Maritime Union of Australia, The v Cal Dive International (Australia) Pty Limited

[2012] FWA 9833

[2012] FWA 9833

FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.739—Dispute resolution

Maritime Union of Australia, The
v
Cal Dive International (Australia) Pty Limited
(C2012/960)

Diving services
COMMISSIONER WILLIAMS	PERTH, 21 NOVEMBER 2012

s.739 - Application to deal with a dispute.

[1] This matter concerns an application made under section 739 of the Fair Work Act 2009 (the Act) by The Maritime Union of Australia (the MUA or the applicant) who seek the determination of a dispute over the meaning of a term of the Cal Dive International (Australia) Pty Limited Gorgon LNG Inshore Diving Project Agreement 2011 [AE885970] (the Agreement). The respondent is Cal Dive International (Australia) Pty Limited (Cal Dive or the respondent).

[2] The application is brought under clause 28.0–Dispute Settlement Procedure of the Agreement.

[3] The term of the Agreement the subject of this dispute is a provision within clause 4.0– No Extra Claims (the disputed term) which reads as follows:

“4.3 This Agreement excludes the existing Gorgon site specific shared accommodation allowance which is payable to Employees covered by this agreement if they share any site accommodation (onshore or vessel/barge).”

[4] The questions put forward for determination by the applicant are:

1. Does clause 4.3 create an entitlement to be paid “...the existing Gorgon site specific shared accommodation allowance...” where employees covered by the Agreement share accommodation?

2. If the answer to the first question is yes, what is the meaning and/or quantum of “...the existing Gorgon site specific shared accommodation allowance...”?

[5] The applicant’s position is that the disputed term of the Agreement does create an entitlement for employees who are sharing accommodation to be paid the Gorgon site specific shared accommodation allowance and the amount of this allowance is $150 per day.

[6] The respondent denies that this provision creates any entitlement for employees to be paid any allowance.

Background

[7] The Agreement covers employees who are divers employed by Cal Dive who work on the Gorgon Development Project. The Agreement applies to all diving work carried out onshore and to near shore marine infrastructure work directly associated with the downstream component of the Gorgon Project at Barrow Island off the coast of north Western Australia.

[8] The Agreement was approved in June 2011 following negotiations between the parties that resulted in a draft agreement being finalised around April 2011. The negotiations for the Agreement were conducted by Mr W. Tracey, the Assistant Branch Secretary, of the Western Australian branch of the MUA and for Cal Dive by Mr P. Evans, the General Manager.

Submissions

The MUA

[9] The MUA submit the when interpreting agreements the context of the document should be taken into account and consideration had for the fact that the documents were drafted by laypersons.

[10] The applicant submits there is no ambiguity in the wording in question however if there is an ambiguity recourse can be had by the Tribunal to extrinsic materials and particularly to the conduct of the parties to the negotiations that produce the Agreement.

[11] The applicant submits that clause 10.1 of the Agreement is consistent with its interpretation of the disputed clause as it provides for the payment of a general allowance which is expressly to cover all disabilities that were known and ascertainable at the time the Agreement was made.

[12] The evidence is clear that at the time of making the Agreement it was not intended that the employees in question of Cal Dive covered by the Agreement would be required to share accommodation and so accordingly this potential disability was not covered by clause 10.1 and so the parties agreed to insert the provision into the Agreement which is clause 4.3.

[13] The MUA submit that the evidence is clear that the pattern of negotiations and draft agreements leading up to the final agreement demonstrate an intention of both parties to make a payment available to employees who would be covered by the Agreement should they at some point in the future be required to share site accommodation and that at the time of those negotiations both parties were aware and understood that the quantum of that allowance was $150 per day.

Cal Dive

[14] The respondent’s position is that, whilst it agrees with the MUA the joint intention during the negotiations to the Agreement was that if employees covered by the Agreement were to share accommodation that an allowance would be paid, it was not agreed or intended that the allowance would be part of the Agreement and an entitlement payable under it.

[15] Consequently the respondent disputes that there is jurisdiction for the Tribunal to resolve this matter because the dispute settling procedure at clause 28.1 is restricted to dealing with disputes about matters arising under the Agreement or in relation to the National Employment Standards.

[16] Absent the dispute being about a matter arising under the Agreement there is no jurisdiction for Fair Work Australia to determine the dispute.

[17] The respondent takes no issue with the principles of interpretation that the MUA have submitted are applicable.

[18] If the Tribunal concludes that it does have jurisdiction to deal with this matter the respondent submits that there is no evidence to support the MUA’s position that the allowance in question should be payable at $150 per night.

[19] Rather the evidence of Mr Evans is that compensation for living on Barrow Island is dealt with by an allowance of $63.39 per day paid to each diver under the Agreement.

[20] The respondent argues that its position is supported by other terms of the Agreement such as clause 9–Classification and Rates of Pay and in particular clause 9.2 that indicates that the rates of pay, allowances etc in the Agreement cover all circumstances conditions and disabilities associated with the work on the project including living on Barrow Island.

[21] Further clause 10.0–Allowances expressly says that the general allowances component of the total casual day rate payable under Appendix A of the Agreement covers all disabilities and special circumstances associated with working on the project and living on Barrow Island, vessels or barges.

[22] If the Tribunal is to determine that an allowances is payable under the Agreement where employees are in shared accommodation then the correct amount is $44.70 per night which is currently being paid to other marine employees which is in addition to the $63.39 per day Barrow Island disability allowance.

The evidence

[23] Evidence was given both by Mr Tracey and Mr Evans.

[24] The evidence of Mr Tracey and Mr Evans is generally consistent with respect to the process of the negotiations leading up to the making of the Agreement.

[25] The negotiations had begun in November 2010 and on 15 April 2011 Mr Tracey met with Mr Evans to discuss a draft agreement that had been the subject of previous discussions and email correspondence.

[26] It is the common evidence of Mr Tracey and Mr Evans that one of the starting points for the negotiations was that the Agreement should include a daily rate of pay with all allowances incorporated into this amount rather than there being multiple separate allowances throughout the Agreement.

[27] The evidence of Mr Tracey was that before this meeting there were two outstanding issues between the parties. These were to do with working “over cycle” and how to deal with future site wide allowances that might apply to the employees working on Barrow Island generally which also included the potential need for a shared accommodation allowance 1. Mr Evans agreed this was the case and that this is what had been discussed with Mr Tracey at this point of the negotiations2.

[28] At this stage there had been no requirement nor was it intended that Cal Dive employees would be required to share accommodation however Mr Tracey was aware that accommodation was a pressing issue on the Gorgon Project and so he told Mr Evans that divers working for Neptune, another employer on the project, were sharing accommodation and along with other employees in the same situation were being paid an allowance of $150 per day to compensate them for this.

[29] Following these discussions on 19 April 2011 Mr Evans sent an email 3 to Mr Tracey with an attachment which was the draft agreement with some changes made by Mr Evans.

[30] The second paragraph of that email from Mr Evans read as follows:

“Don’t like the very broad “I want allowances” section inserted but have added words to cover shared accommodation. Any “new” allowance we just negotiate under the Dispute clause.

Apart from that I am OK.”

[31] Page 3 of the draft agreement 4 to which Mr Evans referred in his email contained within clause 4.0–No Extra Claims the following:

“4.3 Any allowances of any nature that may apply across the board to all employees for any contract is working on the Gorgon project such as shared accommodation shall also apply to employees of the diving company.”

[32] In the draft this sentence had been struck out and immediately underneath Mr Evans’ views were written:

“This is double jeopardy for employers as all existing “Gorgon” allowances are wrapped up in to our diving day rate. Not sure how to handle this IF new allowances are handed out but you proposed wording is far too broad and loose to accept. Happy to state that “This agreement excludes the existing Gorgon site specific shared accommodation allowance which is playable to employees covered by this agreement if they share any site accommodation (sure or vessel forward/barge).” (sic)

[33] The amended terms of clause 4.3 above and the manner in which the first sentence had been struck out is consistent with what Mr Evans said in his email that he did not like the very broad “I want allowances” section and so in his editing he replaced this with the wording found in the Agreement at clause 4.3 that was settled on by the parties and approved by Fair Work Australia.

[34] Again consistent with his explanation in his email Mr Evans in his editing then inserted words to cover the shared accommodation allowance but any other new allowances are not covered by clause 4.3 5.

[35] The witness statement of Mr Evans provided in this matter however says that in relation to this issue whilst it was agreed between the parties that a shared accommodation allowance would be paid, if it became necessary to have divers in shared accommodation, it was not agreed between the parties that the allowance would be payable under the Agreement 6.

[36] However under cross examination Mr Evans readily agreed that it was intended that clause 4.3 would create an obligation to pay the shared accommodation allowance. Having rejected the MUA clause that required all future allowances that might apply to other employees on the project to also apply to Cal Dive employees Mr Evans’ oral evidence was the intent of the revised clause 4.3 was that if shared accommodation was required the allowance would be applicable to Cal Dive’s employees and they had discussed that this was $150 per day 7.

[37] As Mr Evans explained at the time Chevron were paying everyone a shared accommodation allowance of $150 a day. He was aware that there was a union campaign to try and lift that to $225 per day. His understanding was that there was going to be a direct pass through from Chevron to their contractors and subcontractors where sharing accommodation applied because there were significant issues with accommodation. Mr Evans says at the time he agreed with Mr Tracey that if other employees were going to get the shared accommodation allowance then the employees of Cal Dive would as well.

Terms of the Agreement

[38] The relevant terms of the Agreement are set out below:

“9.0 Classifications and Rates of Pay

9.1 The applicable classifications and rates of pay are set out in Appendix A to this Agreement.

9.2 The rates of pay, allowances, penalties and conditions in this Agreement cover all circumstances, conditions and disabilities associated with the work on the Project, including but not limited to recognition for working 10 hour days, weekends, public holidays and for living on Barrow Island.

9.3 Day Rates

(a) Employees will be paid a day rate that is based on the expected average earnings derived over working a seven day week and paid to each Employee per day worked during the 28 day work cycle.

(b) Appendix A prescribes the average Total Casual Day Rates for each classification level payable to Employees for working the hours specified in Clause 16.0.”

“10.0 Allowances

10.1 General Allowances

The General Allowances component of the Total Casual Day Rate listed in Appendix A has been set to cover:

(a) All disabilities and special circumstances associated with working on the Project and living on Barrow Island, vessels or barges;

(b) Allowances for clothing and equipment required for diving or onshore work, including but not limited to wetsuits or full lycra suits, safety boots, work clothing and tool kits.

(c) Specialist training associated with diving qualifications required on the Project;

(d) Gorgon special allowances; and

(e) Other miscellaneous allowances as provided throughout this agreement and will be paid to an Employee for each on duty day worked on Site.

10.2 Diver Medical Technician (DMT) Allowance

An Employee holding a valid DMT qualification will be paid a flat hourly DMT Allowance on each hour worked as follows regardless of whether or not it is used:

Increase Flat Hourly Rate

Operative Date*

1 January 2011 $1.09

1 July 2011 5% $1.14

1 July 2012 5% $1.20

1 July 2013 5% $1.26

* Rates apply from the beginning of the first pay period on or after the above operational dates.

10.3 Depth Allowance

Each Diver, Air Diving Supervisor and Air Diving Superintendent will be paid a flat hourly Depth Allowance on each hour worked for each on duty day after they have reached the Point of Embarkation:

Increase Flat Hourly Rate

Operative Date*

1 January 2011 $4.30

1 July 2011 5% $4.52

1 July 2012 5% $4.74

1 July 2013 5% $4.98

* Rates apply from the beginning of the first pay period on or after the above operational dates.”

“28.0 Dispute Settlement Procedure

28.1 The following provisions shall apply to any dispute between an Employee covered by this agreement and the Employer about any matter arising under this agreement or in relation to the National Employment Standard (NES).

(a) the Employee(s) will discuss the question, dispute or difficulties with their supervisor/manager, who will attempt to resolve the issue;

(b) if the matter is not resolved, the matter will be referred to a Director or more senior management who will attempt to resolve the issue;

(c) if the matter still remains unresolved, then either party to the dispute may refer the matter to a mutually agreed independent third party for mediation or conciliation. Should the parties to the dispute not agree on the appointment of a third party for mediation, then the matter shall be referred to FWA for mediation or conciliation;

(d) if the matter remains unresolved then either party may request that it be dealt with by arbitration.

28.2 At any or all stages of the above procedure, either party may appoint a representative of their choice in writing, to assist in resolution of the dispute.

28.3 At all times whilst a question or dispute is being resolved normal work will continue.”

Principles

[39] The Full Bench ofFair Work Australia considered the approach to the interpretation of enterprise agreements in Cape Australia Holdings Pty Ltd T/A Total Corrosion Control Pty Ltd v Construction, Forestry, Mining and Energy Union 8.  The principles contained in that decision and others that were then reviewed are summarised as follows:

• The construction of a provision starts with a consideration of the ordinary meaning of the words, having regard to the context and purpose of the provision.



• Context is to be approached broadly: it may appear from the text of the agreement taken as a whole, its arrangement and the place in it of the provision being construed. Context may extend to other documents with which the provision being construed has an association. It may also include ideas that gave rise to an expression in a document from which the provision being construed has been taken. Context will also include the legislative background against which the agreement is made and in which it operates.



• The words of an agreement must not be interpreted in a vacuum, divorced from industrial realities. But while a generous and liberal interpretation will be given to the terms used, the agreement should make sense according to the basic conventions of the English language.

[40] Separately were the plain meaning of the words in an agreement are ambiguous or uncertain it is then permissible to have resort to extrinsic materials including relevantly the negotiations leading up to the making of that agreement and, where it can be objectively ascertained, the mutual intention of the parties at that time.

Consideration

[41] Considering clause 4.3 of the Agreement it is readily apparent from a reading of the words that the proper construction cannot be ascertained through their plain meaning alone.

[42] The context of the Agreement to which the respondent has referred, being the other provisions of the Agreement, are all general provisions none of which expressly mention shared accommodation and provide no assistance here. I do not accept the words “living on Barrow Island” in clause 9.2 and “living on Barrow Island, vessels or barges” in clause 10.1(a) extends to the requirement to share accommodation. It is the words of the specific provision 4.3 which is exclusively focused on shared accommodation that will determine the proper construction in this case.

[43] Clearly the words in clause 4.3 of the Agreement are uncertain and ambiguous.

[44] The significance of this conclusion is that it is appropriate for the Tribunal to consider the history of negotiations that culminated in the making of the Agreement to determine the proper construction.

[45] There was a significant amount of commonality between the evidence of Mr Tracey and Mr Evans on the background to their negotiations. Importantly the discussions between them on 15 April 2011 led to Mr Evans sending by email to Mr Tracey an amended draft agreement.

[46] This documentation demonstrates that Mr Evans rejected the MUA’s proposition that the Agreement at clause 4.3 include a term that would provide an entitlement to Cal Dive employees to receive the benefit of all future allowances that might generally apply to employees working on the Gorgon Project.

[47] Mr Evans in his email response to Mr Tracey indicated this was too broad and he rejected those words being in the Agreement. He stated that he had instead added words that would “...cover shared accommodation...” and those words he inserted were what was finally included in the Agreement as clause 4.3.

[48] Whilst there are some conflicts in the evidence between Mr Evans’ witness statement filed prior to the hearing and his evidence under cross examination my conclusion is that the email correspondence between the parties with the edited version of the draft agreement from Mr Evans at the time, plus the oral evidence of Mr Tracey and Mr Evans taken together do demonstrate there was a common intention of the parties when negotiating this Agreement regarding a shared accommodation allowance.

[49] The parties common intention was that the Gorgon site specific shared accommodation allowance was excluded from the day rates prescribed in Appendix A–Classifications and Rates of Pay of the Agreement but that the Gorgon site specific shared accommodation allowance existing at the time, of $150 per day, was payable to employees if they share site accommodation either onshore or on a vessel or a barge.

[50] The alternative interpretation put forward by the respondent; that the parties had agreed that if the employees were required to share accommodation they would receive the Gorgon site specific shared accommodation allowance but they had agreed that this was not as an entitlement under the Agreement, seems unlikely in the extreme. Such a construction would mean that the employees had gained no enforceable right under the terms of the Agreement to be paid such an allowance from the negotiations. The respondent has provided no explanation as to why the MUA representing these employees would agree to such an unusual term of an agreement nor why this was a desirable outcome in any event, even for the respondent, let alone the MUA and its members. Such an interpretation of the Agreement is not consistent with a secure industrial outcome being achieved for the parties and is divorced from the industrial realities of the time.

[51] Given my conclusion as above I am satisfied that the dispute arises under this Agreement and there is no jurisdictional impediment to the Tribunal determining this matter.

[52] Separately there is no evidence that supports the respondent’s alternative submission that the actual figure of the Gorgon site specific shared accommodation allowance was agreed between the parties as part of these negotiations to be $44.70 per night. I reject that submission.

Conclusion

[53] It is my decision that where employees are required to share accommodation clause 4.3 of the Agreement creates an entitlement for them to be paid “... the existing Gorgon site specific shared accommodation allowance...” which is an amount of $150 per day.

COMMISSIONER

Appearances:

L Edmonds for the applicant.

S White of the Australian Mines and Metals Association for the respondent.

Hearing details:

2012.

Perth:

October 5.

 1   Exhibit A1, paragraph 12.

 2   Transcript at PN118 - 129.

 3   Exhibit A1, annexure WT3.

 4   Ibid., annexure WT4.

 5   Transcript at PN155.

 6   Exhibit R1, paragraph 11 and 12.

 7   Transcript at PN158.

 8   [2012] FWAFB 3994.

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