Maritime Union of Australia v EMAS Offshore Services (Australia) Pty Ltd

[2013] FWC 2917

[2013] FWC 2917

FAIR WORK COMMISSION

DECISION

AND

REASONS FOR DECISION

Fair Work Act 2009
s.739 - Application to deal with a dispute

Maritime Union of Australia
v
EMAS Offshore Services (Australia) Pty Ltd
(C2012/422)

COMMISSIONER CLOGHAN PERTH, 17 JULY 2013

Application to deal with a dispute.

[1] This is an application by EMAS Offshore Services (Australia) Pty Ltd that an application by the Maritime Union of Australia filed in the Fair Work Commission on 26 April 2012 be dismissed for want of prosecution.

[2] The dispute concerns whether hook up and commissioning work on the North Rankin B Platform completed on or about 21 May 2012 is construction work for the purposes of a Construction Project Allowance Bonus.

PROCEDURAL BACKGROUND

[3] On 26 April 2012, the Maritime Union of Australia (MUA or Applicant) made application to Fair Work Australia, now Fair Work Commission (Commission) to deal with a dispute in accordance with a dispute settlement procedure (DSP).

[4] The MUA is in dispute with EMAS Offshore Services (Australia) Pty Ltd (Employer).

[5] The DSP is contained in the EMAS Offshore Services (Australia) Pty Ltd Integrated Ratings, Cooks, Caterers and Seafarers (Offshore Oil and Gas) Enterprise Agreement 2010 (Agreement).

[6] The application was made pursuant to s.739 of the Fair Work Act 2009 (FW Act).

[7] The application was the subject of a conciliation conference on 10 May 2012.

[8] On 1 March 2013, the Employer made application that the originating application by the MUA be dismissed for want of prosecution. A further conference of the parties occurred on 20 March 2013. In the absence of a resolution to the dispute and an agreed proposed course of action, the Employer requested that its application for the originating application be dismissed for want of prosecution be heard and determined.

[9] At the hearing on 17 April 2013, the Employer was represented by Mr J Blackburn of Counsel with Ashurst Australia. The MUA was represented by Mr L Edmonds, National Legal Officer.

[10] Having received the documentation and heard submissions, this is my decision and reasons for decision.

THE DISPUTE

[11] Clause 31 of the Agreement provides for the payment of a Construction Project Allowance Bonus (PAB). To be eligible for the PAB, certain criterion is applied.

[12] In the originating application, the MUA state that the parties are in dispute “over when the construction phase of a project is finished”. In particular, “the Applicant claims that the construction phase of the project includes the commissioning phase. The Respondent does not agree with this interpretation”.

BACKGROUND TO DISMISSAL FOR WANT OF PROSECUTION

[13] The application was filed on 26 April 2012. On 1 May 2012, the MUA enquired as to the date of a conciliation conference. The conference was listed for 10 May 2012.

[14] The dispute was not able to be resolved in conference. The Applicant agreed to provide the Employer with draft questions for determination. The Employer would review the questions, and ultimately, the Commission would provide procedural directions for a hearing.

[15] On 17 May 2012, the Commission followed up with the parties on the progress of drafting the questions for determination. The Employer’s representative responded on 21 May 2012 advising that no draft question had been received from the Applicant.

[16] On 17 September 2012, the MUA provided draft questions to the Employer’s representative. On 16 November 2012, the Employer responded to the draft questions. Part of the delay of the Employer in responding to the draft questions was due to the fact that a key Employer representative was overseas and did not return until 9 October 2012.

[17] On 3 December 2012, the parties reached agreement on the questions for determination.

[18] By 21 December 2012, representatives of the parties were in discussion and had agreed that the MUA would advise the Commission that: the parties had reached consensus on the questions for determination; the parties were conferring on agreed directions and that the MUA would advise the Employer’s representative, in mid January 2013, as to when it would be able to provide submissions and witness statements.

[19] On 11 February 2013, the Employer’s representative emailed the MUA seeking the name of witnesses and the substance of its evidence. In addition, the Employer’s representative requested the MUA to provide its contentions of fact and law.

[20] Importantly, in the 11 February 2013 email, the Employer’s representative advised that the Employer did not want the matter “unresolved indefinitely” and advised that “in the event I [the representative] do not receive from you [MUA] the respective dates...by 4:00 pm, 15 February 2013, I am instructed to apply to the FWC to have the matter dismissed”.

[21] In the absence of a response by the MUA to the 15 February 2013 deadline, on 20 February 2013 the Employer requested the Commission, in correspondence, that the application be dismissed on the basis of the MUA’s failure or refusal to progress the originating application.

[22] Following the Employer’s application for the originating application to be dismissed, the MUA advised the Commission on 28 February 2013 as follows:

“On or about 3 December 2012, the following questions for determination were agreed between the parties:

1. Whether the hook-up and commissioning work performed on the North Rankin B Platform Project after 1 May 2012 (the Work) was “work involving the installation of new jackets [or] topsides” within the meaning of Clause 31.1 of the Agreement.

2. If the answer to 1. is “yes”, whether the work was “post miscellaneous and ancillary work” within the meaning of Clause 31.1 of the Agreement.

3. If the answer to 1. if “yes” and the answer to 2. is “no”, whether the Lewek Crusader was “engaged on” a Construction Project within the meaning of Clause 31.1 of the Agreement after 1 May 2012?

4. If the answer to 1. is “yes”, the answer to 2. is “no” and the answer to 3. is “yes”, then:

a when if at all, was “the construction phase...deemed to have finished”; and

b when did the Lewek Crusader permanently depart from the Construction Project location within the meaning of Clause 31.1 of the Agreement.”

[23] Following the MUA’s correspondence to the Commission of 28 February 2013, the Employer formally, on 1 March 2013, pursuant to subsection 587(3) of the FW Act, sought that the application C2012/422 be dismissed and set out grounds for making the application.

[24] The Employer sought that the application be dealt with “on the papers” or be listed for a hearing. The Employer’s application to dismiss C2012/422 was dealt with by written submission and a hearing.

EMPLOYER’S SUBMISSIONS

[25] The Employer’s grounds for dismissing the application fall into three areas as follows:

Want of prosecution

[26] Briefly put, the Employer submits that the MUA commenced proceedings on 26 April 2012 and has failed to prosecute its case with due diligence.

[27] It is not necessary to repeat the sequence of events in paragraphs [13] to [24] but to say that subsequent to a further conference on 20 March 2013, the MUA reduced the originating application to two questions which differed from the agreed questions of 3 December 2012.

[28] After nearly 12 months, the Employer submitted:

● “there was no progress in relation to the preparation of witness statements and submissions;

● the MUA has no witnesses or reliable evidence;

● the MUA does not know what work continued on the North Rankin B Platform Project after 1 May 2012; and

● now wishes to engage in a “fishing expedition” to see whether it has a case. Further, the MUA has only suggested this course of action in response to the Employer applying to have the matter dismissed.”

[29] In addition to doing little to progress its claim commenced nearly 12 months before, the Employer submits that the MUA admits it has no admissible or reliable evidence.

MUA seeking advisory opinion

[30] The Employer submits that the MUA, not being able to prosecute its originating application, has introduced a new question for determination. That question is whether “hook up and commission” (HUC) is within the definition of “Construction Project” in Clause 31 of the Agreement.

[31] The arbitration of such a question, the Employer submits, does not determine whether employees are entitled to be paid a PAB in respect of HUC work after 1 May 2012. Arbitration of such a question is advisory and will not resolve the dispute.

[32] Arbitrating a hypothetical question or determining an issue in the abstract, would be unfair and a waste of time and resources for the Commission and the Employer.

Jurisdiction of the Commission

[33] The Employer asserts that, for the Commission to have jurisdiction to deal with the substantive issue in the originating application, it is necessary for the MUA demonstrate that the steps in the DSP have been complied with.

[34] The Employer has not conceded that such steps have been complied with, and it is necessary for the MUA to establish that the necessary pre-requisite conditions have been met, before the Commission can deal with the application.

MUA’s SUBMISSION

[35] The MUA respond to the three (3) areas advanced by the Employer as grounds for dismissing the originating application as follows.

Want of prosecution

[36] While the MUA acknowledges the Employer’s chronology of events, it disagrees with some aspects of it.

[37] The MUA submits that, with respect to the reasons for the delay between 21 December 2012 and 20 February 2013, the MUA had “endeavoured to source appropriate evidence but that the workers, the subject of the application, were unwilling to give evidence for fear of suffering detriment in the future”. The MUA does not make any comment as to the veracity of these claims.

[38] The MUA submits that, in light of these evidentiary difficulties, it will abandon some of its contentions and press its application simply on the basis of whether “hook and commissioning work” forms part of the construction work as defined.

MUA seeking an advisory opinion

[39] The MUA’s claims that the Employer has misapprehended the nature of the dispute brought to the Commission for resolution. The Commission is being asked to determine the meaning and effect of the Agreement, and in particular, Clause 31 of the Agreement.

[40] The MUA concedes that it is seeking to “tidy up” the wording of Clause 31: Construction Project Allowance Bonus, but rejects any allegation that the proceedings are being used for any collateral purposes.

Jurisdiction of the Commission

[41] While the MUA acknowledges that the question as to jurisdiction can be raised at any stage during proceedings, it is not a basis upon which the application ought to be dismissed.

[42] Further, the MUA submit that non-compliance with the DSP was not raised at the first conference to deal with the dispute on 10 May 2012. At that conference, the Employer agreed that the matter proceed to arbitration.

CONSIDERATION

[43] The DSP provides three (3) discrete steps before an industrial dispute can be referred to the Commission for conciliation and/or arbitration pursuant to s.739 of the FW Act.

[44] In the originating application, the MUA state that the parties have progressed the dispute through the three (3) stages and agreed that the dispute should be referred for arbitration.

[45] Notwithstanding the conferences and communication between the parties, the Employer does not concede that the three (3) preliminary steps have been complied with to enliven the Commission’s jurisdiction. Further, because of the 12 months delay, witness evidence, if there is any evidence, will be less clear than if the matter had been progressed quickly.

[46] The MUA acknowledges that jurisdictional issues can be raised at any time during proceedings and appeared to rely upon the conduct of the parties for compliance with the procedural requirements.

[47] While the MUA submitted that it would “address that point [procedural requirements in DSP] in the future if it is re-agitated”, the lack of specificity, at this late stage, is a factor which I must consider in the overall determination of the application by the Employer to dismiss the application. While the procedural requirements are essential for the Commission’s jurisdiction, the issue was only raised the day before the hearing. For this reason, I have not given the submission significant weight in my consideration.

[48] I now turn to another dimension of the DSP and that is the submission from the MUA that “the disputes procedure contained in the agreement does not have a limitation period attached to it. There’s a limitation period of six years. This matter could be agitated today. There’s nothing to prevent it from doing so”. 1

[49] While Mr Edmonds is correct that the DSP does not set out timelines, Step 1 contains the following narrative, “It is essential that all reasonable efforts be made to resolve any industrial or operational problems at shipboard level. This requires careful attention to such problems at an early stage, to ensure that problems do not develop and lead to unnecessary escalation of the problems”. Further, in Step 4 of the DSP, “it is important that prompt and careful consideration is given to all claims, requests and industrial questions.”

[50] I consider it reasonable to conclude that the parties intended for industrial issues, including disputes, to be acted upon quickly in all steps of the DSP. The failure of this dispute to be progressed quickly, as envisaged in the DSP, is an observation I must consider in the totality of whether the application should be dismissed for want of prosecution.

[51] I now turn to how the nature of this dispute has changed.

[52] In its application, the MUA state, under the question, “What is the dispute about?”, the following:

“Specifically, the Applicant claims that [the] construction phase of the project includes the commissioning phase. The Respondent does not agree with this interpretation.”

[53] In submissions at the hearing, the MUA recalled that at the first conference on 10 May 2012, it argued that the PAB was payable for two reasons. First, that construction work, other than HUC, was continuing beyond 1 May 2012. Secondly, that HUC is construction work within subclause 31.1 of the Agreement 2.

[54] The MUA accept that their first contention that construction work continued beyond 1 May 2012 requires evidence. As the MUA are unable to bring probative evidence regarding their first contention, it has abandoned this claim in prosecuting its application.

[55] The MUA now characterise the question for determination as whether “HUC form part of the construction work as defined in the agreement” 3. I consider this characterisation too plain and inevitably raises a further sequence of events which had been properly contemplated by the parties on or around 3 December 2012 and set out in paragraph [22].

[56] Firstly, it is noteworthy that there is no dispute between the parties that HUC took place between 1 May and concluding on or about 21 May 2012.

[57] I note also that in relation to the question in 4(a) above in paragraph [22], the parties agreed that the deeming of the “construction phase”, for the purposes of the PAB, would be addressed in the Project MOU; it is not.

[58] With respect to the questions agreed for determination on or about 3 December 2012, the MUA informed the Commission on 28 February 2013:

“It was subsequently agreed at the end of December that the MUA would indicate by mid January when it would be in a position to provide witness statements and submissions in relation to this matter.

As you would appreciate from the questions above, the questions to be determined are directed at the nature of work performed in the “second phase” of the North Rankin B Platform Project. The MUA was a party to the Memoranda of Understanding that covered the first phase of the project and it is agreed that part of the project was a “construction project” within the meaning of clause 31 of the Agreement.

However, the MUA was not party to the memoranda that covered the second phase of the project so we had been able to obtain little direct evidence of the work performed in the second phase of the project although we have much “evidence” that is either inadmissible or of limited probative value.

In order to determine the first question, we believe we will need expert evidence as to the nature of the work performed. In order to prepare that evidence, we need to access the scope of work, briefings prepared for the second phase of the project and other Memoranda of Understanding prepared for this phase.

As such, we request the Commission programme this matter for hearing including orders at first instance for the provision of the information we refer to above.”

[59] This correspondence leads me to the contentions by Mr Blackburn that the MUA has no evidence with which to prosecute its claim, and that the orders sought are a “fishing expedition” to see if it can garner evidence to support any claim. I am inclined to agree with Mr Blackburn. In agreeing with Mr Blackburn, I would not wish my finding to indicate that this is common practice of the MUA. This application is distinct, because in my experience, the MUA generally processes matters speedily with a commitment to a particular claim.

[60] Finally, while the MUA have peeled the question for determination down to whether HUC is construction work for the purposes of the project, I am not able to agree with Mr Blackburn that the determination would be “advisory”. In my view, the simple question now posed by the MUA for determination would be inadequate. The prudent course of action would be to determine the questions agreed to by the parties on 3 December 2012 but that presents the MUA, as already indicated, with evidential problems as it has the burden of proof.

[61] It follows from my discussion above regarding the changing questions for determination, their adequacy and the inability of the MUA to bring evidence on the core matter for settlement. I consider this an important factor in whether the application should be dismissed for want of prosecution.

[62] I now turn to the time factor involved in pursuing this application.

[63] An important criterion in evaluating whether this application should be dismissed for want of prosecution is elapsed time.

[64] I am satisfied, in terms of timelines, that the originating application lodged on 26 April 2012, about matters expected to be in dispute in early May 2012, reasonable.

[65] At the conference on 10 May 2012, the MUA agreed to provide proposed questions for determination to the Employer for consideration. The proposed questions were not provided until 17 September 2012 - a delay of over four (4) months.

[66] While the MUA accepts criticism for the delay, the fact that “some national officials who were involved who were in hospital for a considerable period of time” 4, is not a satisfactory explanation in itself. Workplaces deal with employee absences every day. In many respects, long term hospitalisation is easier to deal with than short term non attendance. In my view, it would have been reasonably practicable to have such proposed questions confirmed or modified by others involved.

[67] I now turn to the delay after the parties agreed on 3 December 2012 to the questions for determination by the Commission.

[68] The Employer’s representative communicated with the MUA on 21 December 2012 and confirmed that the Applicant would inform the Employer by mid January of dates when witness statements and submissions could be provided. It is a fact that the Employer, having heard nothing by 11 February 2013, and put the MUA on notice that if a response was not received by 15 February 2013, it would make application to have the originating matter dismissed. In the absence of any response, the Employer made application for the originating application to be dismissed on 20 February 2013.

[69] As at 20 February 2013, what the Commission had in front of it was an application dated 26 April 2012, various copies of email correspondence and no agreed questions for determination to solve the dispute.

[70] In view of the length of elapsed time of 10 months, in my view, it is reasonable to conclude that the matter was not being dealt with promptly pursuant to the Agreement and the MOU. Such a delay is adverse to equity and good conscience in the Commission determining the matter.

[71] I now turn to the fact that the Agreement has a nominal expiry date of 31 July 2013. While I note that Mr Edmonds resisted any notion that the MUA was pursuing the application for collateral purposes, I am unable to ignore the observation made that if the Employer agrees to the MUA’s definition of “construction project” in the replacement enterprise agreement, this particular dispute will no longer be relevant in the future.

[72] Mr Edmonds referred me to the Full Bench in Bimla Chand v State Rail Authority of NSW (Chand) (PR975108) and in particular paragraph [50] as follows:

“The ultimate the issue is what is required by the interests of justice in the circumstances of the particular case. In Sali v SPC Ltd 5Brennan, Deane and McHugh JJ noted6 that

“It is true that it is only in extraordinary circumstances that the interests of justice will be served by a refusal of an adjournment in a case such as the present where the practical effect of the refusal is to terminate the proceedings.”

[73] However, in Chand the Commission was dealing with a self represented applicant, without the financial means to engage legal representation and pursuing successive avenues for representation.

[74] The Full Bench in Chand came to the conclusion:

“[85] The chronology we have set out above does not disclose any period of inactivity on the part of Ms Chand that, in the absence of directions requiring her to do particular things by particular dates, could reasonably be characterised as so prolonged as to justify summary dismissal of her application for relief for want of prosecution.”

[75] Mr Edmonds also referred me to A Ghalloub v Aon Risk Services Australia Limited (Ghalloub) (PR956665) and in particular paragraph [25]:

“Directions are often issued to facilitate the timely and expeditious determination of the application.While the utility of directions may vary depending on the nature of the proceedings, directions can play an important role in case management.If complied with they help to delineate the issues of fact and law and reduce the need for adjournments to take instructions or to gather evidence. The importance of case management is now widely recognised in the law, and directions for hearing a matter are an important aspect of case management in the Commission.In Queensland v. J.L.Holdings Pty Limited the High Court accepted the importance of case management principles but said:

"However, nothing in that case suggests that those principles might be employed, except perhaps in extreme circumstances, to shut a party out from litigating an issue which is fairly arguable. Case management is not an end in itself. It is an important and useful aid for ensuring the prompt and efficient disposal of litigation. But it ought always to be borne in mind, even in changing times, that the ultimate aim of a court is the attainment of justice and no principle of case management can be allowed to supplant that aim."

[76] This application can be primarily distinguished from Chand and Ghalloub as follows:

● this is not an application dealing with unfair dismissal;
● this is not a case, as in Chand, of an unrepresented applicant;
● this is not an application dealing with multiple adjournment of hearings;
● this is not an application concerning non compliance with procedural directions.

[77] There are a number of other factors in which this application can be distinguished from Chand and Ghalloub.

[78] The Full Bench in Ghalloub provided a synopsis of Wilcox and Gummow JJ judgement in Lenijamar Pty Ltd and Others v AGC (ADVANCES) Limited when considering Order 10 rule 7 of the Rules of the Federal Court. The Full Bench stated:

“[27] As is evident the Court noted the width of the discretion conferred by the rule and went on to specify two situations in which an application might be dismissed for want of prosecution.The first situation is one in which the appellant has a history of non-compliance with directions indicating an inability or an unwillingness to have the matter ready for trial within an acceptable period.The second situation is one in which continuing non-compliance is causing unnecessary delay, expense or other prejudice to the respondent. Although obviously not binding in relation to the Commission's proceedings, we think that these observations usefully summarize some of the matters to which the Commission should have regard when considering whether to dismiss an application for want of prosecution.”

[79] While no procedural directions had been issued in this application because of the lack of questions for determination, the above guidance of the Full Bench in considering whether to dismiss an application for want of prosecution is still appropriate.

[80] With respect to the first matter, the question is whether the MUA was ready to proceed “within an acceptable period”. In view of an elapsed period of 10 months, the short answer must be in the negative.

[81] Further, after a period of 10 months, the MUA was put on notice that if it did not set out when it could provide witness evidence, assertions of facts and contentions at law, the Employer would seek for the matter to be dismissed for want of prosecution - which it did. For the MUA protection against having the application dismissed for want of prosecution was in its own hands.

[82] When faced with an application by the Employer to dismiss the originating application, the MUA reconstructed the question of determination. However, that question, in my view, will not settle the dispute.

[83] The MUA is unable to proceed with questions which will resolve the dispute because of a lack of evidence.

[84] I am also mindful that, notwithstanding the above, there is uncertainty as to whether the Commission will have power to hear the dispute, and further that the parties are exchanging draft clauses on a proposed replacement agreement to address the uncertainty of the meaning and application of Clause 31: Construction Project Allowance Bonus in the replacement enterprise agreement.

[85] Against all this background, I have two parties who agreed in the agreement that industrial disputes be dealt with promptly.

[86] Having considered all the facts, conduct of the parties, elapsed time, the reasons given for delays, the consequence of the delays and the fact that the question to be resolved will not ultimately settle the dispute, I consider it fair and reasonable to dismiss the application for want of prosecution. Accordingly, an Order will be issued conjointly with this Decision and Reasons for Decision.

COMMISSIONER

Appearances:

L Edmonds for the Applicant.

J Blackburn of Counsel with Ashurst Australia for the Respondent.

Hearing details:

2013:

Perth,

17 April.

 1   Transcript PN75

 2   Transcript PN66

 3   Transcript PN69

 4   Transcript PN69

 5 (1993) 116 ALR 625

 6   at p 631

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