Maritime Union of Australia, the v Skilled Offshore (Australia) Pty Ltd

[2016] FWC 2003

[2016] FWC 2003

DECISION

Fair Work Act 2009
s.739 - Application to deal with a dispute
Maritime Union of Australia, The
v
Skilled Offshore (Australia) Pty Ltd
(C2015/7932)
VICE PRESIDENT WATSON	MELBOURNE, 7 APRIL 2016

Dispute about matters arising under the enterprise agreement – Interpretation of enterprise

agreement – Whether operation of clause relating to two-crew duty system requires payment

as a “dead day” or “duty day” – Fair Work Act 2009, s.739.

Introduction

[1]        This decision concerns an application for the Fair Work Commission (the

Commission) to deal with a dispute. The application is made by the Maritime Union of

Australia (MUA) under s.739 of the Fair Work Act 2009 (the Act). It concerns employees

employed by Skilled Offshore (Australia) Pty Ltd (Skilled Offshore) under the Offshore

Marine Services Pty Ltd Integrated Ratings, Cooks, Caterers and Seafarers (Offshore Oil and

Gas) Enterprise Agreement 2010 (the Agreement). The dispute relates to a provision of the

Agreement which concerns the operation of the two-crew duty system.

[2]        The matter was listed for conference on 7 December 2015. The parties were unable to

reach an agreed resolution and the MUA requested that the matter be listed for arbitration. At

the hearing, Ms E. Palmer appeared for the MUA and Mr T. Casperz, of counsel, appeared for

Skilled Offshore.

Jurisdiction

[3]        The dispute comes to the Commission by way of the dispute settlement procedure in

the Agreement. This clause relevantly provides:

“45. DISPUTE RESOLUTION PROCEDURES

The Master should be advised of appointment of delegates or change of delegates.

When an industrial dispute arises:

[2016] FWC 2003

Step 1

45.1 The Employee or the Employee's nominated delegate/representative will first

approach the Master of the vessel and advise the Master of the specific nature of the

industrial dispute. It is essential that all reasonable efforts be made to resolve any

industrial or operational problems at shipboard level. This requires that careful

attention be paid to such problems at an early stage, to ensure that frustrations do not

develop and lead to unnecessary escalation of the problems.

Step 2

45.2 (i) If any dispute cannot be resolved at shipboard level, the Master will

immediately, whether at sea or in port, advise the appropriate Employer representative.

(ii) If any dispute cannot be resolved at shipboard level, the Employee or their

nominated representative or delegate affected by the dispute may seek the assistance

of a representative or organisation of their choice, including the Union, to assist in the

resolution of the dispute.

(iii) Where an Employee affected by a dispute appoints the Union or another

representative as their chosen representative then the Union or the other representative

will be immediately advised of the dispute.

(iv) The Union representative or other representative appointed and advised in

accordance with (ii) and (iii) above, and the appropriate officer of the Employer will

take all reasonable steps to achieve the resolution of the dispute. Should the Employee

appoint the Union as their representative and a Union branch official is not

immediately available, the dispute should be referred to the Union's Federal Office

which will nominate the Union official to deal with the dispute.

Step 3

45.3 If any dispute then remains unresolved following discussion between the Union

branch official or other Employee representative and Employer representative, they

will respectively and without delay, refer it to the Federal Secretary of the Union or

other Employee representative and the Chief Industrial Representative of the

Employer who will confer and endeavour to achieve a resolution.

Step 4

45.4 In the event that the preceding steps have failed to resolve the dispute, the dispute

may be referred to Fair Work Australia (FWA) for conciliation and / or arbitration

pursuant to s's 739 and 595 of the Act.

45.5 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.

[2016] FWC 2003

45.6 Work will continue normally, and vessels will continue to trade pending

determination of any dispute in accordance with the above procedures including

periods of non-availability of executives or officials.

45.7 It is essential than any dispute in issue and the reasons for or against are

accurately defined and recorded by those concerned to ensure that ambiguities do not

arise, it is important that prompt and careful consideration is given to all claims,

requests and industrial questions. Equally a reasonable time is required to enable

proper investigation to take place in order to satisfactorily resolve the dispute.

45.8 The Parties acknowledge that at no stage in the process may the Employees

engage in industrial action, which includes a refusal to comply with a lawful

direction.”

[4]        I am satisfied that the parties have empowered the Commission to arbitrate this dispute

under the terms of the Agreement.

Background

[5]        Skilled Offshore provides marine labour services to vessels. Saipem is an oil and gas

industry contractor providing engineering, procurement, construction, and installation services

on pipelines. Sapiem provides its pipe-lay services on the Ichthys Project between an offshore

gasfield north of Broome to the gas processing facility at Darwin. Skilled Offshore provides

labour services on board Saipem’s pipe-lay crane vessel, the FDS, for the Ichthys Project.

[6]        In around August 2015, Skilled Offshore provided fifteen employees to crew the FDS

for a short-term project, mobilised and demobilised through Singapore. The employees first

joined the vessel between 3 and 6 August 2015. On 2 and 3 September 2015, the employees

departed the vessel. They were apparently replaced by a crew who were not employed by

Skilled Offshore and the vessel went into dry dock with a skeleton crew.

[7]        Skilled Offshore did not treat these swing-off days as a duty day in accordance with

sub-clause 14.8 on the basis that it does not apply in the circumstances. It instead treated the

swing-off days as dead days on the basis that sub-clause 14.5.2.1 applies. The MUA contends

that sub-clause 14.8 applies and entitles the crew to accrue leave for the swing-off days on 2

and 3 September.

[8]        The employees of Skilled Offshore who performed work on the FDS are employed

under the Agreement. The disputed clause relates to the operation of this two-crew duty

system which is contained in clause 14 of the Agreement, and in particular the application of

sub-clause 14.8. Clause 14 provides:

“14. TWO-CREW DUTY SYSTEM

14.1 A two·crew duty system will operate providing for the appointment of two crews

to each vessel, one on duty and the other off duty or in transit.

14.2 To compensate for public holidays, intervals of leave, annual leave,

personal/carer's leave, compassionate leave and time spent travelling in off duty time,

a Permanent Employee will accrue time off at the rate of 1.153 days leave, and a

[2016] FWC 2003

casual Employee will accrue one day, for each day spent on duty under the two crew

duty system.

14.3 Any extended period of time off (e.g. outside of the normal swing) is to be taken

at a mutually agreed time, having regard to the operational necessity of ensuring that

only part of the permanent crew members in each department on the vessel take such

time off at any one time, to ensure the continued operational efficiency of the vessel.

14.4 When proceeding on an extended period of time off, it will be the responsibility

of the Employee to ensure that they have sufficient entitlements due to enable the

Employee to draw continuous pay up to the day of the regular crew change when the

Employee is due to rejoin their vessel.

14.5 Commencing on the first full swing period after the registration of this agreement

the following new sub-clauses 14.5.1 and 14.5.2. The Employees (and/or the Union)

are not to make any future claims in respect to swing off day.

14.5.1 The "on duty" period commences on the day the Employee joins the

vessel.

14.5.2 The "off duty" period commences on the day after the Employee leaves

the vessel.

14.5.2.1 Calculations are done on the basis that the day of joining the

ship is counted as a day of duty and the day of leaving the ship will be

treated as a dead day.

14.5.2.2 Where in connection with a swing change an Employee spends

more than one "off duty" day travelling to or from the vessel, the

Employee shall be paid a "dead day" for each additional day or part

thereof spent travelling.

Where the two crew duty system is in place and the Employee's are changing out with

one another, it is agreed that the payment of a dead day recognises that there may be a

need for work to be performed on the Swing off day.

14.6 Off-going crew have the option of breaking their journey home if they can

demonstrate to the Master a need, based on:

(a) hours of work performed in the 24 hour period prior to leaving the vessel;

(b) time of crew change; and

(c) flight times.

(d) Where the journey is broken, an Employee will qualify for a travel day

should they be delayed by more than one off duty day from reaching their

Home Port.

[2016] FWC 2003

14.7 Where the two crew duty system is in place and successive crews are changing

and with one another, that work performed on an Employee's swing-off day will be

paid as a dead day.

14.8 Where the two crew duty system does not operate, or where a crew member has

no relief, the swing-off day will be treated as a duty day and will accrue a day's pay

and a day's leave.

14.9 The extent to which time off granted is more or less than that due shall be debited

or credited to the Employee as less or additional time off to be granted; provided that

the Employee may not be required to take more than 14 and when agreed between the

Parties and due to special circumstances 21 days of leave in advance.

14.10 The maximum time off an Employee may accrue under this clause is 105 days.

Unless agreement has been reached between the Employee and the Employer an

Employee will be required to take time off to ensure that the maximum of 105 days is

not exceeded.

14.11 To enable the two crew duty system to operate there shall be interchange ability

as follows:

(a) Permanent crew -as between opposite numbers on different swings on the same

vessel

(b) Permanent crew -as between opposite numbers on different swings casual relief

and on different vessels”

[9]        Under this clause, time off is accrued by employees at the rates specified in sub-clause

14.2. The day on which crew depart a vessel and are replaced by the second crew is called the

“swing-off day”. This day is usually treated as a “dead day”, that is a day on which an

employee does not accrue any leave pursuant to sub-clause 14.5.2.1. However, under sub-

clause 14.8 it is provided that “[w]here the two crew duty system does not operate, or where a

crew member has no relief, the swing-off day will be treated as a duty day and will accrue a

day's pay and a day's leave”.

[10]      The question the parties have requested to be determined is whether the operation of

sub-clause 14.8 requires the payment on the day when the employees left the vessel in

Singapore in early September 2015 as a “dead day” or a “duty day”.

Principles of Interpretation

[11]      The principles for interpreting terms of enterprise agreements are well established and

1

were recently summarised by a Full Bench of the Commission as follows :

“1. The AI Act does not apply to the construction of an enterprise agreement made

under the Act.

2. In construing an enterprise agreement it is first necessary to determine whether an

agreement has a plain meaning or contains an ambiguity.

[2016] FWC 2003

3. Regard may be had to evidence of surrounding circumstances to assist in determining

whether an ambiguity exists.

4. If the agreement has a plain meaning, evidence of the surrounding circumstances will

not be admitted to contradict the plain language of the agreement.

5. If the language of the agreement is ambiguous or susceptible to more than one

meaning then evidence of the surrounding circumstance will be admissible to aide the

interpretation of the agreement.

6. Admissible evidence of the surrounding circumstances is evidence of the objective

framework of fact and will include:

(a) evidence of prior negotiations to the extent that the negotiations tend to

establish objective background facts known to all parties and the subject matter

of the agreement;

(b) notorious facts of which knowledge is to be presumed;

(c) evidence of matters in common contemplation and constituting a common

assumption.

7. The resolution of a disputed construction of an agreement will turn on the language

of the Agreement understood having regard to its context and purpose.

8. Context might appear from:

(a) the text of the agreement viewed as a whole;

(b) the disputed provision’s place and arrangement in the agreement;

(c) the legislative context under which the agreement was made and in which it

operates.

9. Where the common intention of the parties is sought to be identified, regard is not

to be had to the subjective intentions or expectations of the parties. A common

intention is identified objectively, that is by reference to that which a reasonable

person would understand by the language the parties have used to express their

agreement.

10. The task of interpreting an agreement does not involve rewriting the agreement to

achieve what might be regarded as a fair or just outcome. The task is always one of

interpreting the agreement produced by parties.”

[12]      I will apply these principles to the interpretation of the Agreement.

Interpretation of the Agreement

[13]      The concept of a two-crew duty system has a long history in the maritime industry,

dating back to 1974. That history was recently summarised by Commissioner Cloghan in a

case concerning a different dispute over the operation of a clause in a maritime industry

2

enterprise agreement. He summarised that history as follows :

[2016] FWC 2003

“RELEVANT HISTORY LEADING TO CLAUSE 14 OF THE 2010

ENTERPRISE AGREEMENT

1974 Award

[19] The earliest relevant predecessor award to a modern award was the Maritime

Industry (Survey Vessels) Award 1974 (1974 Award).

[20] Clause 10 of the 1974 Award reads:

“10 - TWO CREW DUTY SYSTEM

(a) In lieu of annual leave, public holidays and accrued leave, a two crew duty system

will be employed on the vessels so that each man will be required to spend only

26 weeks per year on board.

(b) ...

(c) It is recognised that due to the erratic work schedule of vessels, it may not be

possible to produce the exact time on board referred to in paragraph (a) and (b) of

this clause, however, any debits or credits will be carried forward”. (my emphasis)

1991 Award

[21] Subsequent to the 1974 Award and prior to the modern award was the Maritime

Industry Offshore Oil and Gas Operations Award 1991 (1991 Award).

[22] Clause 14 of the 1991 Award reads:

“14 - TWO CREW DUTY SYSTEM

(a) A two crew duty system shall operate providing for the appointment of two crews

to each vessel, one on duty and the other off duty or in transit.

(b) To compensate for public holidays, intervals of leave, annual leave and time spent

travelling in off duty time, an employee shall accrue an entitlement to time off at

the rate of 1.153 days leave for each day spent on duty under the two crew duty

system.

...
(f)	(i) The extent to which time off granted is more or less than that due shall be

debited or credited to the employee as less or additional time off to be granted;

provided that the employee may not be required to take more than seven days of

leave in advance.

(ii) The maximum time off an employee may accrue under this clause is 105

days. Unless agreement has been reached between the relevant union and the employer

an employee will be required to take time off to ensure that the maximum of 105 days

[2016] FWC 2003

is not exceeded. Provided that where an employee who is scheduled on the basis of 4

weeks on 4 weeks off the maximum accrual shall be 84 days.” (my emphasis)

Modern Award

[23] The Maritime Offshore Oil and Gas Award 2010 (Modern Award) provides at

Part 6 - Leave and Public Holidays provisions. Clause 19 is entitled “Leave factor”

and reads as follows:

“19.1 Leave factor and entitlement to leave

(a) Subject to clause 19.2(c) for each day of duty ona vessel or a day during which the

employee is necessarily involved in travelling to or from a vessel or place of work

as required by the employer, an employee will accrue an entitlement to 1.153 of a

day’s leave without loss of pay.

(i) The on duty period commences the day the employee joins the vessel; and

(ii) the off duty period commences the day the employee leaves the vessel.

(b) The extent to which the leave granted is more or less than that actually due will be

debited or credited to the employee as less or additional leave.

19.2 Calculation of leave entitlement

(a) The leave entitlement in clause 19.1 gives effect to, amongst other things:

(i) leave with pay for weekends and public holidays worked;

(ii) annual leave with pay of five weeks per year;

(iii) personal/carer’s leave;

(iv) compassionate leave; and

(v) time spent travelling in off duty time.

(b) Where in connection with a crew change an employee spends more than one off

duty day travelling to or from the vessel, the employee will accrue a day off for

each additional day or part thereof spent.

(c) In acknowledgement that the swing off day is an off duty day under the provisions

of this clause and that an employee may be required to perform duties for all or

part of the day, the employee will be entitled to an additional payment of one day’s

pay at the employee’s normal rate of pay as full compensation for any work

performed on each such crew change day.

(d) The maximum time off an employee may accrue under this clause is 105 days.

Unless agreement has been reached between the employee and employer, an

employee will be required to take time off to ensure that the maximum of 105 days

is not exceeded. Provided that where an employee who is scheduled on the basis of

four weeks on, four weeks off, the maximum accrual will be 84 days.

[2016] FWC 2003

19.3 Taking of leave

(a) Any extended period of time off (i.e. outside of the normal swing) is to be taken at

a mutually agreed time, having regard to the operational necessity of ensuring that

only part of the permanent crew members in each department on the vessel take

such time off at any one time, to ensure the continued operational efficiency of the

vessel.

(b) When proceeding on an extended period of time off, it will be the responsibility of

the employee to ensure that they have sufficient entitlements due to enable them to

draw continuous pay up to the day of the regular crew change when they are due to

rejoin the vessel.

(c) The extent to which time off granted is more or less than that due will be debited

or credited to the employee as less or additional time off to be granted; provided

that the employee may not be required to take more than seven days of leave in

advance.” (my emphasis)

CONSIDERATION OF INDUSTRIAL INSTRUMENTS

[24] The two crew duty system enables one crew to be on duty, while another crew is

off duty or in transit to the vessel. There is nothing remarkable about this arrangement

as it provides for a vessel to be crewed 24 hours per day for 365 days of the year.

[25] The scheduling of the two crew system is described as “even time”, that is, the

employee being either four weeks on duty and four weeks off duty, or five weeks on

duty followed by five weeks off duty.”

[14]      The MUA contends that the plain meaning of sub-clause 14.8 is clear on its face

having regard to its purpose and context within clause 14. It submits that the sub-clause

applies where the two-crew duty system does not operate and/or where a crew member has no

relief; and that where one or both of these conditions are present then the swing-off day will

be treated as a duty day and the off-going crew are entitled to be paid a duty day which

accrues both pay and leave.

[15]      The MUA contends that sub-clause 14.1 defines the two-crew duty system as one

whereby two crews are appointed to each vessel, and that it requires the employer to appoint

two crews to the vessel. It notes that sub-clauses 14.5 and 14.7 further require the two crews

to operate; and that in addition to the on-duty crew there must also be a second crew

appointed to the same vessel who is off-duty or in transit to or from the vessel and who will

successively change out with the on-duty crew. The MUA submits that a crew that is

appointed by someone else not bound by the Agreement is therefore not part of the two-crew

duty system provided for in sub-clause 14.1 and that the departure of the on-duty crew from

the FDS on 2 and 3 September provides an example of when a two-crew duty system does not

operate. It submits that:

 there was only one crew appointed to the FDS within the meaning of sub-clause

14.1;

 there was no second crew in transit to or from the vessel;

[2016] FWC 2003

 there was no second crew off-duty within the meaning of the sub-clause as the

second crew had either ceased employment or been appointed to a different vessel;

while the crew may have been replaced by other seafarers forming a differently

configured crew it was not a crew that was off-duty within the meaning of the

Agreement; and

 the replacement crew would not successively change out with the off-going crew and

only changed out on a once-off basis.

[16]      The MUA further submits that where the two-crew duty system does not operate, the

off-going crew has no relief within the meaning of the Agreement. It contends that this is the

case because, even if some of the crew are replaced by another crew not employed under the

Agreement, they would not provide adequate relief in that they would not be able to be

directed to perform work by the employer.

[17]      The MUA also submits that the purpose of sub-clause 14.8 is self-evident having

regard to the clause and the system it establishes. It contends that it is directed at

compensating for the fact that where there are not successive crews changing out with one

another, there will only be one crew available to perform work under the Agreement at the

direction of the employer on the swing-off day and oncoming crew members are not available

to assist with the work to be performed on this day. The off-going crew is accordingly to

accrue both a day’s pay and a day’s leave.

[18]      Skilled Offshore disputes such a construction of sub-clause 14.8 and contends that the

sub-clause does not apply. It submits that the sub-clause only applies if an employee leaves a

vessel to which two crews had not been appointed, or there is a two-crew duty system and an

employee leaves a vessel in circumstances where there is no relief for that employee in a

departing crew. It notes that the “crewing requirements” set out in the relevant schedule

describe what constitutes a crew for the purposes of determining whether a “two-crew”

system is in operation.

[19]      Skilled Offshore notes that the employees left the vessel on 2 and 3 September in

circumstances where two crews had been appointed by it to the vessel on a day roster/night

roster shift arrangement, the crews joined the vessel for the purposes of commencing the

labour-hire arrangement, and the crews left the vessel at the end of the labour-hire

arrangement. It submits that a crew that is “on-duty” is one on the vessel working their

rostered hours on any particular day of their work cycle (crew 1) and a crew that is “off-duty”

is one who is between rostered hours and is not working or is in transit to the vessel to work

rostered hours when crew 1 finishes working their rostered hours (crew 2). The company

therefore contends that a two-crew duty system was in operation and that there was no

question of the need for any relief of any members of the two crews because they joined the

FDS at the start of the labour-hire arrangement and left at the end. Skilled Offshore therefore

submits that the MUA’s interpretation of sub-clause 14.8 erroneously construes a two-crew

duty system as ceasing to operate at the end of a labour-hire arrangement simply because

there are no replacement crews for them.

[20]      It is necessary to construe sub-clause 14.8 in context and in an effort to give effect to

the meaning intended by the parties to the Agreement. No evidence was led as to the mutual

intention of the parties at the time the Agreement was made. The interpretation must arise

from a textual analysis of the provisions. When compared to the underpinning award

provision on two-crew systems the purpose of sub-clause 14.8 becomes clear. In recognition
[2016] FWC 2003

of work being performed on the swing-off day the award provides for one day’s pay to be

made on that day. The Agreement reflects this, but then goes further. It provides that an

additional benefit of a day’s leave applies when the two-crew system is not in operation or

there is no relief.

[21]      The purpose of this clause seems clear. In normal circumstances, when a two-crew

system is in operation and relief employees arrive as anticipated, a relief member of an

alternative crew would arrive on the vessel on the swing-off day. Hence the outgoing

employee will have little work to do as the oncoming employee will be on duty when they

arrive. The payment is less on the swing-off day because there will be little work to do in

these normal situations. Payment is made because some duties associated with the handover

may be required to be performed and until the new corresponding crew member arrives.

However if the two-crew system is not in operation, or a relief does not arrive, the employee

will be responsible for all work required to be performed while they are on board the vessel.

The parties clearly intend that this be recognised by payment as a duty day rather than a dead

day in these circumstances. It is clear, in my view, that the two-crew system in clause 14 is

referable to the notion of two full alternative crews, one of which would be on duty on the

vessel at any one time, and the other travelling or on leave.

[22]      In the circumstances involved regarding the FDS in September 2015, the short-term

nature of the assignment meant that only one crew was appointed. That crew had employees

who would work day shift or night shift. For the purposes of clause 14, this did not amount to

two crews. It may be said that the crew was relieved by the new crew of another employer.

However, the qualifying words in sub-clause 14.8 are expressed as two alternatives. In my

view, the first alternative is satisfied because the two-crew system did not operate on this

vessel when performing work under the Agreement for this voyage. In my view, the mutual

intention of the parties and the true meaning of the clause is that in the circumstances the

swing-off day needed to be paid as a duty day. If that situation is regarded as anomalous or

overly generous, then that is the result of the agreement the parties made.

Determination

[23]      For the above reasons, I determine this dispute by finding that in the circumstances of

the swing-off day on 2 and 3 September 2015, Skilled Offshore was obliged under the terms

of the Agreement to pay each of the employees as a duty day for their swing-off day.

VICE PRESIDENT

[2016] FWC 2003

Appearances:

Ms E. Palmer for the MUA.

Mr T. Casperz, of counsel, for Skilled Offshore.

Hearing details:

2016.

Perth.

30 March.

Final written submissions:

MUA on 3 March 2016.

Skilled Offshore on 17 March 2016.

Printed by authority of the Commonwealth Government Printer

<Price code C, PR578532>

1

[2014] FWCFB 7447.

2

[2014] FWC 7250.