Mr Geoff Pape v Transfield Worley Services

[2013] FWC 3433

[2013] FWC 3433

FAIR WORK COMMISSION

DECISION

AND

REASONS FOR DECISION

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

Mr Geoff Pape
v
Transfield Worley Services
(C2013/3063)

COMMISSIONER CLOGHAN PERTH, 6 JUNE 2013

Alleged dispute about any matters arising under the enterprise agreement and the NES;[s186(6)].

[1] On 12 February 2013, Mr Geoff Pape (Applicant) made application to the Fair Work Commission to deal with a dispute in accordance with a dispute settling procedure (DSP).

[2] The Applicant is in dispute with Transfield Worley Services (Employer).

[3] The Application is made pursuant to s.739 of the Fair Work Act 2009 (FW Act).

[4] The DSP is contained in the Transfield Worley (Woodside) Onshore and Offshore 2011 Collective Agreement (Agreement).

[5] The application was the subject of conciliation conferences on 2 and 15 April 2013.

[6] At the conclusion of the conference on 15 April 2013, the dispute remained unresolved.

[7] In view of Mr Pape’s travel arrangements, the Applicant and the Employer agreed for the Commission to determine the dispute “on the papers”. Mr Pape relied upon the “papers” he had already provided to the Commission.

[8] Notwithstanding Mr Pape relying upon the documentation he had already provided to the Commission, I issued procedural directions requesting that the Employer provide its statement of facts, submission and further documentary material to Mr Pape. Mr Pape was given the opportunity to respond to the Employer’s “case” and provide any further material to the Commission.

[9] On 1 May 2013, the Commission received the Employer’s submission.

[10] On 6 May 2013, I received a comment, by email, from the Applicant resisting an alleged statement of fact set down by the Employer. Apart from this statement, I received no further submission from the Applicant.

[11] Having considered the documentation provided by both parties, this is my decision and reasons for decision concerning the relief sought by the Applicant.

RELEVANT STATUTORY FRAMEWORK

[12] The relevant provisions of s.739 of the FW Act provide as follows:

• 739 Disputes dealt with by the FWC

(1) This section applies if a term referred to in section 738 requires or allows the FWC to deal with a dispute.

(2) ...

(3) In dealing with a dispute, the FWC must not exercise any powers limited by the term.

(4) If, in accordance with the term, the parties have agreed that the FWC may arbitrate (however described) the dispute, the FWC may do so.

Note: The FWC may also deal with a dispute by mediation or conciliation, or by making a recommendation or expressing an opinion (see subsection 595(2)).

(5) Despite subsection (4), the FWC must not make a decision that is inconsistent with this Act, or a fair work instrument that applies to the parties.

(6) ...

[13] RELEVANT PROVISIONS OF THE AGREEMENT

“Clause 6. Coverage of Agreement:

6.1 ...

6.2 ...

6.3 This Agreement shall apply in the Commonwealth of Australia and in the adjacent areas as defined in the Offshore Petroleum and Greenhouse Gas Storage Act 2006 in force from time to time whether Commonwealth or State as the case may be.”

“Clause 11. Avoidance of Disputes Procedure:

11.1 ...On all occasions, any issue, grievance or dispute over any matter between the parties to this Agreement shall be settled in accordance with this procedure without resorting to industrial action. This shall apply whether the matter in dispute relates directly to site employment or not, or whether it relates to a matter dealt with by this Agreement, or not:

11.1.1 ...

11.1.2 ...

11.1.3 ...

11.1.4 If the dispute still remains unresolved, either party may refer the dispute to the Fair Work Australia. Fair Work Australia may then exercise its conciliation and/or arbitration powers in hearing the grievance/dispute. Both parties will be bound by any decisions made by Fair Work Australia.”

RELEVANT PROVISIONS OF MR PAPE’S CONTRACT OF EMPLOYMENT

[14] Pages 3-7 of a seven (7) page document provided to Mr Pape before his acceptance of the Employer’s employment offer, read as follows:

“The duration of this Offer of Casual employment is valid for a 12 month time period and lapses on the 31 December 2012, but not withholding that the casual arrangement is primarily governed by the Transfield Worley (Woodside) Onshore and Offshore 2011 Collective Agreement (the Agreement).

We confirm an offer of casual employment with Transfield Worley that is conditional upon your written acceptance of the terms/ conditions and attachments.

...

You should be aware that each time you are engaged you will be given a start and finish date. As a casual it constitutes a separate and distinct contract of employment. At the end of each casual engagement there is no obligation on Transfield Worley to offer you further employment or obligation on you to accept any future offer.

This contract must be read in conjunction with the terms and conditions set out in the Agreement, specifically clause 13.10 - casual employees (in the Main Body of the Agreement).

1.0 ENTIRE AGREEMENT

These standard Terms and Conditions of Employment together with the attached Policies and Guidelines form your Contract of Employment and will cover any casual employment you have with Transfield Worley. You will at all times comply with all lawful and reasonable orders and instructions given to you by the Company. This includes compliance with and adherence to the company’s policies, procedures and guidelines as amended from time to time.

Your employment is subject to the Agreement. To the extent of any inconsistency between the terms of this offer (including attachments) and the terms of the Agreement, the latter will prevail.

...

4.0 LOCATION OF EMPLOYMENT

In your employment with Transfield Worley you may be required to work on any of the locations covered by the Agreement or such other locations as directed, at any time during our employment.

...

6. CLASSIFICATION AND REMUNERATION

Whilst it does not form part of your Contract of Employment your conditions of employment will be governed by the Agreement.”

RELEVANT PROVISIONS OF MR PAPE’S LETTER OF OFFER OF EMPLOYMENT

[15] Pages 1 and 2 of a seven (7) page document provided to Mr Pape read as follows:

“I am pleased to offer you casual employment...Your Contract of Employment is attached for your review, acceptance and return to Transfield Worley.

Your employment conditions are covered in the Transfield Worley (Woodside) Onshore and Offshore 2011 Collective Agreement however given the unique nature of this project, there are a number of important points that you should be aware of that are not covered in your Contract of Employment. These are as follows:

- The Safe Astoria is currently located in Batam, Indonesia and as such you may be required to travel to its location via Singapore for the purposes of familiarisation and/or tow to the North Rankin hub. You further may be required to mobilise in Lombok, Indonesia for the purposes of crew changeover.

...

- Actual hours worked in international locations and during the tow until the Safe Astoria is connected by bridge to the North Rankin Hub will be paid at offshore rates, as such over cycle rates will only apply after this milestone...”

APPLICANT’S SUBMISSION

[16] In his application, the Applicant submits:

• subclause 1.4 Over Cycle Hourly Rates of Pay of Schedule 2 - Offshore Platforms provides:

“Employees may be required to work more than the rostered work hours and/or during their off duty period/outside their work cycle, in which case the following over cycle rates plus any applicable allowances will apply”;

• the normal rostered work hours was two (2) weeks on followed by two (2) weeks off;

• while his contract of employment states that the Agreement does not form part of his contract of employment, his employment is governed by the Agreement;

• to the extent of any inconsistency between his contract of employment and the Agreement, the latter prevails;

• at no place in the Agreement does it state that the over cycle rates conditions do not apply in international waters, as verified in the offer of employment letter;

• correspondence from the Employer which alleges that over cycle rates will not be applicable during tow in international waters is incorrect and such a statement cannot be found in the “common law contract” or “Contract of Employment”;

• the offer of employment letter provides that over cycle rates are only applicable once the “Safe Astoria is connected by bridge to the North Rankin hub”; and

• that over cycle payments were not made on the tow from Batam to the North Rankin hub. “My understanding is the contract had not started with Woodside until the bridge was connected. In addition, on the tow down no “normal work cycle” had been established and the rig was still under contract to Woodside until the vessel reached Batam. There is no mention about the tow back to Batam near the end of the contract, only the tow down to North Rankin hub was mentioned, and it was not in the common law contract, but rather in the offer of employment letter”.

[17] I note that Mr Pape has not set out the exact hours he is seeking to be paid at over cycle rates on the tow to Batam. For those details, I will rely on the Employer’s submission.

EMPLOYER’S SUBMISSION

[18] The Employer submits:

• Mr Pape commenced employment on 14 April 2012;

• Mr Pape commenced employment after the Safe Astoria had been connected to the North Rankin Hub Redevelopment Project (Mr Pape disputes this fact and asserts that he “commenced employment onboard the Safe Astoria in Batam, Indonesia”;

• from 14 April 2012 to 1 January 2013, Mr Pape’s employment was “underpinned” by the Agreement;

• Mr Pape ceased employment with the Employer on 21 January 2013;

• subclause 6.3 of the Agreement limits its application to “the Commonwealth of Australia and in adjacent areas as defined in the Offshore Petroleum and Greenhouse Gas Storage Act (2006) in force from time to time whether Commonwealth or State as the case may be”;

• “Mr Pape’s contract of employment, inclusive of letter of offer, provided certain conditions of work performed outside the Agreement’s scope of coverage”;

• Mr Pape’s letter of offer of employment provided that “other conditions of employment” would need to be agreed upon in order to commence employment;

• offshore rates, exclusive of the over cycle payment, would be paid for actual hours worked in international waters;

• offshore rates, exclusive of the over cycle payment, would be paid on the tow from Indonesia until connected to the North Rankin hub, where over cycle rates would commence when appropriate;

• at the time Mr Pape was offered employment, it was not known whether he would be employed for the tow back of the Safe Astoria to Indonesia;

• Mr Pape’s employment was conditional on his acceptance of the conditions outlined in his offer of employment letter;

• in November and December, a number of employees sought to be considered for employment on the tow back to Indonesia of the Safe Astoria. Acknowledgement of the requests by the Employer indicated that over cycle would not be paid while in international waters;

• when contacted in late December 2012, Mr Pape “agreed to be employed for the duration of the tow, requiring him to agree to end his R&R early in order to return to work to commence a new shift and prepare the Safe Astoria for its return to Batam”;

• those employees who had been recruited for the tow back were advised in accordance with Schedule 2 of subclause 7.14 of the Agreement that the Rostered Work hours and Work Cycles clause was not applicable as the Employer required them to commence a different swing and the “over cycle does not apply”;

• Mr Pape commenced his off swing on 21 December 2012 and returned to work on 28 December 2012 - six days before completing the off swing;

• the Safe Astoria disconnected from the North Rankin Hub Project on 28 December 2012 in preparation for its departure on 1 January 2013; and

• Mr Pape ceased employment on 21 January 2013.

CONSIDERATION

[19] It is not in dispute that the two documents which are central to these proceedings are Mr Paper’s offer of employment and the Agreement.

[20] The offer of employment is dated 12 April 2012 and states that Mr Pape’s employment conditions are “covered in the Agreement”. The expression “covered” is used in a workplace sense to indicate to the employee that the document referred to, in this case the Agreement, contains and comprises some of the explicit conditions of employment. The Agreement does not contain all conditions of employment, for example, there are implicit conditions of employment, and also those set out in statute, such as the Occupational Safety and Health Act 1984.

[21] The letter of offer of employment further states, “however given the unique nature of this project, there are a number of important points that you should be aware of that are not covered in your Contract of Employment”.

[22] While the statement above in paragraph [21] could be “tighter”, it is safe to say that it is intended to draw to the attention of the prospective employee that, in addition to the contract of employment, there are conditions attached to employment which are not contained in the contract, in particular, the Agreement. These additional conditions include: the necessity of having a valid passport; the employee will be paid six (6) hours if required to travel between Australia and Singapore; and that “actual hours worked in international locations and during the tow until the Safe Astoria is connected by bridge to the North Rankin hub will be paid at offshore rates as such over cycle rates will only apply after this milestone”.

[23] I apprehend the statements in Mr Pape’s initiating application (which is his submission) to mean either the offer of employment letter does not form part of his contract of employment or alternatively, in the event that the offer of employment does form part of his conditions of employment, where there is inconsistency between the offer of employment and the Agreement, the Agreement prevails. Finally, that there is no mention in either the offer of employment, or the Agreement, regarding what conditions apply in the tow back of the Safe Astoria to Indonesia.

[24] In Goldman Sachs JB Were Services Pty Limited v Nikolich [2007] FCAFC 120 (GSJBW) the Full Court concluded that it was common ground that the “contract of employment was constituted at least in part by a letter of offer dated 4 May 2000. The letter began:

“We are pleased to confirm our verbal offer of employment to you...” paragraph [7].

[25] On appeal, the Full Court dealt with the issue of the “content of the employment contract, which the trial judge found to be contained in part in a formal letter of offer and in part in a lengthy document entitled “Working with Us” (WWU) paragraph [2].

[26] At paragraph [23] the Full Court states:

“23       The principles to be applied in determining whether any, and if so what, parts of WWU were terms of the contract of employment are not in doubt. It is well established that if a reasonable person in the position of a promisee would conclude that a promisor intended to be contractually bound by a particular statement, then the promisor will be so bound. This objective theory of contract has been repeatedly affirmed as representing Australian law by the High Court. Thus, in Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165, 179, the Court said:

“It is not the subjective beliefs or understandings of the parties about their rights and liabilities that govern their contractual relations. What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe. References to the common intention of the parties to a contract are to be understood as referring to what a reasonable person would understand by the language in which the parties have expressed their agreement. The meaning of the terms of a contractual document is to be determined by what a reasonable person would have understood them to mean. That, normally, requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction.” (my emphasis)

[27] The words preceding the Full Court citation immediately above of the High Court judgement are as follows:

“This Court [High Court] in Pacific Carriers Ltd v BNP Paribas, has recently reaffirmed the principle of objectivity by which the rights and liabilities of the parties to a contract are determined.” ([204] HCA 35) (my emphasis)

[28] Having considered the above judgements, I find that the Employer, in the offer of employment, because of the nature of the duties to be undertaken by Mr Pape, highlighted conditions of employment which went beyond the Agreement and the attached general conditions of employment. Objectively, I find that, while it could have been expressed more clearly, that the offer of employment included the “important points” or conditions set out in the correspondence and form part of Mr Pape’s contract of employment.

[29] I now turn to Mr Pape’s submission that, in the event that the provisions in the offer of employment are part of his conditions of employment, where there is an inconsistency between the offer of employment and the agreement, the Agreement prevails.

[30] The Agreement extends to the Commonwealth of Australia and adjacent areas - it does not provide for conditions of employment beyond this geographical boundary. For this reason, one of the conditions of employment contained in the offer of employment is that “actual hours of work in international locations...will be paid at offshore rates, as such over cycle rates will only apply after this milestone [Safe Astoria connected to North Rankin hub].”

[31] As the Agreement is geographically limited, there are no conditions for hours worked in international locations. For employees who will be required to work in international locations on the tow down to the North Rankin hub from Indonesia, the conditions for that work are contained in the letter of offer of employment. The letter of offer of employment provides that actual hours worked shall be at offshore rates.

[32] Accordingly, I do not find any inconsistency between the Agreement and the conditions contained in the offer of employment. I find that the conditions contained in the offer of employment complement, or “fill the gap”, left by the geographical limitations of the Agreement.

[33] I now turn to Mr Pape’s final argument that there is no reference in the offer of employment as to what conditions of employment apply to the tow back from the North Rankin hub to Batam, Indonesia. As a matter of fact, this observation is true and correct. As a consequence, Mr Pape relies upon the Agreement. However, the Agreement is geographically limited and does not provide for conditions of employment in international waters.

[34] For the reasons I have already set out in paragraphs [30] and [31], the Agreement is geographically limited and does not provide for actual hours worked in international locations. However, notwithstanding this impediment in the Agreement and absence in the offer of employment, if I adopt the guidance of the Full Court in GSJWB, and look at the surrounding circumstances, I consider it reasonable to conclude from the “surrounding circumstances known to the parties”, that with respect to the tow back in international waters, it was intended to be paid at “offshore rates” and “over cycle rates” will not apply.

[35] For completion, with respect to actual hours worked between the disconnection of the Safe Astoria from the North Rankin hub and the international waters, Mr Pape submits that, because he returned to work before his rostered leave had expired, he is entitled to over cycle rates. However, the Employer submitted, which Mr Pape did not contest, that in accordance with Schedule 2.7.14 of the Agreement, where the Employer requires the employee to change and commence a new “swing”, over cycle does not apply. In the absence of any contrary argument from Mr Pape, I find the Employer’s meaning and application of the Agreement to be correct. Notwithstanding these circumstances, in the absence of the provisions in Schedule 2.7.14, the “surrounding circumstances” would also lead to the reasonable conclusion that the employment conditions contained in the offer of employment for the tow down of the North Rankin hub would be similar to the tow back to Batam, Indonesia - and that is, at normal cycle rates.

CONCLUSION

[36] For the above reasons, I am unable to agree to the relief sought by the Applicant in his application. The application must be dismissed. An order to this effect will be issued conjointly with this decision and reasons for decision.

COMMISSIONER

Final written submissions:

Applicant: 6 May 2013

Respondent: 1 May 2013.

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