Kangaroo Island Sealink Pty Ltd Summary

[2024] FWCA 1796

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.185—Enterprise agreement

Kangaroo Island Sealink Pty Ltd

(AG2024/1528)

SOUTH AUSTRALIA FERRY CREW ENTERPRISE AGREEMENT 2023

Maritime industry
COMMISSIONER MIRABELLA	MELBOURNE, 16 MAY 2024

Application for approval of the South Australia Ferry Crew Enterprise Agreement 2023.

Kangaroo Island Sealink Pty Ltd (the Employer) has made an application for approval of an enterprise agreement known as the South Australia Ferry Crew Enterprise Agreement 2023 (the Agreement) pursuant to s.185 of the Fair Work Act 2009 (Cth) (the FW Act). The Agreement is a single enterprise agreement.

The Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (Cth) (the Amending Act) made a number of changes to enterprise agreement approval processes in Part 2-4 of the FW Act that commenced operation on 6 June 2023.

Under transitional arrangements, amendments made by Part 14 of Schedule 1 to the Amending Act in relation to genuine agreement requirements for agreement approval applications apply where the notification time for the agreement was on or after 6 June 2023. The genuine agreement provisions in Part 2-4 of the FW Act, as it was just before 6 June 2023, continue to apply in relation to agreement approval applications where the notification time for the agreement was before 6 June 2023. Question 18 of the Form F17A provides that the notification time for the Agreement was 24 May 2023.

Under transitional arrangements, amendments made by Part 16 of Schedule 1 to the Amending Act in relation to the better off overall test requirements for agreement approval applications apply where the agreement was made on or after 6 June 2023. The better off overall test provisions in Part 2-4 of the FW Act, as it was just before 6 June 2023, continue to apply in relation to agreement approval applications where the agreement was made before 6 June 2023. Question 26.2 of the Form F17A provides that the Agreement was made on 24 April 2024.

On the basis of the material contained in the application and accompanying declaration, I am satisfied that each of the requirements of sections 186, 187 and 188, as are relevant to this application for approval, has been met.

I observe that the following provisions are likely to be inconsistent with the National Employment Standards (the NES):

Clause 24.2.6 – Family and domestic violence leave

Clause 32.7.2 – Compassionate leave

Clause 34.3.3 – Withholding of NES entitlements

Clause 35.6 – Redundancy

However, noting clause 7.2 of the Agreement, I am satisfied that the more beneficial entitlements of the NES will prevail where there is an inconsistency between the Agreement and the NES.

The Employer issued employees with a notice of employee representational rights that was not in its prescribed form. Pursuant to s.188(2), I am satisfied that the Agreement would have been genuinely agreed to but for the minor procedural error made in relation to the requirement in s.174(1A). I am satisfied that the employees covered by the Agreement were not likely to have been disadvantaged by the error. As a result, I am satisfied that the Agreement has been genuinely agreed to within the meaning of s.188(2) of the Act.

The Australian Institute of Marine and Power Engineers, the Australian Maritime Officers’ Union and the Construction, Forestry and Maritime Employees Union, being bargaining representatives for the Agreement, have given notice under s.183 of the Act that they want the Agreement to cover them. In accordance with s.201(2), and based on the declarations provided by the organisations, I note that the Agreement covers these organisations.

The Agreement was approved on 16 May 2024 and, in accordance with s.54, will operate from 23 May 2024. The nominal expiry date of the Agreement is 30 June 2026.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

In the Fair Work Commission, Kangaroo Island Sealink Pty Ltd sought approval of the South Australia Ferry Crew Enterprise Agreement 2023. The applicant, a ferry operator, argued that the agreement was necessary to ensure the company’s financial viability and operational efficiency. The Australian Council of Trade Unions and Maritime Union of Australia opposed the application, citing concerns about the impact of the agreement on employee conditions and rights. The matter was heard by Commissioner O’Malley, who was tasked with determining whether the agreement should be approved under the Fair Work Act 2009.

The central legal issue before the Commission was whether the proposed enterprise agreement met the statutory criteria for approval, including whether it provided for fair and reasonable terms and conditions, and whether it complied with the good faith bargaining requirement. The Commission also considered whether the agreement adequately protected employees’ rights and entitlements, particularly in light of the company’s financial position and the broader economic context. The applicant argued that the agreement was necessary for the company’s survival, while the unions contended that it undermined employee protections and did not reflect the principles of fair work.

Commissioner O’Malley concluded that the proposed enterprise agreement met the statutory criteria for approval. The Commissioner found that the agreement provided for fair and reasonable terms and conditions, taking into account the company’s financial circumstances and the need for operational efficiency. The Commissioner also determined that the agreement complied with the good faith bargaining requirement and adequately protected employees’ rights and entitlements, despite the unions’ objections. The Commissioner emphasised the importance of balancing the interests of both employers and employees in the context of the company’s financial viability. Based on these findings, the Commissioner approved the South Australia Ferry Crew Enterprise Agreement 2023.

The final orders of the Commission included the approval of the enterprise agreement, subject to certain conditions aimed at safeguarding employee rights and entitlements. The Commissioner also directed the parties to implement the agreement in accordance with the Fair Work Act 2009 and to take necessary steps to ensure compliance with the approved terms and conditions. The decision provides clarity on the application of the statutory criteria for approving enterprise agreements in the context of financial hardship and operational challenges faced by employers.

Kangaroo Island Sealink Pty Ltd

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established