Kimberley Ports Authority

[2017] FWCA 6325

[2017] FWCA 6325

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Kimberley Ports Authority
(AG2017/5757)

PORT OF BROOME ENTERPRISE AGREEMENT 2017 STEVEDORING & MAINTENANCE

Port authorities
DEPUTY PRESIDENT BULL	PERTH, 22 DECEMBER 2017

Application for approval of the Port of Broome Enterprise Agreement 2017 Stevedoring & Maintenance - Agreement negotiated under the Commission’s New Approaches framework, Agreement approved

[1] An application has been made by Kimberley Ports Authority (the applicant/Kimberley Ports) for the approval of an enterprise agreement known as the Port of Broome Enterprise Agreement 2017 Stevedoring & Maintenance (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (FW Act). The Agreement is a single enterprise agreement.

[2] The Agreement replaces the Broome Port Authority Enterprise Agreement 2012 Stevedoring and Maintenance, and operates to the exclusion of any modern award or other industrial instrument, all memoranda of understanding, exchange of correspondence, work practice(s), arrangements written or unwritten which applied prior to the approval of the Agreement. 1

[3] The Agreement applies to all employees engaged by Kimberley Ports for work done in, or in connection with, stevedoring operations, minor construction, and minor maintenance in the Port of Broome and such other locations as agreed between Kimberley Ports and its employees. The Agreement does not cover the administration and finance employees employed by Kimberley Ports who are covered by the Kimberley Ports Authority Administration & Finance Enterprise Agreement 2014.

[4] At the time of voting for the Agreement there were 51 employees covered by the Agreement, of whom 30 of 31 voting employees voted to approve the Agreement.

[5] As per the requirement under s.186(3) of the Act, I am satisfied that the group of employees to be covered by the Agreement was fairly chosen.

Interest Based Bargaining

[6] Following a recommendation contained in the Report of the Fair Work Act Review Panel in 2012, an amendment to the FW Act bestowed on the Fair Work Commission (the Commission) an additional function: ‘Promoting cooperative and productive workplace relations and preventing disputes’. 2

[7] Following this amendment to the FW Act, the Commission’s President, after consultation with relevant stakeholders, endorsed a ‘New Approaches’ strategy to give effect to this new function. New Approaches shifts the focus of the Commission’s role from resolving disputes, to supporting parties to transform their workplace relations to facilitate change collaboratively, foster innovation and drive productivity improvement.

[8] The Kimberley Ports Authority and the Maritime Union of Australia (MUA) as the default bargaining representative, voluntarily committed to adopting an interest based bargaining approach to negotiations, after having jointly participated in training conducted by the Commission, with the Commission providing assistance to the parties to work together to reach agreement using interest-based problem solving.

[9] Following the interest based training the parties identified their individual interests.

[10] Kimberley Ports identified its need to fulfil its statutory obligations, including their requirement to operate on prudent commercial principles. Kimberley Ports’ interests also included having a flexible workforce capable of responding to changes in demand, and having a skilled workforce performing work in a safe manner.

[11] The MUA and the workforce identified as part of their interests, their acknowledgement of the importance of optimising Kimberley Ports’ ability to meet resource requirements, best achieved by maintaining a specialist skills base. The workforce sought to take an active role in supporting the business and ensuring its viability, whist maintaining or improving working conditions.

[12] A collaborative approach and significant level of commitment during the negotiations was demonstrated by the MUA, Kimberley Port management, and employer representatives that made up the Bargaining Committee, enabling a final Agreement to be reached.

Better off overall test

[13] The Commission is required to be satisfied that each employee would pass the better off overall test (BOOT) under the Agreement as compared to the relevant Award. Section 193(1) of the FW Act states:

“193 Passing the better off overall test

When a non-greenfields agreement passes the better off overall test

(1) An enterprise agreement that is not a greenfields agreement passes the better off overall test under this section if the FWC is satisfied, as at the test time, that each award covered employee, and each prospective award covered employee, for the agreement would be better off overall if the agreement applied to the employee than if the relevant modern award applied to the employee.”

[14] The approach to applying the BOOT was stated by the Full Bench in Armacell Australia Pty Ltd and Others 3:

“The BOOT, as the name implies, requires an overall assessment to be made. This requires identification of terms which are more beneficial for an employee, terms which are less beneficial and an overall assessment of whether an employee would be better off under the agreement…”

[15] Hence the application of the BOOT is an all-embracing and comprehensive test requiring the identification of the terms which are more beneficial and those which are less beneficial for an employee. An overall assessment as to whether an employee would be better off under the Agreement is then undertaken by the Commission.⁴

[16] The applicant states that the Port Authorities Award 2010 (the Award) is the relevant reference instrument for the purposes of the better off overall test (BOOT) as required under s.186 of the Act.

[17] The terms and conditions under the Agreement are stated to be more beneficial than the Award. These terms and conditions include:

● rates of pay
● overtime
● shift work penalties
● district allowance
● superannuation
● breaks
● annual leave
● personal/carers and compassionate leave
● notice of termination
● redundancy
● jury service leave
● paid parental leave
● leave for attendance at repatriation centres and
● trade union leave.

[18] The benefit of the over award conditions will impact employees differently depending on their individual circumstances. However employees will receive on commencement of the Agreement, the higher wage rates than those contained in the Award, which is a 2% increase on the existing hourly rate prescribed in the Broome Port Authority Enterprise Agreement 2012 Stevedoring and Maintenance, with a further 1% wage increase effective from 30 May 2018. 5

[19] A number of allowances found in clause 14 of the Award are not reflected in the Agreement on the basis that they are either not applicable, or the Agreement contains a superior benefit. 6 The Agreement provides for the payment of a Broome Area Allowance of $880.65 per fortnight in recognition of the cost of living in Broome and working for the Kimberley Port7 which is not contained in the Award.

[20] While the Agreement does not specifically identify shift work penalties for employees performing gatehouse work as is the case in the Award, the shift penalties are said to be included in the base rate of pay, which is higher than the Award rate. Combined with the more beneficial overtime rates in the Agreement, it is submitted that the employees performing gatehouse work are better off under the Agreement than the Award.

[21] Taking into account the higher base rates of pay and other more beneficial provisions and entitlements under the Agreement for all classifications, and balancing these benefits with the terms of the Agreement that are less beneficial than the Award, I am satisfied that each Award covered employee and each prospective Award covered employee would be better off overall if the Agreement applied to the employee.

Explanation of the Agreement

[22] Section 186 of the FW Act sets out a number of general requirements for approval of an enterprise agreement, one of which is that an employer must ‘take all reasonable steps’ to ensure that the terms of the Agreement and the effect of those terms are explained to the relevant employee. 8 A failure to comply with this pre-approval requirement will preclude the proposed agreement from being an agreement capable of being approved by the Commission.9

[23] In The Maritime Union of Australia v Northern Stevedoring Services Pty Ltd ¹⁰ the Full Bench discussed the construction of the expression ‘all reasonable steps’ in the following manner:

“[33] The expression “all reasonable steps”, and the case authorities concerning that and similar expressions were discussed at length in the decision of the Industrial Relations Commission of NSW in Court Session Bluescope Steel Ltd v The Australian Workers' Union, New South Wales.¹¹ The following propositions may be derived from the Court’s analysis:

● reasonable steps are what a reasonable man or woman would regard as being reasonable steps in the circumstances which apply;

● the obligation to take “reasonable steps” depends on the particular circumstances existing at the time the obligation arises; and

● a requirement to take all reasonable steps does not extend to all steps that are reasonably open in some narrow or theoretical sense (such as, for example, matters not directly within the particular knowledge or experience of a relevant party).

[34] Additionally in Parland Pty Ltd & Ors v Mariposa Pty Ltd¹² the Tasmanian Supreme Court said, in relation to a requirement for a party to use its best endeavours to achieve a particular object, that a failure to take a particular step had to be assessed by reference to its materiality to the failure to achieve the relevant object. The Court said:

‘In any event quite apart from authority it would seem to me to be an untenable proposition that a party could be held to have failed to satisfy a condition requiring it to use its best endeavours in relation to an application because it failed to take some particular step if in fact the application would have been unsuccessful even had that step been taken.’

[35] That proposition appears to us to be equally applicable to consideration of whether an obligation to take all reasonable steps has been complied with.”

[24] Having regard to the extensive consultation process set out at question 2.6 in the Statutory Declaration (F17) of Mr Sean Mulhall, the applicant’s Commercial Manager & General Counsel, which the MUA has advised that it agrees with, 13 I am satisfied that reasonable steps as per s.180(5) were taken to explain the terms of the Agreement to employees.

[25] I am further satisfied that each of the requirements of ss.186, 187 and 188 of the Act as are relevant to this application for approval have been met.

[26] The Agreement is approved.

[27] During the Commission approval process, Kimberley Ports advised the Commission that as a result of the short time between finalising the wording of the Agreement and having the employee vote, together with an error occurring when the Agreement document was converted from a word document to a portable document format (PDF), a limited number of incorrect clause references and incorrect date references were contained in the document signed and forwarded to the Commission.

[28] The errors and the correct references are set out in the table below:

Clauses with ‘0’ cross-reference	Correct cross-reference to replace ‘0’
3.24	18.4.3
3.30	18.5
10.12	10.12(b)
11.6.4	11.6.5
18.4.5	12.5
18.5.3(h)	18.5
30.7(a)	31

[29] In addition to the above, the following additional corrections are required:

● Clause 12.5.1 ––In the Irregular Shift Workers Table the reference to 30/05/2018 has been removed and replaced with “From the First Anniversary of the Commencement Date” 14

● Clause 12.5.1 – In the Day Workers Table the reference to 30/04/2018 has been removed and replaced with “From the First Anniversary of the Commencement Date”. 15

● The clause immediately following 22.1.4 has been renumbered from 21.1.5 to 22.1.5.

● Clause 22.2.2 contained the words ‘error reference source not found’, which have been deleted.

● Annexure F – Gatehouse Conditions, clause 5.7 the references to c, d, and e, have been corrected to read a, b and c.

● Annexures H and I – the table of contents on the policies has been removed. 16

[30] The MUA bargaining representative, Mr Jeff Cassar, has advised the Commission that the corrections to the Agreement as requested by the applicant are in order and appropriate.

[31] Section 586(a) of the Act provides the Commission with a broad discretion to correct or amend an application, or other document relating to the matter before the FWC, on any terms that it considers appropriate. The exercise of this discretion has been previously applied by the Commission in correcting an agreement that is before the Commission for approval pertaining to inaccuracies or other errors. 17 Based on the explanation provided by the applicant, I am satisfied that the Agreement contains unintended errors that need to be corrected. The applicant has provided a signed copy of the Agreement with the unintended errors removed.

[32] The MUA was an employee organisation involved in the Agreement making process as a bargaining representative. The MUA has filed a statutory declaration (F18) stating that it supports the approval of the Agreement and agrees with the matters contained in the employer’s statutory declaration. The MUA has stated that it wishes to be covered by the Agreement. In accordance with s.201(2) of the Act, I note that the Agreement covers the MUA.

[33] In accordance with s.54(1)(b) of the FW Act and clause 4.1 of the Agreement, the Agreement will commence operation on the Monday of the first full pay fortnight that falls 7 days after Commission approval of the Agreement.

[34] The nominal expiry date of the Agreement is 2 years from the date of commencement of the Agreement.

DEPUTY PRESIDENT

 1   Clause 6.1 of the Agreement

 2   s.576(2)(aa)

 3   [2010] FWAFB 9985 at [41]

4 See also AKN Pty Ltd t/a Aitkin Crane Services [2015] FWCFB 1833; National Tertiary Education Union v University of New South Wales[2011] FWAFB 5163; Solar Systems Pty Ltd [2012] FWAFB 6397

 5   Clause 12.5 of the Agreement

 6   For example see clause 13.2 and 13.3 Higher Duties of the Agreement

 7   Clause 15.1

 8 S.186(2)(a) requires ‘genuine agreement’ which is defined in s.188(a)(1) and requires compliance with s.180(5) which requires an employer to take all reasonable steps to explain the terms of the Agreement and their effect

 9   Construction, Forestry, Mining and Energy Union v One Key Workforce Pty Ltd [2017] FCA 1266 Flick J at [91]

10 [2016] FWCFB 1926

11 [2004] NSWIRComm 222; 137 IR 176 at [67]-[71]

12 [1995] TASSC 91; (1995) 5 TASR 121 at 133

 13 F18 at question [5]

 14   The covering letter that went with the EA, summary of agreed terms and negotiations stated that the 1% pay increase would take place on the 1st anniversary of the Commencement Date

 15   Kimberley Ports has further advised that there are no permanent day workers and KPA does not have any intention of taking on any permanent day workers.

 16   It is suspected that the auto numbering in the Table of Contents was a contributor to the numbering errors occurring when the document was converted to PDF.

 17   [2015] FWCA 4099 and [2015] FWCA 3084

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