Maritime Union of Australia v Swire Pacific Management (Australia) Pty Ltd - [2014] FWCFB 2587

[2014] FWCFB 2587

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.438—Aplication for a protected action ballot order

Maritime Union of Australia, The
v
Swire Pacific Ship Management (Australia) Pty Ltd
(B2014/11)

DEPUTY PRESIDENTGOSTENCNIK
DEPUTY PRESIDENT KOVACIC
COMMISSIONER CLOGHAN

MELBOURNE, 16 APRIL 2014

Proposed protected action ballot by employees of Swire Pacific Ship Management (Australia) Pty Ltd.

Introduction

[1] This is an application by The Maritime Union of Australia (MUA - the Applicant) under s.437 of the Fair Work Act 2009 (the Act) for a protected action ballot order (PABO) to determine whether employees of Swire Pacific Ship Management (Australia) Pty Ltd (Swire - the Respondent) wish to engage in particular protected industrial action for the purpose of advancing their claims for a proposed replacement enterprise agreement to the Swire Pacific Ship Management (Australia) Pty Ltd Integrated Ratings, Cooks, Caterers and Seafarers (Offshore Oil and Gas) Enterprise Agreement 2010 (the General Agreement) but which has a narrower scope than that General Agreement. The General Agreement has a nominal expiry date of 30 July 2013.

[2] The application was filed on 24 January 2014 and was part heard by Commissioner Cloghan on 29 January 2014. As the application raises matters similar to those raised in an appeal by Mermaid Marine Vessel Operations Pty Ltd 1 (the Mermaid Marine appeal), another vessel operator in the offshore oil and gas industry, against a decision of Commissioner Williams granting an MUA application for a PABO2, the application was on 30 January 2014 referred by the President to the same Full Bench constituted to deal with the Mermaid Marine appeal.

[3] The application was heard on 17 February 2014 immediately following the Mermaid Marine appeal and traversed much the same ground as the appeal. Accordingly, we will refer to aspects of our decision in Mermaid Marine Vessel Operations Pty Ltd v The Maritime Union of Australia (Mermaid Marine) 3 where relevant.

[4] The Australian Mines and Metals Association (AMMA) was given permission to appear and make submissions because we were satisfied that it had an interest beyond that of an ordinary member of the public. Further, AMMA is a bargaining representative of Swire for the proposed agreement, the subject of this application, and it also represents 19 vessel operators in the negotiation of their enterprise agreements which regulate the employment of Australian seafarers 4.

[5] For the reasons set out below we are satisfied that s. 438 is not a bar to the PABO application, that an application under s. 437 has been made and that the MUA has been and is genuinely trying to reach an agreement with the Swire. As such, pursuant to s. 443(1) of the Act, we will make a protected action ballot order.

Background

[6] At the time the PABO application was made, Swire employed approximately 98 integrated ratings, cooks, caterers and seafarers (Ratings). Two enterprise agreements cover Swire’s Ratings:

the Swire Pacific Ship Management (Australia) Pty Ltd Integrated Ratings, Cooks, Caterers and Seafarers (Offshore Oil and Gas) Enterprise Agreement 2010 which covers all of Swire’s Ratings regardless of the particular project on which they may be working in the Australian oil and gas industry and which has a nominal expiry date of 30 July 2013; and

the Swire Pacific Ship Management (Australia) Pty Ltd and MUA Gorgon Jetty and Marine Structures Contract Enterprise Agreement 2011 (the Downstream Agreement) which covers Swire’s Ratings on the downstream part of the Gorgon project (i.e. the construction of the liquefied natural gas processing plant on Barrow Island, including the jetty connected to that plant) and which has a nominal expiry date of 31 July 2014. Ratings working under the Downstream Agreement receive a daily retention and continuity allowance of $115 per day when working on the downstream part of the Gorgon project, with the Downstream Agreement put in place to facilitate this payment 5.

[7] Discussions regarding a replacement for the General Agreement (the Replacement Agreement) commenced in late January 2013. As at the date of the application there have been five meetings between the parties, the most recent being on 16 August 2013. A Notice of Employee Representational Rights (NERR) was provided by Swire on or around 17 April 2013 to each of its Ratings covered by the General Agreement, including those Ratings covered by the Downstream Agreement 6. This was on the basis that, at that time, the proposed scope/coverage (these words are used interchangeably in our decision) of the Replacement Agreement, was that it would cover all Ratings employed by Swire.

[8] In addition to enterprise level negotiations, Swire and the MUA have participated in a series of industry level conferences convened by Commissioner Cloghan involving 19 vessel operators working in the offshore oil and gas industry, each of which is covered by an agreement in similar terms to the General Agreement. No objection was taken to Commissioner Cloghan sitting as a member of the Bench on the ground that he had convened and participated in conferences involving amongst other parties, the MUA and Swire. The first of those conferences was convened by Commissioner Cloghan on 20 August 2013. To date more than 20 conferences have taken place under the auspices of Commissioner Cloghan.

[9] Until late 2013 the proposed scope of the Replacement Agreement for Swire (and the broader industry), was that it would cover all Ratings with the possible exception of those undertaking work on Inpex Ichthys project, another LNG project.

[10] In broader developments, in late November 2013 the MUA filed a PABO application in respect of employees of Mermaid Marine Vessel Operations Pty Ltd (Mermaid Marine). The following is an extract from our decision in Mermaid Marine, which sets out developments regarding the Mermaid Marine PABO application:

“[11] During the course of bargaining, the Respondent had on 21 November 2013, applied to the Commission for a protected action ballot order in relation to the proposed Offshore Oil and Gas Enterprise Agreement. At a hearing of that application held on 22 November 2013, the Respondent withdrew the application following an objection by the Appellant founded on s.438 of the Act, arguing that as the Gorgon Agreement covered some of the employees who will be covered by the proposed Offshore Oil and Gas Enterprise Agreement, the application could not be made.

[12] On or about 25 November 2013, the Respondent foreshadowed to the Appellant that it would be proposing a scope clause that would exclude employees to whom the Gorgon Agreement applies. On 13 December 2013 the Respondent advised the Appellant that it was seeking such a narrower scope clause.” (Footnotes omitted)

[11] The Gorgon Agreement referred to in the above extract is the Mermaid Marine equivalent of the Downstream Agreement, and is in terms very similar to the Downstream Agreement.

[12] As previously mentioned the application in this matter was filed on Friday, 24 January 2014 and sought a ballot of all of Swire’s Ratings, reflecting the broader scope of the Replacement Agreement which had been the basis of negotiations until late November 2013. However, on Saturday, 25 January 2014 the MUA filed an amendment to its application reflecting a narrower scope for the Replacement Agreement which it had been advocating since late November 2013 (putting aside the Inpex Ichthys aspect) (MUA Proposed Replacement Agreement).

[13] While further enterprise level negotiations between Swire and the MUA were scheduled for 30 January 2014, the negotiations did not proceed because of the MUA’s PABO application.

The MUA’s submissions and evidence

[14] In short, the MUA submitted that it had standing to bring the PABO application as it was the bargaining representative of an employee who will be covered by the MUA Proposed Replacement Agreement and that the application met the relevant statutory requirements. In particular, the MUA emphasised that it has been, and is genuinely trying to reach an agreement, adding that “in order to prove that the MUA has not genuinely negotiated, it must be established that the MUA has some other extraneous purpose in seeking the ballot other than trying to reach agreement.” 7

[15] At the hearing, the MUA relied on its Outline of Submissions and indicated that it would deal with the issues raised in Swire’s Outline of Submissions in Opposition to Protected Action Ballot Order Application in its closing submissions.

[16] Mr Tracey is an Assistant Branch Secretary of the MUA and gave evidence for the MUA. Mr Tracey’s statement 8 provided details of the various enterprise level discussions between the MUA and Swire and an overview of the industry level discussions which had occurred under the auspices of Commissioner Cloghan. At paragraph [20] of his statement, Mr Tracey gave the following evidence:

“It has been the purpose of the MUA, since negotiations commenced in December 2012, to negotiate an enterprise agreement under the Act that will replace the existing agreement and regulate the employment of our members employed by Swire, including the employees to whom the protected action ballot order, if granted will apply. The MUA has been, and is, genuinely trying to reach agreement with Swire.” (underlining added)

[17] During cross examination by Counsel for Swire and in answer to questions from the Bench, Mr Tracey:

agreed that prior to 22 November 2013 he had not suggested to either Swire or AMMA that the MUA wished to exclude workers working on the downstream part of the Gorgon project from the scope of the Replacement Agreement 9;

rejected the proposition that the claim to exclude Gorgon workers from the Replacement Agreement was a “ruse to get around section 438” of the Act 10;

disagreed that the purpose of sending an email to Mermaid Marine on 13 December 2013 further articulating the MUA’s proposal regarding the scope clause for the Replacement Agreement was to buttress the MUA’s second protected action ballot order application in respect of Mermaid Marine which was filed on 18 December 2013 11;

acknowledged that while a consideration in this regard was the desire “to keep alive the ability to apply for and take protected action if it arose to maximise our bargaining position”, a further consideration was to ensure that employees working on the downstream Gorgon project did not lose the daily retention and continuity allowance of $115 per day when the Downstream Agreement expired on 31 July 2014 were those employees to revert to coverage by the General Agreement 12;

confirmed that the first time the MUA had converted its general claim regarding the scope of the Replacement Agreement to a precise scope clause for Swire was in an email sent by Mr Tracey at 8.57pm on 30 January 2014 13;

stated that no vessel operators beyond Swire and Mermaid Marine had been provided specific scope clauses as the intention was that other vessel operators would be provided such a clause prior to enterprise level negotiations with them 14;

indicated that in respect of scope the MUA wanted “a coverage clause that reflects the carve-out of the Gorgon work and then puts us in a position where we’re able to go and negotiate a new agreement for that work given that it expires mid-year this year ...” 15;

conceded that there may well be a further change to the coverage clause now proposed by the MUA 16; and

indicated that he did not wish to change any of his evidence regarding the truthfulness of the answers he had given after reviewing the email 17 he had sent to Mr White of AMMA on 22 January 2014 stating that the MUA has “no claims or issues outside those already raised and adopted inside the Fair Work process as well as any issues agreed between the parties in the individual Swires meeting to date. It is our intention to start our negotiating position from this point.”18

Swire’s submissions and evidence

[18] In submissions filed before the commencement of the hearing, Swire argued that that the protected action ballot order sought by the MUA should not be made for any one or more of the following five grounds 19:

1. as the Ratings can move between undertaking work under the General Agreement and the Downstream Agreement, it is not possible at any particular point in time to determine with any clarity who should be balloted for the purposes of industrial action in support of the Replacement Agreement;

2. the MUA has not made an application under s.437 of the Act in relation to the proposed enterprise agreement on the basis that the scope of the Replacement Agreement is reflected by the “the pool of employees to whom the employer is obliged to provide a Notice of Employee Representational Rights ... unless or until the parties reach agreement on a different scope or a scope order is made” 20 and the MUA’s application did not reflect that broader scope;

3. for same reasons as outlined in (2) above, as a consequence of s.438(1) of the Act the MUA is restricted from making the application until 30 days before the nominal expiry date of the Downstream Agreement, i.e. until 1 July 2014;

4. even if the MUA Proposed Replacement Agreement reflects the narrower scope, s.438(1) of the Act prevents the MUA from making the application until 30 days before the nominal expiry date of the Downstream Agreement because the Downstream Agreement will no longer apply to the employees on the downstream part of the Gorgon Project after 31 July 2014, and so the pool of employees “who will be covered” by the MUA Proposed Replacement Agreement includes employees who are now covered by the Downstream Agreement 21; and

5. the MUA is not genuinely trying to reach an agreement with Swire because the MUA still wants an agreement with the broader scope agreed between the parties in early 2013 and the obvious purpose in the MUA informing Swire that it now wants an agreement with narrower scope is to attempt to avoid the operation of s.438(1). 22

[19] At the hearing, Swire indicated that it no longer pressed ground 1 above, that it intended to rely the submissions made by AMMA in the Mermaid Marine appeal in respect of grounds 2 to 4 above and that it would address the issue of genuineness (ground 5 above).

[20] Messrs Hearnden, White and Harris all provided witness statements.

[21] Mr Hearnden’s statement 23, inter alia, provided an overview of Swire’s business, its employment arrangements, enterprise agreement coverage, the transition of Ratings between enterprise agreements and bargaining for a Replacement Agreement. Of note, Mr Hearden attested that he first became aware in late November 2013 of the MUA’s wish to exclude downstream work on the Gorgon Project from the MUA Proposed Replacement Agreement24. Mr Hearnden was not required for cross examination.

[22] Mr White’s statement 25 set out, among other things, in some detail the history of the negotiations for a Replacement Agreement for Swire, both at the enterprise and industry level. Under cross examination Mr White was questioned almost exclusively about what he understood to be the MUA’s position regarding the inclusion or exclusion of the Inpex Ichthys project from the scope of the Replacement Agreement. In this regard, Mr White stated that it had not been made clear to him, or to his knowledge to anyone else, that the MUA wished to drop its claim to exclude the project from the scope of the Replacement Agreement with Swire, though acknowledging there was written communication between the MUA and another vessel operator, Tidewater, to that effect.26

[23] Mr Harris’s statement 27 dealt primarily with the issue of the period of notice which should be required should the Commission decide to make the order sought by the MUA. As with Mr Hearnden, Mr Harris was not cross examined.

AMMA submissions

[24] In short, AMMA adopted the submissions made on behalf of Swire and the oral submissions it made in the Mermaid Marine appeal concerning the legal issues common to both proceedings 28.

Relevant statutory framework

[25] In Mermaid Marine we set out and discussed the relevant statutory framework. 29 For present purposes it is sufficient to note that following.Part 3-3 of the Act is concerned with industrial action. Division 8 of Part 3-3 of the Act deals with protected action ballots and at s.436 describes the objects of the Division as follows:

436 Object of this Division

The object of this Division is to establish a fair, simple and democratic process to allow a bargaining representative to determine whether employees wish to engage in particular protected industrial action for a proposed enterprise agreement.

437 Application for a protected action ballot order

Who may apply for a protected action ballot order

1. A bargaining representative of an employee who will be covered by a proposed enterprise agreement, or 2 or more such bargaining representatives (acting jointly), may apply to the FWC for an order (a protected action ballot order) requiring a protected action ballot to be conducted to determine whether employees wish to engage in particular protected industrial action for the agreement.

2. Subsection (1) does not apply if the proposed enterprise agreement is:

(a) a greenfields agreement; or

(b) a multi-enterprise agreement.

Matters to be specified in application

3. The application must specify:

(a) the group or groups of employees who are to be balloted; and

(b) the question or questions to be put to the employees who are to be balloted, including the nature of the proposed industrial action.

4. If the applicant wishes a person other than the Australian Electoral Commission to be the protected action ballot agent for the protected action ballot, the application must specify the name of the person.

Note: The protected action ballot agent will be the Australian Electoral Commission unless the FWC specifies another person in the protected action ballot order as the protected action ballot agent (see subsection 443(4)).

5. A group of employees specified under paragraph (3)(a) is taken to include only employees who:

(a) will be covered by the proposed enterprise agreement; and

(b) either:

i. are represented by a bargaining representative who is an applicant for the protected action ballot order; or

ii. are bargaining representatives for themselves but are members of an employee organisation that is an applicant for the protected action ballot order.

Documents to accompany application

6. The application must be accompanied by any documents and other information prescribed by the regulations.

438 Restriction on when application may be made

1. If one or more enterprise agreements cover the employees who will be covered by the proposed enterprise agreement, an application for a protected action ballot order must not be made earlier than 30 days before the nominal expiry date of the enterprise agreement, or the latest nominal expiry date of those enterprise agreements (as the case may be).

2. To avoid doubt, making an application for a protected action ballot order does not constitute organising industrial action.

443 When the FWC must make a protected action ballot order

1. The FWC must make a protected action ballot order in relation to a proposed enterprise agreement if:

(a) an application has been made under section 437; and

(b) the FWC is satisfied that each applicant has been, and is, genuinely trying to reach an agreement with the employer of the employees who are to be balloted.

Approach to the construction of the relevant statutory provisions

[26] Dealing first with the approach to the construction of the relevant statutory provisions, we follow the approach we adopted in Mermaid Marine as set out below:

“[21] In considering the relevant statutory provisions at issue in this appeal the starting point is to construe the words of the statute according to their ordinary meaning having regard to the context and legislative purpose. The words of the statute being construed should be read by reference to the language of the statute as a whole. As Lawler VP and Bissett C observed in JJ Richards and Sons Pty Ltd v Transport Workers’ Union of Australia, after reciting relevant authorities concerning statutory construction:

Drawing these principles together, the task of statutory interpretation is concerned with ascertaining the intention of the legislature as manifested by the text of the legislation. Context (using that word in its widest sense to include such things as the existing state of the law and the mischief which, by legitimate means, one may discern the statute was intended to remedy) and the purpose or object underlying the legislation must always be considered. These must be considered in the first instance, not merely at some later stage when ambiguity might be thought to arise. The text of a provision, read in context and having regard to the object and purpose of the provision, is always the surest guide.

[22] His Honour Justice Flick in J.J. Richards & Sons Pty Ltd and Another v Fair Work Australia and Another discussed three long established and fundamental principles to statutory construction. In so doing His Honour said:

First, the so-called “golden rule” of the common law as to statutory construction is that “the grammatical and ordinary sense of the words is to be adhered to, unless that would lead to some absurdity, or some repugnance or inconsistency with the rest of the instrument, in which case the grammatical and ordinary sense of the words may be modified, so as to avoid that absurdity and inconsistency, but no farther”: Grey v Pearson [1857] EngR 335; (1857) 6 HLC 61 at 106 per Lord Wensleydale. See also: Australian Boot Trade Employés’ Federation v Whybrow & Co [1910] HCA 53; (1910) 11 CLR 311 at 341 to 342 per Higgins J. The “golden rule” is not confined to circumstances where a “mistake” has been made in the wording of an Act; the rule is also applied to avoid construing legislation so as to produce patently unintended or absurd results: Footscray City College v Ruzicka [2007] VSCA 136 at [16], 16 VR 498 at 505 per Chernov JA (Warren CJ and Maxwell P agreeing).

Second, the common law also recognised that “[i]t is a strong thing to read into an Act of Parliament words which are not there, and in the absence of clear necessity it is a wrong thing to do”: Thompson v Goold & Co [1910] AC 409 at 420 per Lord Mersey. See also: Dallikavak v Minister for Immigration and Ethnic Affairs (1985) 9 FCR 98 at 103 per Northrop and Pincus JJ; Minister for Immigration and Citizenship v Hart [2009] FCAFC 112 at [6] per Spender J.

Third, a construction of a statutory provision is to be preferred “that would best achieve the purpose or object of the Act”: Acts Interpretation Act 1901 (Cth) s 15AA. The requirement to look to the purpose or object of an Act is more than an instruction to adopt the traditional mischief or purpose rule in preference to the literal rule of construction; s 15AA requires no ambiguity or inconsistency in a statutory provision before a court is not only permitted, but required to have regard to purpose: Mills v Meeking [1990] HCA 6; (1990) 169 CLR 214 at 235. Dawson J there went on to observe that the provision there in question, being a provision comparable to s 15AA, “... requires a court to construe an Act, not to rewrite it, in the light of its purposes”. Similarly, in Trevisan v Commissioner of Taxation (1991) 29 FCR 157 at 162, Burchett J observed that s 15AA “... is not a warrant for redrafting legislation nearer to an assumed desire of the legislature. It is not for the courts to legislate ...”. See also: R v L (1994) 49 FCR 534 at 538 per Burchett, Miles and Ryan JJ; Skea v Minister for Immigration, Local Government and Ethnic Affairs (1994) 51 FCR 82 at 85 per Moore J; Minister for Immigration and Multicultural Affairs v Lim [2001] FCA 512 at [7], [2001] FCA 512; 112 FCR 589 at 592 to 593 per Sundberg J. “In the end the task of the court is to ascertain and to enforce the actual commands of the legislature”: Re Application of The News Corp Ltd (1987) 15 FCR 227 at 236 per Bowen CJ.” (footnotes omitted).

Consideration

[27] Before dealing specifically with the statutory requirements, we will firstly address the four grounds pressed by Swire in opposition to the PABO application. Given the overlap between some of the grounds in opposition relied upon by Swire and the matters considered in Mermaid Marine, where appropriate we draw on our reasons in that decision.

Ground 1

As ground 1 was not pressed we do not deal with it further but note that we rejected a similar argument in Mermaid Marine. 30

Grounds 2 and 3

[28] The issues underpinning grounds 2 and 3 were dealt with jointly in the written submissions of Swire and the MUA. We will also deal with them together.

[29] Swire contends that the scope of the Replacement Agreement is the broader scope which had been the basis of negotiations until the time of the first PABO application in respect of Mermaid Marine and which was reflected in the group of employees to whom a NERR was issued by Swire in April 2013. In its closing submissions in reply, Swire set out the issues which it considered the Commission has to determine in respect of these issues in the following way:

a) First, the proper construction of the expression “proposed enterprise agreement”;

b) Secondly, whether a new proposed enterprise agreement was created each time a new of different claim was made by the MUA in the bargaining process. The MUA contends there was, whereas Swire contends there was not;

c) Thirdly, whether the pool of employees to who the NERR is sent is in the sole control of the employer;

d) Fourthly, whether Swire’s submissions concerning “proposed enterprise agreement” are inconsistent with the authorities that an employee organisation can become a “bargaining representative” for the purpose of making an application for a protected action ballot order prior to the issue of an NERR;

e) Fifthly, whether Swire’s submissions as to the proposed enterprise agreement are “undermined by the decision in AFMWU v Kraft Foods [2010] FWA 4404”, as contended by the MUA; and

f) Sixthly, whether the decision, or any part of it, of the majority in Ford Motor Company of Australia Limited v CEPU [2009] FWAFB 1240 remains good law. 31

[30] The MUA submits that:

the MUA’s position on scope of the MUA Proposed Replacement Agreement is a claim in the bargaining process;

the proposed enterprise agreement in the present context is made up of and defined by the claims that it contains at the relevant point in time (i.e at the time the PABO application is made);

the MUA and Swire are each entitled to contend for a particular scope for the Replacement Agreement;

there may be more than one “proposed enterprise agreement” on foot at any time during the course of bargaining;

identification of the proposed enterprise agreement the subject of a PABO application is a factual matter, and the bargaining representative making the application is entitled to rely on the agreement it has proposed or it may choose to make the application in relation to an agreement proposed by another bargaining representative;

the term “proposed enterprise agreement” is used in a generic sense to describe the desired outcome which is an agreement;

o limit the ‘variety of possibilities’ of the form of a proposed enterprise agreement can take by reference to the NERR - which is in the sole control of the employer - is artificial and finds no support in the text of the Act; and

there is nothing in the text and scheme of the Act which would suggest the NERR limits the capacity of a bargaining representative to apply for a PABO or that requires a bargaining representative to seek authority from its constituents to vary claims make in the course of bargaining 32.

[31] Central to the determination of the issues raised in these grounds is the meaning that is to be ascribed to the expression “proposed enterprise agreement”. In Mermaid Marine, on that question, we said:

“[43] In MSS Security Pty Ltd v Liquor, Hospitality and Miscellaneous Union 37, a Full Bench of Fair Work Australia observed that :

The Fair Work Act 2009 (FW Act) uses the expression “proposed enterprise agreement”, “proposed single-enterprise agreement” and “proposed agreement” in a number of places. An agreement may be “proposed” by an employer or it may be “proposed” by a bargaining representative of employees or there may be different and competing agreements “proposed” by both. Where a person makes an application under the FW Act in their capacity as a bargaining representative for a “proposed enterprise agreement” or “proposed single enterprise agreement”, the bargaining representative is entitled to rely on the agreement it has proposed or it may choose to make the application in relation to an agreement proposed by another bargaining representative. In this case, it was the LHMU that first “proposed” an agreement and it was the agreement proposed by the LHMU that was the “proposed single” for purposes of the LHMU’s application for a protected action ballot order under s.437.

[44] We respectfully agree and adopt those observations in resolving the meaning of “a proposed agreement” in s.438(1).

Meaning of and indentify the “proposed enterprise agreement” in s.438

[45] The prohibition of making an application for a protected action ballot order under s.438(1) is, in our view, concerned with identifying whether an employee who is covered by an enterprise agreement that has not passed its normal expiry date will also be covered by the proposed enterprise agreement. The relevant enquiry is therefore directed to assessing whether any of the employees who will fall within the scope of the proposed enterprise agreement that is the subject of the application are also covered by an enterprise agreement that has not passed its nominal expiry date.

[46] When read in context, “a proposed enterprise agreement” in s.438(1) seems to us to mean no more than the agreement the bargaining representative applying for an order under s. 447 is proposing at the time the application for a protected action ballot order is made. It is that agreement to which the ballot will relate and it is employees represented by the bargaining representative who fall within the scope of that agreement (or a group of such employees) who will vote on questions of particular industrial action. That the Appellant does not agree with the scope of the proposed agreement or would prefer a broader scope or that the bargaining parties have bargained for a broader scope previously is, for the purpose of identifying the proposed enterprise agreement to which s.438(1) might relate, irrelevant in considering whether s.438(1) prohibits an application being made.

[47] In our view, this construction adheres to the ordinary meaning of “a proposed enterprise agreement” and does not lead to any absurdity or repugnance. It is consistent with the objects and purpose of the scheme of bargaining, agreement-making and industrial action established by the Act.

[48] In this case the Respondent proposes an agreement with a scope that excludes employees to whom the Gorgon Agreement applies. For present purposes we do not think that anything material turns on the fact that the application is expressed to exclude employees to whom the Gorgon Agreement “applies” rather than excluding employees “covered” by the Gorgon Agreement. The PABO Application is limited to only those employees that will be covered by the Respondent’s proposed enterprise agreement. Those employees are not covered by another enterprise agreement that has not passed its nominal expiry date. It follows that the Respondent is not prevented by reason of s.438(1) from making the PABO Application.

[49] We also observe that s.438(1) reflects the intent underpinning the Act that industrial action not be engaged in or organised by persons covered by an enterprise agreement which is yet to pass its nominal expiry date. Section 417 of the Act to which we earlier referred also reflects that intent.

[50] The construction of s.438(1) that we favour is consistent with and does undermine that intent. The employees who are balloted on the question of whether particular industrial action should be authorised are not covered by an enterprise agreement that has not passed its normal expiry date. Only those employees covered by the General Agreement who are not also covered by the Gorgon Agreement are the persons to be balloted. Further, no employee covered Gorgon Agreement will be covered by the Respondent’s proposed enterprise agreement. Neither s. 438(1) nor s.417 operate so as to prevent the taking of protected industrial action by employees who are not covered by an in term enterprise agreement in furtherance of claims for a proposed enterprise agreement, which by its scope will be limited to covering only those employees.”

[32] We see no reason for departing from that view in this application.

[33] As to the role of the NERR in determining the proposed enterprise agreement and the persons who will be covered by the agreement, we make the following observations. First, the purpose of a NERR is to inform employees who are employed at the Notification Time 33 and who will be covered by the proposed enterprise agreement of their right to be represented by a bargaining representative.34 On this issue, a five member Full Bench of the Commission in Peabody Moorvale Pty Ltd v Construction, Forestry, Mining and Energy Union35 observed as follows:

[20]As to the context, the Notice provides employees with important information about the nature of an enterprise agreement and the employees’ right to appoint a bargaining representative to assist them in bargaining for the agreement or in a matter before the Commission about bargaining for the agreement. The Notice sets out the default position for union members, that is, they will be represented by their union if they do not appoint a bargaining representative. 36

[34] Secondly, the NERR does not determine the “proposed enterprise agreement”. There is nothing in the text of the Act which would support such a view and it is inconsistent with the purpose served by the NERR. The proposed enterprise agreement is something that one of the parties “wants to negotiate”. There need not be a developed draft, and it may simply be an idea or a series of claims that employees or the employer wants to negotiate with a view to that idea or those claims becoming an agreement that is ultimately approved by the Commission. 37

[35] Thirdly, where scope of a proposed agreement is in dispute at the Notification Time, the NERR is to be given to employees within the broader scope of a proposed agreement. 38 But this does not mean that the NERR so given determines the scope of the proposed agreement.

[36] Fourthly, for the reasons given in Mermaid Marine 39, the NERR does not determine the identity of the bargaining representatives for the proposed enterprise agreement, much less does it set in stone the persons who will be covered by, or the scope of, the proposed enterprise agreement being bargained for, unless a scope order is made.

[37] Absent a scope order, given the express provisions of s. 171 and the purpose which is served by the giving of a NERR, we see no basis for concluding that the MUA’s capacity or authority as a bargaining representative to bargain about scope or to make the PABO application is limited by the NERR or by the proposed enterprise agreement that is identified therein.

[38] In the circumstances, we do not consider it necessary to deal with the matters in e) and f) of Swire’s submissions in reply as set out at paragraph [29] above.

Ground 4

[39] Swire contends that s. 438 is invoked to prohibit the PABO application because once the Downstream Agreement expires on 31 July 2014 the employees covered by that agreement would become covered by the MUA Proposed Replacement Agreement by reason of s. 58 of the Act. It also submits that the result does not change if the Downstream Agreement is varied or replaced. This later submission, so far as it relates to a replacement agreement for the Downstream Agreement, presupposes that the MUA Proposed Replacement Agreement commences operation before a replacement for the Downstream Agreement comes into operation.

[40] The relevant provisions of s. 58 are as follows.

Subdivision C—Interaction between one or more enterprise agreements

58 Only one enterprise agreement can apply to an employee

Only one enterprise agreement can apply to an employee

1. Only one enterprise agreement can apply to an employee at a particular time.

General rule—later agreement does not apply until earlier agreement passes its nominal expiry date

2. If:

(a) an enterprise agreement (the earlier agreement) applies to an employee in relation to particular employment; and

(b) another enterprise agreement (the later agreement) that covers the employee in relation to the same employment comes into operation; and

(c) subsection (3) (which deals with a single-enterprise agreement replacing a multi-enterprise agreement) does not apply;

then:

(d) if the earlier agreement has not passed its nominal expiry date:

i. the later agreement cannot apply to the employee in relation to that employment until the earlier agreement passes its nominal expiry date; and

ii. the earlier agreement ceases to apply to the employee in relation to that employment when the earlier agreement passes its nominal expiry date, and can never so apply again; or

(e) if the earlier agreement has passed its nominal expiry date—the earlier agreement ceases to apply to the employee when the later agreement comes into operation, and can never so apply again.

[41] The MUA submits that there is no intention that employees covered by the Downstream Agreement will be covered by the MUA Proposed Replacement Agreement and no certainty that they will be 40. Mr Tracey also gave evidence that it was not the intention of the MUA that that the employees covered by the Downstream Agreement would later, after its nominal expiry date, be covered by the MUA Proposed Replacement Agreement.41 It submits that the exclusion in the MUA Proposed Replacement Agreement of persons covered by the Downstream Agreement included persons that are covered by that agreement as replaced or varied.42 It further submits that the question of overlapping coverage (for the purposes of s. 438 of the Act) can only be determined by reference to the coverage of the proposed enterprise agreement at the time of the application and not to some future coverage, which is only a mere possibility.43

[42] This was also an issue dealt with in Mermaid Marine in the following terms.

“[68] … The Appellant submitted that the exception contained in the Respondent’s scope proposal, which deals with coverage, is expressed to operate in respect of employees to whom the Gorgon Agreement applies. It goes on to state, that for the avoidance of doubt, should the Gorgon Agreement be terminated, the enterprise agreement proposed by the Respondent would apply. It is submitted that the way in which the exception is expressed makes it clear that the Respondent’s 13 December 2013 scope proposal covers the employees to whom the Gorgon Agreement applies.

[69] Thus it was submitted that when considering coverage of the Respondent’s 13 December 2013 scope proposal, it is simply not to the point that at any particular time employees to whom the Gorgon Agreement applies may be excluded. The position is not different to the current position in relation to the interaction between the General Agreement and the Gorgon Agreement. If the Gorgon Agreement applies, the General Agreement does not apply, but that does not alter the coverage of the General Agreement. That is, the Respondent’s 13 December 2013 scope proposal, even with the exception propounded by the Respondent, must include within its coverage employees covered by the Gorgon Agreement.

[70] It was submitted that s.438 is invoked if more than one enterprise agreement covers employees who will be covered by the proposed enterprise agreement. Section 438 applies where the proposed enterprise agreement will cover employees who are covered by an enterprise agreement which is not within 30 days of its nominal expiry date, regardless of whether the proposed enterprise agreement is expressed to not apply to those employees. Accordingly, the Respondent could not make the application and the Commissioner, as a consequence, was not empowered to hear and determine the Application.

[71] The first part of the Appellant’s argument turns on the proper construction of the phrase “will be covered” in s.438 of the Act.

[72] In Construction, Forestry, Mining and Energy Union v Hamberger and Another Katzmann J considered the meaning of the phrase “will be covered” in the context of s.172 of the Act. Her Honour said:

The first question, then, is what is meant by the expression “who will be covered by the agreement”, more particularly what “will” means in this context.

The starting point is to construe the words according to their ordinary meaning having regard to their context and legislative purpose. Context includes the existing state of the law and the mischief it was intended to remedy. See Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue(Northern Territory) (2009) 239 CLR 27 at [14]; CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408. The words should be read by reference to the language of the statute as a whole: Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355at [69].

The majority interpreted “will” in the expression to mean “future likelihood” (which the majority apparently took to be synonymous with an expression of present intention). The CFMEU submitted that the more appropriate meaning of “will be covered” in context is that coverage of the employees employed at the time the agreement is made is a necessary result of the agreement being made, intimating that such an interpretation provided the required degree of certainty. In any event, the CFMEU submitted that, even if the majority were correct, in this case it could not be said that it was intended that the employees who are employed at the time will be covered by the agreement if there is a clear indication in the agreement itself that they may not be. Thus, it was said, the employees who are employed at the time and participate in the vote for the agreement might be covered by it; it cannot be said they necessarily will be covered.

The majority’s interpretation reflected one of the meanings given to the auxiliary verb in the Macquarie Dictionary:

indicating future likelihood: I will take a taxi; she will meet us there; do you think it will rain?; you will be surprised.

The CFMEU’s contention reflects one of the meanings given in the Oxford English Dictionary:

expressing a determinate or necessary consequence (without the notion of futurity).

In my view, the construction which the CFMEU espouses is the preferable one. It more accurately reflects the sense in which the expression is used in the statute. But I do not think that this is determinative of the question of validity.

In ascertaining the meaning of the statutory words an examination of the existing state of the law has proved unhelpful. Section 327 of the Workplace Relations Act (now repealed) provided:

An employer may make an agreement (an employee collective agreement) in writing with persons employed at the time in a single business (or part of a single business) of the employer whose employment will, or would but for the operation of an ITEA that has passed its nominal expiry date, be subject to the agreement.

I have been unable to find any authority that considered the meaning of the expression “will ... be subject to the agreement” in that section. Certainly, my attention was drawn to none.

Notwithstanding what the majority appear to have thought, the Explanatory Memorandum is also unhelpful on this question. They referred to paragraph 683, which states:

The use of the phrase ‘employees who will be covered by the agreement’ in clause 172 is intended to make clear that the employees covered by the agreement are not limited to those employees who were employed at the time the agreement was made. An agreement covers all employees whom it is expressed to cover (clause 53). This includes persons employed at the time the agreement was made and persons employed at a later time provided that they fall within a class or group of employees who are expressed to be covered by the agreement.

The majority said of this passage:

This makes clear that the phrase “employees who will be covered by the agreement” refers to the class or group of employees who are expressed to be covered by the agreement. It does not restrict how the agreement specifies that class or group. As with any other term of an agreement it is a matter for the parties to decide what they agree about (subject to meeting the specific requirements contained in ss. 186 and 187).
[Emphasis in original.]

In essence, all the majority picked up from paragraph 683 was the reference to clause 53 (now s 53 of the Act). In my view, whatever the intention of the draftsperson may have been, the use of the expression“employees who will be covered by the agreement” in s 172 does not make it clear “that the employees covered by the agreement are not limited to those employees who were employed at the time the agreement was made”, but may also include employees employed at a later time as long as they fall within the specified class. On the contrary, s 172 is concerned with the making of an enterprise agreement and the employer can hardly make an enterprise agreement with employees not yet employed, even if some time in the future they may be covered by the agreement. Objectively, the intention of the legislature in using the expression was to ensure that the employer could only make an agreement with those employees who were named or described in the agreement and whom the agreement purported to cover.

[73] We think Her Honour is correct and we see no reason to ascribe a different meaning to that phrase as it appears in s.438. To similar effect, a Full Bench of Fair Work Australia in CBI Contractors Pty Ltd v Construction, Forestry, Mining and Energy Union said:

[16] These grounds of appeal turn on the proper construction of the expression “a majority of employees … who will be covered by the agreement” in s 237(2)(a). CBI contends that the word “will” is concerned with future likelihood and the expression requires an assessment of which employees, if any, “will” be covered by the proposed agreement and then ascertaining that a majority of those employees want to bargain. It was argued that, on the evidence before him, the Deputy President could not be satisfied that any employees would be covered by an agreement made through bargaining that occurred as a consequence of the majority support determination sought by the CFMEU.

[17] We were not persuaded by those arguments. The Macquarie Dictionary, for example, demonstrates that the word “will” has a range of meanings. That word is not invariably concerned with “future likelihood”.
…
[22] The expression “employees who will be covered by [an] agreement” appears in numerous sections of the FW Act [footnote omitted].
[23] When consideration is given to the many contexts in which the expression “employees who will be covered by [an] agreement” is used, we are compelled to the conclusion that the legislature used that expression merely as a way of conveniently referring to the group or groups of employees who are proposed to be covered by an agreement (and who, therefore, will be covered when the agreement is made) rather than as a requirement that calls for a prediction as to which particular employees in the group will, when the agreement is made, be covered by the agreement.

[74] In the present context, s.438 is concerned with identifying employees who are covered by the Gorgon Agreement and ascertaining whether any such employee “will” also be covered by the proposed enterprise agreement. The answer is to be gleaned from the scope of the proposed enterprise agreement which excludes persons to whom the Gorgon Agreement applies and then asking: will the scope of the Respondent’s proposed enterprise agreement determine or as a necessary consequence would determine (without the notion of futurity) that employees covered by the Gorgon Agreement “will be covered” by the Respondent’s proposed enterprise agreement? The answer must be “no”.

[75] As to the second part of the Appellant’s argument, we do not think that the Appellant’s proposition by reference to the current interaction between the General Agreement and the Gorgon Agreement − that if the Gorgon Agreement applies, the General Agreement does not apply, but that does not alter the coverage of the General Agreement (our emphasis) − is analogous with the position that pertains vis-a-vis the Gorgon Agreement and the Respondent’s proposed enterprise agreement. Assuming both instruments were in operation, when the Respondent’s proposed enterprise agreement applies to an employee, the Gorgon Agreement would not apply and the Gorgon agreement would not cover that employee because necessarily that employee would not be performing work under the Gorgon Contract as determined by the Appellant. Conversely when the Gorgon Agreement is applied to an employee, the Respondent’s proposed enterprise agreement would neither apply nor cover that employee by reason of the exclusion of such an employee from the scope of the Respondent’s proposed enterprise agreement.” (footnotes and citations not included)

[43] We see no reason to depart from our approach in Mermaid Marine in this application.

[44] The MUA Proposed Replacement Agreement is expressed to cover:

“...the Employer and the Employees employed by the Employer in classifications contained within the Agreement while engaged in the Maritime Offshore Oil and Gas Industry in Australia, with the exception of those Employees to whom the Gorgon Agreement applies.” 44

[45] Clause 3 of the Replacement Agreement defines “Gorgon Agreement” as the Swire Pacific Ship Management (Australia) Pty Ltd and MUA Gorgon Jetty and Marine Structures Contract Enterprise Agreement 2011 (AG2011/14553) as varied or replaced. 45 The “Gorgon Agreement” is referred to in this decision as the Downstream Agreement.

[46] It is clear from the above that the MUA Proposed Replacement Agreement will not cover any person to whom the Downstream Agreement applies.

[47] The Downstream Agreement’s coverage provisions are not as clearly expressed as they might be. However when regard is had to the definitions of “Employee” and “Gorgon Project” is clause 2, the coverage provisions in clause 4 and Deputy President Sams’ decision to approve the agreement and his observations about coverage 46, it seems clear enough that the Downstream Agreement covers employees of Swire engaged in a classification contained in the General Agreement who perform work covered by the “Gorgon Project” being work that is connected with the construction of the LNG plant, product load out jetty, material offloading facility and associated facilities and infrastructure on Barrow Island undertaken by the Kellogg Joint Venture Gorgon47 and is subject to the LNG Jetty and Marine Structures Contract. In short hand terms, it covers Swire employees whilst they perform work that is within the scope of contract to which Swire and the joint venture parties are parties (the JV Swire Contract).

[48] For the purposes of determining whether s. 438 prevents the PABO application, the relevant question is: whether the Downstream Agreement covers any employee who will be covered by the MUA Proposed Replacement Agreement? Given that the Downstream Agreement does not cover employees who will be covered by the MUA Proposed Replacement Agreement by reason of the exclusion from coverage earlier described, the answer is no. The other aspect of Swire’s submissions depends on notions of futurity, which for the reasons given in Mermaid Marine, are to be disregarded. 48

[49] We agree with the MUA’s submission that the future coverage of the MUA Proposed Replacement Agreement in the manner suggested by Swire is not certain. The uncertainty is demonstrated by the following.

[50] For the purposes of s. 58(2), the Downstream Agreement is the “earlier agreement” and the MUA Proposed Replacement Agreement would be the “later agreement” if it came into operation. Sections 58(2)(d) and (e) only have work to do it, when the later agreement comes into operation, and covers “the employee” to whom the earlier agreement applies. If the MUA Proposed Replacement Agreement commences operation before the nominal expiry date of the Downstream Agreement, it will not cover the employees to whom the Downstream Agreement applies at that time. After the nominal expiry date of the Downstream Agreement, the Replacement Agreement might, on the current drafting, apply to the employees covered by the Downstream Agreement. This will not be the case if the Replacement Agreement comes into operation after the Downstream Agreement passes its nominal expiry date because s. 58(2)(b) will not have been satisfied. This is because the later agreement being the MUA Proposed Replacement Agreement will not cover employees to whom the Downstream Agreement applies. Even though the Downstream Agreement has passed its nominal expiry date, it will continue to apply to the relevant employees until such time as it is terminated or an agreement of a kind described in s. 58(2)(b) comes into operation so that s. 58(2)(e) is engaged. All this assumes that there is no agreement to replace the Downstream Agreement made, approved and in operation before its nominal expiry date.

Ground 5

[51] It is not suggested that the MUA had not been genuinely trying to reach an agreement up until 22 November 2013. However, it is submitted that the MUA, in now seeking a narrower scope, it is not or is no longer genuinely trying to reach an agreement.

[52] To make good this submission Swire points to the fact that under cross examination Mr Tracey identified the following as the rationale for seeking to narrow the proposed scope of the Replacement Agreement in November 2013:

First, to “keep alive the opportunity to get a protected action ballot and have the option of taking protected action because it increase our bargaining position and leverage in the negotiations that are going on”; and

Secondly, to ensure the Gorgon Downstream employees would continue to receive the $115/day allowance for working on the Gorgon Downstream Project after the nominal expiry of the Gorgon Downstream Agreement (Daily Allowance Reason).” 49

[53] Swire further submits that the Daily Allowance Reason should be rejected on the basis that if the MUA was genuinely concerned about this issue it would have raised the matter in the negotiations with vessel operators and in the email communication between the MUA and its members on the negotiations for the Replacement Agreement the Daily Allowance Reason was not mentioned. Discarding the Daily Allowance Reason, Swire contended, “it is apparent that the only reason the MUA sought to change the scope of the ‘proposed enterprise agreement’ was to avoid the operation of s. 438 of the Act.” In support of that view Swire highlighted a number of factors, including:

no vessel operator other than Swire and Mermaid Marine had received a revised coverage clause seeking to exclude Gorgon Downstream workers;

negotiations had not commenced for any agreements to replace the Downstream Agreements; and

the MUA’s application in this matter as filed on 24 January 2014 did not seek to carve out employees covered by the Downstream Agreement, with the amendment to the application on 25 January 2014 merely designed to avoid the operation of s.438 of the Act. 50

[54] Swire also submits that Mr Tracey’s evidence that the MUA genuinely wants to negotiate an agreement with a narrow scope, should not be accepted because the weight of evidence suggests it is more likely that the MUA is still seeking an agreement with broader scope and it is only now putting forward a narrow scope to attempt to avoid the operation of s. 438 of the Act. 51

[55] For its part the MUA submitted that the evidence did not support a ‘reasonable and definite’ inference that the MUA is not genuinely trying to reach an enterprise agreement which excluded downstream Gorgon employees. The MUA further submitted that it had not sought to alter the scope for the Replacement Agreement earlier because it genuinely believed, due to a misunderstanding of the distinction between application and coverage that it did not need to. The MUA highlighted a number of matters to support that contention largely based on comments it had made to AMMA on a number of occasions and its submissions in the Mermaid Marine PABO application proceedings before Commissioner Williams. The MUA submitted that the evidence that it was genuinely seeking to reach an agreement was more credible and probable than the inference suggested by Swire, that should be drawn, and that Mr Tracey’s evidence should be accepted and that “there is not compelling circumstantial evidence that ought lead the Commission to reject it. 52

[56] Before considering whether or not the MUA has been and is genuinely trying to reach an agreement, we set out some of the authorities dealing with this question.

Authorities on genuinely trying to reach an agreement

[57] The issue of genuinely trying to reach an agreement has been the subject of a number of Full Bench decisions. One of the earliest decisions was in Ford Motor Company of Australia Limited v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia, and others (Ford) 53. In that case, the majority had the following to say on the issue:

“[45] ... In our view, those employees to be covered by the proposed agreement must be identified and known at all stages of the bargaining process. ... Similarly, if bargaining has commenced and there are issues about the appropriateness of the employees proposed to be covered, a scope order can be made and again the provisions of s.173 are activated. ...

Conclusion

[48] It follows that bargaining had not taken, and was not taking, place for an enterprise agreement under the Act that covers only the non-powertrain employees because Ford had refused to bargain, and was not bargaining, for an agreement with that scope. The discussions that took place between Ford and the unions from 2 October until the date of the hearing at first instance cannot, in our view, be construed as bargaining for a proposed agreement that was not to cover powertrain employees, because Ford had categorically stated that it would not bargain, and was not bargaining, on that basis. As bargaining for such an agreement had not commenced the unions had not been, and were not, genuinely trying to reach an agreement with Ford to cover the employees who were sought to be balloted.

[49] The proper characterisation of the post 1 October 2009 discussions is that they were general discussions about aspects of an agreement that might be formally the subject of bargaining under the Act once the employees who were to be covered by it were ascertained.”

[58] In Stuartholme School v The Corporation of the Trustees of the Roman Catholic Archdiocese of Brisbane (Stuartholme) 54 a Full Bench said:

“[25] ... we would not be inclined to adopt the reasoning of the majority in Ford. There is no reason why questions of scope cannot be included in bargaining in the context of a single interest employer authorisation and the mere fact that a bargaining representative puts scope in issue does not mean the bargaining representative is not genuinely trying to reach an agreement. ...”

[59] In MSS Security Pty Ltd v Liquor, Hospitality and Miscellaneous Union (MSS) 55 a Full Bench said:

“[14] In Stuartholme School v The Corporation of the Trustees of the Roman Catholic Archdiocese of Brisbane (Stuartholme) a Full Bench of Fair Work Australia held that the scope of a proposed agreement is a matter than can itself be the subject of bargaining for the agreement. We respectfully endorse the reasoning and conclusion of the Full Bench in that regard.

[15] Once it is accepted that the scope of a proposed agreement can itself be a matter for bargaining it follows that the employer’s obligation under s.173(1) to issue a notice of representation rights in relation to a “proposed enterprise agreement” is to issue such a notice to all employees who would be covered by the broader scope of the agreement proposed by the union or the employer as the case may be.

…

[18] As the Full Bench in Stuartholme noted, “[t]he terms of [s.237] unambiguously suggest that bargaining may have commenced under the Fair Work Act even though the parties to the bargaining process are in disagreement about the scope of the proposed agreement.” Where there is a continuing disagreement between the bargaining parties as to the scope of the proposed enterprise agreement, the remedy for the party who wants a narrower scope is to seek a scope order pursuant to s.238. In the absence of such an order, bargaining will proceed on the basis of the broader scope, save that the parties are entitled to continue bargaining over the scope itself until such time as the scope of the proposed agreement is settled through bargaining or by the making of a scope order.” (footnotes omitted)

[60] In J.J. Richards & Sons Pty Ltd v Transport Workers’ Union of Australia (J.J. Richards) 56the majority stated:

“[58] The expression “genuinely trying” in s.443(1)(b) is, clearly enough, concerned with the genuineness of the “trying”, the efforts, to reach the stated goal, namely an enterprise agreement that meets the requirements of the FW Act. It is directed at the authenticity of the applicant’s efforts to reach that goal. The genuineness or authenticity of an applicant’s efforts to reach that goal will turn on its motivation - the intention, object or purpose.

…

[62] In the ordinary course of events where an applicant for a protected ballot order calls (acceptable) evidence that their intention, object or purpose is to reach an enterprise agreement under the FW Act, what may be described as an evidentiary onus shifts to the party or parties opposing the application to demonstrate why that evidence ought not be accepted sufficient to shift the evidentiary onus back to the applicant.

[63] In circumstances where an applicant for a protected ballot order calls (acceptable) evidence that their intention, object or purpose is to reach an enterprise agreement under the FW Act a finding that the applicant was not “genuinely trying to reach an [enterprise] agreement” within the meaning of s.443(1)(b) will necessarily involve accepting evidence establishing that the applicant had some other, extraneous purpose in seeking the ballot. Indeed, when there is evidence from an applicant for a protected action ballot order that they have been and are “genuinely trying to reach an [enterprise] agreement” under the FW Act, it is difficult to conceive of circumstances where it could properly be found they were not, unless there is cross-examination or other evidence establishing that the applicant in truth has some other, extraneous intention, object or purpose or is seeking something other than an enterprise agreement under the FW Act. For example, the evidence may demonstrate that the applicant is pursuing an agreement that it knows or ought reasonably knows would not be an enterprise agreement within the meaning of the FW Act because it contains non-permitted matters contrary to s.172(1) or that the true motivation is to apply pressure in pursuit of political or environmental goals or simply to punish the employer for some perceived wrong doing.” (underlining added)

[61] In a second JJ Richards decision, J.J. Richards & Sons Pty Ltd and Another v Transport Workers Union of Australia (J.J. Richards II) 57a Full Bench stated:

“[40] Whether an applicant is genuinely trying to reach an agreement is a question of fact to be decided on the material before the tribunal....

[41] In a case in which a bargaining representative legitimately requests an employer to bargain and it is clear the employer does not agree to do so, it is likely that the representative will be found to be genuinely trying to reach an agreement, unless there is material from which it could be concluded that the request to bargain is a sham. Where the employer agrees to bargain other considerations are likely to be relevant. In either case all of the circumstances would need to be taken into account in deciding whether the bargaining representative is genuine.” 58

[62] In J.J Richards Sons Pty Ltd and Another v Fair Work Australia and Another 59a Full Court of the Federal Court held that a protected action ballot order under s. 443(1) of the Act may be made even though bargaining between an employer and employees has not commenced. As to the question of whether a bargaining representative has been and is genuinely trying to reach an agreement, Flick J said:

“It is ultimately concluded that s 443(1)(b) is to be construed such that Fair Work Australia cannot reach a state of satisfaction that an “applicant … is … genuinely trying to reach an agreement with the employer” unless:

an applicant has approached the employer and informed the employer of the general ambit of that for which agreement is sought; and

the employer has foreshadowed — even in the most general of terms — its attitude as to the proposed agreement.

More may be required. Much may well depend upon the factual scenario in which the terms of s 443(1)(b) are to be applied. But such a minimum statement of that which is required is sufficient to dispose of the present Application. Contrary to the submissions advanced on behalf of the Applicants, the terms of s 443(1)(b) do not require:

bargaining to have commenced within the meaning of and for the purposes of s 173, found within Pt 2-4 of the Fair Work Act.

So much, it is concluded, follows from the natural and ordinary meaning of the phrase “trying to reach an agreement … ”. It is difficult to conclude that any person can try to reach an agreement with another in the absence of a disclosure of that for which consensus is sought. One person may wish to reach an agreement with another. But, until the general content of the proposed agreement is disclosed, it cannot be said that he has even attempted to reach an agreement. Until disclosed, it is not known whether the other person will readily embrace the proposed agreement or shun it or (perhaps) embrace the concept of an agreement but wish to vary one or other of its terms. Until disclosed, the person seeking agreement has not even tried to solicit the response of the other. Unless the disclosure is genuinely with a view to reaching agreement, it could well be said that the attempt to reach an agreement falls short of a person even trying to reach agreement. The addition of the word “genuine” — on one approach to construction — perhaps adds little. But the addition of that term serves to emphasise the importance of a person actually trying to solicit agreement. Until a proposed agreement has been disclosed to the prospective parties, and a response solicited, an applicant has not even tried to reach agreement — let alone genuinely tried to reach agreement.” 60

[63] These cases highlight the evolution of the approach to the issue of genuinely trying to reach an agreement since 2009 when Ford was decided.The approach in Ford appears not to have been followed in any of the subsequent authorities noted above. From the decisions in Stuartholme and MSS it is apparent that scope can be the subject of bargaining, with the Full Bench in Stuartholme determining that the fact “that a bargaining representative puts scope in issue does not mean the bargaining representative is not genuinely trying to reach an agreement.” From J.J Richards II and the Full Court decision in J.J Richards we discern that commencement of bargaining is not a prerequisite to a protected action ballot order and it follows, that it is not, in and of itself, a barrier to finding that a bargaining representative has been and is genuinely trying to reach an agreement. Against this background, we adopt the approach of the majority in J.J. Richards, the Full Bench in J.J. Richards II and that of Flick J in the Full Court decision in J.J Richards as set out above.

Chronology of communications between MUA and Swire going to scope after 22 November 2013

[64] We set out below a chronology of the various communications passing between the MUA and Swire on the issue of scope after 22 November 2013, which is the date when the MUA withdrew its first PABO application in respect of Mermaid Marine. The chronology captures communications which occurred at both the industry and enterprise level, but does not include matters related solely to Mermaid Marine (for instance, the subsequent PABO application related to Mermaid Marine).

25 November 2013 - email from Ms Palmer to Mr Wakelin of AMMA providing MUA comments on the AMMA version of the draft enterprise agreement. In respect of clause 4 - Coverage of the draft agreement the MUA included the following comments:

“MUA claim to exclude INPEX is still live.

MUA is seeking advice on rship with Gorgon RCA agreements. At this stage our claim is to exclude Gorgon (wording should reflect the scope clause of the Gorgon Agreement for that particular VO).

Likewise we need to exclude dredging scope of works as per coverage in dredging agreement.” 61

Ms Palmer’s covering email includes the following:

“Please note the following significant changes which have been made since we discussed our comments at the last conference:

1) We are seeking advice on the relationship between these agreements and the Gorgon RCA agreements. Subject to that advice when we receive it, our claim is that the downstream work covered by the wording of the Gorgon RCA agreements should be excluded from the scope of these agreements (with the wording of the exclusion to the scope to mirror the scope clause of the relevant Gorgon RCA agreement).

...

We want to reiterate that we are engaging in this industry-level negotiation and drafting process on request from employers and pursuant to the s590 process, but we believe that ongoing enterprise-level negotiations are critical to ensuring the agreements are reached with each of the employers. As we get to the final stages, we need to be meeting individual employers for enterprise-level negotiations to ensure the final agreement reached with each is in accordance with the needs of that employer and our members so employed. We do not want the industry-level negotiations preferred by the AMMA to hinder our prospects of reaching agreement with individual employers (for eg, we may need to revise our position on a particular claim in relation to a particular employer as part of a bargain struck with that employer). ...

We accept the usefulness of this industry-level process, but we will continue to seek meetings with employers to progress enterprise-level bargaining. ..” 62

29 November 2013 - email from Mr Danny Cain of the MUA to Mr Hearnden “requesting another EBA meeting as soon as possible.” 63

13 December 2013 - email from Mr Tracey to Mr Hearnden seeking confirmation of Swire’s “ability to meet over the EA in coming weeks.” The email also referred to the meeting request being raised on Mr Tracey’s behalf by Mr Cain of the MUA when he met with the new Chief Executive Officer of Swire on 6 December 2013.

● 18 December 2013 - FWC conference without Commissioner Cloghan. The purpose of the conference was for the industry parties to progress drafting of clauses to be included in the Replacement Agreement 64. Also on that day, Ms Palmer of the MUA to Mr White of AMMA providing MUA comments on the draft enterprise agreement reflecting the discussion earlier that day. In respect of clause 4 - Coverage of the draft agreement the MUA included the following comments:

“MUA claim to exclude INPEX is still live. MUA claim is to exclude Gorgon (wording should reflect the scope clause of the Gorgon Agreement for that particular VO).

NOT AGREED.” 65

20 December 2013 - FWC conference without Commissioner Cloghan. The purpose of the conference was for the industry parties to progress drafting of clauses to be included in the parties’ respective replacement agreements for their respective General Agreements 66.

13 January 2014 - follow up email from Mr Tracey to Mr Hearnden seeking urgent confirmation of Swire’s availability to meet. 67

16 January 2014 - Mr Tracey wrote to Mr White identifying the MUA’s “key claims” for the settlement of the Replacement Agreement. On the issue of scope the letter stated “we would be prepared to consider making concessions with regard to items: 4 (scope) ...” 68 Attached to the letter was an updated draft agreement was attached to the letter, which in respect of clause 4 included a comment identical to that provided by Ms Palmer to Mr White on 18 December 2013 and set out above.69

14, 15 and 17 January 2014 - FWC conference.

20 January 2014 - email from Mr White responding to Mr Tracey’s emails of 13 December 2013 and 13 January 2014 indicating Swire’s availability to meet.

22 January 2014 - Mr Tracey responds to Mr White’s email of 20 January 2014 proposing the parties meet on 31 January 2014 70.

23 January 2014 - email from Mr White to MUA confirming arrangements for 31 January 2014 meeting with MUA. The email also confirms “that Swire has adopted the industry position and do not at this stage have any differences to the negotiating positions reached at the Fair Work Commission.” 71

24 January 2014 - PABO application in respect of Swire filed with FWC. The application described the employees to be balloted in the following terms:

“All employees of the Respondent whose employment is subject to the terms of the Swire Pacific Ship Management (Australia) Pty Ltd Integrated Ratings, Cooks, Caterers and Seafarers (Offshore Oil and Gas) Enterprise Agreement 2010 and who are members of the Applicant.” 72

25 January 2015 - PABO application amended to exclude employees to whom the Downstream Agreement applies. The amended draft order described the employees to be balloted in the following terms:

“In accordance with section 437(5) of the Act the employees to be balloted are all employees of the respondent to whom the Swire Pacific Ship Management (Australia) Pty Ltd Integrated Ratings, Cooks, Caterers and Seafarers (Offshore Oil and Gas) Enterprise Agreement 2010 applies, and who are members of the applicant, with the exceptions of those employees to whom the Swire Pacific Ship Management (Australia) Pty Ltd and MUA Gorgon Jetty and Marine Structures Contract Enterprise Agreement 2011 applies.” 73

29 January 2014 - initial hearing of PABO application by Commissioner Cloghan. Also on that day Mr White emails Mr Tracey proposing that meeting scheduled for 31 January 2014 be rescheduled as Swire had not had adequate time to prepare for the meeting given the PABO application 74.

30 January 2014 - Mr Tracey responds to Mr White’s email proposing alternative meeting dates. On the issue of scope, Mr Tracey’s email states:

“I would also like to clarify an important issue around the scope clause of the agreement as we did with other vessel operators.

The MUA position with respect to the scope of the proposed agreement is consistent with that which has been expressed in the industry negotiations. It is therefore consistent with the undertakings we gave each other by email in the second half of last week and is as follows in bold italics:

The Industry position in the draft EA presented by the MUA is stated as - “MUA claim to exclude INPEX is still live. MUA claim is to exclude Gorgon (wording should reflect the scope clause of the Gorgon Agreement for that particular VO).”

For the avoidance of doubt, the effect of this for Swire Pacific is that our proposed scope clause and a related new definition are as follows:

Clause 4 - Coverage

This Agreement covers the Employer and the Employees employed by the Employer in the classifications contained within this Agreement while engaged in the Maritime Offshore Oil and gas Industry in Australia, with the exception of those Employees to whom the Gorgon Agreement applies.

Clause 3 - Definition

“Gorgon Agreement” means the Swire Pacific Ship Management (Australia) Pty Ltd and MUA Gorgon Jetty and Marine Structures Contract Enterprise Agreement 2011 (AG2011/14552) as varied or replaced.” 75

4 February 2014 - Mr White responds to Mr Tracey’s email of 30 January 2014 seeking the MUA’s written response on a number of issues, including coverage. On the issue of coverage, Mr White’s email states:

“Coverage

As you are aware, we do not consider the union to be genuinely trying to reach agreement as you are proposing various different coverage clauses.

Despite the process to date ... we remain unclear about coverage.

Please respond confirming that the coverage that the union is prepared to commit to, and is genuinely seeking, in the bargaining.” 76

10 February 2014 - Mr Tracey emails Mr White draft enterprise agreement dated 15 January 2014. On the issue of coverage, the draft enterprise agreement includes the comment as per the attachment to Ms Palmer’s email of 18 December 2013 and set out above 77.

12 February 2014 - Mr White emails Mr Tracey responding to 16 January 2014 letter. The response states”

“As was verbally conveyed to you in the FWC on 17 January 2014, I confirm that the VOs do not accept the position outlined in your letter of 16 January.

This view was reinforced in writing by the letter of 6 February 2014 ...” 78

13 February 2014 - Mr Tracey responds (at 4.56pm) to Mr White’s email of the previous day. In his response Mr Tracey states:

“The MUA’s position on scope as per my email of 4.59pm [sic Mr Tracey’s email of 30 January 2014] is entirely consistent with the draft agreement which was attached to my related email of 7.18pm.

That draft agreement - as you are well aware - was developed for the industry negotiations. The comment on clause 4 of the draft agreement clearly states:

“MUA claim to exclude INPEX is still live. MUA claim is to exclude Gorgon (wording should reflect the scope clause of the Gorgon Agreement for that particular VO).”

The general comment is then fleshed out vis-a-vis Swire Pacific with the wording in my email of 4.59pm, which ‘reflect[s] the scope clause of the Gorgon Agreement’ for Swire Pacific.

The MUA is disappointed that, despite its good faith bargaining obligations, Swire Pacific has chosen not to give genuine consideration or a specific response to our letter of 16 January or any of the claims therein.”

Later that day Mr Tracey sends a further email (10.40pm) to Mr White again referring to Mr White’s response of the previous day. That email concludes with the following sentence:

“To be clear, we consider your response to our proposal of 16 January and its specific elements is not sufficient to meet your obligations under s 228(1)(c) and (d) of the Fair Work Act.” 79

14 February 2014 - FWC conference. Under cross examination Mr Tracey said that he had tabled an email to Tidewater at the FWC conference on the basis that “it would have application to the rest of the employees in the industry 80. On the issue of coverage, the email stated:

“3. We agree to include Inpex within the scope of this agreement now that we have positive confirmation that indicative rates is not the approach AMMA wishes to pursue on the Inpex job.” 81

[65] It is apparent from the above chronology that there has been considerable written communication between the parties since late November 2013, but that any direct conversations have been limited to industry level negotiations conducted under the auspices of the Commission (both with and without Commissioner Cloghan). While direct discussions with Swire were, after several approaches from the MUA, scheduled for 31 January 2014, they were rescheduled at Swire’s request.

[66] Further it is apparent, that in respect of employees that will be covered by the MUA Proposed Replacement Agreement, the MUA’s position has been, in the main, consistent since at least 18 December 2013 when Ms Palmer emailed Mr White. That approach was also foreshadowed in Ms Palmer’s email to Mr Wakelin of AMMA of 25 November, 2013 albeit with the caveat that the MUA was seeking advice on the relationship between the Replacement Agreement and the Downstream Agreement. The MUA’s position was reiterated on 16 and 30 January and 10 and 13 February 2014, in some cases with further elaboration (for instance Mr Tracey’s emails to Mr White of 30 January and 13 February 2014).

[67] There are some anomalies in the MUA’s position on the issue of scope. For example, the PABO application filed by the MUA on 24 January 2014 is the most significant departure from the position enunciated by the MUA on coverage since at least 18 December 2013, though the application was amended on 25 January 2014 so that it reflected the MUA’s proposed narrower scope. In addition, the MUA indicated in its letter of 16 January 2014 to Mr White that it was willing to consider making concessions with regard to scope. Beyond that, the only issue relating to the coverage of the MUA Proposed Replacement Agreement that was not raised by the MUA in the above exchanges is the Daily Allowance Reason. On this point we found Mr Tracey’s evidence less than compelling. Given the apparent importance of the maintenance of allowance as a reason for the MUA’s changed position on scope, it is surprising that the reason was not communicated to Swire or to AMMA more generally. Furthermore, there is a serious question whether the change in scope would achieve that end. 82 One would be inclined to think that more care would be taken in drafting if that was a purpose sought to be achieved.

[68] Swire and other Vessel Operators do not support the narrower scope proposed by the MUA, though the reasons for that position do not appear to be set out anywhere in the above exchanges or in the evidence elsewhere. A response seems to have been given to the MUA by letter dated 6 February 2014 83 but that letter was not produced in evidence. We acknowledge however that the narrower scope advocated by the MUA post 22 November 2013 is a departure from the basis on which the parties have been negotiating since late 2012.

Is the MUA genuinely trying to reach an agreement with Swire?

[69] The evidence before us demonstrates that scope is an issue in dispute in bargaining between MUA and Swire. The scope issue as it relates to the exclusion of Swire employees covered by the Downstream Agreement only arose on 22 November 2013 in the context of the MUA’s first PABO application in respect of Mermaid Marine. That the MUA as a bargaining representative put scope in issue does not mean it is not genuinely trying to reach an agreement. 84 Likewise, the fact that the MUA has changed its position on scope does not, of itself, support a finding that the MUA is not genuinely trying to reach an agreement simply because scope is in dispute. This remains the case even if scope had been agreed in principle before the MUA’s change in position. That the MUA has indicated that it is prepared to make concessions of scope, is not indicative on its own that it is not genuinely trying to reach an agreement on the MUA Proposed Replacement Agreement, particularly when that statement is, in the present context, ambiguous, and might be referring to concessions regarding the Inpex Project employees.

[70] Mr Tracey’s evidence was that the MUA has been and is genuinely trying to reach an agreement 85. He maintained this position during cross examination. In J.J. Richards the majority said where “there is evidence from an applicant for a protected action ballot order that they have been and are “genuinely trying to reach an [enterprise] agreement” under the Act, it is difficult to conceive of circumstances where it could properly be found they were not ...” Also relevant in this regard are Mr Tracey’s comments in his letter of 16 January 2014 to Mr White identifying the MUA’s “key claims” for the settlement of the Replacement Agreement. On the issue of scope that letter stated “we would be prepared to consider making concessions with regard to items: 4 (scope) ...” Ms Palmer’s comments in her email to Mr Wakelin of 25 November 2013 (see paragraph [64] above) also suggest a willingness/intent on the part of the MUA to adapt its claims to the needs of individual vessel operator’s enterprises and MUA members working in those enterprises. Applying the approach of the majority in J.J. Richards, the material before us supports a finding that the MUA has been and is genuinely trying to reach an agreement. Furthermore, the chronology of correspondence detailed earlier in this decision shows that the general content of the proposed enterprise agreement, including its scope, sought by the MUA has been disclosed to Swire, and a response has been solicited by the MUA. Indeed a response by Swire rejecting the MUA’s scope proposal has been given. This also supports a conclusion that the MUA has been and is genuinely trying to reach an agreement with Swire.86

Does the evidence establish that the MUA’s purpose is all about avoiding s. 438(1) of the Act?

[71] We now turn to consider whether the MUA has, by raising a change in scope, some extraneous intention, object or purpose or is seeking something other than an enterprise agreement under the Act as described by the majority in J.J. Richards. In Mermaid Marine we said:

[93] The evidence of the Respondent’s change in its position on scope and of the circumstances in which the change was brought about was suggestive of purpose or motive that was all about avoiding the consequence of s. 438(1) and had very little to do with trying to reach agreement with the Appellant on the Respondent’s proposed enterprise agreement that was the subject of the PABO Application. The failure to take into account that evidence is an appellable error. (Footnote omitted) 87

[72] The MUA does not dispute that keeping alive the option of taking protected industrial action was a factor in deciding to pursue the MUA Proposed Replacement Agreement. The question then is whether there is anything untoward in a bargaining representative structuring its claim for a proposed enterprise agreement (whether before or during bargaining) so that they ensure or leave open the prospect of accessing the various mechanisms available under the Act to further its claim for a proposed enterprise agreement.

[73] We are unable to identify any provision in the Act which expressly precludes this. Nor do we think the requirement that a bargaining representative has been and is genuinely trying to reach an agreement as a necessary precondition to the making of a PABO, carries with it an implication that a bargaining representative is so precluded. In and of itself, a bargaining representative making a particular strategic choice which is permissible under the bargaining scheme established by the Act, is not a basis on which to conclude that the bargaining representative is not genuinely trying to reach an agreement or that the bargaining representative has some extraneous intent or purpose. Recourse to protected industrial action and applications to facilitate that action, are an accepted means by which a bargaining representative may further the interests of those it represents. That the MUA seeks to avoid particular consequences which would deprive it of pursuing a lawful and legitimate right, by altering its position on scope, without probative evidence that doing so is to enable the MUA to further its original position on scope, is not a sound basis for concluding that the bargaining representative is not genuinely trying to reach an agreement.

[74] The MUA’s change of position on the issue of scope is reflective of the dynamics of bargaining. This view is reinforced by the evolution of the MUA’s position on the issue of whether or not the Inpex project is covered by the Replacement Agreement. Under cross examination Mr Tracey indicated that the MUA’s view was first raised with Swire on 16 August 2013 and was in response to the approach taken to the Inpex project by AMMA. With AMMA subsequently moving away from an approach to the project premised on indicative rates, the MUA no longer sought the exclusion of workers on the Inpex project from the Replacement Agreement. While Mr Tracey’s evidence was to the effect that that view was settled inside the MUA in late 2013 it was not until 14 February 2014 that it was communicated to Tidewater (by email) and the rest of the industry verbally at the FWC conference convened on that day 88. However, Mr White’s evidence was that while he was aware of the correspondence to Tidewater on Inpex, he did not consider that it was made clear by Mr Tracey at the FWC conference on 14 February 2014 that the approach would apply across other vessel operators89.

[75] Evidence which suggested that the MUA vis-a-vis Swire, continues to press for a broader scope, and that the narrower scope claim is simply a ruse to enable protected industrial action to occur in order to press a claim for an agreement containing a broader scope, would raise serious questions about the MUA’s motive, purpose and genuineness. But no evidence to that effect is before us, and Mr Tracey expressly rejected such a proposition. 90 Swire submitted that the weight of evidence suggests that it is more likely that the MUA is still seeking an agreement with a broader scope and it is only pursuing a narrow scope to attempt to avoid the operation of s. 438 of the Act. If that were correct we would readily conclude that we were not satisfied the MUA is genuinely trying to reach an agreement, but the weight of evidence in our view does not go nearly that far. The evidence establishes that the MUA’s changed position is motivated by wanting to keep its protected industrial action options open. However the evidence also establishes that the MUA now seeks, and has since late in 2013, sought an agreement with Swire which contains a narrower scope. Without evidence that the MUA is still pursuing a broader scoped agreement with Swire, we do not consider that seeking to avoid the operation of s.438 of the Act by changing and then maintaining a position on the scope which is narrower than that previously claimed by the MUA, is an “extraneous intention, object or purpose” of the kind referred to by the majority in J.J. Richards as reflective of the MUA not genuinely trying to reach an agreement. We are also not persuaded that we should infer any extraneous intention, object or purpose. The evidence relied on by Swire in support of such an inference is not strong91. Swire points to the following matters it says suggest the MUA is still seeking an agreement with a broader scope that includes those employees covered by the Downstream Agreement:

the timing of the change to scope which was made in response to a realisation that the broader scope claim would prevent protected industrial action being taken;

the MUA’s admission that it altered its scope claim because it sought to keep alive the protected industrial action option;

the long history of bargaining for a broader scope in the Replacement Agreement dating back to January 2013;

the lack of information to MUA members that the change in position on scope was motivated by a desire to protect allowance entitlements of employees covered by the Downstream Agreement;

the failure by the MUA to raise the Daily Allowance Reason with Swire at any time before the PABO Application was heard by us;

the change in scope has only been notified to Swire and Mermaid Marine; no other vessel operator has received a draft scope clause containing the narrower scope;

the MUA has not commenced bargaining for a replacement Downstream Agreement;

the coverage clause notified to Swire by the MUA on 30 January 2014 does not exclude the Inpex Project;

the scope contained in the pre amended PABO Application; and

the amended PABO application contains a scope clause drafted in a way that results in the Replacement Agreement covering the employees covered by the Downstream Agreement once that agreement passed its nominal expiry date. 92

[76] Taken together this evidence establishes no more than that the MUA wishes to preserve the option of protected industrial action; its Daily Allowance Reason is disingenuous; it has changed its position on scope after almost a year of negotiation on a broader scope for the Replacement Agreement after discovering that the protected industrial action option is not available; and it is guilty of sloppy drafting.

[77] We do not accept Swire’s suggestion that the evidence establishes that a broader scope is still being pursued by the MUA with other vessel operators. 93 The matters discussed at conference between industry parties held on 18 December 2013 and in the subsequent email from Ms Palmer of the MUA to Mr White of AMMA show clearly that the MUA seeks to “exclude Gorgon (wording should reflect the scope clause of the Gorgon Agreement for that particular VO)” and that this was “not agreed”.94

[78] Further, for the reasons given earlier at [39] - [50] we do not accept that the amended PABO application is intended to have the effect suggested by Swire.

[79] In our view the evidence relied on by Swire is not evidence of a kind that would give rise to reasonable and definite inference 95 that the MUA has changed its position on scope merely to avoid the consequence of s. 438(1) and that it continues to seek an agreement with Swire that contains a broader scope including employees covered by the Downstream Agreement.

[80] On this point, as previously noted, the MUA’s position regarding scope (at least in respect of excluding employees covered by the Downstream Agreement) has been consistent since at least 18 December 2013 when Ms Palmer emailed Mr White, the significant exception being the PABO application lodged on 24 January 2014 which was amended the following day so that it aligned with the narrower scope advocated by the MUA. Swire submits that the scope reflected in the PABO application of 24 January 2014 reflects the MUA’s actual intent in respect of coverage. Mr Tracey’s evidence that this was an inadvertent error which was promptly corrected is less than compelling given developments following the initial Mermaid Marine PABO application.

[81] Beyond this, at paragraph [20] of his statement, Mr Tracey states:

The use of the word “including” implies coverage beyond those which the PABO application identifies as the group to be balloted.

[82] Similarly, the inconsistency in Mr Tracey’s email of 30 January 2014 to Mr White regarding the exclusion of Inpex workers, with the proposed scope clause set out in that email not referring to Inpex (though the preceding text did) raises questions about the genuineness of the MUA’s position on the issue of scope.

[83] When viewed together, these anomalies give support to Swire’s submission that the MUAs position on scope is merely an attempt to avoid the operation of s. 438(1) of the Act. However, as we previously stated, we do not consider seeking to avoid the operation of s.438 of the Act, without probative evidence that doing so is to enable the MUA to further its original position on scope, is an “extraneous intention, object or purpose” and as reflective of the MUA not genuinely trying to reach an agreement. Mr Tracey’s evidence at paragraph [20] of his statement reproduced above is merely reflective of the history of bargaining, and does not in our view, indicate the MUA continues to pursue a broader scope for the Replacement Agreement.

[84] Further, one of the unique aspects in this matter is the mix of industry level and enterprise level discussions for a Replacement Agreement. This has seen more than twenty industry level discussions under the auspices of the Commission together with five enterprise level meeting between the MUA and Swire. The last of those enterprise level meetings occurred on 16 August 2013. The absence of any enterprise level discussions between Swire and the MUA since August 2013 raises questions as to whether or not the MUA is genuinely trying to reach an agreement with Swire. However, on the material before us, the MUA has since 29 November 2013 been seeking to arrange further discussions with Swire. While a meeting was eventually confirmed by Swire on 23 January 2014 for 31 January 2014, it was rescheduled at Swire’s request due to the application in this matter. Swire participated in the FWC conferences in December 2013 and January and February 2014 where the narrower scope was discussed, among other issues. AMMA also participated in these conferences as a bargaining representative of Swire and of the other vessel operators. In addition, there were the various exchanges between the MUA and Swire outlined at paragraph [64] above where the narrower scope was clearly canvassed.

[85] Taken together, the evidence establishes that the MUA has been and is genuinely trying to reach an agreement with Swire, and we are so satisfied.

Statutory requirements

[86] With particular regard to the statutory requirements, we are satisfied that the MUA is a bargaining representative for the purposes of s.437(1) of the Act and that the matters set out in the MUA’s application satisfy the requirements set out in ss. 437(3) to (6) of the Act. Further, for the reasons set out at paragraphs [28] to [50] s. 438 is not engaged and, for the reasons set out at paragraphs [51] to [85], we are satisfied that the MUA has been and is genuinely trying to reach an agreement with Swire.

Form of order

[87] We deal firstly with the identification of employees to be balloted as set out in the amended PABO application and draft order. The amended PABO application identifies the group of employees to be balloted as follows:

“In accordance with s 437(5) of the Act, the employees to be balloted are all employees of the Respondent to whom Swire Pacific Ship Management (Australia) Pty Ltd Integrated Ratings, Cooks, Caterers and Seafarers (Offshore Oil and Gas) Enterprise Agreement 2010 (AG2010/12511) applies and who are members of the Applicant, with the exception of those employees to whom the Swire Pacific Ship Management (Australia) Pty Ltd and MUA Gorgon Jetty and Marine Structures Contract Enterprise Agreement 2011 (AG2011/14552) applies.”

[88] Mr Tracey gave evidence that it was not the intention of the MUA to have employees covered by the Downstream Agreement later covered by the MUA Proposed Replacement Agreement:

DEPUTY PRESIDENT GOSTENCNIK: Mr Tracey, earlier you answered some questions from Mr Wood about the coverage provision in clause 4 which, for convenience sake, if you look at SDW31 - - -?---Yes.

- - - is reproduced there, and you'll see that relevantly that coverage clause uses the term "the Gorgon agreement applies", and I think the exchange between you and Mr Wood as to the effect that by using that term you're in fact having the reverse effect of, rather than preserving the allowances for the Gorgon employees once the new agreement is made on your terms, and the Gorgon Agreement expires, that in fact everybody will lose their allowance because this agreement that you're now pursuing will cover them. Remember that discussion?---I remember that discussion. If that - that position is correct that they put - yes, certainly, and that's - - -

That position is correct. Does that mean that if that position is correct you're going to change the coverage clause?---Well, we would certainly want a coverage clause that reflects the carve-out of the Gorgon work and then puts us in a position where we're able to go and negotiate a new agreement for that work given that it expires mid-year this year, and we'll probably need to get cracking on that for the number of employees whose agreement expires at 30 June.

Yes, but if this agreement is made before then, and that agreement then expires, then this agreement will apply until that agreement is replaced. Correct?

---Well, that's the advice I now need to - - -

Discharging it, yes?---That's the advice we now need to take because we - - -

Yes. So given that you now need to take that advice, is it the case that there may well be a change to the coverage clause?---If the position of our membership there are not protected, certainly, because the intent was to do that, but if we're now being told that that's not the case then we probably need to engage Mark Ritter for a little bit longer. 96

[89] On one view the intention of the MUA, as expressed in Mr Tracey’s evidence, is not given full effect in the description of the employees who are to be balloted.

[90] Section 437(3)(a) provides that the PABO application must specify “the group or groups of employees who are to be balloted”. Section 437(5) provides inter alia that a “group or group specified under paragraph (3)(a) is taken to include only employees who: (a) will be covered by the proposed agreement”. Section 443(3)(b) provides that a protected action ballot order must specify “the group or groups of employees who are to be balloted”. The evidence relied on by the MUA clearly discloses that the group of employees who are to be balloted and who will be covered by the MUA Proposed Replacement Agreement does not include employees covered by the Downstream Agreement. The MUA has submitted a proposed draft order which identifies the group of employees who are to be balloted in the manner described at [87] of this decision. Given the intention of the MUA as disclosed by Mr Tracey’s evidence is to exclude “Gorgon work” and employees performing that work, we do not propose to identify the group of employees in the manner suggested by the MUA.

[91] Instead we propose to identify the exclusion of employees from the group of employees to be balloted in the order we will make, by using the word “covers” instead of “applies”. Consequential alterations to the proposed draft order are necessary as a result. In the current circumstances, the alteration makes no difference because those employees covered, are the same employees to whom the Downstream Agreement applies. However it serves to mark our more clearly the MUA’s intended scope of the MUA Proposed Replacement Agreement.

[92] The MUA has also sought to amend the draft PABO attached to its application reflecting an extended notice period for each form of protected industrial action of 6 days. If an order is to issue, Swire unsurprisingly did not object to a longer notice period. In the circumstances we are satisfied, particularly having regard to the uncontested evidence of Mr Harris that there are exceptional circumstances justifying a longer period of notice than 3 working days. Consequently the order we make will specify a period of 6 calendar days.

Conclusion

[93] Pursuant to s. 443(1) of the Act, we make a protected action ballot order. An order to that effect is issued separately in PR549395.

[94] As a postscript we make the following observations. The obligation to continue to genuinely try to reach an agreement with Swire as a condition precedent to the organising and taking of protected industrial action does not end with the determination of this application. The MUA has since late 2013 maintained, and we have accepted, that it seeks an agreement with Swire containing a narrower scope which excludes employees performing that is the subject of the JV Swire Contract who are covered by the Downstream Agreement. On the assumption that the ballot of employees that will take place as a consequence of the order that we make approves certain industrial action in relation to the MUA Proposed Replacement Agreement, any industrial action which is subsequently organised by the MUA and taken by relevant Swire employees will only likely be protected, if inter alia, the MUA continues to genuinely try to reach an agreement (the MUA Proposed Replacement Agreement) with Swire. 97

DEPUTY PRESIDENT

Appearances:

M Ritter SC with E Palmer for the Applicant

Mr S Wood SC with Mr T Saunders of Counsel for the Respondent

Mr T Saunders of Counsel for AMMA

Hearing details:

Perth

17 February 2014

Further Submissions

Applicant 28 February 2014

Respondent 4 March 2014

1 Mermaid Marine Vessel Operations Pty Ltd v The Maritime Union of Australia (C2014/2788)

2 [2014] FWC 8

3 [2014] FWCFB 1317

4 AMMA’s Outline of Supplementary Submissions in Opposition to Protected Action Ballot Order Application at paragraph [4]

5 Swire’s Outline of Submissions in Opposition to Protected Action Ballot Order Application at paragraphs 2-5

6 Exhibit Swire 7 at paragraph [17]

7 Outline of Submissions at paragraph [19]

8 Exhibit MUA 1

9 Transcript at PN213

10 Ibid, PN261-262

11 Ibid, PN288-297

12 Ibid, PN302-311

13 Ibid, PN366-374

14 Ibid, PN407-408

15 Ibid, PN443-444

16 Ibid, PN447

17 Exhibit Swire 5

18 Transcript at PN463-468

19 Swire’s Outline of Submissions in Opposition to Protected Action Ballot Order Application at paragraphs [11]-[36]

20 Ibid at paragraph [19]

21 Ibid at paragraph [34]

22 Ibid at paragraph [36]

23 Exhibit Swire 7

24 Ibid at paragraph [39]

25 Exhibit Swire 6

26 Transcript at PN512-531

27 Exhibit Swire 8

28 AMMA’s Outline of Supplementary Submissions in Opposition to Protected Action Ballot Order Application at paragraphs [1] and [6]

29 [2014] FWCFB 1317 at [24] - [44]

30 [2014] FWCFB 1317 at [66]

31 Swire’s Submissions in Reply at paragraph [16]

32 MUA Submissions in Response at paragraph [21] - [52]

33 See s. 173(2)

34 See s. 173(1)

35 [2014] FWCFB 2042

36 Ibid at [20]

37 See Wesfarmers Premier Coal Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (No 2) (2004) 138 IR 362 at [55] and [56]; Explanatory memorandum to Fair Work Bill 2008 at [643]

38 MSS Security Pty Ltd v Liquor, Hospitality and Miscellaneous Union [2010] FWAFB 6519 at [19]

39 [2014] FWAFB 1317 at [97]

40 MUA Submissions in Response at paragraph [5]

41 Transcript PN442 - PN447

42 Ibid at [4]

43 Ibid at paragraph [20]

44 Exhibit MUA 1 at WT8 p.3; Exhibit Swire 6 at SDW 31 p.1

45 Ibid

46 Exhibit Swire 6 at SWW 2

47 Defined in clause 2 of the Downstream Agreement as KBR E+C Australia Pty Ltd; JGC corporation; Clough Projects Australia Pty Ltd and Hatch Associates Pty Ltd

48 [2014] FWCFB 1317 at [72] - [74]

49 Swire’s Outline of Supplementary Submissions in Opposition to Protected Action Ballot Order Application at paragraph [23]

50 Ibid at paragraphs [24]-[25]

51 Swire’s Submissions in Reply at paragraphs [36]-[38]

52 MUA Submissions in Response at paragraphs [53]-[67]

53 [2009] FWAFB 1240

54 [2010] FWAFB 1714

55 [2010] FWAFB 6519

56 [2010] FWAFB 9963

57 [2011] FWAFB 3377

58 Ibid at [40] and [41]

59 (2012) 201 FCR 297

60 Ibid and 312 [58] - [59]

61 Exhibit Swire 2. Note in respect of the reference to the exclusion of dredging, at the hearing Swire did not press the issue - see transcript at PN279

62 Exhibit Swire 6 at Attachment SDW-19

63 Exhibit Swire 5

64 Exhibit Swire 6 at paragraph [15]

65 Exhibit Swire 3

66 Exhibit Swire 6 at paragraph [15]

67 Exhibit Swire 5

68 Exhibit MUA 1 at Attachment WT5

69 Ibid at Attachment WT6

70 Exhibit Swire 5

71 Ibid

72 Form F34 Application for a Protected Action Ballot Order

73 Transcript at PN79

74 Exhibit MUA 1 at Attachment WT8

75 Ibid

76 Ibid

77 Exhibit Swire 6 at Attachment SDW-34

78 Ibid at Attachment SDW35

79 Exhibit MUA 2

80 Transcript at PN159

81 Exhibit MUA 5

82 See Transcript PN443 - PN447

83 An email from Mr White to Mr Tracey of 12 February refers to VO’s not accepting the change in scope and that this was reinforced in writing on 6 February 2014

84 See Stuartholme at [25]

85 Exhibit MUA 1 at paragraph [20]

86 See per Flick J in J.J Richards Sons Pty Ltd and another v Fair Work Australia and Another (2012) 201 FCR 297 at [59]

87 [2014] FWCFB 1317

88 Transcript at PN166

89 Ibid, PN512-531

90 See transcript PN439 - PN441

91 The evidence from which an inference is suggested be drawn is set out in Swire’s Submission of 14 February 2014 at [22] to [25]

92 See Swire’s Submissions in Reply at paragraph [36]

93 Ibid at [36] f)

94 See Exhibit Swire 6 at paragraph [15] and Exhibit Swire 3

95 See for example Moama Bowling Club v Thomson [2013] VSC 744

96 Transcript PN442 - PN447

97 See common requirements for Protected Industrial Action in s. 413

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