Johnnie Clements-Kupsch v Saxon Energy Services Australia Pty Ltd

[2015] FWC 4081

[2015] FWC 4081

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s 394 - Application for unfair dismissal remedy

Johnnie Clements-Kupsch
v
Saxon Energy Services Australia Pty Ltd
(U2014/12417)

DEPUTY PRESIDENT SAMS SYDNEY, 18 JUNE 2015

Application for an unfair dismissal remedy - jurisdictional objection - high income threshold - whether employee covered by modern award - driller operating drilling equipment - Award classifications - role, duties and responsibilities fall under Award’s coverage - jurisdictional objection dismissed - applicant a person protected from unfair dismissal - remitted for further proceedings.

[1] This decision will determine a jurisdictional objection pressed by Saxon Energy Services Australia Pty Ltd (‘Saxon’, the ‘Company’ or the ‘objector’), to an application filed, pursuant to s 394 of the Fair Work Act 2009 (the ‘Act’), by Mr Johnnie Clements-Kupsch (the ‘applicant’), in which he seeks a remedy for his alleged unfair dismissal on 20 August 2014. At the time of his dismissal, the applicant was employed as a Driller on a drilling site known as Rig 185 in Fairview, Queensland.

[2] For the purposes of determining the objection, the reasons for the applicant’s dismissal are not particularly relevant, suffice to note that the objector had been requested by its client (Santos) to remove the applicant from Rig 185 and, as no other redeployment options were available, he was dismissed and paid three weeks pay in lieu of notice.

[3] The objection of the respondent is that the applicant’s annual rate of earnings were above the high income threshold (at the time, $133,000) and he was not covered by a modern award or an enterprise agreement. The statutory foundation for the objection is set out in s 382 of the Act as to whether a person is protected from unfair dismissal. The section is expressed as follows:

‘382 When a person is protected from unfair dismissal

A person is protected from unfair dismissal at a time if, at that time:

(a) the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period; and

(b) one or more of the following apply:

(i) a modern award covers the person;

(ii) an enterprise agreement applies to the person in relation to the employment;

(iii) the sum of the person’s annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is less than the high income threshold.’

[4] Shortly stated, the applicant’s position was that while his ‘potential’ annual earnings were $154,000, his earnings were subject to various stand down without pay circumstances, such as industrial action, breakdown of machinery, disciplinary proceedings, or inclement weather. However, in the twelve months prior to his dismissal, he had earned the full ‘potential’ amount. In any event, the applicant’s central argument was that he was engaged according to the terms and conditions of the Hydrocarbons Industry (Upstream) Award 2010 [MA000062] (the ‘Award’) and was therefore a person protected from unfair dismissal, according to s 382(b)(i) of the Act. The objection was listed for hearing on 9 March 2015 with Mr M Procter, Solicitor and Mr D Pillay, Solicitor appearing with permission for the objector and Mr AC Harding of Counsel instructed by Mr B Lashmar, Solicitor appearing with permission for the applicant.

THE EVIDENCE

[5] A number of terms of the Award are relevant to the issue to be determined by the Commission. The coverage clause (cl 4) is expressed in detailed terms, both as to inclusions and exclusions. I set out the clause in full below:

4. Coverage

4.1 This industry award covers employers throughout Australia who are engaged in the hydrocarbons industry in respect of work by their employees engaged in the classifications listed in this award, to the exclusion of any other modern award.

4.2 Definition of hydrocarbons industry

For the purposes of this clause, hydrocarbons industry means:


(a) the exploration and/or drilling for hydrocarbons by use of on and offshore drilling rigs or platform drilling rigs or any other means;

(b) the preparatory work and development of an oil or gas field, including well servicing, and decommissioning of hydrocarbon facilities;

(c) the extraction, separation, production and processing, piping, storage, distribution and transport (including handling or loading facilities) of hydrocarbons;

(d) provision of services incidental to the activities set out in clause 4.2(a) to (c) above, including:

(i) provision of clerical and administrative, warehousing, stores and materials, medical, laboratory, utility or general services, or platform services at a location where the activities in clause 4.2(a) to (c) above are being performed;

(ii) provision of catering, cleaning and accommodation services where owned or operated by an employer engaged in the activities set out in clause 4.2(a) to (c) above at a location where the activities in clause 4.2(a) to (c) above are being performed;

(iii) provision of supply base services owned or operated by an employer engaged in the activities set out in clause 4.2(a) to (c) above;


(e) the commissioning, servicing, maintaining (including mechanical, electrical, fabricating or engineering and preparatory work) modification, upgrading or repairing of facilities, plant and/or equipment used in the activities set out above by employees principally employed to perform work on an ongoing basis at a location where the activities described above are being performed; or

(f) the provision of temporary labour services used in the activities set out in clause 4.2(a) to (e) above, by temporary labour personnel principally engaged to perform work at a location where the activities described above are being performed.

4.3 Exclusions

This award does not cover:

(a) employees who are covered by a modern enterprise award, or an enterprise instrument (within the meaning of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth)), or employers in relation to those employees;

(b) employees who are covered by a State reference public sector modern award, or a State reference public sector transitional award (within the meaning of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth)), or employers in relation to those employees;

(c) an employee excluded from award coverage by the Act;

(d) employers in respect of their operations or activities in the following industries or occupations:

(i) employees principally engaged as maritime officers, maritime engineers, ratings and catering crew on any vessel used in offshore hydrocarbon operations (including but not limited to any propelled or non-propelled vessel used in navigation, construction or drilling, ship, barge, drilling vessel, rig, crane vessel, floating production facility, tug boat, support vessel, supply vessel, stand-by/emergency vessel, pipe laying vessel, diving support vessel, lighter or like vessels);

(ii) refining hydrocarbons including crude oil, petroleum and petro-chemical products and manufacture of hydrocarbon-based products;

(iii) transportation, storage, distribution, marketing and sale of products produced in clause 4.3(d)(ii) or finished hydrocarbons products, including operations at bulk liquid terminals, refineries, airports and depots;

(iv) information technology professionals, professional engineers, geologists and scientists;
(v) security, catering, cleaning and accommodation services (unless employed by an employer engaged in the hydrocarbons industry or related company); or

(vi) aviation industry; or

(e) employers in respect of their operations or activities covered by the Manufacturing and Associated Industries and Occupations Award 2010, except for work covered by clause 4.2 above.

4.4 This award covers employers which provide group training services for apprentices and trainees engaged in the industry and/or parts of industry set out at clause 4.1 and those apprentices and trainees engaged by a group training service hosted by a company to perform work at a location where the activities described herein are being performed. This subclause operates subject to the exclusions from coverage in this award.

4.5 Where an employer is covered by more than one award, an employee of that employer is covered by the award classification which is most appropriate to the work performed by the employee and to the environment in which the employee normally performs the work.

NOTE: Where there is no classification for a particular employee in this award it is possible that the employer and that employee are covered by an award with occupational coverage.

[6] Schedule B to the Award deals with Classifications and Structure. Its terms are as follows:

Schedule B—Classification and Structure
...

B.1 Classification and progression principles

B.1.1 Classification

In each of the classifications under this award it is a requirement that an employee must:

(a) perform work in a fully flexible manner as reasonably required by the employer and in accordance with the employee’s ability and competence;

(b) acquire any skills as reasonably requested by the employer and, where necessary, undertake required training and assist with the training of others; and

(c) use such tools and equipment as may be required, subject to the limit of the employee’s skills and competence and provided that the employee has been properly trained in the use of such tools and equipment.

B.1.2 Progression

An employee will progress through the classification levels subject to:

(a) possessing the applicable skills for the level; and

(b) being required by the employer to perform work at that level.

Progression from Level 4 and above will be subject to the employee being appointed by the employer.

B.2 Classification groups

B.2.1 Hydrocarbons Industry Services Employees

A Hydrocarbons Industry Services Employee is designated as such by their employer and performs all tasks as directed by their employer which include but are not limited to: clerical and administrative duties; labouring; assisting drilling and processing employees, and tradespersons; rigging, scaffolding; cargo-handling, operation of plant and equipment; maintenance work on plant, equipment or buildings; performance of general plant, stores and materials, workshop, warehouse and packaging tasks; performance of first aid; preparing and cleaning equipment and materials; and on site catering, accommodation, cleaning and security.

B.2.2 Hydrocarbons Industry Onshore Drilling Employees

A Hydrocarbons Industry Onshore Drilling Employee is designated as such by their employer and performs all tasks as directed by their employer which include but are not limited to: onshore hydrocarbons activities (including any activities under the industry services stream, including labouring, sampling, drilling, processing, production and delivery activities); operation and maintenance of onshore hydrocarbons plant and equipment (including pumps, drilling equipment; derricks and forklifts); preparation of tubing and piping; erecting and dismantling drilling rigs; and minor engine maintenance [my emphasis].

B.2.3 Hydrocarbons Industry Offshore Drilling Employees

A Hydrocarbons Industry Offshore Drilling Employee is designated as such by their employer and performs all tasks as directed by their employer which include but are not limited to: offshore hydrocarbons activities (including any activities under the industry services stream, including labouring, sampling, drilling, processing, production and delivery activities); and operation and maintenance of offshore hydrocarbons plant and equipment (including pumps, drilling equipment, derricks, forklifts and rig deck cranes); preparation of tubing and piping; erecting and dismantling drilling rigs; and minor engine maintenance.

B.2.4 Hydrocarbons Industry Operations and Processing Employees

A Hydrocarbons Industry Operations and Processing Employee is designated as such by their employer and performs all tasks as directed by their employer which include but are not limited to: operating and adjusting all hydrocarbons plant equipment (and associated control panels) utilised in hydrocarbons industry extraction, separation, production and processing, piping, storage, distribution and delivery; maintaining plant productivity; and laboratory technicians providing services on such plant.

B.2.5 Hydrocarbons Industry Modification and Maintenance Trades Employees

A Hydrocarbons Industry Modification and Maintenance Trades Employee is designated as such by their employer, performs all tasks onshore or offshore as directed by their employer and is trade qualified.

B.3 Classification structure

B.3.1 Entry Level—Introductory

(a) An employee at this level is undertaking the standard induction training required for the operation or business. Such training covers: conditions of employment; plant safety; first aid procedures; movement around the site; work and documentation procedures; quality control and quality assurance; and introduction to supervisors and fellow workers. Employees at this level perform routine duties under direct supervision.

(b) This level applies to the following classification groups:

• Hydrocarbons Industry Services; Hydrocarbons Industry Onshore Drilling; Hydrocarbons Industry Offshore Drilling; Hydrocarbons Industry Operations and Processing.

B.3.2 Level 1—Basic

(a) An employee at this level will have completed the standard induction training and have been assessed to be able to competently carry out the basic and semi-skilled work required for this level.

(b) This level applies to the following classification groups:
Hydrocarbons Industry Services; Hydrocarbons Industry Onshore Drilling; Hydrocarbons Industry Offshore Drilling; Hydrocarbons Industry Operations and Processing.

B.3.3 Level 2—Intermediate

(a) An employee at this level will have been assessed as being competent to carry out semi-skilled work on a broad range of plant and equipment functions. The employee exercises discretion within their level of skill and is responsible for the quality of the work subject to routine supervision.

(b) This level applies to the following classification groups:
Hydrocarbons Industry Services; Hydrocarbons Industry Onshore Drilling; Hydrocarbons Industry Offshore Drilling; Hydrocarbons Industry Operations and Processing.

B.3.4 Level 3—Competent

(a) An employee at this level will have been assessed as being competent to apply skills and knowledge in complex but routine situations where discretion and judgment are involved. The skills and knowledge are acquired through the completion of a trade certificate, or through practical experience, which has equipped the employee with an equivalent level of skills and knowledge.

(b) An employee at this level can plan tasks, select equipment and appropriate procedures from known alternatives and takes responsibility for the work of others. An employee at this level requires only limited supervision or guidance.

(c) An employee at this level understands and applies quality control techniques; exercises discretion within the scope of this level; performs work under limited supervision; operates all equipment incidental to the work; and assists in the provision of on-the-job training.

(d) This level applies to the following classification groups:
Hydrocarbons Industry Onshore Drilling; Hydrocarbons Industry Offshore Drilling; Hydrocarbons Industry Operations and Processing; Hydrocarbons Industry Modification and Maintenance Trades.

B.3.5 Level 4—Advanced

(a) An employee at this level will have met the requirements for Level 3 and been assessed as being competent to perform tasks which require in depth skill or knowledge, or the employee is assessed as having the integration of a broad range of skills. The work may be of a non-routine nature requiring the application of the relevant skills and knowledge to new but predictable situations.

(b) The level of skills or knowledge required to perform this work will involve the completion of post trade training appropriate for this level, or through the acquisition of practical skills and knowledge which has equipped the employee with the equivalent level of skills and knowledge.

(c) An employee at this level will provide guidance, assistance to others and may supervise employees below Level 4.

(d) This level applies to the following classification groups:

• Hydrocarbons Industry Offshore Drilling; Hydrocarbons Industry Operations and Processing; Hydrocarbons Industry Modification and Maintenance Trades [my emphasis].

B.3.6 Level 5—Advanced Specialist

(a) An employee at this level will have met the requirements for Level 4 and holds a trade qualification used in the operation and has acquired additional knowledge by having satisfactorily completed a prescribed post-trade course appropriate for this level or the achievement to the satisfaction of the employer of a comparable standard of skill and knowledge by other means including in-plant training or on-the-job experience.

(b) An employee at this level will provide guidance, assistance to others and may supervise employees below Level 5.

(c) This level applies to the following classification groups:

• Hydrocarbons Industry Modification and Maintenance Trades.

B.3.7 Level 6—Dual Trade

(a) An employee at this level will have met the requirements for Level 5 and holds a dual trade qualification or equivalent prescribed post-trade course used in the operation and has acquired additional knowledge enabling the employee to apply dual trade skills or an equivalent level of high precision specialised trade skills.

(b) An employee at this level has high precision trade skills in more than one area; is qualified to work on machinery or equipment with complex mechanical, hydraulic, electrical circuitry or controls; and meets the skills requirements for Tradespersons in accordance with the Manufacturing and Associated Industries and Occupations Award 2010 for this level.

(c) An employee at this level will provide guidance, assistance to others and may supervise employees below Level 6.

(d) This level applies to Hydrocarbons Industry Modification and Maintenance Trades.

B.3.8 Level 7—Dual Trade Instrument Technician

(a) An employee at this level will have met the requirements for Level 6 and have acquired further additional knowledge by having satisfactorily completed a prescribed post-trade course or an advanced trade equivalent enabling the employee to apply advanced dual trade instrument electrical technician skills.

(b) This level applies to Hydrocarbons Industry Modification and Maintenance Trades.

[7] The applicant argued that he was covered by Classification B.3.4 Level 3 - Competent, as it applies to onshore drilling, as will be seen by the terms of that classification above. By contrast, the objector argued that the applicant was engaged at Level 4 - Advanced. While the Award provides for Level 4 - Advanced, it only applies to offshore, and not onshore drilling. On its face, this would seem plain by the words of the classification set out above. It was said that the applicant’s engagement was therefore excluded from Award coverage as he was not ‘engaged in the classifications listed in this award’ (cl 4.1).

THE EVIDENCE

[8] The following persons gave evidence in the proceeding:

• The applicant;



• Mr Roy Julianto Parhusip, Operations Manager; and



• Ms Lauren Linnan, Human Resources Team Leader.

Neither Mr Parhusip or Ms Linnan were required for cross examination.

For the objector

[9] Mr Parhusip has worked in the oil and gas drilling industry since September 2002 throughout South East Asia, the Middle East, South America and Pakistan. It was his evidence that Drillers on drilling rigs are highly skilled employees with a great deal of responsibility, being the third most senior employee in relation to drilling operations. The role includes a wide range of complex tasks, including supervising the Rig crew, operating, inspecting and documenting the operations of the Rig. Saxon requires a Driller to hold a Certificate IV in Drilling Oil/Gas (Onshore).

[10] Mr Parhusip stated that the Rig crew, for which the applicant was responsible in supervising, consisted of:

(a) Assistant Driller;
(b) Derrickhand;
(c) Motorhand;
(d) Floorhand; and
(e) Leasehand.

[11] Mr Parhusip set out the supervisory duties of the Driller as including:

(a) monitoring the crew’s activities;
(b) motivating the crew;
(c) ensuring the crew was working safely;
(d) ensuring the crew completed tasks in a timely manner;
(e) conducting and supervising Rig safety meetings;
(f) conducting pre-tour meetings to ensure goals and objectives were set for the day;
(g) providing on the job training and coaching to improve the crew’s skills;
(h) working with the Rig Manager, managing injured workers and identifying safe and suitable duties; and
(i) identifying solutions to any identified issues.

[12] Mr Parhusip explained that Drillers are required to operate the Rig in isolated and high-risk environments and are expected to be one of the most skilled technicians on site. The Rig is an expensive and complex piece of machinery, with many components. The skills and abilities a Driller requires to safely and effectively operate the Rig include:

1. Technical knowledge of:

a. the Rig’s instrumentation and control systems;
b. the Rig’s mechanical systems;
c. the Rig’s electrical circuitry; and
d. the Rig’s hydraulic systems.

2. Knowledge of the company policies and procedures.
3. Knowlege of the relevant safety legislation and regulations and applying this knowledge to ensure the safe operations of the Rig. Safety is a key responsibility of Drillers. A mistake from a Driller can result in a fatality.
4. The ability to respond to unforeseen situations and emergencies.
5. The ability to analyse the information relevant to the Rig’s operations from various sources including the Rig’s instrumentation and control systems and crew members to decide on the best course of action.

[13] Mr Parhusip said that in order to inspect the Rig, Drillers must:

(a) be familiar with and understand all relevant technical standards regulations;
(b) visually inspect the Rig; and
(c) test the various Rig components to ensure they are functioning safely.

[14] Mr Parhusip said that Drillers are required to enter data about the Rig’s operations into the Company’s computer systems and to document information about the activities of the crew, operations and any relevant incidents.

[15] Ms Linnan detailed the history of the applicant’s employment with Saxon. Having commenced employment in March 2011 as a Derrickhand, he became an Assistant Driller in October 2011 and a Driller in June 2012. A copy of the applicant’s contract of employment is annexed to this decision and marked as ‘Annexure A’. From July 2014, the objector paid the applicant at the rate of $5,924.24 per fortnight.

For the applicant

[16] In his first statement, the applicant set out a number of occasions on which he had been stood down, without pay, due to inclement weather or in other circumstances. To supplement his potential earnings due to the stand downs, he worked additional overtime or transferred to other rigs. The applicant also described his performance reviews and promotions since being first employed in 2011.

[17] The applicant set out the positions on the Rig, in descending order of seniority, as:

(a) Santos Day Company Man;
(b) Santos Night Company Man;
(c) Rig Superintendent;
(d) Rig Manager;
(e) Night Tour Push;
(f) Day Tour Push;
(g) Safety Officer;
(h) Chief Mechanic;
(i) Chief Electrician;
(j) Driller;
(k) Assistant Driller;
(l) Derrickman;
(m) Motorman;
(n) Floorman; and
(o) Leasehand.

[18] The applicant claimed that his main duty was to operate the Rig controls, while the Rig crew were usually supervised by his direct supervisors. He sometimes had responsibility for the Assistant Drillers. However, many shifts did not have an Assistant Driller.

[19] In respect to safety and working instructions and deadlines, these matters were dictated by the client, Santos. His training role was simply to provide guidance and advice to the Rig crew and he had no responsibility for injured workers.

[20] In operating the Rig control panel, the applicant had no detailed technical knowledge of the mechanical, electrical and/or hydraulic systems. This was the responsibility of the Mechanic and Electrician. In controlling the Rig’s levers and switches and safety issues, the applicant said he took direct instruction from his superiors. In documenting the Rig operation, the applicant would input the day to day jobs in the Rig computer. This information was then inputted into the respondent’s computer by his superiors.

[21] The applicant described his duties as routine and systematic, primarily because all jobs and tasks are performed strictly in accordance with the Work Instructions (WIs) and Job Safety Analyses (JSAs). There were detailed work instructions for every task on the Rig.

[22] The applicant said that to his knowledge, the rig crews in offshore operations are required to have more skills and experience because:

(a) the rigs offshore are of a more advanced technology;
(b) workers are required to have additional skills and advanced courses completed prior to working offshore;
(c) the roles are by nature more advanced due to greater responsibility; and
(d) each position offshore requires a minimum of at least five (5) years experience at each position.

[23] In a further statement, the applicant said that he had never worked with, dealt with, met or even heard of Mr Parhusip, throughout his entire period of employment. As far as he knew, Mr Parhusip was never involved in his employment or training and had never observed him working on Saxon’s Rig 185. As far as he was aware, Mr Parhusip had not been employed as the Operations Manager for Saxon in Queensland during the entire period he was employed as a Driller.

[24] In oral evidence, the applicant described the supervisory processes involved when there were breakdowns or mishaps on the Rig. He said that everything that happens on the Rig was controlled by the Rig Manager or the client. The applicant said that his whole crew was controlled by his immediate supervisor and they all answer to the Rig Manager, who could bypass him and go directly to the crew personnel.

[25] The applicant agreed that the Rig Superintendent was not always on the Rig on a daily basis, but he was in full contact by phone or email every day and nothing went on without approval by him or his superiors. The applicant said he would convey directions from the Rig Manager and other supervisors to his crew or Supervisors would go straight to the crew.

[26] In further questioning, the applicant described the process of signing off on safety documents and the process involving WIs, which is superintended by the client.

SUBMISSIONS

For the applicant

[27] After setting out the background to the applicant’s employment and the relevant provisions of the Act (which I will come to shortly), Mr Lashmar examined the coverage and classification provisions in the Award. It was submitted that as a Driller, the applicant was required to undertake the following duties:

(a) Operate the drill rig, including operating the brake handle of the Rig;
(b) Supervisor and monitor daily activities of the Drilling crew, ensuring correct and safe operation of drilling equipment; and
(c) Participate in Rig Down and Rig Up activities (erection and dismantling of the drill rig).

He was therefore a Hydrocarbons Drilling Employee covered by the Award, unless otherwise expressly excluded from coverage.

[28] Mr Lashmar put detailed submissions concerning the applicant’s annual rate of earnings and his ‘potential earnings’ in his letter of contract. As Mr Harding did not press this aspect of the case in later oral submissions, I will not summarise those submissions here.

[29] In a second submission, the applicant’s representatives referred to the ‘beneficial’ interpretation of the words in the Award and the principles of Award interpretation; See: Amcor Ltd v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 441 (‘Amcor’), United Firefighters Union of Australia v Metropolitan Fire and Emergency Services Board [2006] FCAFC 84 and Dazmany Pty Ltd t/as Sails Resort v P. Thorn [Print P3536].

[30] While there was no dispute that the respondent is engaged in the hydrocarbons industry, the question is whether the applicant was engaged in the classifications listed in the Award. As the applicant was employed as a Driller, operating drilling equipment, he fell squarely within the classification of Hydrocarbons Industry Onshore Drilling Employee. To the extent the applicant performed tasks beyond drilling and operating drilling equipment, the definition provides for such circumstances by the use of the words ‘tasks... not limited to ...’.

[31] It was further argued that it made no sense for an Advanced Driller employee to be covered by the Award if working offshore, but an onshore Driller, with the same skills, would not be covered. One reason could be that employees with those skills are generally employed offshore. In any event, it was submitted that the applicant sensibly fitted within the B.3.4 Level 3 - Competent classification. As the eighth most senior person on site, the respondent had overstated his role, responsibilities and skills level. The applicant’s evidence in this respect should be accepted and Mr Parhusip’s evidence, who did not even know the applicant, should be given little weight.

[32] The applicant’s evidence demonstrated that:

(a) The applicant’s duties required him to perform routine tasks under the guidance and supervision of his superiors;
(b) In this regard, the operation of the Rig was highly regulated by the respondent. All jobs and tasks were performed strictly in accordance with the relevant WIs and JSAs, which covered all aspects of the operation of the Rig. These WIs and JSAs, formulated by the respondent, were highly detailed and proscriptive in nature.
(c) The WIs and JSAs were collated by the respondent’s senior employees in a large folder and were consulted by all Rig crew prior to undertaking a job at a Pre Job Safety Meeting, conducted by one of the applicant’s superiors. The JSAs were intended to cover the breadth of circumstances or situations which could eventuate in the course of the operation of the Rig.
(d)The detailed and prescriptive nature of these WIs and JSAs made the roles of the Rig crew, including the Driller, routine;
(e) In the event a job or task was not present in a JSA, before the task was attended to, the entire work party including, but not limited to the Safety Officer and Tour Pusher would conduct a meeting and create a JSA for the task for approval by the Rig Manager and Santos’ Company Man. The JSA was then put into the appropriate form and distributed to form the collated file of the JSAs.
(f) Accordingly, the applicant’s operation of the Rig was routine, systematic and in accordance with Company policies and procedures. In the event of emergencies and unforeseen situations of a serious nature, the applicant was subject to the supervision and instruction of superiors.
(g) Whilst the applicant, as a member of the Rig crew, was required to meet deadlines, these were set and controlled by others;
(h) The applicant did not possess detailed technical knowledge of the Rig’s mechanical systems, electrical circuitry; and/or hydraulic systems. The identification of errors, shorts, breakages or breakdowns was attended to by the onsite Mechanic and Electrician, as appropriate;
(i) The applicant had a limited role in the supervision of the Rig Crew. His primary duty was to operate the Rig Controls. As such, supervision of the Rig Crew was also monitored by the superiors of the applicant, specifically the Tour Push;
(j) Whilst the applicant did play a role in ensuring the safety of the Rig, safety of operations and Rig was the duty of all employees, who were required to follow strict working instructions and procedures. Importantly, he was not responsible for safety meetings and only on rare occasions (if a superior was not available) did he conduct these meetings. These meetings were usually undertaken during the day by the Company Man, Rig Manager and Safety Officers and during the night by the Night Company Man or Night Tour Push;
(k) The applicant was not responsible for providing training to members of the Rig Crew;
(l) The applicant was required to maintain documentation as to drilling, namely Pason Notes, as part of his duties. These notes simply recorded information such as drill speed, stoppages etc and are provided to the Rig Manager or Tour Pusher for input into the Saxon Computers/Software.

[33] In conclusion, it was submitted that Saxon’s objection should be dismissed and the Commission should find that the applicant was employed under the Award and was therefore a person protected from unfair dismissal.

[34] In oral submissions, Mr Hardy emphasised that the mere fact that the minimum wages of the Advanced Level do not apply to onshore drilling, did not mean the coverage of the Award is affected by these levels. He referred to the applicant’s evidence that the offshore drillers are those generally with more skills and experience. Mr Harding put that so long as the applicant comes within the classification group (and he must), then there is Award coverage. It is not a matter of simply going to the levels and excluding him.

[35] Mr Harding said that what the applicant said about his role, which was not seriously challenged, comfortably fits within the description of an employee who performs work under limited supervision, operating all equipment incidental to the work, taking responsibility for his work and the work of some others.

[36] Mr Harding submitted that Mr Parhusip’s evidence should carry little weight. He had no direct knowledge of the applicant’s work, duties or responsibilities. His evidence was generally about Drillers, but not specifically about what the applicant did. The only relevant evidence was from the applicant himself. He was a reliable and credible witness.

[37] In reply, Mr Harding said that the objector’s case was effectively that any Driller, by definition, is a person at Level 4 - Advanced. This cannot be right, given the Classification Group B.2.2 provides for employees who are Drillers who operate drilling equipment.

For the objector

[38] Solicitors for the objector submitted that the evidence of Mr Parhusip as to the applicant’s role, duties and responsibilities and his status, as the third most senior employee on the Rig, demonstrated that he was not covered by the Award. Reliance was had on the coverage clause in the Award (See para [5]).

[39] The objector said that for the Award to cover the applicant, he must have been engaged under one of the classifications in the Award. As the highest classification is B.3.4 Level 3 Competent and the applicant was engaged in work beyond that classification, he was not covered by the Award. It was put that Level 3 - Competent has the following relevant hallmarks:

(a) requires skills and knowledge to apply to complex, but routine situations where discretion and judgement are involved;
(b) takes responsibility for the work of others;
(c) requires only limited supervision or guidance; and
(d) assists in the provision of on-the-job training.

[40] The objector submitted that the work engaged in by the applicant was more suitably covered by B.3.5 - Level 4 - Advanced as a Driller is required to hold a post trade qualification of Certificate IV. However, the Award classifications ‘cut out’ at Level 3.

[41] The submission then set out the applicant’s earnings which the objector was required to pay (and did pay). These were $423.16 for each 12.25 hour shift worked and $432.16 whilst in the field, not working on shift (the balance of the 24 hour period). The applicant’s standard roster required him to be in the field for a fortnight at a time, working seven shifts a fortnight. This equated to $5,924.24 per fortnight or $154,030.20p.a.

[42] In supplementing the written submissions, Mr Procter put that generally, when an employee becomes increasingly qualified and gains increased responsibility, then the Award has less to do with that role. Mr Procter outlined the coverage and classifications structure under the Award to demonstrate that the work the applicant was engaged in, did not come under any classification in the Award. Particular emphasis was placed on the statutory requirement for a Driller to hold a Certificate IV post trade qualification, which was only a feature of Level 4 and therefore outside of the Award coverage. Mr Procter also relied on the applicant’s own evidence that he was a Rig Crew Supervisor.

[43] Mr Procter criticised the submission of Mr Harding that because Mr Parhusip had not met or worked with the applicant, his evidence should be rejected. Mr Parhusip was an Operations Manager with 13 years experience. Whether he had met the applicant or not was irrelevant to what classification the applicant was engaged under. Mr Parhusipwas in an ideal position to give evidence of a Driller’s role. Importantly, he was not challenged on his evidence.

CONSIDERATION

[44] Section 396 of the Act requires the Commission to determine a number of preliminary matters before considering the merits of an unfair dismissal application. The section is in the following terms:

‘396 Initial matters to be considered before merits

The FWC must decide the following matters relating to an application for an order under Division 4 before considering the merits of the application:

(a) whether the application was made within the period required in subsection 394(2);

(b) whether the person was protected from unfair dismissal;

(c) whether the dismissal was consistent with the Small Business Fair Dismissal Code;

(d) whether the dismissal was a case of genuine redundancy.’

[45] In dealing with these matters, the applicant’s unfair dismissal application was lodged within the 21 day statutory time period set out in s 394(2) of the Act. The objector is not a small business. Therefore sub-section s 396(c) is not applicable. As there was no submission put that the applicant’s dismissal was a case of genuine redundancy, s 396(d) is also not relevant. This leaves for my determination only the question of whether the applicant was a person protected from unfair dismissal.

[46] This requires reference to the criteria for determining whether a person is protected from unfair dismissal found at s 382 of the Act, as follows:

‘382 When a person is protected from unfair dismissal

A person is protected from unfair dismissal at a time if, at that time:

(a) the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period; and

(b) one or more of the following apply:

(i) a modern award covers the person;

(ii) an enterprise agreement applies to the person in relation to the employment;

(iii) the sum of the person’s annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is less than the high income threshold.’

[47] Despite the applicant’s evidence concerning his loss of earnings due to stand downs, in various circumstances and the reference to the ‘potential’ earnings of $154,453.02, it would appear that ultimately, there was no dispute that the applicant did earn above the high income threshold for the purposes of s 382(b)(ii) of the Act. In the result, the only issue to be determined by the Commission is whether the applicant was covered by the Hydrocarbons Industry (Upstream) Award 2010 and therefore a person protected from unfair dismissal.

[48] There is no doubt that the applicant was appointed as a Driller reporting to the Rig Manager on 25 May 2012. So much so is plainly clear from his letter of appointment (See Annexure A). There was no evidence that the objector had appointed the applicant to the position of ‘Rig Crew Supervisor’ or that he was led to believe, by management, that he was the ‘Rig Crew Supervisor’ as claimed by the objector. Indeed, there does not appear to be any warrant from the Award or the evidence of the positions on the Rig, that any such position actually exists.

[49] In my view, the fact that the applicant had, or was required to have, a Certificate IV is not determinative of the true position of the applicant vis-a-vis the Award. Many employees hold qualifications beyond what are necessary for the performance of a particular job or function. The crucial determinate is the nature of the applicant’s role, duties and responsibilities. Moreover, if the argument of the objector was accepted, then it would mean every onshore Driller (in Queensland at least) would be outside coverage of the Award, notwithstanding the express inclusion of the classification of Driller in B.2.2 of Schedule B.

[50] In addition, it is difficult to comprehend that if the primary purpose of the Award, as expressed in the definition of ‘hydrocarbons industry’ (cl 4.2), (which I do not believe is disputed) is the exploration/drilling for hydrocarbons, that the very person/s who is/are responsible for that drilling are not covered by the Award. To me, this is a nonsense proposition which could not possibly have been comprehended by the drafters of the Award or the Commission Full Bench which approved it.

[51] In any event, I accept Mr Harding’s submission that as the coverage clause expressly states the work of a Driller operating drilling equipment is covered by the Award, that is the end of the matter, unless he was otherwise excluded. I also accept the proposition that by the use of the words ‘tasks... not limited to...’, it must mean tasks incidental to drilling. To the extent that the applicant was engaged in such tasks, such a fact does not operate to exclude him from the Award’s coverage.

[52] In addition, even a cursory examination of the applicant’s contract of employment (Annexure A) discloses all the hallmarks of an industrial arrangement covering an award employee, as distinct to a management or supervisory employee. For example, he had a standard 38 hour week, a training requirement, standard redundancy provisions, long service leave, annual leave, personal leave and compassionate leave entitlements and minimum superannuation benefits.

[53] While I acknowledge Mr Parhusip’s general experience and knowledge of the operation of onshore rig operations (and make no criticism of his evidence), I consider that his evidence was general, not specific to the applicant and overstated the true position of the applicant’s role, duties and responsibilities, particularly considering the overarching influence and strict direction of the client (Santos). Given the general nature of Mr Parhusip’s evidence, there could be no criticism of Mr Harding for not cross examining him. It was unnecessary.

[54] In opinion, the applicant was a credible and truthful witness, whose evidence was not seriously questioned or undermined. He did not seek to understate his position but, to my mind, he put his duties and responsibilities in the proper context. The objector’s case was not made out on any direct evidentiary basis and, accordingly, the only evidence which the Commission has before it (and which was properly tested) is that of the applicant.

[55] It follows that I generally accept Mr Harding’s submissions as to the applicant’s role, duties and responsibilities as set out in para [35] above. Accordingly, I am satisfied that the applicant’s role was comprehended by Classification B.3.4 - Level 3 - Competent. Given this finding, I am further satisfied that the applicant is a person protected from unfair dismissal. The respondent’s objection to the Commission’s jurisdiction is dismissed. The applicant’s unfair dismissal application is remitted to the Commission’s Unfair Dismissal Team for further programming. Orders giving effect to my findings are issued contemporaneously with this decision.

DEPUTY PRESIDENT

Appearances:

Mr AC Harding of Counsel instructed by Mr B Lashmar, Solicitor for the applicant.

Mr M Procter, Solicitor, with Mr D Pillay, Solicitor for the objector.

Hearing details:

2015:

Sydney, Brisbane

9 March.

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