Farstad Shipping (Indian Pacific) Pty Ltd

[2018] FWCA 1535

[2018] FWCA 1535

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.222 - Application for approval of a termination of an enterprise agreement

Farstad Shipping (Indian Pacific) Pty Ltd
(AG2018/344)

FARSTAD (INDIAN PACIFIC) PTY LTD (INTEGRATED RATINGS, COOKS AND CATERERS) OFFSHORE OIL AND GAS ENTERPRISE AGREEMENT 2015

Maritime industry
DEPUTY PRESIDENT BINET	PERTH, 15 MARCH 2018

Application for termination of the Farstad (Indian Pacific) Pty Ltd (Integrated Ratings, Cooks and Caterers) Offshore Oil and Gas Enterprise Agreement 2015.

[1] On 1 February 2018 Farstad Shipping (Indian Pacific) Pty Ltd (Farstad) filed an application (Application) pursuant to section 222 of the Fair Work Act 2009 (FW Act) to terminate the Farstad (Indian Pacific) Pty Ltd (Integrated Ratings, Cooks and Caterers) Offshore Oil and Gas Enterprise Agreement 2015 (Agreement).

[2] The Agreement is a single enterprise agreement with a nominal expiry date of 1 July 2018

[3] The Agreement covers the Maritime Union of Australia (MUA)

[4] Sections 220, 221, 222 and 223 of the FW Act state:

“220 Employers may request employees to approve a proposed termination of an enterprise agreement

(1) An employer covered by an enterprise agreement may request the employees covered by the agreement to approve a proposed termination of the agreement by voting for it.

(2) Before making the request, the employer must:

(a) take all reasonable steps to notify the employees of the following:

(i) the time and place at which the vote will occur;

(ii) the voting method that will be used; and

(b) give the employees a reasonable opportunity to decide whether they want to approve the proposed termination.

(3) Without limiting subsection (1), the employer may request that the employees vote by ballot or by an electronic method.

221 When termination of an enterprise agreement is agreed to

Single-enterprise agreement

(1) If the employees of an employer, or each employer, covered by a single-enterprise agreement have been asked to approve a proposed termination of the agreement under subsection 220(1), the termination is agreed to when a majority of the employees who cast a valid vote approve the termination.

Multi-enterprise agreement

(2) If the employees of each employer covered by a multi-enterprise agreement have been asked to approve a proposed termination of the agreement under subsection 220(1), the termination is agreed to when a majority of the employees of each individual employer who cast a valid vote have approved the termination.

222 Application for the FWC’s approval of a termination of an enterprise agreement

Application for approval

(1) If a termination of an enterprise agreement has been agreed to, a person covered by the agreement must apply to the FWC for approval of the termination.

Material to accompany the application

(2) The application must be accompanied by any declarations that are required by the procedural rules to accompany the application.

When the application must be made

(3) The application must be made:

(a) within 14 days after the termination is agreed to; or

(b) if in all the circumstances the FWC considers it fair to extend that period—within such further period as the FWC allows.

223 When the FWC must approve a termination of an enterprise agreement

If an application for the approval of a termination of an enterprise agreement is made under section 222, the FWC must approve the termination if:

(a) the FWC is satisfied that each employer covered by the agreement complied with subsection 220(2) (which deals with giving employees a reasonable opportunity to decide etc.) in relation to the agreement; and

(b) the FWC is satisfied that the termination was agreed to in accordance with whichever of subsection 221(1) or (2) applies (those subsections deal with agreement to the termination of different kinds of enterprise agreements by employee vote); and

(c) the FWC is satisfied that there are no other reasonable grounds for believing that the employees have not agreed to the termination; and

(d) the FWC considers that it is appropriate to approve the termination taking into account the views of the employee organisation or employee organisations (if any) covered by the agreement.”

[5] On 8 February 2018, directions were issued to Farstad and the MUA in order to determine the Application. At the request of Farstad, and with the consent of the MUA, amended directions (Amended Directions) were issued on 13 February 2018 to expedite the determination of this Application. The Amended Directions requiredFarstad and the MUA to file with the FWC and serve on each other an outline of submissions addressing the requirements in section 223 of the FW Act and any evidence on which they sought to rely. On 15 February 2018 Farstad filed an outline of submissions and a signed witness statement (Linfield Statement) of Farstad Crewing Manager, Ms Natasha Lindfield (Ms Lindfield) (together the Farstad Submissions)

[6] Section 222(1) of the FW Act provides that an application to terminate an agreement pursuant to section 222 of the FW Act can only be made by a person covered by the Agreement. As the employer covered by the Agreement Farstad has standing to make the Application.

[7] Section 222(2) requires that the application be accompanied by any declarations that are required by the procedural rules. Rule 26 of the Fair Work Commission Rules 2013 requires that the application be accompanied by a Form F24A statutory declaration. Farstad filed a Form F24A statutory declaration of Ms Lindfield dated 1 February 2018 (Lindfield Declaration).

[8] Subsection 220(2)(b) requires the employer to give the relevant employees a reasonable opportunity to decide whether they want to approve the proposed termination. According to the Lindfield Statement employees covered by the Agreement were set an email on 4 January 2018 which among other things informed them that:

a. it was necessary to terminate the Agreement and replace it with a new agreement because the Agreement did not match current industry standards and was making the company uncompetitive in the marketplace;

b. all employees would be given an opportunity to have their say on the proposed termination of the Agreement and the terms of the New Agreement;

c. If approved the New Agreement would commence operation on the termination of the Agreement; and

d. Ms Lindfield and a representative of the MUA would meet employees in person to discuss the process.

[9] Farstad subsequently decided to extend the consultation period and on 8 January 2018 sent employees covered by the Agreement a revised consultation schedule.

[10] Ms Lindfield and a representative of the MUA subsequently jointly held face to face meetings with the employees covered by the Agreement to answer any questions employees covered by the Agreement might have. According to Ms Lindfield, after presenting a PowerPoint presentation to employees to explain the reasons and effect of the termination, employees were allowed a period alone with the MUA representative to hold further private discussions.

[11] According to the Lindfield Declaration on 17 January 2018, employees covered by the Agreement were sent an email with information about when and how a ballot was to be conducted to ascertain whether a majority of those employees approved the termination of the Agreement, prior to the nominal expiry date of the Agreement and the approval of the New Agreement.

[12] The voting process commenced on 25 January 2018 and concluded on 27 January 2018. According to Ms Lindfield 92 of the 118 employees covered by the Agreement voted in favour of the termination of the Agreement. A majority of employees who cast a valid vote approved the termination of the Agreement. I am therefore satisfied that the termination of the Agreement was approved for the purposes of section 223(b) of the FW Act.

[13] I am satisfied that by virtue of the extended and extensive consultation period Farstad discharged its obligation pursuant to subsection 220(2)(b) of the FW Act to give the relevant employees a reasonable opportunity to decide whether they wanted to approve the proposed termination.

[14] The high proportion of employees who voted in the ballot suggests that Farstad discharged its obligation pursuant to subsection 220(2)(a) of the FW Act to take all reasonable steps to notify employees covered by the Agreement of the time and place at which the vote would occur, and the voting method that would be used.

[15] Section 222(3) requires that the Application be made within 14 days of the agreement to terminate. The termination was agreed to on 27 January 2018. The Application was lodged with the FWC on 1 February 2018. On the same day Farstad lodged an application for the approval of a new Agreement, the SolstadFarstad (Integrated Ratings, Cooks and Caterers) Offshore Oil and Gas Enterprise Agreement 2018 (New Agreement). Farstad requested that the Agreement be terminated 7 days after the New Agreement is approved so that the Agreement applies until the day after the New Agreement is approved.

[16] On 21 February 2019 the MUA emailed Chambers to advise they do not object to the termination of the Agreement and support the submissions of Farstad (MUA Submissions).

[17] The Amended Directions required Farstad to provide a copy of the Application, the Lindfield Declaration, the Farstad Submissions, the MUA Submissions, and the Amended Directions to all employees covered by the Agreement. The Directions contained an invitation for any employee covered by the Agreement, who wished to be heard with respect to the Application, contact the FWC by close of business on Thursday, 8 March 2018 with advice to that effect.

[18] On 22 February 2018, Ms Lindfield filed a statutory declaration confirming that a copy of the Application, the Lindfield Declaration, the Farstad Submissions, the MUA Submissions and the Amended Directions had been provided to all employees whose terms of employment are regulated by the Agreement.

[19] No applications to be heard were received by any employees of Farstad on or before close of business on Thursday, 8 March 2018.

[20] Based on the material that is before me, and in the absence of any request from an employee to be heard, I am satisfied that Farstad has complied with its obligations under subsection 220(2), that the termination was agreed to by a majority of employees in accordance with subsection 221(1), that there are no reasonable grounds for believing that the employees have not agreed to the termination and that it is appropriate to approve the termination of the Agreement.

[21] I therefore approve the termination of the Agreement. The termination will come into effect on 22 March 2018.

DEPUTY PRESIDENT

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