Maritime Union of Australia, The v PB Sea-Tow (Australia) Pty Ltd

[2013] FWC 1095

[2013] FWC 1095

FAIR WORK COMMISSION

REASONS FOR DECISION

Fair Work Act 2009
s.739—Dispute resolution

Maritime Union of Australia, The
v
PB Sea-Tow (Australia) Pty Ltd
(C2012/6319)

Dredging industry
VICE PRESIDENT WATSON	SYDNEY, 15 FEBRUARY 2013

Alleged dispute concerning failure to provide adequate notice to employees.

Introduction

[1] These reasons for decision are a revised version of the decision given on transcript on 10 January 2013. This decision concerns an application by the Maritime Union of Australia (MUA) pursuant to s.739 of the Fair Work Act 2009 (Cth) (the Act) to deal with a dispute. The dispute concerns compliance by PB Sea-Tow (Australia) Pty Ltd (PBST) with clause 25 of the PB Sea-Tow (Australia) Pty Ltd - Inshore Maritime Enterprise Agreement 2011 (the Agreement) relating to consultation.

[2] At the close of the hearing I indicated that there had been substantial compliance with the consultation provisions and therefore concluded that an application for orders in relation to preserving the status quo be dismissed.

[3] This decision provides my reasons for that conclusion.

Jurisdiction

[4] The parties agree that the Fair Work Commission has the power to arbitrate the dispute under s.739 of the Act pursuant to the dispute procedures set out in the 2011 Agreement.

[5] Sub-clauses 26.2 and 26.3 of the Agreement relevantly provide:

“26.2. It is the intention of the parties that in fulfilment of this Clause, FWA shall exercise its powers and functions normally associated with conciliation and private arbitration and section 739(4).

26.3. The parties bound/covered by this Agreement agree that any decision or determination of FWA under this Clause shall be binding and final by virtue of this Clause but note that a decision of a single member of FWA can be appealed to the Full Bench of FWA.”

Background

[6] PBST provides transportation services from the Port of Gladstone for two construction projects: the QCLNG project and the APLNG project. Bechtel is the construction company engaged to construct both LNG projects. In mid-2012 Bechtel contracted PBST to transport aggregate for the APLNG project.

[7] On Saturday 15 December 2012, Bechtel terminated the APLNG contract with PBST. The discontinuance of the APLNG project forced PBST to consider the redundancy of employees, many of whom are members of the MUA.

[8] The MUA was informed of the termination of the APLNG contract on Monday 17 December 2012. On that day PBST also advised its employees of the termination of the contract. PBST and the MUA subsequently engaged in discussions relating to redeployment and redundancy options for all affected employees.

[9] On 18 December 2012, MUA members commenced industrial action. Subsequent orders were made by Commissioner Booth on that day to cease the industrial action.

[10] On 19 December 2012, an application was lodged by the MUA for Fair Work Australia to deal with a dispute pursuant to s.739 of the Act.

[11] On 21 December 2012, PBST informed employees that Bechtel had amended the contract expiry date to 10 January 2013. An urgent conciliation conference was held before Commissioner Booth by telephone. Orders restraining PBST were not made. PBST advised that they would provide a response to matters raised in a delegates conference held earlier that day. The delegates conference referred to was a two hour teleconference for the purposes of providing the MUA with an opportunity to discuss its demands.

[12] On 24 December 2012 PBST sent the MUA and its delegates minutes of the meeting of 21 December together with PBST’s response to the matters raised.

[13] Further discussions between both parties ensued throughout the Christmas holiday period. During these discussions PBST attempted to facilitate a teleconference with the MUA to be held on 27 December 2012. The MUA rejected the invitation for a teleconference and instead requested an in-person meeting in Sydney between 2 and 5 January 2013.

[14] On 27 December 2012, PBST emailed all APLNG employees to give notice of the termination to take effect on 10 January 2013. After several days of email and telephone correspondence between the parties the MUA requested an urgent listing of the matter on 2 January 2013. I held a directions teleconference on 4 January 2013 and subsequently listed the matter for hearing on 9 January 2013. The matter resumed on 10 January 2013 and continued until concluded late that evening.

The MUA’s Submissions

[15] The MUA submits that PBST did not engage in consultation with the MUA or Port of Gladstone employees prior to the 17 December 2012 notification of redundancies. It also submits that, despite attempts by the MUA to make urgent arrangements, national level consultation did not occur.

[16] It is the position of the MUA that PBST has failed to provide the employees and their union with necessary information and has therefore failed to engage in consultation in order to mitigate adverse effects resulting from the change.

[17] The MUA contends that, had PBST adhered to the consultation provisions of the Agreement, more time and effort would have been dedicated to the information and consultation process. The MUA submit that the outcomes of such would have included enhanced job security by way of voluntary redundancies, application of first on/first off principles, redeployment and the possibility of resumption of employment with PBST.

[18] The MUA further submits that the usual attendant circumstances and expectations of a proper consultation have been absent. It claims that the process lacked information about the reasons and background to the decision; details of what is proposed and why; an ample and sufficient opportunity to express views so that they can be given careful genuine consideration; an opportunity to point out problems or difficulties; and the ability to do this in a timely manner before a final decision is made. 1

[19] The MUA sought two alternative forms of relief. First, that the parties revert back to the consultation and information processes contemplated by the Agreement. Alternatively it sought orders regarding the mechanics of the redundancies.

PBST’s Submissions

[20] PBST submits that the application should be dismissed. It contends that PBST has consulted with the MUA and its delegates, as well as provided a series of opportunities for further consultation. It is PBST’s position that the MUA has tactically refused to participate in such consultations as a means of improving its case before the Commission.

[21] PBST submits that any problems with the consultation process initially arose from the sudden and unexpected termination of the contract by Bechtel. PBST does not concede that any such problems ever existed, and in any event, the steps taken by PBST in response to the MUA subsequently cured any such problems.

[22] It is the position of PBST that the MUA demand for a redundancy process that involves the calling for volunteers and application of the last on/first off basis, does not form part of the Agreement and would therefore create a bad precedent. In addition, such a process is inconsistent with PBST retaining its best employees and would be unfair to employees on the QCLNG project.

[23] PBST contends that it made a series of concessions to the MUA during the consultation process. The concessions include allowing QCLNG employees to resign to effectively free up positions for APLNG employees, and agreeing to inform all APLNG employees if PBST secured further work out of the Port of Gladstone.

[24] PBST submits that the response from the MUA has been a “dirty tricks” campaign 2, that demonstrates an absence of good faith. It contends that the following are examples of MUA’s bad faith in the matter: unlawful industrial action; refusal to participate in two consultative meetings; failure of the MUA National Office to attend key telephone conferences; attempts to bypass PBST’s National IR Representative; abusive emails and telephone conversations; and misrepresenting the position of PBST in correspondence to Commissioner Booth.

[25] In relation to the Agreement, PBST submits that in addition to containing a no extra claims commitment in the Agreement (Clause 34) restricts the Commission from arbitrating on a matter inconsistent with the Agreement and the redundancy provision (Clause 22) does not provide for voluntary redundancy or the application of the last on/first off principle.

Decision on Transcript

[26] As stated above, the application by the MUA is primarily to seek relief relating to consultation set out as an attachment to the outline of submissions in this matter. The case advanced essentially contends that there has been noncompliance with clause 25 of the enterprise agreement in relation to the consultation about terminations of employment due to take effect today.

[27] The parties are essentially in agreement as to the authorities and the proper approach towards those particular obligations. Those provisions in the agreement reflect in large part provisions in awards, in legislation and enterprise agreements extending back to the 1980s and they have been the subject of various interpretations and applications over the years. In more recent times, a leading case of Logan J in the CEPU v QR Ltd and Ors 3 deals in particular with the necessary ingredients of consultation under similar provisions. I apply that approach generally and the authorities referred to by the parties in considering the matter of the primary relief sought by the MUA in this matter.

[28] The circumstances that have given rise to the notices of termination arise from an unexpected termination of the contract on 15 December of last year. That notice of termination was modified subsequently by an indication that the contract will expire on the expiry of the term of the contract, being 10 January 2013. It is clear on the evidence that the original notice and indeed the non-extension of the contract, was something that was not anticipated by any of the parties in these proceedings. It is that circumstance which I think has had a significant effect on the communications and dealings between the parties in relation to the implications of the termination of the contract.

[29] In determining whether to make an order I think it is necessary to have regard to that context, and also the general circumstances of the employment and adopt a practical approach to the interpretation of the relevant clause relied on by the MUA. I pay particular regard to whether, having regard to that context and that approach, there has been a breach of the clause of such significance that warrants an order being made that more comprehensive consultation occur in accordance with the draft determination sought by the union.

[30] The parties have made various allegations, both prior to the proceedings and in the proceedings, concerning the conduct of each other. It is clear that the communications and consultations are considerably fraught and subject to a high level of tension between the parties. I do not consider that either party is blameless in relation to the various communications, but I give primary consideration to whether there has been substantive compliance with the consultation provisions of the agreement. In all the circumstances, I am satisfied that there has been substantial compliance with the consultation provisions.

[31] I note in particular that after the initial notice was given by Bechtel on Saturday, 15 December, the representative of PBST contacted the Assistant Federal Secretary of the MUA to advise him of the circumstances and with his acquiescence, or at his request, then notified the employees later that day. Later in that week a meeting was held - on Friday, 21 December - attended by various delegates and officials of the MUA. That meeting provided an opportunity for discussions to occur on all the circumstances and for the MUA to advance its position in relation to the steps that should be taken to respond to the termination of the contract. By that stage, of course, Bechtel had varied the notice and indicated that the termination date was to be 10 January 2013.

[32] The evidence establishes, and I find, that the company considered the matters that were raised at that meeting and communicated with the MUA in considerable detail in an email sent on Monday, 24 December. In that email various concessions were made regarding the process and the entitlements of employees subject to the termination of the contract. I consider that those steps in particular satisfy the requirements of the company, in the difficult circumstances in which it was placed, to consult with its workforce and their representatives, and consider with an open mind matters that were raised by the employees and on behalf of the employees concerned. In the circumstances that I have outlined, in very general terms, I do not propose to make orders relating to further consultation as set out in the first alternative draft determination.

[33] The MUA seeks, in the alternative, various other orders relating to the implementation of the redundancies. These matters go to the actual mechanics of the redundancies, such as a further process of offering voluntary redundancies to QCLNG employees and other matters designed to mitigate the adverse effects of employees affected by the termination of the contract. These matters have been the subject of considerable argument, both as to jurisdiction and the availability of relief of this nature. In all the circumstances and by reference to the terms of the agreement, my conclusion in relation to these matters is that a case has not been made out on the merits to justify a determination in those terms.

[34] I do not find it necessary, in those circumstances, to rule on the questions of jurisdiction and the arguments relating to inconsistency between the relief sought and the terms of the agreement. In all those circumstances, I dismiss the application for orders in relation to this matter.

VICE PRESIDENT WATSON

Appearances:

S. Reidy, of counsel, and A. Jacka for the Maritime Union of Australia.

G. Jolly and T. Woodland for PB Sea-Tow (Australia) Pty Ltd.

Hearing details:

January 9 and 10.

Sydney

2013

 1 Exhibit R6 - Applicant’s Outline of Submissions at [4(d)] - CEPU v QR (2010) 268 ALR 514 at [40]-[45] per Logan J

 2   Exhibit J12 - Outline of Submissions on Behalf of PB Sea-Tow at [10]

 3   Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia and Others v QR Ltd and Others (2010) 268 ALR 514

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