Mr Oliver Maschmann v Solstad Australia Pty Ltd T/A Solstad Offshore
[2024] FWC 1525
•14 JUNE 2024
| [2024] FWC 1525 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.739 - Application to deal with a dispute
Mr Oliver Maschmann
v
Solstad Australia Pty Ltd T/A Solstad Offshore
(C2024/829)
| DEPUTY PRESIDENT BINET | PERTH, 14 JUNE 2024 |
Alleged dispute about any matters arising under the enterprise agreement and the NES;[s186(6)]
On 12 February 2024 Mr Oliver Maschmann (Mr Maschmann) filed an application (Application) pursuant to section 739 of Fair Work Act 2009 (Cth) (FW Act) with the Fair Work Commission (FWC). The Application sought that the FWC deal with a dispute between Mr Maschmann and Solstad Offshore Pty Ltd trading as Solstad Offshore (Solstad) in accordance with the dispute resolution procedure contained in Clause 13 of the Solstad Australia Pty Ltd and AIMPE (Marine Engineers) Offshore Oil and Gas Enterprise Agreement 2023 (Agreement).
The dispute concerns the payment of the sailing shorthand allowance pursuant to clause 29 of the Agreement.
On 1 March 2024 the parties participated in conciliation, but the issues in dispute could not be resolved.
Directions for the filing of materials in advance of a hearing to determine the Application were issued to the parties on 13 March 2024 (Directions). The Application was listed for hearing in Perth on 1 May 2024 (Hearing).
The parties subsequently advised Chambers on 30 April 2024 that they did not wish to be heard orally in relation to the Application and with the consent of the parties the Application was determined ‘on the papers’.
Evidence
In accordance with the Directions Mr Maschmann filed a witness statement setting out his evidence in chief.[1] Mr Maschmann is employed by Solstad as a Chief Engineer.
In accordance with the Directions Solstad filed a witness statement of Mr Joel George Mullins (Mr Mullins) setting out his evidence in chief.[2] Mr Mullins is employed by Solstad as Operations Director.
The parties jointly prepared and filed a digital court book containing the evidence and submissions of the parties.
Mr Maschmann filed written closing submissions on 8 May 2024. Solstad filed written closing submissions on 14 May 2024. Mr Maschmann filed written closing submissions in reply on 22 May 2024.
In reaching my decision I have considered all the submissions made and the evidence tendered by the parties, even if not expressly referred to in these reasons for decision.
Background
Solstad is an offshore shipping company. Solstad specialises in the supply of vessels and crew to the oil and gas industry.
Within Australian waters Solstad currently manage four anchor handling tug supply vessels and supply crews to four platform support vessels operated by Tidewater Marine Australia.[3]
To perform these tasks Solstad employs approximately: [4]
a.60 Marine Officers;
b.60 Marine Engineers and Electrical Technical Officers (ETOs); and
c.80 Integrated Ratings, Cooks and Stewards.
Solstad currently has, and has historically had, enterprise agreements in place with:[5]
a.the Australian Maritime Officers Union (AMOU) to cover the Marine Officers,
b.the Maritime Union of Australia (MUA) to cover the Integrated Ratings, Cooks and Stewards; and
c.the Australian Institute of Marine and Power Engineers (AIMPE) to cover the Marine Engineers and ETOs.
The evidence of Mr Mullins is that in the common parlance of the offshore marine industry the term ‘department’ is used to describe the groups of employees covered by the scope of each of these agreements. That is, the Marine Officers form one ‘department’ (Deck Department), the marine engineers and ETOs form another ‘department’ (Engineering Department) and the IRs, Cooks and Stewards form a third ‘department’ (Catering Department).[6]
The Agreement commenced operation on 11 October 2023. The nominal expiry date of the Agreement is 4 October 2027.
The Agreement provides for the payment of a shorthand allowance in the following circumstances:
“Sailing Short Handed
29.9 Solstad and Employees will ensure that Vessels sailing to sea are not delayed by crew shortage and all Vessels will sail shorthanded, provided that the proper safety and welfare of the crew is not jeopardised.
29.10 No vessel will operate in contravention of the provisions of the Navigation Act, Marine Orders, STCW and applicable flag state requirements.
29.11 Where a Vessel is required to sail to sea with less than its normal agreed manning of Employees of a particular department, the Vessel will be taken to sea on the understanding that the daily wage of the absentee Employee will be divided amongst those remaining Employees on the Vessel of that department for the period of short handedness. The last day of short handedness is the day the before the relief joins the Vessel.
29.12 The payment of shorthand monies will not apply, however:
(a) Where the short handedness results from the granting of leave to an Employee on compassionate grounds; or
(b) When an Employee is absent not due to any fault of Solstad.”
An equivalent clause is contained in Solstad’s enterprise agreements with the AMOU and the MUA.[7]
The vessels operated by Solstad include the Normand Saracen (Vessel). In December 2023 the Vessel set sail with a crew which included one Chief Engineer (Mr Maschmann), one 1st Engineer, one 2nd Engineer and one ETO.[8]
On Monday 18 December 2023 the 2nd Engineer on the Vessel suffered a back injury at work which is the subject of a workers compensation claim.[9]
On the morning of Wednesday 20 December 2023 the injured employee left the Vessel to be assessed by a doctor. The injured employee was certified unfit for work and did not return to the Vessel to complete his swing. The Vessel sailed later the same day without the injured employee.[10]
Solstad endeavoured to locate a replacement ETO or engineer but was unable to do so given that the individual would be required to be at sea over the festive period.[11]
The Vessel made a port call on 23 December 2023.
No replacement crew member joined the Vessel until the swing was completed and a crew change occurred on 3 January 2024.
Solstad paid an amount equal to 1/3 of the injured employee’s daily wage to each of Mr Maschmann, the 1st Engineer and the ETO each day commencing from 23 December 2023 until Mr Maschmann, the 1st Engineer and the ETO completed their swing on 3 January 2024 and left the Vessel.
The parties are in dispute with respect to when and how the shorthand allowance is payable. Mr Maschmann asserts that:
a.the shorthand allowance should have been paid from 20 December 2023 when the Vessel set sail without the injured employee or a replacement crew member; and
b.the injured employee’s salary should have been divided between himself and the 1st Engineer only.
It is agreed by the parties that the Mr Maschmann complied with the provisions of the dispute resolution procedure found at clause 13 of the Agreement before filing the Application.[12]
Consideration
The power of the FWC to deal with disputes is set out in section 595 of the FW Act. Section 595 provides that the FWC may only deal with a dispute if it is expressly authorised to do so under, or in accordance with, a provision of the FW Act.
The Application was made pursuant to section 739 of the FW Act.
Section 739 of the FW Act allows the FWC to deal with a dispute about an agreement if the agreement includes a term containing a dispute resolution procedure.
The Agreement contains a dispute resolution procedure of the nature contemplated by section 739 at clause 13. Clause 13 provides as follows:
“13. Dispute Settlement Procedure
13.1 For a dispute about a matter arising under this Agreement or the NES, the following Dispute Settlement Procedure shall be followed:
Step 1:
(a) The matter will in the first instance be discussed between the Employee(s) and the Master.
(b) The Employee will approach the Master of the Vessel and advise the Master of the specific nature of the problem or request. It is essential that all reasonable efforts be made to resolve any problem at shipboard level. This requires that careful attention be paid to such problems at an early stage, to ensure that frustrations do not develop and lead to unnecessary escalation of the problem.
(c)If the dispute arises whilst not on board of a Vessel, Step 1 will not apply. If the matter remains unresolved:
Step 2:
(d) The Master will immediately advise the appropriate Solstad representative of the situation.
(e) The Employee(s) and Solstad’s appropriate Officer will take all reasonable steps to achieve the resolution of the dispute.
If the matter remains unresolved:
Step 3:
(f) In the event that the preceding steps have failed to resolve the matter, the matter shall be referred to a mutually agreed facilitator for conciliation or determination if agreed.
(g) This step does not preclude the right of either party to refer a dispute to the FWC prior utilising a mutual agreed facilitator. If the matter remains unresolved:
Step 4:
In the event that the preceding steps have failed to resolve the matter, the dispute may be referred to the FWC by either party for conciliation and/or arbitration pursuant to section 739 and section 595 of the Fair Work Act.
13.2 Where Step 4 of sub-clause 13.1 applies, the FWC may deal with the dispute in two stages:
(a) The FWC will first attempt to resolve the dispute as it considers appropriate, including by mediation, conciliation, expressing an opinion or making a recommendation; and
(b) If the FWC is unable to resolve the dispute at the first stage, the FWC may then:
(i) Arbitrate the dispute; and
(ii) Make a determination that is binding on both the parties.
13.3 It is essential that the dispute and the reasons for or against are accurately defined and recorded by those concerned to ensure that ambiguities do not arise. It is important that prompt and careful consideration is given to all claims, requests and industrial questions. Equally, a reasonable time is required to enable proper investigation to take place in order to satisfactorily resolve the dispute.
13.4 Subject to section 596 (Representation by lawyers and paid agents before the FWC), Solstad and the Employee who is a party to a dispute may appoint another person, organisation or association, including the AIMPE, to accompany and/or represent them for the purposes of the procedures in this clause.
13.5 While the parties to the dispute are trying to resolve the dispute using the procedures in this term:
(a) Vessels will continue to trade pending determination of any matter or dispute in accordance with the dispute procedures including periods of non-availability of executives; and
(b) An Employee must continue to perform his or her work as he or she would normally, unless he or she has a reasonable concern about an imminent risk to his or her safety; and
(c) An Employee must comply with a direction given by Solstad to perform other available work at the same workplace, or at another workplace, unless:
(i) The work is not safe; or
(ii) Applicable work health and safety legislation would not permit the work performed; or
(iii) The work is not appropriate for the Employee to perform.
(d) The parties acknowledge that at no stage in the process may the Employees engage in industrial action, which includes a refusal to comply with a lawful and reasonable direction.
13.6 The parties to the dispute agree to be bound by a decision made by the FWC in accordance with this term, but note that a decision of a single member of the FWC can be appealed to the Full Bench of the FWC.
13.7 The provisions of this clause do not affect, replace, or override in any way any other rights and duties of the parties to this Agreement pursuant to the Fair Work Act or any other Act, or at common law in relation to any matter including, without limitation, any entitlement for a party to refer a matter to the FWC and including prohibition on unprotected industrial action.
13A.1 For a dispute about a matter that pertains to the employment relationship but does not arise under this Agreement or the NES, the parties will firstly attempt to resolve the dispute at the workplace level by following Steps 1 and 2 of the Dispute Settlement Procedure at sub-clause 13.1.
13A.2 If the matter cannot be resolved, and both parties agree then Steps 3 and 4 of the Dispute Settlement Procedure at sub-clause 13.1 may be followed and such agreement shall not unreasonable be withheld.
13A.3 The clarification at sub-clause 13.7 applies to this clause 13A.
13A.4 To avoid doubt, and without (by implication or otherwise) affecting the powers exercised under Step 4 in sub-clause 13.1, settlement of a dispute under this clause 13A including by arbitration:
(a) must not be inconsistent with another provision of this Agreement;
(b) must not be inconsistent with Solstad’s prerogative to manage its own business subject to the principles in Australian Federated Union of Locomotive Enginemen v. SRANSW (1984) 295 CAR 188 (the “XPT Case”); and
(c) must not be inconsistent with a contractual obligation of Solstad for the performance of work or the supply of services, to the extent or for the duration of such obligation.”
The FWC may deal with a dispute only on application by a party to the dispute.[13]
There is no dispute,[14] and I am satisfied, that the issues in dispute between the parties fall within the scope of clause 13 of the Agreement.
There is no dispute,[15] and I am satisfied, that Mr Maschmann has complied with the procedural steps contained in clause 13 of the Agreement.
I am satisfied that Mr Maschmann has standing to make the Application and that I have the jurisdiction to determine the dispute.
In dealing with the dispute the FWC cannot exercise powers limited by the term.[16] If, in accordance with the term, the parties have agreed that the FWC may arbitrate (however described) the dispute, the FWC may do so. The FWC must not make a decision that is inconsistent with the FW Act or the Agreement.[17]
In Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v ALS Industrial Australia Pty Ltd[18] the Full Federal Court said at [70] to [71] that the powers and functions of the FWC identified in sections 577, 578, 590, 593, 595, 677 and 678 of the FW Act are available to the FWC when conducting a private arbitration.
Relevantly sections 577 and 578 of the FW Act provide as follows:
“s.577 Performance of functions etc. by the FWC
The FWC must perform its functions and exercise its powers in a manner that:
(a) is fair and just; and
(b) is quick, informal and avoids unnecessary technicalities; and
(c) is open and transparent; and
(d) promotes harmonious and cooperative workplace relations.”
“s.578 Matters the FWC must take into account in performing functions etc.
In performing functions or exercising powers, in relation to a matter, under a part of this Act (including this Part), the FWC must take into account:
(a) the objects of this Act, and any objects of the part of this Act; and
(b) equity, good conscience and the merits of the matter; …”
The Full Bench, in Princess Linen Services Pty Ltd v United Workers’ Union[19] at [15] and [16] of its decision, recently confirmed the principles of interpretation of enterprise agreements as follows:
“The most succinct expression of the correct approach is that articulated by the Federal Court Full Court in WorkPac Pty Ltd v Skene as follows (citations omitted):
“[197] The starting point for interpretation of an enterprise agreement is the ordinary meaning of the words, read as a whole and in context. The interpretation “… turns on the language of the particular agreement, understood in the light of its industrial context and purpose…”. The words are not to be interpreted in a vacuum divorced from industrial realities; rather, industrial agreements are made for various industries in the light of the customs and working conditions of each, and they are frequently couched in terms intelligible to the parties but without the careful attention to form and draftsmanship that one expects to find in an Act of Parliament. To similar effect, it has been said that the framers of such documents were likely of a “practical bent of mind” and may well have been more concerned with expressing an intention in a way likely to be understood in the relevant industry rather than with legal niceties and jargon, so that a purposive approach to interpretation is appropriate and a narrow or pedantic approach is misplaced.”
The Full Court observations are consistent with the approach taken by the Full Bench of this Commission in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Union Manufacturing Workers (AMWU) v Berri Pty Limited (Berri).”
It is justifiable to read an agreement to give effect to its evident purpose, having regard to such context, despite mere inconsistencies or infelicities of expression which might tend to some other reading. A Court or Tribunal should not adopt a narrow or pedantic approach to the interpretation of enterprise agreements.[20]
Clause 29.11 provides that the shorthand allowance is payable where “…a Vessel is required to sail to sea with less than its normal agreed manning of Employees of a particular department…”
The Agreement defines a ‘Employee’ as:
“Employee" or "Employees" means a person or persons employed by Solstad in the Maritime Offshore Oil and Gas Industry in any of the classifications contained within this Agreement under clause 64, other than Cadets or Trainees.”
The classifications contained in clause 64 of the Agreement are as follows:
“64. Classifications
64.1 A Chief Engineer holds, as a minimum, an STCW regulation 111 /2 Certificate of Competence as Engineer Class 1 (Motor) and is appointed as such.
64.2 A First Engineer holds, as a minimum, an STCW regulation 111/2 Certificate of Competence as Engineer Class 2 (Motor) and is appointed as such.
64.3 A Second Engineer holds, as a minimum, an STCW regulation 111/1 Certificate of Competence as Watchkeeper (Engine) and is appointed as such.
64.4 Third Engineer is an Engineer Officer who complies with Clause 64.3, is appointed as such and who either:
(a)has been offered an employment contract after finishing his Cadetship or Traineeship, or
(b) has no experience in the Maritime Offshore Oil and Gas Industry as an Engineer Officer, or
(c)has less than 18 months experience in the Maritime Offshore Oil and Gas Industry as an Engineer Officer. Solstad will provide the Third Engineer with the following training:
(i) Offshore Safety - Engine,
(ii) Anchor Handling Safety,
(iii) Working at heights,
(iv) Confined spaces, and
(v) DP Induction for Engineers. Progression to the Rank of Second Engineer will be after 8 months sea time on offshore Vessels, including previous experience.”
Mr Mashcmann submits that because the definition of ‘Employee’ contained in clause 3 of the Agreement does not refer to ETOs then the employees among whom the wages of the absent crew member must be divided for the purposes of the short hand allowance are only those employees employed in the engineering classifications.
However, clause 4 of the Agreement provides that:
“This Agreement covers Solstad and the Employees, Cadets and Trainees employed by Solstad in the classifications contained within this Agreement while engaged in the Maritime Offshore Oil and Gas Industry in Australia.”
The salary schedule in clause 26 of the Agreement refers to the following classifications (and provides a wage rate for) Chief Engineers, 1st Engineers, 2nd Engineers and ETOs. There is no wage rate provided for 3rd Engineers.
While clause 64 does not refer to the classification of ETO, when the Agreement is reviewed as a whole, consistent with the scope of the Agreement, it would appear that the term ‘Employee’ is used in the Agreement (in particular in clause 29) to refer to both employees employed in engineering classifications and employees engaged at ETOs. See, for example clause 27 which deals with superannuation:
“27 .5 Superannuation contributions to Employees are paid as follows:
(a) The Solstad will make a 14.5% superannuation/income protection insurance
contribution on behalf of each employee.
Solstad's contribution for casual employees shall be 14.5% of their salary. This amount is inclusive of SGC contributions and the cost of any income protection insurance they may choose to have.
Superannuation contributions to Permanent Employees are paid as follows:
(b) Solstad's contribution shall be 13% of annualised salary, inclusive of the legislated minimum contribution under the Superannuation Guarantee (Administration) Act 1992 (Cth ).
(c) Solstad will provide all Permanent Engineers and ETOs employed under this Agreement with income protection insurance. If a majority of the Engineers and ETOs employed under this Agreement nominate an income protection provider, this provider will become the income protection provider for all Employees employed pursuant to this Agreement. Solstad will pay contributions at the rate of 1.5% of the permanent Aggregate Salary to that provider.”
That clause 29.11 was intended to contemplate the inclusion of ETOs among those eligible for shorthand allowance is further enforced by the use of the phrase “normal agreed manning of Employees of a particular department…” in clause 29.11.
Clause 65 of the Agreement sets out the agreed minimum manning levels for different types of vessels as follows:
“65. Minimum manning Levels
65.1 The minimum manning for all Vessels not in operations will be as per the safe manning certificate of the Vessel.
Platform Supply Vessels (Category 2 – Over 64 Metres)
65.2 The minimum manning for Solstad owned or managed Vessels undertaking 24-hour operations on Platform Supply Vessels (over 64 metres) will be:
(a) One Chief Engineer,
(b) One First Engineer, and
(c) One Second Engineer or ETO.
65.3 The minimum manning for operations less than 24 hour on Solstad owned AHTS Vessels (greater than 8,999 BHP) and Platform Supply Vessels (over 64 metres) will be:
(a) One Chief Engineer,
(b) One First Engineer, and
(c) A Second Engineer and/or ETO when required by operational workloads.
Specialist Vessels
65.4 The minimum manning for 24-hour operations on Solstad owned or managed Specialist Vessels will be:
(a) One Chief Engineer,
(b) One First Engineer, and
(c) One Second Engineer or ETO.
AHTS Vessels (Category 2 – Greater than 8,999 BHP)
65.5 The minimum manning for Solstad owned or managed vessels undertaking 24-hour operations on AHTS vessels (greater than 8,999 BHP) will be:
(a) One Chief Engineer,
(b) Once First Engineer,
(c) One Second Engineer, and
(d) One ETO.”
This clause sets out minimum manning levels of the “Engineering Department” namely engineers and ETOs for each type of vessel. An equivalent clause exists in the AMOU and MUA agreements for the Deck Department and the Catering Department respectively.
The purpose of the shorthand allowance is to compensate employees who may be required to perform additional duties in the absence of a crew member. If an ETO forms part of the agreed minimum manning number, it would be illogical for the shorthand allowance clause to provide that the allowance is payable in the absence of an ETO, but that ETOs are not entitled to be paid the allowance in the absence of other employees required to meet the minimum manning level.
Furthermore, the witness evidence of Mr Mullins is that the term ‘department’ which is used in several clauses in the Agreement includes for the purposes of the Agreement both engineers and ETOs. This is consistent with typical division of industrial coverage in the offshore vessel industry between deck, engine and catering departments.
Mr Mashcmann submits that the shorthand allowance should only be divided among employees required to undertake watchkeeping duties. He says that such an interpretation of the clause is supported by past practices of Solstad to divide the wages of the absent employee only among employees employed in engineering classifications. There is nothing within the clause itself or the Agreement as a whole that supports such an interpretation. Mr Mashcmann has not produced evidence to establish such a practice existed and, even if he did, the existence of such a practice is not determinative of the correct interpretation of the clause.
Mr Maschmann submits that the shorthand allowance was payable from 20 December 2023 when the Vessel sailed with less that its normal agreed manning of employees. Solstad asserts that it is only liable to pay the shorthand allowance from 23 December 2023 when the Vessel next returned to Port and another crew member could board the Vessel. Solstad say that payment is not triggered until it has had a ‘reasonable’ time to secure alternate crew.
The plain and simple language of the shorthand allowance clause, and the clear purpose of the clause, do not support the interpretation of the clause proposed by Solstad. The clear purpose of the clause is to allow the Vessel to sail notwithstanding a shortage of crew so that the Vessel may discharge its contractual obligations and serve its commercial purpose while compensating employees for the additional duties they may be required to perform in the absence of a full complement of crew. The trigger for the payment of clause is the Vessel sailing to sea with a shortage of crew, not when it is reasonable or convenient for the employer to secure replacement crew. Had that been the case the clause could have clearly stated so.
Notwithstanding that it paid the allowance for a portion of the period that the injured engineer was absent, Solstad submits that it in fact had no obligation to pay the allowance because the absence of the injured employee was ‘not due to any fault of Solstad.’
It is not in dispute that the absence occurred because the employee was injured at work. As an employer, Solstad has a duty of care to its employees to remove workplace hazards and prevent workplace injuries. There is no evidence to suggest that the injury incurred by the relevant employee was incurred due to misconduct, negligence or folly on the part of the relevant employee.
The shorthand allowance clause carves out absences at employee request to counteract the possibility that such a request would be denied because the employer wished to avoid the obligation to pay the allowance. The clause also carves out other circumstances beyond the control or influence of Solstad.
When read in its industrial context, a workplace injury is one of the types of absences which the clause intended to trigger the payment of the allowance.
Having had the interpretation of the clause clarified I anticipate that Solstad will promptly make payment of the allowance to the three relevant employees including Mr Maschmann for the period from 20 December 2023 to 23 December 2023.
DEPUTY PRESIDENT
Hearing details:
Matter determined on the Papers.
Final written submissions:
Applicant’s final written submissions filed 8 May 2024.
Respondent’s final written submissions filed 14 May 2024.
Applicant’s final written submissions in reply filed 22 May 2024.
[1] Digital Court Book (DCB) 83-85.
[2] Ibid 89-95.
[3] Ibid 90.
[4] Ibid.
[5] Ibid 92.
[6] Ibid.
[7] Ibid.
[8] Ibid 1.
[9] Ibid.
[10] Ibid.
[11] Ibid 94.
[12] Ibid 2.
[13] Ibid; Fair Work Act 2009 (Cth) s.739(6).
[14] DCB (n 1) 2.
[15] Ibid 2.
[16] Fair Work Act 2009 (Cth) s.739(3).
[17] Ibid s.739(5).
[18] [2015] FCAFC 123; 235 FCR 305.
[19] [2021] FWCFB 1903.
[20] See Kucks v CSR Ltd (1996) 66 IR 182, 184; WorkPac Pty Ltd v Skene [2018] FCAFC 131 at [197]; Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union' known as the Australian Manufacturing Workers Union (AMWU) v Berri Pty Ltd[2017] FWCFB 3005 at [114].
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