Maritime Union of Australia v Samson Maritime Pty Ltd T/A Samson Express Offshore
[2014] FWC 1101
•6 MARCH 2014
[2014] FWC 1101 |
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
Samson Maritime Pty Ltd T/A Samson Express Offshore
(C2013/1662)
COMMISSIONER CLOGHAN | PERTH, 6 MARCH 2014 |
Alleged dispute about any matters arising under the enterprise agreement.
[1] This is an application by the Maritime Union of Australia for the payment of a Project Completion Bonus for employees on the vessel, MEO Sovereign 1, on its voyage from Batam, Indonesia to Dampier, Western Australia.
[2] Samson Express Offshore resists the MUA application and assert that the employees became entitled to the Project Completion Bonus when the Sovereign was on-hired to its client for use on the Wheatstone Project.
PROCEDURAL BACKGROUND
[3] On 21 October 2013, the Maritime Union of Australia (MUA or Applicant) made application to the Fair Work Commission (Commission) to deal with a dispute in accordance with a dispute settlement procedure (DSP).
[4] The MUA is in dispute with Samson Maritime Pty Ltd T/A Samson Express Offshore (Employer).
[5] The application is made pursuant to s.739 of the Fair Work Act 2009 (FW Act).
[6] The DSP is contained in the Samson Maritime Pty Ltd (trading as Samson Express Offshore) Dredging International MUA Contract Propelled Dredging Greenfields Agreement 2012 (Agreement).
[7] The dispute was the subject of a conference on 4 November 2013 but remained unresolved.
[8] Procedural directions were issued on 14 November 2013 for a hearing on 7 February 2014.
[9] At the hearing on 7 February 2014, the MUA was represented by Ms E Palmer, Industrial Officer. Evidence was given on behalf of the MUA by:
● Mr D Heath, Assistant Branch Secretary, Western Australian Branch;
● Mr G Gakis, Organiser, Western Australian Branch;
● Mr M Stowell, Integrated Rating who is employed by the Employer; and
● Mr E Outman, Integrated Rating who is employed by the Employer.
[10] The Employer was represented by Mr A Drake-Brockman of counsel. Evidence was given on behalf of the Employer by:
● Mr J Mullins, Offshore Operations Manager; and
● Ms I Jewson, Human Resources and Industrial Relations Manager.
[11] At the conclusion of the hearing, I reserved my decision. This is my decision and reasons for decision.
RELEVANT STATUTORY FRAMEWORK
[12] There was no dispute between the parties that the MUA properly filed the application in accordance with Clause 7: Settlement of Disputes Procedure of the Agreement and pursuant to s.739 of the FW Act.
RELEVANT BACKGROUND
[13] On 24 April 2013, the Employer deployed a number of its employees to Batam, Indonesia to assist in preparing the vessel, MEO Sovereign 1 (Sovereign) to sail from Batam to Dampier in Western Australia.
[14] The Sovereign was to be on-hired to a client of the Employer - Dredging International (Australia) Pty Ltd (DIAU)
[15] The Sovereign sailed from Batam on 27 April 2013 and arrived in Dampier on 3 May 2013.
[16] On 4 May 2013, an on-hire report was completed for DIAU.
[17] On 5 May 2013, DIAU formally took hire of the Sovereign to be used on the Wheatstone Project.
[18] On 6 May 2013, the Employer commenced payment of the Project Completion Bonus (PCB) to the relevant employees in accordance with subclause 14.2 of the Agreement.
[19] The Wheatstone Project is a $29B project 12 kilometres west of Onslow. Natural gas is extracted and partly processed from the Wheatstone and Iago fields. The partially processed natural gas is then conveyed to an onshore LNG plant for further processing and eventual distribution overseas and local consumption.
[20] On 15 May 2013, the Sovereign physically arrived on the Wheatstone Project.
[21] Between 24 June and 11 October 2013, Ms Jewson and Mr Gakis exchanged emails as to whether the employees were entitled to payment of the PCB on the voyage from Batam to Dampier.
[22] No agreement was reached between the MUA and the Employer as to whether the employees were entitled to the PCB on the voyage from Batam to Dampier. Subsequently, on 21 October 2013, the MUA filed an application in the Commission to deal with the dispute.
QUESTIONS FOR DETERMINATION
[23] The MUA and the Employer agree that the questions for determination are as follows:
1. When being mobilised for the Wheatstone Project, were the Employees working on the Sovereign “working on a Dredge" and "engaged in Capital Works Projects” for the purpose of clause 14.1 of the Agreement?
2. When being demobilised from the Wheatstone Project, were the Employees working on the Sovereign “working on a Dredge" and "engaged in Capital Works Projects” for the purpose of clause 14.1 of the Agreement? and
3. Is the Project Completion Bonus payable for each day of work for employees engaged on the mobilisation and/or demobilisation voyages of the Sovereign?
[24] In my view, this dispute turns on question 3 as it relates to mobilisation. I received no evidence or facts in relation to the demobilisation of the Sovereign.
RELEVANT ENTERPRISE AGREEMENT PROVISIONS
[25] The primary clause in contention in this dispute is Clause 14: Project Completion Bonus (PCB) of the Agreement which relevantly reads as follows:
“14.1 From the commencement of this Agreement, employees working on Dredges engaged in Capital Works Projects shall be entitled to a Project Completion Bonus in respect of each day on which they perform work on Dredges in the circumstances set out in this clause.
14.2 The PCB shall be $95.00 for each day of service on board a vessel. This amount shall be paid by the Employer into the PROTECT fund on a monthly basis.
14.3 The PCB is designed to provide an incentive for Employees to continue their employment until completion of the Capital Works Project and to work in a co-operative and productive manner without resort to any unlawful industrial action.
14.4 For the avoidance of doubt, the PCB is in full satisfaction for any and all claims for project conditions, disabilities and/or special or unusual matters of any kind whatsoever, other than hard lying, which may occur on Capital Works Projects during the life of this Agreement.
14.5 The PCB is payable in respect of each day of service on board a vessel engaged in a Capital Works Project. This does not include:
14.5.1 any work performed on Non Capital works projects;
14.5.2 Where the vessel the employee is working on is “laid up”;
14.5.3 Pre and Post ancillary work;
14.5.4 Off duty days or leave days;
14.5.5 Days not works by an employee due to workers compensation;
14.5.6 Days not worked by an employee due to Personal leave absences, Compassionate leave absences and/or Study leave absences;
14.5.7 Where the employee is receiving income protection benefits; or
14.5.8 For any other absence whether or not it is approved by the Employer.
14.6 The amount of the PCB shall be increased each year in accordance with the following table.
Increase Date | Entitlement |
1.7.12 | $100.70 |
1.7.13 | $106.70 |
1.7.14 | $113.10 |
1.7.15 | $119.89 |
[26] The definition of “Capital Works Project” in Clause 14 is defined in subclause 1.1 of the Agreement as follows:
“a project undertaken within Australia and/or its territorial waters, including building and engineering works, that creates or adds to or upgrades an asset. Capital Works projects would typically include Dredging works carried out for the resources Industry/Sector that are typically integral to the laying of pipelines and/or preparation for construction works being carried out as part of the project etc. It would also include infrastructure projects carried out by port authorities. Projects for the purpose of carrying out repairs and/or maintenance works are to be distinguished from capital works.”
[27] For the purposes of this dispute, the following definitions are also found in the Agreement:
“Demobilisation/demobilized - the time from which a vessel leaves or is preparing to leave the Project site either at the conclusion of a project or at the conclusion of the vessels involvement with the project and includes any voyage to a next project, port, repair facility, or anchorage.”
“Dredging and/or Dredging Work - the work performed by a Dredge including channel maintenance and/or channel deepening, land reclamation, trenching, site investigation operations (including soil investigation/sampling), moving soil or soil and/or rock positioning, or rock dumping (other than with the use of rock dumping vessels), backfilling, slope protection, rock drilling and/or breaking and/or blasting works and/or drilling and/or sluicing work generally in or in connection with dredging projects in any of the States and/or territories of the Commonwealth of Australia or within the territorial waters of the Commonwealth and includes such work in connection with metalliferous mining and other mining and oil and gas projects.”
“Fully Operational - the period between the time Employees commence working following mobilisation of a vessel until the completion of the demobilisation period. Such period shall include the delivery voyage of the vessel, preparation on site for operations, dredging operations, running repairs and maintenance carried out during the course of the contract and return voyage if required to the home or another port where appropriate, but does not include scheduled breaks in the contract program where the vessel is not required.”
“Mobilization/mobilized - the time prior to a vessel arriving on site for the commencement of work on a project and would include the time spent by Employees travelling to and in foreign ports awaiting vessel departure as well as the period of the delivery voyage of the vessel.”
[28] Scope is relevantly defined in Clause 3 as follows:
“3. Scope
3.1 This Agreement is binding on the parties to this Agreement and employees engaged in the classifications set out in the Agreement in or in connection with dredging on Dredging International (Australia) Pty Ltd Projects in Australia including travelling to or from a dumping area, or whilst moving from port to port.”
APPLICANT’S CASE
[29] The MUA submits:
● in order for employees to be entitled to payment of the PCB in accordance with the Agreement, the relevant employees must be working on a vessel and engaged in a Capital Works Project (CWP);
● the relevant employees were working on the Sovereign and there is no dispute that the Wheatstone Project is a CWP for the purposes of the Agreement;
● the “substantial” or “primary purpose” of the Sovereign when making the voyage from Batam to Dampier, was for the project; “this was its sole purpose to the exclusion of any other”;
● given that industrial instruments (including enterprise agreements) are not drafted by skilled draftsperson and for the purpose of settling disputes, “there is some interpretative freedom in their construction”;
● the Agreement should be “read as a whole and in context” and “must not be interpreted in a vacuum divorced from industrial reality”. A “generous” interpretation is to be preferred over a strictly literal approach;
● it is acknowledged that industrial instruments must be construed according to their “ordinary and usual meaning” and “make sense according to the basic conventions of the English language”;
● the intention of the PCB in the Agreement is to “incentivise” the employees to maintain their employment for the duration of the Wheatstone Project; and
● having regard to the words of the Agreement, and their evident purpose, the PCB is payable from 27 April 2013. 1
EMPLOYER’S CASE
[30] The Employer submits:
● for the relevant employees to be paid the PCB it is necessary that they be working on dredges engaged in CWPs;
● the work performed must be in or in connection with dredging work;
● the work performed in the voyage from Batam to Dampier does not support an argument that it is connected to the Wheatstone Project dredging work;
● during the voyage from Batam to Dampier, the Sovereign was not operating as a dredging vessel;
● the Sovereign was being brought to Western Australia to be on-hired to DIAU;
● consequently, during the voyage to Western Australia, the relevant employees were not engaged in a CWP;
● it is only when the Sovereign was formally on-hired to DIAU and engaged on a CWP, are the relevant employees entitled to the PCB;
● the meaning intended by the parties to the Agreement are to be “primarily ascertained by reference to the plain and ordinary meaning of the words used in their whole context”; and
● when the definitions of the Agreement are read with the plain and ordinary meaning of the words in the Agreement, and the “basic convention of the English language, the relevant employees on board the Sovereign are only entitled to the PCB when working on dredges from 6 May 2013 when the vessel became engaged on the Wheatstone Project in Onslow, Western Australia. 2
[31] The Employer requests an order dismissing the application pursuant to s.587 of the FW Act.
CONSIDERATION
Interpretation of Enterprise Agreements
[32] The Full Bench in Cape Australia Holdings Pty Ltd T/A Total Corrosion Control Pty Ltd v Construction, Forestry, Mining and Energy Union [2012] FWAFB 3994 (Cape Australia Holdings) set out under the heading “The Interpretation of Enterprise Agreements” the following:
“[7] As to the general approach to the construction of enterprise agreements the observations of French J, as he then was, in City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union (Wanneroo) are apposite:
“[53] The construction of an award, like that of a statute, begins with a consideration of the ordinary meaning of its words. As with the task of statutory construction regard must be paid to the context and purpose of the provision or expression being construed. Context may appear from the text of the instrument taken as a whole, its arrangement and the place in it of the provision under construction. It is not confined to the words of the relevant Act or instrument surrounding the expression to be construed. It may extend to ‘...the entire document of which it is a part or to other documents with which there is an association’. It may also include ‘....ideas that gave rise to an expression in a document from which it has been taken’ - Short v FW Hercus Pty Ltd (1993) 40 FCR 511 at 518 (Burchett J); Australian Municipal, Clerical and Services Union v Treasurer of the Commonwealth of Australia (1998) 80 IR 345 (Marshall J).”
[8] While his Honour’s observations were made in the context of interpreting an award the same principles apply to the interpretation of enterprise agreements. For example, similar observations were made by their Honours Gummow, Hayne and Heydon JJ in Amcor v CFMEU:
“Clause 55.1.1 must be read in context. It is necessary, therefore, to have regard not only to the text of cl 55.1.1, but also to a number of other matters: first, the other provisions made by cl 55; secondly, the text and operation of the Agreement both as a whole and by reference to other particular provisions made by it; and, thirdly, the legislative background against which the Agreement was made and in which it was to operate.”
[9] The fact that the instrument being construed is an enterprise agreement is itself an important contextual consideration. As French J observed in Wanneroo, at paragraph [57]:
“It is of course necessary, in the construction of an award, to remember, as a contextual consideration, that it is an award under consideration. Its words must not be interpreted in a vacuum divorced from industrial realities - City of Wanneroo v Holmes (1989) 30 IR 362 at 378-379 and cases there cited. There is a long tradition of generous construction over a strictly literal approach where industrial awards are concerned - see eg GeoA Bond and Co. Ltd (in liq) v McKenzie [1929] AR (NSW) 498 at 503-504 (Street J). It may be that this means no more than that courts and tribunals will not make too much of infelicitous expression in the drafting of an award nor be astute to discern absurdity or illogicality or apparent inconsistencies. But while fractured and illogical prose may be met by a generous and liberal approach to construction, I repeat what I said in City of Wanneroo v Holmes (at 380):
“Awards, whether made by consent or otherwise, should make sense according to the basic conventions of the English language. They bind the parties on pain of pecuniary penalties.”
[10] None of these principles were matters of contention in these proceedings and we have applied them in the determination of the appeal. The issue on appeal is the application of the principles to clause 5 of the Total Corrosion Control Agreement.”
[33] I have adopted the approach of the Full Bench in Cape Australia Holdings in this application.
[34] The first noticeable fact is that the Agreement is, pursuant to the FW Act, a “greenfields” agreement. A “greenfields” agreement is for a “genuine new enterprise”. The meaning of “enterprise” is defined in s.12 of the FW Act as follows:
“a business, activity, project or undertaking.”
[35] The Employer existed as a “business” prior to the Agreement being formed, hence, the Agreement has been created and “tailored” to meet the needs of a proposed “activity”, “project” or “undertaking”. Neither party specifically made submissions in relation to this particular aspect of the dispute but, from the submissions and evidence, proceeded on the basis that the Agreement was created, for purposes of this dispute, for the Wheatstone Project.
[36] The extent of the Agreement, which is binding on the Employer and its employees is set out in subclause 3.1 as follows: “in or in connection with dredging or Dredging International (Australia) Pty Ltd Projects, in Australiaincluding travelling to or from a dumping area, or whilst moving from port to port”.
[37] Simply put, the scope of the Agreement, in a selective sense, relates to dredging, or in connection with dredging, or in connection with DIAU projects in Australia.
[38] A question to be considered is whether the activity of bringing the Sovereign from Batam to Dampier, is dredging or in connection with dredging or in connection with the Wheatstone Project.
[39] It was not submitted that the employees were performing dredging work on the voyage from Batam to Dampier. I now turn to the other two categories of whether the activity of the voyage from Batam to Dampier was “in connection with dredging” or “ in connection with DIAU projects in Australia”.
[40] The Australian Concise Oxford English Dictionary (ACOED) defines “connect” as “join in sequence or order; cause to be joined mentally or practically; in having some origin or nature or consequence or purpose”. Similarly, “connection” means “act of connecting; state of being connected”.
[41] The then Chief Justice in R v Isaacs and Ors; Ex parte Argyle Diamond Mines and Ors and R v Isaac and Ors Ex parte Transport Workers’ Union of Australia (Isaac) came to the judgement that the words “in connection”, in relation to union eligibility rules, should not be narrowly constructed. In that particular case, the then Chief Justice came to the view that an enterprise can have more than one purpose. Gibb CJ states “...That does not mean that if the enterprise has two purposes, it is necessary to decide which is predominant. It is quite possible that an industry or calling can accurately be described in a number of ways, and the fact that it comes within one description does not mean that it cannot also come within another.” 3
[42] Gibb CJ refers and adopts Aitkin J in R v Moore; Ex parte Federated Miscellaneous Workers’ Union (Moore) at p483 where he states, “It does not, in my opinion, follow from the fact that it may be said that an employer is engaged in construction work that he may not also properly be regarded as engaged in activities in, or in connecting with, metaliferous mining”.
[43] When examining the question of the eligibility rules of a union and industry coverage, the then Chief Justice in Isaac came to the view that it “depends on all the circumstances of the case. In the present case there was one coordinated project carried on in one place in Western Australia...There was a close physical proximity...This proximity was neither contrived nor adventitious...” (393) Gibb CJ referred to the need to go beyond the immediate narrow activity in deciding the question of the employer’s industry. In my view, this approach by the High Court is apposite in considering whether the employees’ work on the Sovereign is both being engaged in mobilisation to Australia and the Wheatstone Project. Further, that the Sovereign’s voyage from Batam to Dampier was both in connection with dredging and/or in connection with DIAU projects in Australia.
[44] The parties agree that the relevant employees, on the voyage from Batam to Dampier, were covered by the Agreement. However, that does not automatically mean that the terms of Clause 14: Productivity Completion Bonus are applicable to the employees.
[45] Employees are only entitled to the PCB, in accordance with subclause 14.1 of the Agreement, if they are “working on Dredges engaged in Capital Works Projects...in the circumstances set out in this clause.”
[46] There is no dispute that the relevant employees were on the Sovereign. The questions for consideration, as submitted by the Employer, are whether the employees were engaged in dredging work or whether they were “engaged on a CWP”. The Employer asserts that the employees were not engaged on the Wheatstone Project but merely bringing a vessel from Batam to Dampier to enable the vessel to be on-hired to DIAU and be engaged on the Project.
[47] It is noticeable that to be entitled to the PCB in subclause 14.1 of the Agreement, the first condition requires the employees to be “working” on Dredges. The subclause does not say that the employees have to be undertaking dredging duties. If the common intention of the parties was that, to receive the PCB, the employees had to be engaged in dredging work, the clause could have simply included such words. As it is, the employees only have to be working on dredges to be entitled to the PCB.
[48] The task of construing the meaning of PCB clause is made all the more difficult when considering subclause 14.2 of the Agreement which states that payment is “for each day of service on board a vessel”. When subclauses 14.1 and 14.2 of the Agreement are combined, there is an entitlement to payment when “working on Dredges” and/or “on board a vessel”.
[49] I observe in Clause 14 of the Agreement, the reference to the payment being made while employees are “engaged in” CWPs. The ACOED defines “in” as “inclusion or position within limits of space, time, circumstance, etc” and elsewhere “concerned with or pertaining to”. In my view, the word “in” in the terms of subclauses 14.1 and 14.5 is intended to show the relationship between the employees working on Dredges and CWPs. Put differently, what governs the payment is that there must be a relationship between the employees working on the Dredges and the CWPs.
[50] For completion, I note that the word “on” in subclauses 14.1 and 14.5 confers a far tighter and narrower relationship. The word “on” unambiguously conveys the meaning that the employees have to be “on” the Dredges“.
[51] The words “on” or “in” can be contrasted with subclause 14.5 of the Agreement. In subclause 14.5, it appears that the common intention of the parties was to exclude employees, if they were not working (in the sense that they were on approved leave of one sort or another, such as personal leave).
[52] At the commencement of the arbitral proceedings, I raised with both parties whether they were going to address me in relation to subclause 14.5.3 of the Agreement which excludes payment for “Pre and Post ancillary work” 4. I indicated to both parties that their written submissions regarding this issue were “notable by its absence”5.
[53] Mr Heath gave evidence of the difference between pre-ancillary work and the mobilisation of delivery boats 6.
[54] Mr Heath’s evidence was as follows:
“---The pre-ancillary work that takes place on a dredging project would survey work, environmental survey work, putting down cyclone moorings, work before a dredge came onto the dredging project. Mobilisation would occur after that pre-ancillary work has already taken place.
Just to clarify, Mr Heath, where is the pre-ancillary work undertaken?---The pre-ancillary work is undertaken on the respective dredging project; in this case, the Wheatstone dredging project. There was a fair amount of environmental survey and survey work, plus the putting down of cyclone moorings prior to any dredge mobilising coming onto the project.
So is it fair to say that it’s preparing the site?---Absolutely. Before any dredging work commences, that pre-ancillary work needs to take place, otherwise it’s impossible to dredge with any accuracy or without the infrastructure needed to operate the dredge or the dredges.” 7
[55] Mr Heath’s evidence was not cross examined, nor was it raised in the Employer’s submissions.
[56] Having considered Mr Heath’s uncontested evidence as to the meaning of “pre-ancillary work”, I am satisfied that the voyage from Batam to Dampier does not fall within the exclusion provision in subclause 14.5.3 of the Agreement.
[57] I now return to the main issue and that is whether on the voyage from Batam to Dampier, the relevant employees were engaged “in” a CWP - the Wheatstone Project.
[58] A CWP is relevantly defined in subclause 1.1 of the Agreement as:
“a project undertaken within Australia and/or its territorial waters...”
[59] The Employer submits that during the voyage from Batam to Dampier, “employees were not engaged in a Capital Works Project as defined under the Agreement, as they were not engaged in a project undertaken within Australia and/or its territorial waters” 8 (my emphasis). Further, it was only after the vessel was inspected on 5 May 2013 and on-hired to DIAU on 6 May 2013, could it be said that the employees were “engaged” in the Wheatstone Project.
[60] The verb “engage” is variously defined in the ACOED as “bind by contract (to perform)”; “bind by promise (especially in marriage)” and “interlock (one thing with another)”. The word appears to derive from bringing two things together - interlocking.
[61] The Employer submits that the employees were neither “within Australia and/or its territorial waters” and were also not “engaged in or in association with Dredging or Dredging work during the mobilisation”. Consequently, the employees on board the vessel were not working on a “Capital Works Project”. Instead, the employer submits the employees were engaged in duties necessary to get the vessel mobilised to Australia. 9
[62] It is notable that the Employer’s submission mistakenly uses the word “on” in relation to the CWP, when for employees to receive the PCB it is necessary that they be engaged “in” the Wheatstone Project.
[63] It is not disputed that the voyage from Batam to Dampier is not physically within the geographical limits of the Wheatstone Project.
[64] The contention of the Employer is that the “principal purpose” of the journey from Batam to Dampier is for “mobilisation to Australia”.
[65] To say that the employees on the Sovereign were mobilising the vessel from Batam to Dampier and end the matter there, is devoid of meaning. The actual mobilisation of the Sovereign only has meaning if it has purpose, and that purpose, in this case was to be utilised as a vessel relating to the Wheatstone Project. There was an interlocking between the voyage of the Sovereign from Batam to Dampier and the Wheatstone Project.
[66] It would be an entirely different situation if the Sovereign voyaged to Western Australia to berth in a port on the possibility that it may be contracted in the future - but that is not the case in these circumstances. The circumstances of this application are that the Sovereign was brought to Western Australia to be specifically used in the Wheatstone Project. One set of circumstances - mobilisation - was followed by another - work relating to the Wheatstone Project. This, in my view, establishes an indisputable connection or engagement between both events for the Commission to come to the conclusion that the employees were engaged in a sequential and interlocking sequence of events when leaving Batam on the Sovereign.
[67] The Employer submits that nowhere in Clause 14 of the Agreement is there reference to the word “mobilisation”. Further, there is a distinction between dredging work and mobilisation. Both statements are true and a matter of fact. However, notwithstanding the truth of these statements, it is not conclusive evidence that the PCB is not payable to be relevant employees on the journey from Batam to Dampier; that can only be found in Clause 14 of the Agreement.
[68] In subclause 14.1 of the Agreement the PCB is payable to the employees if they are “working on” or “perform(ing) work on” dredges. Subclause 14.1 does not import the words that the employees have to be performing dredging work or work associated with mobilising a vessel. It was uncontested that the employees were not dredging on the voyage from Batam to Dampier.
[69] The voyage of the Sovereign from Batam to Dampier is not just a matter of going from A to B. The journey from Batam to Dampier, as the evidence demonstrates, was for the purpose of engagement in the Wheatstone Project.
[70] From the time the relevant employees set sail from Batam, the Sovereign’s principal purpose was as a vessel engaged in the Wheatstone Project. This finding is supported by the Employer’s evidence.
[71] There are three elements of the Employer’s evidence as to the engagement of the voyage of the Sovereign and its crew from Batam to Dampier and the Wheatstone Project. The elements are: employees, training and medicals, and finally, the contractual circumstances of the Sovereign.
[72] Firstly, I refer to the circumstances surrounding employment of employees on the Sovereign. This is best explained by Ms Jewson in her evidence as follows:
“Did Samson hire any new employees or allocate any existing employees to work for DI on the Wheatstone project prior to the vessel departing Batam?---Yes. We used some of our own employees on our books, and also new employees, yes.
And they were clearly allocated to the DI contract on the Wheatstone project? ---Correct.
Before the vessel left Batam?---Yes. They were under the enterprise agreement in Batam.
But they were clearly going to be working for DI on the Wheatstone project? ---Yes, if the vessel was on-hired.
Why do you say it was covered by the Samson Maritime, Dredging International, MUA contract, Propelled Dredging Greenfields Agreement at the time that the vessel was in Batam?---If we paid our employees any less than that, it wouldn’t be fair to them, so we had to pay them as per that agreement.
But you said that they were covered by that agreement at the point that they were in Batam?---That’s correct.
They were covered by that agreement at that point?---Yes. They were getting paid that salary under the agreement and they had signed a letter of offer stating that that was their terms and conditions.
So the letter of offer indicated that this agreement would form their terms and conditions?---Yes.
Not some other agreement?---No.
So it was clearly the Samson Maritime, Dredging International, MUA Agreement, even though you weren’t a hundred per cent sure that Dredging International was going to accept the vessel?---Yes.” 10
[73] Secondly, with respect to training and medicals for the employees, Ms Jewson gave the following evidence:
“MS PALMER: Did Samson employees have to undergo any special training or induction for the Wheatstone project before they got on the vessel in Batam? ---Yes.
They did?---Yes.
And that was specifically for the Wheatstone project?---Yes.” 11
“And they were required to undergo that training and induction before they went to Batam?---Yes...” 12
“Did Samson employees have to undertake a project medical, a Wheatstone project medical, before they went to Batam?---Yes, the Bechtel medical.
The Bechtel medical; and if they had failed that medical?---They wouldn’t have been suitable for the Wheatstone project.” 13
“So all the employees that you sent to Batam, had they all had the Wheatstone medical?---Yes.
And had they all had the Wheatstone training?---Yes.” 14
[74] Thirdly, the evidence of Mr Mullins is illustrative of the context relating to the Sovereign’s contractual circumstances. Mr Mullins’ evidence was as follows:
“So is it fair to say that the main purpose of bringing the vessel from Batam was for the Wheatstone project?---That is fair to say.
And that’s the project or activity that it was engaged in?---No. That would be incorrect as the vessel was not considered engaged in project activity until on-hire.” 15
“You have said that the purpose of bringing the vessel from Batam was for work on the Wheatstone project?---Correct.” 16
“And before it left Batam, you knew that it was going to be working for DI? ---Correct.
On the Wheatstone project?---Correct.” 17
“But there is some kind of audit or pre-inspection of the vessel for its work on the Wheatstone project before it leaves Batam?---Correct.” 18
“Was there anything that you had to do to the vessel to get it ready for its work on the Wheatstone project?---There were a few - yes. There were conversions to the fuel tanks. They had to be modified in order for us to carry the maximum amount of fuel, which is her primary operational use on the Wheatstone project.
Was that conversion done in Batam?---Correct.
Because you knew the vessel was going to be used on the Wheatstone project? ---That’s correct.” 19
“So it was carrying the equipment that you would need for it to perform its role as a bunkering vessel or fuel tanker on the Wheatstone project. Is that correct? ---Yes.
It was all ready to go on the Wheatstone project?---Correct.” 20
“And that’s because you knew that it was going to be used as a bunkering vessel on the Wheatstone project?---Yes, correct.
And that was already agreed with DI before the vessel left Batam?---Correct.” 21
[75] The Sovereign’s daily reports of 27 April and 3 May 2013 specifically state that the “Project/Activity” of the vessel is “Wheatstone Project”. Further, that the “Client/Project Name” is “Wheatstone Project”. 22 In my view, this documentary evidence confirms oral evidence that the Sovereign was, from the Employer’s perspective, engaged in and undertaking activities associated with the Wheatstone Project.
[76] It seems to me that these three elements should be considered when applying the circumstances of whether, at the relevant time, the employees were “engaged” in a CWP, in this case the Wheatstone Project.
[77] The Sovereign was brought from Batam to Australia to be contracted to DIAU for the Wheatstone Project 23. While there was always the possibility that the Sovereign may not have been acceptable to either DIAU or Australian maritime authorities, I am satisfied, on the evidence, that the Employer undertook all prudent actions to ensure that the Sovereign’s voyage to Australia would enable it to carry out its intended contractual and operational obligations relating to the Wheatstone Project.
[78] Having considered the ordinary meaning of “engaged in Capital Works Project” and the evidence surrounding the circumstance of that engagement with the Wheatstone Project, it appears that both conditions have been satisfied for the employees to be paid the PCB. I say “appears” because the Employer submitted that the employees only became “engaged in project activity until on-hire [to DIAU]” 24.
[79] The Employer’s submission is that the vessel Sovereign and its employees only became “engaged” in the Wheatstone Project when the contractual relationship between itself and DIAU commenced on 6 May 2013.
[80] In this submission, the Employer is defining “engaged” in the narrow terms of its formal contractual relationship with its client. I apprehend two difficulties with this submission. Firstly, as the Employer concedes, it did not negotiate the Agreement but entered in a “mirror” enterprise agreement of the “head” enterprise agreement between DIAU and MUA. There was no bargaining for the greenfields agreement, simply the adoption of another enterprise agreement with the necessary changes. Consequently, the Employer cannot state that this was the common intention of the parties when agreeing on the words in Clause 14 of the Agreement - it is simply its interpretation.
[81] Secondly, if this was its intention in relation to payment of the PCB, why was this intention not expressed with the replacement of the word “engaged”. For these reasons, I am not persuaded that the intention of the parties, as submitted by the Employer, was that the employees on the Sovereign became “engaged” in the Wheatstone Project when the Employer commenced its contract with DIAU.
[82] In summary, the Employer is essentially submitting to the Commission that the payment of the PCB to employees can be found in its contractual relationship with clients. In my view, the task is wider and requires clause 14 to be read in its plain and ordinary sense in the context of the Agreement as a whole. Further, and importantly, applying that interpretation in all the circumstances of this particular dispute.
[83] The fact is that the activities associated with the Wheatstone Project cannot be undertaken without vessels. Vessels, such as the Sovereign, do not mobilise for no purpose. From the evidence of Ms Jewson and Mr Mullins, there is a direct connection between the recruitment, training, medical examinations, the deployment of employees and the voyage of the Sovereign to the Wheatstone Project. In my view, the primary and predominant purpose, and substantial character of the voyage of the Sovereign and its employees from Batam to Dampier was in connection with the Wheatstone Project. I am unable to accept the narrow characterisation of the voyage from Batam to Dampier was only for the purpose of being on-hired to DIAU.
CONCLUSION
[84] Having considered the provisions of the Agreement as a whole, the context of the operation of the Agreement, evidence, submissions and the relevant case law, I determine that the answer to question 3 in paragraph [23] is in the affirmative. For the reasons set out above, the employees on the Sovereign are entitled to be paid the PCB for the voyage from Batam to Dampier from 27 April 2013.
COMMISSIONER
Appearances:
E Palmer with D Heath for the Applicant.
A Drake-Brockman of counsel with I Jewson for the Respondent.
Hearing details:
2014:
Perth,
7 February.
1 Exhibit A1
2 Exhibit R1
3 ALR 385 at 392
4 Transcript PN33
5 Transcript PN35
6 Transcript PN35
7 Transcript PN183 to PN185
8 Exhibit R1
9 Exhibit R1
10 Transcript PN381-PN390
11 Transcript PN402-PN404
12 Transcript PN405
13 Transcript PN406 & PN407
14 Transcript PN409 & PN410
15 Transcript PN505 & PN506
16 Transcript PN511
17 Transcript PN515 & PN516
18 Transcript PN518
19 Transcript PN528 to PN530
20 Transcript PN535 & PN536
21 Transcript PN539 & PN540
22 Exhibit R7 (JGM 2 and 3)
23 Transcript PN 374, PN 514 and PN 519
24 Transcript PN506
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