terminated, the dispute resolution procedures in the Hydrocarbons Award will apply. The unions overstate and oversimplify the “right” to access arbitration. Clause 5(c) of the Agreement provides a limited right to access arbitration for disputes managed through the Interest Based and Problem Solving Process. Arbitration is available only in limited circumstances once the prescribed steps set out in clause 5(c) have been followed. Following the termination of the Agreement, employees retain the right to have disputes resolved through the dispute resolution process set out in clause 9 of the Hydrocarbons Award. |
Loss of right to convert from full-time work to part-time work | If the Agreement is terminated, clause 10.3 of the Hydrocarbons Award will apply. Clause 17(e)(i) does not provide an unqualified “right” to convert from full-time to part-time because it is contingent on Esso’s agreement. |
Loss of rights to an appropriate retrenchment package and not just NES minimum | If the Agreement is terminated, clause 12 of the Hydrocarbons Award, the NES and company policy will apply. The Agreement provides for an appropriate retrenchment package. It does not, itself, provide any specific details of the content of the “appropriate retrenchment package” and does not provide that the package will be above the NES minimum. Accordingly, the additional benefits afforded to the employee under clause 31 is not significant. |
Loss of rights to a fair grievance procedure, including the requirements for three warnings to be given before dismissal for underperformance | If the Agreement is terminated, the model dispute resolution clause under clause 9 of the Hydrocarbons Award will apply. There is nothing to suggest that procedure is not fair. There is no requirement under the Agreement for three warnings to be given before dismissal for underperformance. Rather, it provides for the counselling process that will “normally” take place. However, the process is not mandated and there is, therefore, no “right” for three warnings before dismissal for underperformance. Further, there is express acknowledgment of Esso’s right to dismiss an employee instantly for serious or wilful misconduct. Further, given the employees are covered by the Hydrocarbons Award, the unfair dismissal provisions under the FW Act will apply in respect of performance related dismissals. |
Loss of protections against overwork under the overtime matrix, including a cap on non-stand overtime, and default rules regulating the circumstances in which overtime may be required | If the Agreement is terminated, the working, and payment of overtime will be regulated in accordance with the terms of the undertaking in conjunction company policy. Under the undertakings and the Award, there is no cap for non-standard overtime. However, overtime would continue to be regulated by Esso’s fatigue management manual in order to ensure health and safety and capped at 75 hours per annum. Additionally, Esso’s maintenance employees, who are not subject to the overtime selection matrix, do not work excessive amounts of overtime as a result. In 2016, maintenance employees worked on average 24 hours of overtime for the entire year. Esso has very modest overtime rates. In 2017, operators worked an average of 10.13 hours of overtime and PSOs an average of 3.40 hours of overtime.12 This is consistent with the overtime worked in 2016. Further, there remains the requirement under the NES for reasonable additional hours. |
Loss of the DPIC or “Designated Person in Charge” allowance, which is paid to maintenance technicians in charge of a shift | If the Agreement is terminated, the allowance provisions in the undertakings and under the Hydrocarbons Award will apply. There is no provision for DPIC allowance under the undertakings or the Award. However, the Award’s Leading Hand Allowance may apply. |
Loss of rights to a favourable standard of amenities | If the Agreement is terminated, amenities will be provided in accordance with company direction/policy and the Occupational Health and Safety Act 2004 (Vic). Section 21(2)(d) of the OHS Act requires that employers provide, so far as is reasonably practicable, adequate facilities for the welfare of the employees at any workplace under the management and control of the employer. |
Loss of rights to assistance from unions, including rights to participate in paid or unpaid communication meetings | If the Agreement is terminated, the provisions of Part 3-4 will apply. |
| • of rights to be transported to/from stop work meetings which occur onshore | If the Agreement is terminated, the provisions of Part 3-4 will apply. |
1 AE890812
2 PR561142, PR561655 and PR561701
3 PR561701
4 (2015) 251 IR 75
5 Ibid at [175]
6 Ibid at [171]
7 [2015] FCA 758; (2015) 253 IR 304
8 Ibid at 351-352 at [135]-[139]; 354-355 at [144]-[148]
9 See Esso Australia Pty Ltd v The Australian Workers' Union [2016] FCAFC 72; (2016) 245 FCR 39 and Australian Mines and Metals Association Inc. v The Maritime Union of Australia [2016] FCAFC 71; (2016) 242 FCR 210
10 PR588352
11 See Esso Australia Pty Ltd v The Australian Workers’ Union; The Australian Workers’ Union v Esso Australia Pty Ltd [2016] HCATrans 311
12 [2017] FWCA 1860
13 Order dated 14 October 2016
14 Directions dated 8 December 2016
15 [2017] HCA 54
16 Ibid at [64]
17 Ibid at [35] and [51]
18 See Esso Australia Pty Ltd v “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU); The Australian Workers’ Union and Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia[2018] FWCFB 4120; PR588352
19 VID981/2018; Minister for Industrial Relations for the State of Victoria v Esso Australia Pty Ltd & Ors
20 Minister for Industrial Relations for the State of Victoria v Esso Australia Pty Ltd [2019] FCAFC 26
21 [2018] FWC 6244
22 [2019] FWC 3696
23 Exhibit 1, Commission Book, pp.4484-4773
24 Ibid at p.4478
25 The names of the fields are in evidence but are the subject of a confidentiality order and therefore not reproduced in the decision
26 Ibid at p.4485 at [10]; The actual dollar values are in evidence but are the subject of a confidentiality order and therefore not reproduced in the decision
27 Ibid at p.5332 at [30] and p.5333 at [33]
28 Ibid at p.105 at [13]-[14]
29 Ibid at p.4486 at [17]; The actual percentage is in evidence but is the subject of a confidentiality order and therefore not reproduced in the decision
30 Ibid at p.4347; The actual percentage is in evidence but is the subject of a confidentiality order and therefore not reproduced in the decision
31 The names of the platforms are in evidence but are the subject of a confidentiality order and therefore not reproduced in the decision
32 Ibid at p.3954 at [21]; Figure 4 is the subject of a confidentiality order and therefore not reproduced in the decision
33 The name of the platform is in evidence but is the subject of a confidentiality order and therefore not reproduced in the decision
34 Ibid at p.4487 at [18]
35 Ibid at p.3974A, Updated GBJV Long Term Gas Outlook graph; This graph is the subject of a confidentiality order and therefore not reproduced in the decision
36 The name of the development is in evidence but is the subject of a confidentiality order and therefore not reproduced in the decision
37 Ibid at pp.5336A-5336AB, Extract from the GBJV Pricing Model dated 30 January 2019; This document is the subject of a confidentiality order and therefore not reproduced in the decision
38 Ibid at p.4487 at [20]
39 Ibid at [21]
40 Ibid at p.5338 at [8]
41 Ibid at p.4489 at [24]
42 Ibid at p.4779 at [16]
43 Ibid at p.4489 at [24(c)]
44 Ibid at p.3957 at [35]; p.5073 at [19(b)] and [24]; The actual dollar value is in evidence but is the subject of a confidentiality order and therefore not reproduced in the decision
45 Ibid at pp.601-602 at [149]-[153]
46 Ibid at pp.602-603 at [154]-[158]
47 Ibid at pp.603-604 at [159]-[160]
48 Ibid at p.683, tab 13 at [9] and [24]
49 Ibid at p.35 at [24]; pp.125-152 at Annexures SD-1 and SD-2
50 Ibid at p.1044 at [17] and p.3673 at [34]
51 Ibid at p.1045 at [26]
52 Ibid at pp.1574-1575 at [75]-[81]
53 Ibid at p.1575 at [82]-[84]; The actual percentage is in evidence but is the subject of a confidentiality order and therefore not reproduced in the decision
54 Ibid at p.1576 at [85]-[91]
55 Ibid at pp.1576-1577 at [92]-[93]
56 Ibid at p.1586 at [152]-[153]; p.1684 at [288]
57 Ibid at p.1586 at [154]
58 Ibid at p.1586 at [154]-[155]; p.1685 at [292]; p.1687 at [299]
59 Ibid at p.1684 at [289]-[290]; p.1746 at [53]
60 Ibid at p.1684 at [291]
61 Ibid at p.1685 at [294]-[295]
62 Ibid at p.397 at [55]
63 Ibid at p.1629 at [110(d)]
64 Ibid at pp.163-164 at [29]-[30]
65 Ibid at pp.5355-5385 at Annexure RZR-1; In a bargaining meeting on 19 December 2018 before Commissioner Cribb, it was agreed that Esso would send the proposed agreement to the Unions for review in January 2019. At a bargaining meeting before Deputy President Clancy on 24 January 2019, it was again agreed that Esso will provide the Unions with a copy of the proposed agreement for the Unions to review and provide a response. A copy of the proposed agreement was provided on 1 February 2019
66 Ibid at p.5352 at [26]
67 Ibid at pp.528-529 at [12]; p.1563 at [12]
68 Ibid at pp.537-538 at [50]
69 Ibid at p.1589 at [168]-[172]
70 Ibid at p.538 at [51]
71 Ibid at p.1589 at [174]-[175]
72 Ibid at p.1590 at [177]
73 Ibid at [178]-[179]
74 Ibid at [180]-[182]
75 Ibid at p.1590-1591 at [183]-[184]
76 Ibid at p.1591 at [185]-[188]
77 Ibid at p.1592 at [190]-[191]
78 Ibid at pp.1592-1593 at [192]-[195]
79 Ibid at p.1593 at [196]-[199]
80 Ibid at p.538 at [53]
81 Ibid at pp.538-539 at [54]-[55]
82 Ibid at p.1594 at [201]-[206]
83 Ibid at p.539 at [57]-[59]
84 Ibid at pp.1594-1595 at [207]-[212]
85 Ibid at pp.540-541at [60]-[66]
86 Ibid at pp.5076-5077 at [41]
87 Ibid at p.5077 at [42]
88 Ibid at pp.5077-5078 at [43]
89 Ibid at p.5312 at [25] and comparison table at pp.5315-5325
90 Aurizon Operations Limited; Aurizon Network Pty Ltd; Australia Eastern Railroad Pty Ltd [2015] FWCFB 540 at [111]
91 [2015] FWCFB 540 at [118]-[152]
92 [2015] FCAFC 126 at [1]-[26]
93 [2013] FWCFB 8726
94 Ibid at [18]
95 [2000] HCA 47; (2000) 203 CLR 194 per Gleeson CJ and Gaudron and Hayne JJ
96 Ibid at [19]
97 Construction, Forestry, Mining and Energy Union v Peabody Energy Australia PCI Mine Management Pty Ltd[2016] FWCFB 3591 at [18]
98 [1986] HCA 40; (1986) 162 CLR 24; see also Griffiths v The Queen (1989) 167 CLR 372 at 379; Ho v Professional Services Review Committee No 295 [2007] FCA 388 at [23]-[26] and Hasim v Attorney-General of the Commonwealth [2013] FCA 1433; (2013) 218 FCR 25 at [65]
99 See Friends of Hinchinbrook Society Inc v Minister for Environment (No 3) (1997) 77 FCR 153; Australian Competition and Consumer Commission v Leelee Pty Ltd [1999] FCA 1121; Edwards v Giudice [1999] FCA 1836 and National Retail Association v Fair Work Commission [2014] FCAFC 118
100 (1987) 16 FCR 167 cited with approval by Hely J in Elias v Federal Commissioner of Taxation (2002) 123 FCR 499 at [62] and by Katzmann J in CFMEU v FWA (2011) 195 FCR 74 at [103]
101 (1987) 16 FCR 167 at 184
102 [1986] HCA 40; (1986) 162 CLR 24
103 Ibid at [15], pp.39-41
104 Kellogg Brown and Root, Bass Strait (Esso) Onshore/Offshore Facilities Certified Agreement 2000 (2005) 139 IR 34 at 40
105 Ibid
106 Ibid
107 Ibid at 41
108 See for example Re Australian Insurance Employees Union; Ex parte Academy Insurance Pty Ltd (1988) 78 ALR 466 at [467]
109 Kellogg Brown and Root, Bass Strait (Esso) Onshore/Offshore Facilities Certified Agreement 2000 (2005) 139 IR 34 at 41
110 Ibid
111 Exhibit 1, Commission Book, p.5312 at [26]; Esso’s final submissions dated 7 February 2019 at [F.1]
112 Esso’s final submissions dated 7 February 2019 at [F.2]
113 Ibid at [F.3]
114 Ibid at [F.4]
115 Exhibit 1, Commission Book, p.576 at [56]
116 Ibid at p.5081 at [56]-[57]; Outline of submissions for the AWU, CEPU and AMWU dated 7 February 2019 at [117]-[118]
117 Aurizon Operations Limited; Aurizon Network Pty Ltd; Australia Eastern Railroad Pty Ltd [2015] FWCFB 540
118 [2017] FWCFB 1019
119 Exhibit 1, Commission Book, p.5308 at [5]
120 Ibid at p.5308 at [7]
121 (2005) 139 IR 34 at [47]-[49]
122 Exhibit 1, Commission Book, pp.5308-5309 at [8]-[9]; p.576 at [57]
123 Ibid at p.1615 at [64]-[65]; Kellogg Brown & Root Pty Ltd and others v Esso Australia Pty Ltd (2005) 139 IR 34 at [23]
124 Exhibit 1, Commission Book, p.1616 at [67]-[68]
125 Ibid at p.1619 at [75]
126 Ibid at pp.1616-1617 at [69]-[73]
127 Ibid at p.5309 at [10]; Kellogg Brown & Root Pty Ltd and others v Esso Australia Pty Ltd (2005) 139 IR 34 at [46]
128 Clause 8 of Esso's Undertaking dated 1 August 2016 annexed to the s.226 application; see also Schedule 2 to this decision
129 Exhibit 1, Commission Book, p.3673 at [37]-[38]; p.4505 at [86]
130 Ibid at p.596 at [137]; p.3651 at [32]
131 Ibid at p.596 at [138]; p.3651 at [32]
132 [2018] FWCFB 4120
133 Contrast the position of the restrictions on redundancies in Aurizon which Aurizon inherited as part of the prioritisation process
134 Aurizon Operations Limited; Aurizon Network Pty Ltd; Australia Eastern Railroad Pty Ltd [2015] FWCFB 540 at [26]; [44]-[47]
135 Exhibit 1, Commission Book, p.5079 at [51]; Outline of submissions for the AWU, CEPU and AMWU dated 7 February 2019 at [108]-[109]
136 Exhibit 1, Commission Book, pp.4603 and 5079; The actual dollar values are in evidence but are the subject of a confidentiality order and therefore not reproduced in the decision
137 Ibid at p.5079 at [50]; Outline of submissions for the AWU, CEPU and AMWU dated 7 February 2019 at [108]-[109]
138 Exhibit 1, Commission Book, p.5081 at [59]
139 Ibid at p.5313 at [31]
140 Ibid at p.5080 at [30]-[31]; Outline of submissions for the AWU, CEPU and AMWU dated 7 February 2019 at [110]-[111]
141 Exhibit 1, Commission Book, p.5071 at [13(d)]; p.5076 at [39]
142 Ibid at p.5082 at [61]; See Kellogg Brown & Root Pty Ltd and others v Esso Australia Pty Ltd (2005) 139 IR 34 at [23]
143 Exhibit 1, Commission Book, p.5313 at [32]
144 See for example Reserve Bank of Australia statement on Monetary Policy at p.56
145 Exhibit 1, Commission Book, pp.259–368
146 Ibid at pp.943–988
147 Ibid at p.5075 at [33]; pp.1634-1673 at [128]-[245]; Outline of submissions for the AWU, CEPU and AMWU dated 7 February 2019 at [73]
148 Exhibit 1, Commission Book, p.1634 at [128]
149 Ibid at p.976 at [8.3]
150 Ibid at p.4781 at [24]
151 Ibid at p.1634 at [128]; p.1641 at [144]; p.1672 at [244]; p.5169 at [23]; p.5173 at [43]; p.5204 at [18]; p.5208 at [40]; p.5192 at [18]; p.2782 at [20]; p.5233 at [27]; p.5244 at [24]; p.5285 at [114]; p.5294 at [19]-[20]; p.5181at [32]-[35]; p.1642 at [145]
152 Ibid at p.248 at [7]-[8]
153 Ibid at p.262
154 Ibid at p.265
155 Ibid at p.611 at [195]; p.4496 at [44]-[47]; p.4784 at [28(d)]
156 Ibid at p.615 at [216]; p.972 at [7.4.4]; p.2779 at [10]; p.2765 at [12]
157 Ibid at p.612 at [198]-[199]; p.3798 at [27]; p.3799 at [28(d)]
158 Ibid at p.4533 at [2.1]
159 Ibid
160 Ibid at p.4569
161 Ibid at p.1809
162 Ibid at p.5075 at [35]-[36]
163 Ibid at p.1628 at [110(a)]; p.1633 at [126]
164 Ibid at p.605 at [168]; p.610 at [189]
165 Ibid at p.610 at [189]-[192]
166 Working Hours Case (2002) 114 IR 390
167 Ibid at [129]
168 See Schedule 3, clauses 11(1) and 11(2)(a) and 11(2)(c)
169 See regulation 3.1(2); Exhibit 1, Commission Book, pp.1630-1631 at [113]-[115]
170 Exhibit 1, Commission Book, p.5081 at [58]; p.1633 at [123]
171 Ibid at pp.597-599 at [139]-[146]; pp.4528-4596; pp.4617-4622; pp.4717-4723; pp.4505-4507 at [90]
172 Ibid at pp.4507-4510 at [91]-[92]; p.599-601 at [147]-[148]; p.612 at [200]
173 Ibid at p.605 at [165]-[166]
174 Ibid at p.2401 at lines 803-805
175 Outline of submissions for the AWU, CEPU and AMWU dated 7 February 2019 at [74]; Exhibit 1, Commission Book, pp.3149-3152 at PN2270-PN2299
176 Exhibit 1, Commission Book, p.1626 at [104]-[105]
177 Ibid at p.1626 at [105]
178 Ibid at p.606 at [171]-[172]; p.955 at [3.2]
179 Ibid at p.5309 at [13]
180 Ibid at pp.595-596 at [134]-[135]; p.4779 at [16]; p.3673 at [36]; p.1044 at [17]
181 Ibid at p.5311 at [22]
182 Ibid at p.602 at [151]-[153]
183 Ibid at p.603 at [155]-[158]
184 Ibid at p.606 at [170]
185 See s.3(d) of the Act; Outline of submissions for the AWU, CEPU and AMWU dated 7 February 2019 at [67]; Exhibit 1, Commission Book, p.5075 at [31]
186 Outline of submissions for the AWU, CEPU and AMWU dated 7 February 2019 at [68]; Exhibit 1, Commission Book, p.5075 at [32]
187 Exhibit 1, Commission Book, pp.1618-1619 at [74(d)]
188 Ibid at pp.264-265
189 Ibid at p.967 at [6.1.1]
190 Ibid at pp.1617-1618 at [73(a)] and p.3252 at PN3307-PN3308
191 Ibid at p.5238 at [56]; p.5172 at [37]; p.5185 at [48] and [49]; p.5186 at [50]-[52]; p.5198 at [47]; p.5207 at [36]; p.5208 at [38]; p.5245 at [30]; p.5246 at [31]; pp.5252-5253 at [31]-[33]; pp.5260-5261 at [32]; p.2795 at [18]; p.2817 at [52]; pp.2785-2786 at [37] and [41]; p.5269 at [39]; p.5299 at [35]
192 Ibid at p.5237 at [51]-[52]; p.5172 at [36]; p.5185 at [48]; p.2750 at [34]; p.5198 at [47]; p.4245 at [29]-[30]; p.5252 at [31]; p.2816 at [48]; p.5224 at [66]
193 Ibid at p.5238 at [53]-[54]; p.2787 at [41]; p.5253 at [36]; p.5140 at [52]; p.2767 at [25]-[26]; pp.5187-5188 at [54]
194 Ibid at p.2784 at [33] and p.2786 at [41]; p.5234 at [36]; p.5237 at [52]; p.2750 at [34]; pp.5150-5151 at [45]-[50]; p.5223 at [63]; p.5224 at [66]
195 Ibid at p.2795 at [16]; p.5207 at [34]-[36]
196 Ibid at p.2785 at [38]; p.5140 at [57]; p.2822 at [23]
197 Ibid at p.5246 at [32] and [34]
198 Ibid at p.5311 at [20]
199 Ibid at p.5311 at [20]-[21]; p.616 at [224]
200 Ibid at p.617 at [225]; p.967 at [6.1.3]; p.968 at [6.1.7]-[6.1.8]
201 Ibid at p.5075 at [37]
202 Ibid at p.1629 at [110(d)]
203 Ibid at p.5312 at [25] and comparison table at pp.5315-5325
204 Ibid at p.5312 at [25]
205 Fair Work Act 2009 (Cth), s.228
206 Ibid at ss.229-233
207 Ibid at ss.234-235
208 Ibid at s.269 (which appears in Part 2–5 of the Act)
209 Ibid at ss.238–239
210 Ibid at s.240
211 Ibid at s.592(1) and (4)
212 Ibid at s.415
213 Ibid at s.414(6)
214 Transcript of proceedings dated 6 March 2015 at PN709-PN724
215 PR561701, clause 3.1
216 Ibid at clause 2
217 Ibid at clause 6
218 [2015] FCA 758, (2015) 253 IR 304
219 Ibid at [53]-[65]
220 Ibid at [90]
221 Ibid
222 Ibid
223 Ibid
224 Ibid at [126]-[129]
225 [2015] FCA 677; (2015) 251 IR 75; [2015] FCA 758, (2015) 253 IR 304 at [151]
226 [2015] FCA 758, (2015) 253 IR 304 at [150]
227 Exhibit 1, Commission Book, p.3654 at [47]
228 Ibid
229 Ibid at p.575 at [52]
230 Ibid at p.5310 at [15]
231 Ibid at p.579 at [70]-[72]
232 Ibid at p.579 at [72]
233 Ibid at pp.576-577 at [60]
234 Ibid at p.618 at [229]-[236]
235 Ibid at p.579 at [73]; p.4614; p.603 at [159]; The actual dollar value is in evidence but is the subject of a confidentiality order and therefore not reproduced in the decision
236 Ibid at pp.603-604 at [160]; p.4503 at [78]-[81]
237 Ibid at pp.579-580 at [74]-[75]; p.3965 at Figure 1; p.3314 at PN262; p.3471 at PN1731; The actual percentage is in evidence but is the subject of a confidentiality order and therefore not reproduced in the decision
238 Ibid at p.580 at [75]; p.3322 at PN338
239 Ibid at p.3956 at [29]-[30]; pp.580-581 at [77]-[78]
240 Ibid at p.581 at [80]
241 Ibid at p.582 at [82]
242 Ibid at p.3322 at PN340; p.3488 at PN1887
243 Ibid at p.582 at [4.3]; p.4487 at [18]; pp.3032-3035 at PN1080-PN1123; The amount of decline is in evidence but is the subject of a confidentiality order and therefore not reproduced in the decision
244 Ibid at p.583 at [83]; pp.3973-3974 at [46]; The actual percentage is in evidence but is the subject of a confidentiality order and therefore not reproduced in the decision
245 Ibid at p.3974 at [47]; p.583 at [84]
246 Ibid at p.584 at [86]; pp.3974-3975 at [48]-[49]; p.3034 at PN1101
247 Ibid at p.584 at [87]; p.3975 at [49]
248 Ibid at p.587 at [97]-[98]; p.1080; The actual percentage and dollar values are in evidence but are the subject of a confidentiality order and therefore not reproduced in the decision
249 Ibid at p.587 at [96]; p.589 at [105]
250 Ibid at p.588 at [99]-[100]
251 Ibid at p.585 at [89]-[91]
252 Ibid at p.586 at [92]-[93]; p.3492 at PN1923; pp.1123-1130; This document is the subject of a confidentiality order
253 Ibid at p.1628 at [110(c)]
254 Ibid at p.1621 at [84]-[85]; pp.4602-4603; The actual dollar value is in evidence but is the subject of a confidentiality order and therefore not reproduced in the decision
255 Ibid at p.1621 at [86]; p.3068 at PN1462-PN1464
256 Ibid at p.5073 at [21] and [22]
257 Ibid at p.1622 at [87]; p.1121-1122; The actual dollar value is in evidence but is the subject of a confidentiality order and therefore not reproduced in the decision
258 Ibid at p.1622 at [87]-[89]; The actual percentage is in evidence but is the subject of a confidentiality order and therefore not reproduced in the decision
259 Ibid at p.5073 at [24] and p.5074 at [25]
260 Ibid at p.1623 at [90]
261 Ibid at p.5130 at [17]; p.579 at [73]
262 Ibid at p.5078 at [44]
263 Ibid at p.5078 at [45]
264 See Fair Work Act 2009 (Cth), ss.3(f) and 171(a)
265 Exhibit 1, Commission Book, p.5079 at [46]-[49]
266 Ibid at p.1624 at [96]
267 Aurizon Operations Limited; Aurizon Network Pty Ltd; Australia Eastern Railroad Pty Ltd [2015] FWCFB 540 at [173]; Exhibit 1, Commission Book, p.5312 at [27]
268 Exhibit 1, Commission Book, p.5312 at [28]
269 Ibid at [29]-[30]
4
29
0