[2018] FWCA 4521

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s 185 - Application for approval of a single-enterprise agreement

Noorton Pty Ltd t/a Manly Fast Ferry
(AG2017/3080)

MANLY FAST FERRY - SYDNEY HARBOUR SERVICES - ON-BOARD CREW - GPHS & HOSTS - ENTERPRISE AGREEMENT 2017

Port authorities
DEPUTY PRESIDENT SAMS	SYDNEY, 7 AUGUST 2018

Application for approval of an enterprise agreement – Sydney Harbour services – ferry and marine tourism industries – protracted negotiations over two and a half years – last round of negotiations with employees directly – consistent Union view that Ports, Harbours, Enclosed Waters Award would otherwise apply to employees – NSW Government contract for commuter ferry services – employer also engaged in marine tourism activities, such as whale watching – related proceedings before four members of the Commission – all employees are employed as casuals – narrow vote of employees to approve agreement after unsuccessful votes – identity of employer – whether Notice of Employee Representational Rights (‘NERR’) validly issued – whether employees ‘genuinely agreed’ to the Agreement – valid cohort of employees who voted – whether employees eligible to vote or will be covered by the Agreement – whether Agreement meets the Better Off Overall Test (‘BOOT’) – comparison to correct Modern Award – no doubt as the identity of the employer – no issues as to whether the Agreement was ‘genuinely agreed’ by the employees – long standing casual employees who are regularly engaged – employees who voted were eligible to vote and would be covered by the agreement – detailed BOOT comparisons with rosters and timesheets – further undertakings proposed – agreement would pass the BOOT whether either the Ports Award or the Marine Tourism Award was the reference instrument – some lesser benefits compared to Ports Award outweighed on balance by benefits, including higher rates of pay and optional permanent conversion – BOOT satisfied in respect to existing and future employees (permanent full-time or part-time) – minor undertakings sought for clarity – views of bargaining representatives to be sought before final approval of Agreement.

BACKGROUND

[1] This decision will determine an application filed by Noorton Pty Ltd t/a Manly Fast Ferry (the ‘Company’ or ‘applicant’ or ‘Manly Fast Ferry’), pursuant to s 185 of the Fair Work Act 2009 (the ‘Act’). The application seeks the approval from the Fair Work Commission (the ‘Commission’) of an enterprise agreement agreed to by employees of the applicanton 11 July 2017. The Agreement is titled Manly Fast Ferry – Sydney Harbour Services – On-Board Crew – GPHs and Hosts – Enterprise Agreement 2017 (the ‘Agreement’). The application for approval of the Agreement was filed on 24 July 2017, thereby satisfying the requirements of s 185(3)(a) of the Act.

[2] It would be an understatement to describe the background to this application as protracted and torturous. It has its origins in a decision of the New South Wales Government in late 2008 to put to tender a contract for the high speed (Monday to Friday) commuter service between Circular Quay and Manly. Manly Fast Ferry was the successful tenderer. Prior to winning the contract the applicant only operated marine tourism services and at the time two old Workplace Agreements were in place to cover the separate contracted ferry services and the marine tourism/commercial vessel operations. The two agreements were respectively:

• Manly Fast Ferry & MUA – Sydney Harbour Ferry – Workplace Agreement 2009 (‘MFF Ferry Agreement’);and

• Noorton Pty. Ltd. Commercial Vessels & Whale Watching – General Purpose Hands – Workplace Agreement 2009 (‘Marine Tourism Agreement’)

Relevantly, although there were two separate agreements, employees would commonly work under the MFF Ferry Agreement in the morning and afternoon peaks and then operate the same vessel in the off peak, on marine tourism services, under the Marine Tourism Agreement.

[3] During the initial contract period of 15 months, Manly Fast Ferry operated alongside the State Government operated Sydney Harbour Ferries on the Circular Quay to Manly service. Competition for these harbour ferry services became more intense from early 2010, until the Government in 2014, decided to seek a long term contract for only two ferry operators on the Circular Quay – Manly service, one of which would be the now privately operated Harbour City Ferries. The other operator was Manly Fast Ferry, which won a seven year contract commencing on 1 April 2015.

[4] The applicant decided to replace the old MFF Ferry Agreement with a new agreement, intended, at the time, to only cover the ferry operations. Negotiations for the new agreement commenced in April/May 2015 with the Maritime Union of Australia (the ‘Union’), despite the amalgamation of the Union with the Construction, Forestry, Mining and Energy Union and the Textile, Clothing and Footwear Union of Australia in March this year, I shall continue to refer to the Union as the MUA. In cutting to the chase, negotiations have been ongoing for over two years since that time until the filing of this application on 24 July 2017 – the applicant’s fourth attempt at having an agreement approved. Throughout this period there have been various related proceedings before at least three other members of the Commission and two earlier votes of employees which resulted in iterations of the Agreement being lodged in the Commission, but subsequently withdrawn by the applicant.

[5] Throughout this period the central dispute between the applicant and the Union has been, and continues to be, what Modern Award should apply to the employees under a single agreement covering both the ferry and tourism operations; namely:

• the Ports, Harbours and Enclosed Water Vessels Award 2010 [MA000052] ‘(Ports Award’); or

• the Marine Tourism and Charter Vessels Award 2010 [MA000093] (‘Marine Tourism Award’).

[6] Against the objections of the Union, the applicant put the proposed Agreement to a secret ballot vote of 49 employees to be covered by the Agreement (all of whom are casual) on 11 July 2017. By a narrow margin of 23 for and 21 against, the Agreement was approved. The application for approval (F16) filed by Mr Richard Ford, Managing Director, identified the applicant as Noorton Pty Ltd t/a Manly Fast Ferry.

[7] In the accompanying statutory declaration and ten annexures dealing mainly with the pre-approval steps and indicative rosters (Form F17), Mr Ford identified the two Modern Awards as the relevant reference instruments for the respective functions of ferry services and marine tourism operations. Mr Ford set out a number of benefits and conditions in excess of, or not provided for by the Modern Awards and a number of less beneficial terms. He attested that the Agreement satisfied the Better Off Overall Test (BOOT) whether the test was applied against the Ports Award or the Marine Tourism Award.

[8] In an F18, filed by Mr A Jacka on behalf of the Union, on 8 August 2017, the Union did not support the approval of the Agreement for the following reasons:

(a) The Commission cannot be satisfied that the notice requirements, pursuant to s172(3) of the Act have been met.

(b) The Commission cannot be satisfied, pursuant to s186(2)(a) and s188 of the Act that the Agreement has been ‘genuinely agreed’ to by the employees covered by the Agreement.

(c) The Commission cannot be satisfied that the group of employees to be covered by the Agreement was ‘fairly chosen’ (s186(3)).

(d) The Commission cannot be satisfied, pursuant to s186(2)(d) of the Act that the Agreement passes the Better Off Overall Test.

[9] Unsurprisingly, the Union disagreed with the employer’s F17 on the grounds that:

(a) the notification time was not 6 June 2017. There was no valid notification to employees;

(b) the reference instrument is the Ports, Harbours and Enclosed Water Vessels Award 2010 only. The Marine Tourism and Charter Vessels Award 2010 does not cover the employer or any of the employees covered by the Agreement; and

[10] By this time the application was under review by the Commission’s Enterprise Agreement Triage Team and a report was prepared for the Panel Head, Deputy President Gostencnik on 24 September 2017. A number of concerns were raised by the Deputy President and communicated to the parties on 5 October 2017. The applicant provided certain undertakings in respect to span of hours and the Union continued to press its objections (as above). On 20 October 2017 the applicant’s solicitors, Holman Webb (Mr Stephen McCarthy) provided a 22 page response to further concerns raised by the Triage Team and the Union. On 27 October 2017 the Union advised that it continued its opposition to the approval of the Agreement and requested an arbitration of the matter. The application was then remitted to me for hearing. On 7 November 2017, I issued directions for a hearing on 18 and 19 December 2017. However, due to the unavailability of key witnesses, the hearing by consent, was relisted for 5 and 6 February 2018. In the meantime, the Commission, as presently constituted, heard and determined an application filed by the Union, pursuant to s 483AA of the Act, seeking orders for access to non-member records; see: The Maritime Union of Australia [2017] FWC 6228. These proceedings related to a dispute filed by the Union in which a determination was sought that only the Ports Award applied to the employees of the applicant. This dispute remained unresolved, but ultimately was overtaken by the filing of this application for approval of the Agreement.

[11] The hearing dates were further adjourned until 12 and 13 February 2018. Mr S McCarthy, Solicitor appeared for the applicant and Ms L Doust of Counsel, with Mr Jacka appeared for the Union. Both parties were granted permission to be represented by lawyers, pursuant to s 596 of the Act. The hearing days were taken up with oral evidence and cross examination of Mr Ford. Directions for the filing of final submissions were issued, but extended, by consent, until the final submission was filed by the applicant on 17 April 2018.

THE EVIDENCE

[12] Evidence in this matter was provided by Mr Richard Ford, Director of Noorton Pty Ltd and Manly Fast Ferry Pty Ltd and Mr Paul Garrett, Assistant Secretary of the Sydney Branch of the Union, who was not required for cross examination. I observe that Mr Ford’s evidence, although helpful and comprehensively referenced from source documents, was more in the form of submissions, replete with opinions, assertions, and repetitive statements, rather than evidence in proper form. I shall take that into account when considering Mr Ford’s evidence.

Mr Richard Ford

[13] Mr Ford set out the history of the applicant’s operations and its winning of the seven year ferry services contract for the NSW Government. In addition to the Circular Quay/Manly commuter services, the business operates the following marine tourism and commercial vessel services:

(a) Sydney Harbour Eco Hopper (around the Harbour sightseeing service, which includes Taronga Zoo and Weekend Harbour Beaches services);

(b) Whale watching services;

(c) General charter vessel function services, catering for events such as weddings, social, family & business functions, Sydney-Hobart Race Day, New Year’s Eve Harbour cruises and the like; and

(d) Manly to Sydney Aquarium/Darling Harbour service – although this service is treated differently.

[14] Mr Ford outlined the steps he took to issue the first Notice of Employee Representational Rights (NERR) to affected employees on 29 April 2015. Mr Ford made clear that the proposed Agreement was to apply only to the newly contracted ferry services. Mr Ford said that from the outset, the Union (acting as the ‘default’ bargaining representative) adopted a hostile and challenging approach to the bargaining process across a number of fronts simultaneously. Despite this, the applicant continued to meet with, and negotiated with the Union and its delegates. Around June 2015, the applicant agreed to the Union’s proposal, to replace the two old Workplace Agreements with a single agreement covering both the ferry services business and the marine tourism operations. Mr Ford claimed the applicant agreed to do so on the understanding that a final outcome would involve a ‘blended and averaged’ approach to rates of pay and conditions. This was necessary to ensure cost competitiveness for its tourism and commercial operations. The applicant provided a summary of its proposal as follows:

‘a. Combining Ferry & Tourist services rates & conditions

The new MFF Enterprise Agreement Offer will now cover both:-

i. MFF’s Sydney Harbour ferry operations; and

ii. MFF’s Sydney Harbour tourist services.

What does this mean?

By “blending together and averaging” the different:-

¬ Wage rates; &

¬ Penalty rates; &

¬ Terms and conditions of employment;

That apply to MFF’s 2 separate areas of operation:

ϖ Ferries &

ϖ Tourism

MFF is now offering the employees one set of rates and conditions that will apply when employees are at work for MFF – whether to a ferry run or a tourist run.

The “blending together” and “averaging” of the wage & penalty rates and conditions must be done in such a way as to ensure that the Company can operate both its ferry services as well as its marine tourist services without being priced out of the tourist sector. MFF’s proposed amended Agreement seeks to do this.

[15] Mr Ford said this approach was maintained for the following two years of negotiations with some 25 draft agreements, all of which reflected this approach. It is contained in Clause 5(c) and (d) of the Agreement now before the Commission for approval. It reads:

‘c. Significant Feature of the Terms & Conditions of the Agreement

A significant feature of this new Agreement is to establish a single code of employment that is to cover both the Company’s Sydney Harbour public passenger ferry service operations as well as the Company’s Sydney Harbour commercial vessel/marine tourism services. Consequently, the rates of pay, penalty rates and terms and conditions of employment reflect the need to blend together and average the employment conditions standards that apply in the two separate maritime industry sectors covered by this Agreement. The two distinct maritime industry sectors are the “public passenger ferry services” sector and the “commercial vessel/marine tourism” sector and the two otherwise applicable Modern Awards that prescribe the two distinct minimum employment standards in relation to the two industry sectors are:-

i. The Ports, Harbours and Enclosed Water Vessels Award 2010; and

ii. The Marine Tourism and Charter Vessels Award 2010.

d. The blending together and averaging of the rates of pay (in almost all cases) and employment standards to establish a single code of employment under this Agreement and the certainty that arises from the business’s ferry services contract with the NSW Government will:-

i. Allow the Company to offer its longer serving GPH or Host/Hostess casual employees the opportunity to convert from casual employment to permanent employment after an employee has rendered 6 months of service; and

ii. Allow all employees who may, on any day, perform work in both the ferry services sector and the commercial vessel/marine tourism sector, to receive a common blended and averaged rate of pay for work at any particular time, with the exception of where an “Uplift Rate” may be payable to Casual Employees at certain specified times for work on ferry services;

iii. While at the same time ensuring that the Company can both operate its ferry services as and when needed while still being able to afford to compete in the commercial vessel/marine tourism sector and not be priced out of the commercial vessel/marine tourism sector market.’

[16] Mr Ford believed the Union had initially supported this ‘blending and averaging’ approach as demonstrated by its proposed wage scales in August 2015, showing an ‘all in’ General Purpose Hand (‘GPH’)/Deckhand rate of $50,000 pa (the new Agreement rate is now $53,547).

[17] Mr Ford maintained that if the rates and conditions of the Port Award were applied to the applicant’s marine tourism and commercial operations, it would make that sector of the business financially unviable. This might force a wind down or withdrawal from these services. This would negatively impact on the number of employees and the available hours for existing employees. Mr Ford believed that the Union’s insistence of the Port Award being the only reference instrument for the purposes of the BOOT was contrary to its original position and appeared to have changed following dispute proceedings before Deputy President Dean in October 2016 (Matter B2015/1113).

[18] For the following reasons, Mr Ford said it was the applicant’s view that the two Modern Awards are the relevant reference instruments in respect to the application of the BOOT:

a. At present the applicant’s two distinct areas of business activities operate in two different cost competitive business markets.

b. This has been the case since the commencement of the business’s ferry services in early 2009.

c. The two separate and distinct and still currently operating old Workplace Agreements (the ‘Old’ Agreements) reflect and support the applicant’s two separate and distinct business cost structures.

d. The other party to the Agreement – the employees – recognise and accept the reality of the need for this distinction and separation of the two parts of the business.

Mr Ford claimed there was no impediment under the Act for the Commission to consider the ‘unusual’ approach of applying two awards for the purposes of the BOOT, given the unique environment the applicant operates in. It reflects the realities of the business and the intention of the applicant and the employees who are parties to the Agreement. He believed that the new Agreement will result in employees being ‘better off overall’.

[19] Mr Ford returned to the more recent negotiations for the Agreement. In rejecting the applicant’s latest settlement offer on 29 May 2017, the Union (Mr Garrett) declared ‘that bargaining was concluded’. As a result the applicant issued a new NERR to relevant employees on 6 June 2017, as the earlier NERR was defective. Mr Ford added that notwithstanding the Union’s position, the applicant proposed a revised ‘best and final offer’ in a letter to the Union on 9 June 2017. It read in part:

‘It must be said however it is simply not possible to reconcile the MUA’s insistence that the business’s Hopper services must be regarded as a ferry service with the reality that to accept the MUA’s position would both make the cost of operating the Hopper service untenable as well as be contrary to the fact that the Hopper service is designed to function as a marine tourism product and not a ferry service.

Nonetheless, MFF does want to finalise these long drawn out EBA negotiations and reach a long overdue completion. With that in mind MFF would like to make one final endeavour to finalise the EBA negotiations by putting forward a “best and final” Offer.’

[20] The Union was advised on 14 June 2017 of a proposed new Agreement which include the following:

1. The higher Casual Rate of $29.50/hour.

2. The consequential higher Casual Aggregated Weekend Rate of $34.50/hour.

3. The higher Uplift Rates for GPH’s on Ferry runs of:

a. $45.00/hour on Sundays between Manly and Circular Quay;

b. $31.50/hour After 6:00pm Monday to Friday; and

c. $56.20/hour on Public Holidays between Manly and Circular Quay.

The Union did not reply to this letter and instead, lodged a dispute application on 16 June 2017, which was listed for conference before me on 29 June 2017 (matter C2017/3255). Mr Ford understood the Union through its dispute notification, had requested the Commission to determine the appropriate award coverage for the employees.

[21] Mr Ford stated that the Union responded to the applicant on 19 June 2017 by now asserting underpayment of wages and claiming the Company was ‘bullying workers into accepting inferior conditions’. Mr Ford considered this was an attempt to ‘mix and confuse’ two separate issues – the bargaining process with allegations of underpayment of wages.

[22] Mr Ford included comparison tables for the new Agreement and the two Modern Awards and indicative rosters, noting that all present employees are casual employees. Mr Ford contended that the tables demonstrate that:

(a) in every instance the Casual rates prescribed by the new Agreement are higher than the comparable rates prescribed for Casual employees by either of the two Modern Awards;

(b) in relation to future employment of Permanent employees, the Table shows the new Agreement’s ordinary rates, overtime rates and penalty rates are higher than the comparable rates prescribed for Permanent employees by either of the two Modern Awards, other than in four circumstances. The four circumstances are:

Ports & Harbours etc. Award

1. Permanent employees ordinary hours rate on a Saturday;

2. Permanent employees ordinary hours rate on a Sunday; and

3. Permanent employees overtime rate on a Sunday.

Marine Tourism etc. Award

4. Permanent Saturday Overtime rate after three hours of overtime.

(c) In relation to the above four instances where the Agreement rates are below the comparative Modem Award rates, I would observe that when the two Modern Awards rates are “blended and averaged”, there is then only one circumstance where the Agreement’s rates are not higher than the averaged two Award rates, and that is in the circumstance of permanent employees working ordinary hours rate on a Sunday.

[23] All of this material was provided to the Union and in various proceedings before Commissioner Cambridge, Vice President Watson and Deputy President Dean. Mr Ford asserted that in every instance under an indicative four week roster, every employee, whether Casual, Part-Time or Full-Time employees, will be ‘better off’ under the Agreement.

[24] Mr Ford said that the only criticism the Union had ever made of the calculations was that the only work considered ‘marine tourism’ was ‘whale watching’; a position consistently rejected by the applicant. Nevertheless, for present purposes, Mr Ford applied the Union’s approach and again in every case, employees will be ‘better off overall’. Increases flowing from the Agreement (1 December 2017) will continue to ensure employees are ‘better off overall’.

[25] Mr Ford reiterated that, with one exception (a small number of Host/Hostess employees who are exclusively in marine tourism) the applicant operates the same vessels with the same crews in two different industries. The vast bulk of the employees are classified as General Purpose Hands (GPHs).

[26] Mr Ford noted that under the relevant State legislation (Passenger Transport Act 2014) the only ferry service conducted by the business is the contracted Circular Quay/Manly service. None of the other services conducted by the applicant are ‘technically’ ferry services. It is not correct, as the Union contends, that any ‘timetabled service is effectively a ferry service’. This has been explained to the Union on many occasions. Support for the applicant’s position arises from other legislative sources (Certificates issued under the Marine Safety (Domestic Commercial Vessel) National Law Act 2012 (Cth) and Marine Orders 503 and 504 (Cth)). The effect of the certificates is demonstrated by its vessel, Ocean Dreaming II as follows:

When Ocean Dreaming II is operating as a passenger ferry the vessel is restricted to:-

1. A maximum of 23 passengers on the Sundeck

2. A maximum of 92 passengers. on the Upper Deck; and

3. No passengers are allowed on the Fore Deck.

However, when Ocean Dreaming II is operating as a marine tourism/charter vessel, the passenger restrictions increase to become:-

1. A maximum of 55 passengers on the Sundeck

2. A maximum of 110 passengers on the Upper Deck; and

3. A maximum of 37 passengers on the Fore Deck.

[27] Mr Ford referred to the applicant’s principal market competitors which all employ employees under the Marine Tourism Award, and not the Ports Award. They are:

a. Matilda Cruises/ Captain Cook Cruises/SeaLink;

b. Fantasea Cruises; and

c. Rosman Ferries.

[28] Mr Ford observed that although the Circular Quay to Darling Harbour service is not gazetted as a ‘ferry service’ under the State Act, the applicant offered a concession to the Union to treat it as a ‘ferry service’. This is reflected in the coverage clause and the Agreement (Cl 5).

[29] Mr Ford’s evidence dealt with the applicant’s responses and undertakings offered to the Commission after requests for further particulars from DP Gostencnik. Mr Ford stressed that no employee performs exclusively ferry work and that the Ports Award is not the only Award to be considered for the purposes of the BOOT.

[30] Mr Ford made particular reference to cl 12(g) and stated that this sub clause was not a ‘make good’ provision to ensure BOOT compliance, because the Agreement already meets the BOOT. It is just a means by which an employee can check that the Agreement rates are being paid correctly. Mr Ford also addressed the Union’s claim that the permanent part-time provisions do not match the corresponding provisions in the Ports Award. Mr Ford said firstly, that the Union ignores the part-time provisions in the Marine Tourism Award and in any event, the Agreement’s part-time provisions more than satisfy the BOOT in that they provide:

(a) a minimum of 4 ordinary hours work on any day;

(b) a maximum of 11 ordinary hours on a day;

(c) a guaranteed minimum of ordinary hours for a Part Time Employee of 40% of a full time employees 38 ordinary hours over a 4 week roster cycle i.e. a minimum of 64 ordinary hours per 4 weeks or an average of a minimum of 16 ordinary hours each week;

(d) the right of an employee to seek an increase in their minimum percentage arrangements where their current minimum% is exceeded for 6 months or more;

(e) the protection that an employee's guaranteed minimum % can only be reduced with the employee's agreement;

(f) that each extra hour worked is paid for at the ‘Hourly equivalent Salary Rate’ prescribed by the Agreement, except for additional hours worked that are in excess of:

• 11 hours on any day;

• 48 hours in a week;

• 96 hours In a fortnight;

• 52 hours in a 4 week pay calculation period;

in which case the extra hours would be paid for at the rate of 1% for the first two hours and then double time thereafter at the ‘Hourly equivalent Salary Rate’ prescribed by the Agreement.

[31] Mr Ford described as disappointing, the Union’s rejection of these conditions, given the flexibility welcomed by employees and the many months of negotiations on the issue. Specifically, Mr Ford rejected the Union’s claims that the Agreement does not:

(a) provide a minimum of three hours for casual employees. In fact, the Agreement provides a four hour minimum.

(b) prescribe rates for Ticket Sellers, because the Agreement does not cover Ticket Sellers.

(c) provide for a Span of Hours. This is now covered by the applicant’s undertaking; see: para 153(i) following. Mr Ford expressly rejected the Unions claim as the span of hours being only those applying under the Ports Award.

(d) provide for $1796 compensation for loss of personal effects. The rate proposed is $1698 which is $533 above the amount in the Marine Tourism Award.

(e) provide for a Bilge Allowance. This allowance is not found in the Marine Tourism Award and no employees would be expected to work in the ships bilge. If such work was required the provision of the Ports Award would apply by virtue of cl 14.12.

(f) provide an Expense Allowance. No reimbursement is found in the Marine Tourism Award. However, there would be no circumstance where an employee incurring a work related expense would not be reimbursed. An undertaking can be offered if the Commission considers it necessary.

(g) provide a First Aid allowance. No employee is required to be qualified in first aid.

(h) contain a Meal Allowance. These allowances are expressly included in the rates of pay which prescribes:

The Annual Salaries prescribed in Schedule 1 have been set to take into account and to cover the following provisions of this Agreement:-

6. All otherwise applicable allowances, except for the allowances and the other additional payments prescribed by Clause 26. Travel & Call Back “Out of Hours”.

(i) contain a ships stranded or wrecked or on fire allowance. The allowance in the Ports Award relate to ships wrecked or stranded during a voyage. This does not relate to the work of the applicant’s employees.

(j) contain a provision regarding the transport of employees. This is incorrect as cl 14.22 of the Agreement sets out the costs paid by the employer or transport provided by the employer. The clause also provides for an additional 15 minutes pay and a $10 travel expense when an employee starts or finishes at a different location on the same shift.

(k) In addition, the applicant will provide an undertaking to only pay wages weekly or fortnightly.

Mr Paul Garrett

[32] Mr Garrett has responsibility for representing the industrial interests of members of the Union. He has extensive experience and practical knowledge of the maritime industry and is familiar with the history and operation of both Modern Awards. Mr Garrett has extensive experience in dealing with safety, industrial, government and regulatory issues affecting maritime workers operating in, or around Sydney Harbour, and he negotiated the 2004, 2006, 2012, 2014 and 2016 Agreements covering agencies and companies operating Sydney Ferries.

[33] On behalf of the Union, Mr Garrett opposed the application to approve the Agreement. He was concerned that the Agreement does not comply with the statutory requirements under the Act, and undercuts the entitlements of employees when compared to the Ports Award. He was particularly concerned that it is now suggested that Noorton Pty Ltd is the employer of the employees, despite his dealings with Manly Fast Ferry Pty Ltd over recent times. At the time, Mr Garrett took the view, despite the applicant applying one rate for services between Circular Quay and Manly and a different rate for off peak services, they were all ferry services, covered by the Ports Award.

[34] Mr Garrett included in his evidence the three NERRs issued by the applicant on 29 April 2015, 14 September 2015 and 26 April 2016. Mr Garrett said that on 19 December 2016 when a proposed agreement was submitted for approval by the Commission (Manly Fast Ferry Pty Ltd – Sydney Harbour Services – On Board Crew – GPHs and Hosts Enterprise Agreement 2016) Mr Ford swore a statutory declaration attesting to Manly Fast Ferry Pty Ltd as the true employer of the employees. Mr Garrett had understood this to be the case because the applicant had a contract with the NSW Government to deliver fast ferry services between Circular Quay and Manly. Mr Garrett’s own research disclosed that as at 19 June 2017, Noorton Pty Ltd was not registered as trading under the name of Manly Fast Ferry. This approval application was discontinued by the applicant on 13 February 2017.

[35] Mr Garrett said that on 23 February 2017 Manly Fast Ferry issued another NERR to employees for a proposed agreement in respect to employees that are employed by Manly Fast Ferry as either a:

• General Purpose Hand (GPH);

• Host/Hostess;

• Junior General Purpose Hand (GPH); or a

• Junior Host/Hostess;

on the Company’s vessels in relation to the Company’s maritime tourism services on or about or out of Sydney Harbour and/or ferry service operations on or about Sydney Harbour.

[36] When Mr Garrett wrote to the applicant in 2017 concerning underpayments to employees, at no time was it said by the applicant or its solicitor, that the Company was Noorton Pty Ltd. A further NERR was issued by Noorton Pty Ltd on 6 June 2017 which Mr Garrett was not made aware of at the time. Three days later, Mr McCarthy sent a ‘best and final’ offer for the Manly Fast Ferry P/L – Sydney Harbour Services – On Board Crew – GPHs & Hosts Enterprise Agreement 2017. It was not the name used in the NERR of 6 June 2017. A subsequent email on 14 June 2017 from Mr McCarthy, identified Noorton Pty Ltd as the employer party to the Agreement. This prompted Mr Garrett to file a dispute application with the Commission concerning:

• which modern Award currently applied to employees;

• which enterprise agreement currently applied to employees;

• a breach of the Ports Award for alleged underpayment of wages; and

• who the employer was.

Mr Garrett claimed the above circumstances were baffling, and he was sceptical, because Noorton had been named as the employer of whale watching operations (marine tourism). A check of the ABNs on the employees’ pay slips did not shed any light on which Company was the true employer.

[37] When the applicant put the Agreement to a vote, the employer was identified as Noorton Pty Ltd t/a Manly Fast Ferry. Mr Garrett made requests for further information, raised concerns about the access period and sought to have the vote of employees deferred. In the dispute notification response of 28 June 2017, the applicant continued to assert Noorton Pty Ltd as the employer. However, the vote scheduled for 29 June 2017 was cancelled.

[38] Mr Garrett referred to relevant applicable maritime legislation as to the definition of a ‘ferry’. The NSW Marine Safety Regulation 2016 states:

ferry and ferry service have the same meaning as in the Passenger Transport Act 2014.

Note.

The Passenger Transport Act 2014 defines ferry as a vessel which seats more than 8 adult persons, and includes a vessel of any class prescribed by the regulations under that Act for the purposes of that definition.

Mr Garrett said that all vessels operated by the applicant seat more than 8 adult persons.

[39] Mr Garrett observed that all of the applicant’s Sydney Harbour services operate according to a timetable. He set out each of the following services and their timetables as at 14 June 2018:

(a) Manly – Circular Quay

(b) Manly – Darling Harbour

(d) Manly – Pyrmont Bay

(e) Manly – Watsons Bay

(f) Harbour Beaches Ferry

(g) Eco Hopper

(h) Whale Watching (Mr Garrett agreed that whale watching is seasonal, but it is still timetabled between May and December).

[40] It was Mr Garrett’s evidence that the applicant has a high and regular turnover of employees. He estimated that in a period of two years there has been some 200 additional employees. Mr Garrett claimed the applicant hired a number of new casual staff immediately prior to the Agreement vote. He did not expect they would continue to be employed or be covered by the Agreement. Further, he was concerned that some of the employees may not have been entitled to vote, if they were employees of Manly Fast Ferry, and not Noorton.

[41] Mr Garrett responded to Mr Ford’s statement as follows:

(a) Mr Ford regularly voiced his concerns as to the correct Award to be applied, as it was apparent that he had costed his business on the basis that the Marine Tourism Award applied to all, or most of the work. Mr Garrett said he would not have agreed to any arrangement which may have disadvantaged employees as to their rightful Award entitlements.

(b) Mr Ford was ‘cherry picking’ the lowest conditions from each of the Awards to be included in an Agreement. He gave an example of Juniors being included when there is no provision for Juniors in the Ports Award.

(c) Mr Garrett disagreed that the application for approval of the then Agreement was withdrawn in December 2016 because of the ‘opposition, objection and pressure’ from the Union. It was because the NERR was non-compliant.

(d) Mr Garrett had regularly challenged the accuracy of the tables and rosters provided by the applicant. He maintained that 90% of the work is ferry work.

[42] In a reply statement, Mr Ford said that the Union had been aware for years that Noorton Pty Ltd is the employer. For example in dispute proceedings in matter C2017/3255 this was made clear in documents (payslips) provided to the Commission in 2017, for a number of employees for the period between May – July 2017. The Union even accepted Noorton was the employer when it first issued an NERR in April 2015. Nevertheless, the business is generally known as Manly Fast Ferry.

[43] Mr Ford explained the business strategy which originally began with establishing a new agreement between employees and Noorton Pty Ltd. It became an agreement between employees and the related entity of Manly Fast Ferry for ferry and marine tourism work. Manly Fast Ferry then returned to the original intention of an agreement between employees and Noorton Pty Ltd as a result of ‘commercially confidential’ matters, coinciding with the final stages of the Agreement negotiations in June/July 2017. It resulted in a decision to retain the structure of having Noorton as the employer of all employees. This is why the NERR issued on 6 June 2017 was issued by Noorton Pty Ltd.

[44] Mr Ford denied that Noorton Pty Ltd had done nothing to initiate bargaining before it issued the 6 June 2017 NERR. He said that after Mr Garrett had declared bargaining at an end, he communicated directly with the employees for the purpose of negotiating and finalising an agreement. These communications included SMS text messages to employee representatives, Beau Chippindale and Nicola Spata. On 2 June 2017, the applicant sought legal advice as to the way forward. This resulted in the NERR of 6 June 2017.

[45] Mr Ford responded to criticism that the applicant had not demonstrated how the employees who were to vote, were selected. Noorton Pty Ltd uses a roster system called easyEMPLOYER to manage the roster and prepare timesheets for payroll processing. The system categorises employees according to classifications GPH, Hosts, Sales, Master etc.

[46] Mr Ford had downloaded the list of current GPH and Host employees on the easyEMPLOYER system at the time the invitation to vote was distributed. He said that if the Commission required further details, the applicant would be willing to do so, subject to the employees’ names being kept confidential.

[47] Mr Ford rejected the allegation that there had been a substantial turnover of labour. At the time of the vote 31% of the employees had been engaged for over two years and a number of other former GPH employees had been promoted to Master positions.

[48] Mr Ford set out the Company structure as follows:

The business ferry services, which include:-

a. Manly to Circular Quay; and

b. Manly to Sydney Aquarium/Darling Harbour service

are the business activities operated by Manly Fast Ferry Pty Ltd.

The businesses tourist activities, which include:

a. Sydney Harbour Eco Hopper (around the Harbour sightseeing) service;

b. Taronga Zoo & Weekend Harbour Beaches services; and

c. whale watching;

are the businesses operated by Noorton Pty Ltd.

This structural separation in the business reflect operations reflects the fact that Manly Fast Ferry Pty Ltd both:

a. Holds the ferry services contract with the NSW Government/Transport for NSW (TfNSW) which allows it to operate a commuter ferry service between Manly and Circular Quay; and

b. Has been granted an exemption by TfNSW to operate a commuter ferry service between Manly and Darling Harbour under the Passenger Transport Regulations 2007 (NSW). The exemption exempts MFF P/L from the statutory requirement under the Passenger Transport Act (NSW) to hold a service contract with NSW Government/TforNSW in order to operate a commuter ferry service.

Noorton Pty Ltd is, and has been at all material times, the only employer of the employees:-

a. working on the business vessels while they perform all of the abovementioned services; and

b. who are covered by the new Agreement.

Manly Fast Ferry Pty. Ltd. is wholly owned by Noorton Pty. Ltd.

Manly Fast Ferry Pty. Ltd. has no employees. In this regard I would further note that Manly Fast Ferry Pty. Ltd. is not, and has not been for many years, registered with the ATO for PAYG tax purposes.

[49] Mr Ford claimed that communications from the applicant in June 2017 which may have referenced Manly Fast Ferry were ‘typographical errors’. This fact was as reflected in the new Agreement naming Noorton Pty Ltd as the employer and Mr Garrett acknowledged as much. The earlier dispute application in which Manly Fast Ferry had filed a response, was because the Union had filed the application against Manly Fast Ferry. In any event, Mr Garrett had conceded Noorton was the employer.

[50] Mr Ford rejected Mr Garrett’s misrepresentation of the definition in the PassengerTransport Act 2014 (NSW) as he failed to mention:

• Section 4 Definitions, goes on to define “ferry service” to mean “a public passenger service provided by means of a ferry”.

• Section 5 Public Passenger Services, then sets out a detailed definition on the meaning of public passenger service.

• Section 39(1) of the Act (significantly) is in the following terms:

“(1) A person must not operate a public passenger service that is conducted according to regular routes and timetables or according to regular routes and at regular intervals otherwise than under the authority of a passenger service contract.”; and

• Section 39(2) of the [Passenger Transport Act 2014 (NSW)] provides that Section 39 does not apply to a “tourist service”.

[51] Mr Ford regretted the Union’s claim that the tables and Award comparisons were inaccurate; particularly after many hours of preparation and presentation during the negotiations and in proceedings before three different Commission members.

[52] Mr Ford believed the Union’s issue is not about the accuracy of the calculations, but reflects the Union’s claims that it wanted larger wage increases and a greater proportion of ferry work compared to marine tourism work. Moreover, Mr Ford believed that on several occasions, the Union had indicated the parties were close to agreement, but no final agreement was achieved. Mr Ford acknowledged that the calculations were based on ‘indicative rosters’ because they include future Part-Time and Full-Time comparisons in circumstances in which the applicant only presently engages Casuals. This is because the applicant has agreed to a new approach to move employees to more permanent employment, if they choose to do so. These rosters were provided to Deputy President Dean on 29 September 2016 and further roster comparisons, showing start and finish times was provided to the Union, at their request, on 18 January 2018. Mr Ford made clear that employees are still ‘better off overall’ under the rates of pay in the new Agreement, even if the Union’s position is accepted i.e. that all work is regarded as ferry work, except ‘whale watching’.

Cross examination of Mr Ford

[53] Mr Ford conceded that he was incorrect in his statements when he said there had been four votes of employees. He explained there were two actual votes and two other occasions, where the vote was notified, but later cancelled.

[54] Mr Ford agreed he commenced as a Director and Company Secretary on 19 July 1995. The Company was established at his instigation. As a result of a recent transaction, he no longer has any shares in Noorton Pty Ltd. His transfer of shares was to NRMA Marine Pty Ltd (NRMA Marine) which is now the major shareholder in the Company. He remains General Manager of Noorton, as an employee of NRMA Marine and reports to the Board, which has established a company known as Manly Fast Ferry. He said he did not include this development in his second statement, because he understood the Commission was only concerned with the circumstances leading up to, and the date of the vote in July 2017.

[55] Mr Ford is responsible for industrial relations for the applicant. He could not be sure, without checking, whether he remained a director of Noorton Pty Ltd or Manly Fast Ferry. Mr Ford accepted that, at one point, Noorton Pty Ltd held all the shares in Manly Fast Ferry Pty Ltd, but he could not be sure of the new structure, now NRMA Marine is involved.

[56] Mr Ford confirmed that during the period from April 2015 to July 2017 he was in charge of managing the applicant with his brother. He is the person most across Manly Fast Ferry’s industrial and employment affairs. He understood that Transport NSW had agreed for the assignment by Manly Fast Ferry of the long term ferry service contract to NRMA Marine. Manly Fast Ferry also has certain regulatory provisions in respect to Darling Harbour and Milsons Point ferry services.

[57] Mr Ford said that in respect to the applicant’s vessels Seacat I and Seacat 2, only one of them is in operation at the present time. Mr Ford claimed he could not source the survey certificate for Seacat I in the time ordered under a Notice to Produce. He could continue to make inquiries and find the survey certificate and produce it. He had previously not provided the survey certificate for the vessel ‘Totally Wild’,because it is not covered by theAgreement. It has no GPHs or hosts on board.

[58] Mr Ford was asked about the lists of employees who voted in the ballot for the Agreement’s approval. He claimed the way the applicant rosters employees to perform shifts is ‘commercially confidential’. Nevertheless, he agreed the rosters contain shifts that would not be covered by the Agreement.

[59] Ms Doust pressed Mr Ford on the legal basis on which he had signed the Agreement. Mr Ford asserted that the legal name of the employer was Noorton Pty Ltd, but people refer to, and associate it as Manly Fast Ferry. The employees say they work for Manly Fast Ferry, but their payslips, group certificates and rosters come from Noorton Pty Ltd. Mr Ford accepted that when he attested to the F17 he had indicated that Many Fast Ferry was the name the Company traded under. Mr Ford was unaware that a business trading under a business name, must have the business name registered. Mr Ford added that Manly Fast Ferry Pty Ltd is wholly owned by Noorton Pty Ltd. However, he conceded Manly Fast Ferry is not registered as the trading name. Mr Ford explained that Noorton Pty Ltd derives revenue from tourism services and Manly Fast Ferry earns revenue from the ferry services. Mr Ford was shown various references in documents, including an earlier draft agreement and emails, purporting to show Noorton Pty Ltd, trading under the name of Manly Fast Ferry. A letter to employees of 19 June 2017 advising, inter alia, of the ‘access period’ for the new Agreement and the NERR, were issued as being on behalf of Noorton Pty Ltd t/a Manly Fast Ferry. In this exchange with Ms Doust, Mr Ford said:

… I'm saying I put them in there because our employees understand the name of the agreement is ‘Manly Fast Ferry’, so the consistent reference to Manly Fast Ferry with Noorton Pty Ltd being the employer has them understand what we're talking about because it is a Manly Fast Ferry agreement for Sydney Harbour Services, on-board crew, GPH and hosts enterprise agreement. ‘Noorton Pty Ltd’ is the employer. "Manly Fast Ferry" is the agreement.

(Transcript, PN375)

[60] Mr Ford accepted that Noorton does not trade as Manly Fast Ferry, but he maintained that to the employees the agreement is (with) Manly Fast Ferry. Mr Ford insisted that in May 2017 there was no link to the sale of the business to a change of respondency to an enterprise agreement.

[61] It was Mr Ford’s evidence that he was not aware of any document, in the possession of Noorton, which records the agreement of employees to accept employment. Mr Ford agreed he had responsibility for industrial matters, with advice from Mr McCarthy. He had issued the NERR in April 2015 to employees working on the Circular Quay to Manly Ferry service. He accepted it was an important part of the process to ensure the employer was correctly identified. The employer at that time (April – September 2015), was Noorton Pty Ltd, as Manly Fast Ferry had no employees. He explained the business strategy at the time:

‘Well, initially we proposed to the MUA an agreement which covered the GPHs and hosts working on the ferry service between Manly and Circular Quay. The feedback from the employees and the MUA was that the desire was to have one agreement that covered both the tourism work and the ferry work operated by the two separate entities, and so then it was – prior to April 2015 we had two workplace agreements, one was under the name of "Manly Fast Ferry" and one was under the name of Noorton Pty Ltd. So once the company agreed with the MUA's request and the staff's request to put them under one entity – one agreement, the decision was made by the company that we should employ under Manly Fast Ferry so that the one agreement and all employees would be covered under the one company, and that was our intention after the initial negotiations.’

(Transcript, PN430)

[62] This proposal was not implemented. However, Mr Ford understood that once the Agreement was in place the applicant could transfer employees to another Company, providing the employees’ existing rights and entitlements were maintained. He believed that could happen now. The employees were not asked about this at the time (July/August 2015) because the proposition did not proceed. Mr Ford said that around 14 September 2015 employees of Noorton received an NERR, although that notice stated Manly Fast Ferry was the employer and bargaining with them would be ‘the arrangement going forward’. It wasn’t until May 2017 that Mr McCarthy explained that the NERR had to be reissued under the name of Noorton Pty Ltd. There had been a communication breakdown as to timing of when the transfer would occur. No steps were taken between September 2015 and 26 April 2016 to implement the decision and no consultation was had with employees about transferring them to a different entity. It did not happen.

[63] Mr Ford insisted Noorton was, and always has been the employer of the employees. Noorton remained the employer when the 26 April 2016 NERR was issued to GPH and Hosts engaged in marine tourism activities. Despite the NERR detailing Manly Fast Ferry as the employer, it was still the intention, at this point, to move in that direction. The same applied to another NERR issued on 20 May 2016. Mr Ford agreed that all of the documents issued to employees around 25 November 2016, maintain that Manly Fast Ferry was the employer. Mr Ford acknowledged that in the documents provided to the Commission, all information must be truthful. In any event, the application at that time was discontinued.

[64] Mr Ford conceded that a new NERR issued on 23 February 2017 continued reference to Manly Fast Ferry as the employer. From this time until June 2017, the Union continued to bargain, but had not asked to bargain with Noorton.

[65] In respect to the negotiations with Mr Beau Chippendale, Mr Ford agreed he was a Master at the time of the vote for the Agreement and did not vote. He was however a Deckhand throughout the two and a half years of negotiations. Ms Nicole Spata works in the Darling Harbour office and on the vessels at times as a GPH. She also manages the rosters. Neither Mr Chippendale nor Ms Spata were nominated as employee bargaining representatives. Mr Ford agreed that in his emails to them he continued to refer to Manly Fast Ferry as the employer. Mr Ford did not accept this was a significant issue for employees. They all knew what was meant. He said he was told the legal name of the employer was irrelevant to them and they just wanted an agreement in place.

[66] Questioning then turned to the voting list of employees. Mr Ford had prepared the list from downloaded electronic files. The NERR was issued on 6 June 2017. He informed Mr McCarthy on 19 June 2017 that new employees were being ‘added all the time’ and he wanted to make sure he captured all eligible employees to vote. He denied this was a reference to new employees added between 6 and 19 June 2017.

[67] Mr Ford was shown a list of 49 names in answer to a Notice to Produce. The document recorded who voted and who did not vote on 11 July 2017. Mr Ford had utilised the rosters to establish if employees worked a shift before, or after the vote, the date employees commenced employment and their last login date. He said the first four columns of the document were downloaded from a company, Simply Voting, and the second four columns were transcribed by him from the applicant’s records.

[68] Mr Ford was then asked to compare the voting lists with the actual rosters of employees. In respect to:

Employee A:

- Days worked before vote - 22 and 23 June;

- After vote – 20 and 21 July

- Not at work on day of vote.

Employee B:

- Worked up until 2 June

- No annual leave up to and including the vote (5 weeks)

- intended to be reemployed.

Employee C:

- Worked some hours on 26 May 2017

- No further work until 7 October 2017 (four and a half months)

Employee D:

- Sales duties 13 – 15 July

- Raratonga whale research 19 July, 23 July plus

- employed since 2009.

- no indication he was performing deckhand duties after the vote.

- last login 4 February 2018.

Employee E:

- last shift before vote - 10 June

- worked 10 – 12 July

- asks for annual leave to be paid out on 12 July

- unknown if he left

- traineeship.

Employee F:

- Worked for the majority of shifts as a coxswain or Master in the week prior to the vote.

Employee G:

- sales employee in the office at Darling Harbour, 8am to 4:30pm shifts.

- not working as a deckhand in sample roster, but has worked as a host.

Employee H:

- wharf hand performing deckhand work on 2 July and for the week up to the vote.

Employee I

- for the full roster period the employee is on unpaid leave in the United Kingdom. There is no record of the employee being at work prior to the vote. June payslips show the employee worked 16.5 hours as a deckhand, Darling Harbour service 5 hours, Hopper 23 hours.

[69] Mr Ford agreed that Wharf Hands are not covered by the Agreement, but by the old Noorton Workplace Agreement 2009.

[70] Mr Ford said employees move across Sales, Wharf Hand, Deckhand and Host roles depending on the Company’s requirements for a particular shift or vessel. In response to questions from me, Mr Ford said that the old Workplace Agreement will continue to apply to employees working on the wharf, until that Agreement is replaced. The employees who move across from the wharf to a vessel will remain covered by two agreements for the foreseeable future.

[71] In further evidence, Mr Ford said he had no access to, and cannot provide any material to identify how an employee voted. The vote was undertaken by an independent company which had been sourced, because it had been used for other agreement votes.

[72] Mr Ford was referred to the service timetable covered by the Manly Fast Ferry contract. He agreed there were changes to the timetable between June 2017 and June 2018. Services were added on weekdays and weekends and wharf departures were changed. Mr Ford said both the ferry services and the tourist services have increased since the vote. Mr Ford said most of the vessels can operate on any route and are subject to change based on timetabling or maintenance requirements. The time sheets will not show this. However, the employee’s payslips show which vessel he/she worked on. Services such as Manly/Darling Harbour or Manly/North Sydney and Manly/Watsons Bay are designated ‘hopper’ services on the timesheets. Mr Ford added that there are additional services added in summer, such as the Harbour Beaches Ferry which does not operate on weekdays. When shown the published timetables on the website annexed to Mr Garrett’s statement, Mr Ford agreed that timetabling for ferry services also includes tourist services (hop on/hop off services) and loop services. Whale watching cruises run from May to December. Five vessels can be used, but GPHs do not work on the vessel ‘Totally Wild’. Mr Ford said the most accurate records of the work performed is the timesheets, as rosters might change due to the unavailability of a particular vessel.

[73] Mr Ford was asked about the Certificates of Survey of all the applicant’s vessels. The following are passenger ferries:

• Seacat I and Seacat II (not used on Manly Fast Ferry services)

• Arafura Pearl

• Ocean Rider (Operates Manly Fast Ferry)

• Ocean Trader and Ocean Wave (Operates Manly Fast Ferry and Hopper and Whale Watching)

• Ocean Flyer and Ocean Surfer (Operates Manly Fast Ferry, but due to size not used on Hopper service).

[74] Mr Ford agreed that some employees work after 6:00 pm, particularly during summer and some employees work on Sundays and Public Holidays (e.g. Harbour Beach Ferries). Schedule 2 of the Agreement provides for an ‘uplift’ for afternoon/evening work and Sunday/Public Holiday work, but only to the Circular Quay/Manly and Manly/Darling Harbour Services. This is because these are the only services the Company designates as ferry services.

[75] Mr Ford believed the number of employees since the vote (49) may be 10% higher or lower than 49. Mr Ford claimed that while a number of employees have expressed interest in becoming permanent, the majority, particularly the longer term employees, who secure most of the weekend casual shifts, would prefer to remain as Casuals.

[76] In respect to Mr Ford’s conclusion that employees will be ‘better off overall’ irrespective of which Modern Award is the reference instrument, he was asked about his indicative rosters provided in these proceedings. Part of the calculations relate to Permanent Part-Time employees which were purely speculative, as no employee currently works Permanent Part-Time. The calculations were predicated on all employees electing to become permanent after 6 months, although it was voluntary. These proposals were worked through and discussed in proceedings before Commissioner Cambridge and Deputy President Dean. This model assumed 14 Part-time Permanents, 11 Full-Time Permanents and 4 Casuals.

[77] Mr Ford said that sales employees were not included in the vote, although two who also worked on the vessels, were included. Mr Ford acknowledged the modelling did not include Hostesses or Juniors (the latter cannot be employed serving alcohol). Mr Ford agreed that Juniors could be employed in other roles on the vessel. He had not provided any modelling for Junior employees. Generally, there is one or two GPHs on a vessel.

In re-examination

[78] Mr Ford reiterated that when bargaining commenced in April 2015 and ever since, the employees have been employed by Noorton Pty Ltd. Manly Fast Ferry did not employ any employees and is a wholly owned subsidiary of Noorton Pty Ltd. He reaffirmed that Noorton operates the Marine Tourism business and Manly Fast Ferry operates the Ferry services. Mr Ford said that most of the Company’s vessels are signaged with Manly Fast Ferry and the staff uniforms have Manly Fast Ferry logos, notwithstanding Manly Fast Ferry is not the employer. Mr Ford explained there is a crossover of operations in Sydney Harbour, but the revenues are separated ‘behind the scenes’ Mr Ford repeated that the 6 June 2017 NERR was issued in the name of Noorton Pty Ltd.

[79] Mr Ford understood that Mr Chippendale had been a delegate of the Union, as he attended most of the EBA negotiation meetings and was the main contact on site between the crew and the applicant. Despite negotiating directly with Mr Chippendale after 6 June 2017, the applicant continued to communicate with the Union, as it did by writing to the Union on 9 June 2017.

[80] Mr Ford claimed that the applicant believed that 32% to 35% of the work was Tourism related and the remainder was Ferry work. By reference to the Certificate of Service for the vessel Ocean Dreaming II, Mr Ford said the regulators require different conditions, crewing and operating profiles when the same vessel operates marine or ferry services. This vessel operates commuter ferry services in the morning/afternoon peaks and whale watching from 9:00 am to 4:00 pm.

[81] Mr Ford described the indicative roster and comparison documents as follows:

It shows – this document outlines the vessels and their start and finish times for each shift, the length. The next column designates the service that that particular shift is operating. Then the start and finish times, weekend shifts – so this document is an embedded spreadsheet into the – sits in front of the previous document, and also the comparative tables. So this outlines the indicative operating profile of the vessels at the time this process was done. From there we can change or input the employees, be it permanent, part-time or casual, on particular rosters to fill the roster and to fill the shifts, and the result of these two combined will produce the comparison tables, calculations, against – so this designates the hours that they've worked, when they start and finish, and whether we designate it as ferry and tourism. So this gives us flexibility to interrogate different profiles. So for example, when we wanted to do the comparison when all work was ferry except for whales, we could toggle those columns in column five to the all-ferry work. And that would give us different results.

(Transcript, PN1368)

[82] He then described the purpose of the applicant providing details of the employee’s payslips:

The payslips outline each individual operation, and you'll see, in the description column, if you look at page 1, you have a deckhand on MFF; you have a deckhand on the Darling Harbour service, a deckhand on whale watching, a deckhand on the Hopper service; training hours, travel. So these payslips outline exactly what was worked. The timesheets come from the roster system, which may be modified or changed, due to operational reasons, on any particular day, but the employees would submit an updated timesheet, or explanation if the services are changed. So the payslips demonstrate exactly what was worked, according to the employee in the company. The roster indicates how it was originally rostered and proposed.

(Transcript, PN1426)

SUBMISSIONS

For the applicant

[83] In opening, Mr McCarthy put the following propositions:

(a) Noorton Pty Ltd was, and still is the employer of the employees who are employed under the new Agreement.

(b) Noorton Pty Ltd operates the marine tourism services part of the business.

(d) Noorton Pty Ltd wholly owns Manly Fast Ferry Pty Ltd.

(e) Noorton Pty Ltd and Manly Fast Ferry Pty Ltd are related corporations.

(f) At the time of the filing of these Submissions i.e. on 5 March 2018, Richard Ford remains a Director of Noorton Pty Ltd and a Director of Manly Fast Ferry Pty Ltd.

(g) The business operates under the brand name ‘Manly Fast Ferry’. This is reflected in the title of the new Agreement.

[84] In dealing with the pre-approval requirements, Mr McCarthy submitted that:

(a) On 6 June 2017 the Applicant issued a replacement NERR to each of the affected employees.

(b) Subsequently each affected employee was issued:

• a written notification of the time, place and method of voting to be used on 29^th June 2017 – A copy is attachment 4 of the Company’s Form F17.

• A written request to vote on 30^th June 2017 – A copy is Attachment 5 of the Company’s Form F17.

(d) The employees were provided with a copy of the terms of the Agreement by Email prior to the commencement of the access period.

(e) The employees were also provided access to the terms of the Agreement throughout the Access Period via the applicant’s intranet. The relevant material was posted prior to the commencement of the access period.

(f) The applicant took reasonable steps to explain the terms of the Agreement and its effect on the employees during the access period.

(g) The majority of employees who cast a valid vote agreed to approve the proposed new Agreement on 11 July 2017, which was more than 21 days after the NERR was issued.

(h) The group of employees covered by the Agreement were fairly chosen considering geographical, operational or organizational distinctness. The new Agreement covers all of the Company’s on-board vessel crew other than Officers i.e. General Purpose Hands and Host/Hostess employees.

[85] Mr McCarthy submitted that the pre-approval processes and terms of the Agreement met all the statutory requirements under the Act.

[86] In respect to the BOOT, Mr McCarthy noted that unlike agreements where one agreement applies to different groups of employees covered by different awards, or where the major or substantial work is performed in an industry, in this case the approach should be different; see G.J.E. Pty Ltd [2013] FWCFB 1705 at [18] and [21] – [24]. In that case the 28.37% of revenue was sufficient to determine the ‘substantial character of the business’ was in the retail industry and accordingly, this business was covered under the General Retail Industry Award 2010.

[87] In this case, the business has more than one character operating in more than one industry – ferry industry (65%) and marine tourism (35%). Mr McCarthy put that for the purposes of the BOOT, the Commission would determine, as an exercise of discretion that:

(a) there are two applicable Modern Awards applying at the same time; and

(b) to the same employees who are performing work in two different industries that would be covered by the two applicable Modern Awards in the same workplace at one and the same time.

[88] Mr McCarthy noted that from the outset of negotiations, the Union had demanded and the applicant agreed to have one Agreement covering both industries, providing there would be a ‘blending and averaging’ approach to ensure a competitive cost structure in the marine tourism sector.

[89] In respect to the two Awards being applicable, Mr McCarthy said the Commission would take into account that:

(a) two ‘old’ Workplace Agreements exist and still currently operate;
(b) the two ‘old’ Workplace Agreements will be replaced by one Agreement;
(c) two modern awards operate in different sectors of the maritime industry.
(d) legal and contractual recognition of the distinction between when a vessel operates as a ‘ferry’ and when the same vessel operates as marine tourism/charter vessel.
(e) Certificates of Survey issued under the Marine Safety (Domestic Commercial Vessel) National Law Act 2012 (Cth) also recognise this differentiation.
(f) Statutory recognition of the differentiation as set out in the Passenger Transport Act 2014 (NSW); see s 39(1) and (2).

[90] Mr McCarthy identified a number of examples of tourism services, which do not require a service contract with the NSW Government: lunch, coffee, dinner cruises, jet boats, sailing cruises, shopper hopper services and whale watching. Mr McCarthy submitted that the existence of a timetable, or a vessel capable of carrying more than eight passengers, is not a determinative of a ferry service or a tourism service.It is determined by the purpose of the service and the type of passengers carried on the service, i.e. commuters or tourists.

[91] Mr McCarthy submitted that the Award/Agreement comparisons, indicative rosters and calculation tables, tendered by the applicant, in respect to rates of pay, overtime and penalty rates disclose the following:

In every instance the casual rates prescribed by the new Agreement are higher than the comparable rates prescribed for Casual employees by either of the two Modern Awards.

In relation to future employment of Permanent employees, remembering that at present all employees are employed as Casuals, the Table shows that the new Agreement’s ordinary rates, overtime rates and penalty rates are higher than the comparable rates prescribed for Permanent employees by either of the two Modern Awards, other than in four circumstances. The four circumstances are:

Ports & Harbours etc. Award

1. Permanent employees ordinary hours rate on a Saturday;

2. Permanent employees ordinary hours rate on a Sunday; and

3. Permanent employees Overtime rate on a Sunday.

Marine Tourism etc. Award

4. Permanent Sunday Overtime rate after 3 hours of overtime.

73. However as the Wage Table also shows, when the two Modern Awards rates are ‘blended and averaged’, there is then only one circumstance where the Enterprise Agreement’s rates are not higher than the “averaged and blended” Award rates, and that is in the circumstance of permanent employees working ordinary hours on a Sunday.

[92] All of these documents demonstrate that on all occasions, whether the employees are Casual or Permanent Full-Time or Part-Time employees, the employees will be financially better off under the Agreement, than the Awards. This has been extended by a 1.8% increase paid from 1 December 2017. Mr McCarthy emphasised that the rates, in fact, meet the Union’s position that ‘all of the shifts performed by employees are to be regarded as ferry work, except for whale watching’. Mr McCarthy rejected the Union’s claim that it did not have sufficient material to undertake its own calculations. These calculations had been provided to Deputy President Dean on 29 September 2016.

[93] In response to a concern as to the rates applicable to GPHs for overtime or work on Sunday and Public Holidays, the applicant proposed three ‘uplift’ allowances at Schedule 2 of the Agreement. This will ensure that:

… when casual GPH employees work on a ferry run either:-

a. After 6:00PM Monday to Friday; or

b. On a Sunday; or
c. On a Public Holiday;

the employee will be paid an hourly rate that is equal to or greater than the otherwise applicable rate for such work as prescribed by the Ports, Harbours and Enclosed Water Vessels Award. It should be noted that the increase from 1 December 2017 in the ‘uplift Allowances’ will ensure that the rates for such work will be greater in each instance than the rates prescribed in the PH&EVV Award.

[94] Mr McCarthy rejected the Union’s contention that the Agreement does not pass the BOOT. The Union’s case is based entirely on a false assumption that the Marine Tourism Award has no relevance or application to this matter. In addition, the Commission’s Triage Team had requested further information and appropriate undertakings as a result of its own inquiries and a submission put to it by the Union. The applicant had provided two detailed responses and source documents. It had offered an undertaking in respect to ‘Span of Hours’ (which the Union rejected). Mr McCarthy relied on Mr Ford’s evidence as to the limitations on employment of Junior employees and why Junior rates are included to provide vocational training of young people which is found in the Marine Tourism Award.

[95] In respect to the pre-approval steps, Mr McCarthy rejected the Union’s claim that the applicant had, since April 2015, consistently misrepresented the name of the applicant by identifying Manly Fast Ferry Pty Ltd as the employer of the employees, when on the applicant’s own view, Noorton Pty Ltd is, and always was, the correct employer. The question of the correct employer is a matter of fact. Noorton Pty Ltd was named as the employer on the first NERR on 29 April 2015. Moreover, the Union itself referred to Manly Fast Ferry in a publication it issued on 6 May 2015. In any event, the old Noorton Workplace Agreement will continue to apply to the employees, without a new agreement in place. This is well understood by the employees and the Union.

[96] Further, Mr Ford was at all material times a Director of Noorton Pty. Ltd and a Director of Manly Fast Ferry Pty. Ltd; the two companies are related entities under the Corporations Act; the operating businesses trade under the brand name of ‘Manly Fast Ferry’; Manly Fast Ferry Pty Ltd operates the ferry service operations of the business and Noorton Pty Ltd operates the marine tourism and commercial operations of the business.

[97] Mr McCarthy emphasised that all payslips and group certificates had been issued in the name of Noorton Pty Ltd. There could be no misunderstanding as to the identity of the employer. Mr McCarthy relied on Mr Ford’s evidence; see: para [43] as to the changing business strategy as to the reason why the final NERR issued on 6 June 2017 was in the name of Noorton Pty Ltd.

[98] Separately the Union must have been aware that Noorton was the employer when the Union:

i) advised Noorton of a dispute on 16 June 2017 (matter C2017/3255); and

ii) presented employee payslips in a right of entry dispute under s 483AA (Matter RE2017/786).

[99] Mr McCarthy addressed the Union’s submission that the Agreement was not ‘genuinely agreed’ because Noorton has not complied with the requirements under s 173(1) and (2) in respect to notification time. That section reads:

173 Notice of employee representational rights

Employer to notify each employee of representational rights

(1) An employer that will be covered by a proposed enterprise agreement that is not a greenfields agreement must take all reasonable steps to give notice of the right to be represented by a bargaining representative to each employee who:

(a) will be covered by the agreement; and

(b) is employed at the notification time for the agreement.

Note: For the content of the notice, see section 174.

Notification time

(2) The notification time for a proposed enterprise agreement is the time when:

(a) the employer agrees to bargain, or initiates bargaining, for the agreement; or

(b) a majority support determination in relation to the agreement comes into operation; or

(d) a low-paid authorisation in relation to the agreement that specifies the employer comes into operation.

Note: The employer cannot request employees to approve the agreement under section 181 until 21 days after the last notice is given (see subsection 181(2)).

[100] Mr McCarthy said that there is no statutory requirement for an employer to take a particular form of action, or to prove that it had agreed to bargain or initiated bargaining. This is evident from existing case law and the Commission’s Benchbook on enterprise bargaining. The decision in Uniline Australia Limited [2016] FWCFB 4969 does not support the Union’s submission; in fact, quite the reverse. The applicant had initiated bargaining and had issued a NERR within the 14 day time limitation. Even if the Union’s position is correct, the applicant initiated bargaining with Mr Chippendale and Ms Spata in text messages of 31 May 2017 and 2 June 2017 prior to the last NERR issued on 6 June 2017. It is irrelevant whether Mr Chippendale and Ms Spata were bargaining representatives, as the Company was communicating directly with employees after the Union declared bargaining at an end. In any event, Mr Chippendale had been known as the MUA site delegate and had been involved in bargaining over a long period.

[101] Mr McCarthy put an alternative submission that the issuance of an NERR is itself an act by the employer to initiate bargaining. This is because the prescribed terms of the NERR do no more than put employees on notice of their bargaining rights to representation:

‘[The Employer] gives notice that it is bargaining in relation to an enterprise agreement ([name of proposed enterprise agreement]) which is proposed to cover employees that [proposed coverage].’

[102] In addition it is clear that further communications with the Union continued after the issuance of the NERR with a ‘best and final offer’ conveyed to the Union on 9 June 2017.

[103] As to the cohort of employees identified as eligible voters, Mr McCarthy relied on the steps taken by Mr Ford; see: para [66]-[68], which used both an independent service provider and downloaded Company data showing:

- the Shift worked by the employee before or on the date of the vote;

- the Shift worked by the employee after the vote;

- the employees start date of employment with Noorton P/L; and

- the last date the employee logged on to the Company’s on-line roster system.

[104] Mr McCarthy addressed each of the circumstances of eight unnamed employees identified in cross examination (Employees 2, 6, 11, 12, 16, 20, 33 and 37). No issue was raised which would have disentitled any of these employees from the vote. Mr McCarthy concluded as follows that:

(a) All 49 employees given a vote (the cohort) had started with the business not only before the date of the vote, but had started with the business before the end of the previous financial year (i.e. before 30 June 2017) and so had all started at least 11 days before the date the vote took place on 11 July 2017.

(b) 38 of the 49 employees given a vote (i.e. 77.5%) started with the business more than one year before the vote.

(d) 17 of the 49 employees given a vote (i.e. 35%) started with the business more than 2 years before the vote.

(e) All 49 employees given a vote (i.e. 100%) worked for the business after the date on which the vote was conducted on 11 July 2017.

[105] This breakdown also demonstrated the Union’s claim of a high turnover of labour was wrong. There was no uncertainty that Noorton had always been the legal employer. It followed that all 49 employees were employed at the time of the vote and will be covered by the Agreement; see: National Tertiary Education Industry Union v Swinburne University of Technology [2015] 232 FCR 246 (‘Swinburne’) and McDermott v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers’ Union (AMWU)[2016] FWCFB 2222 (‘McDermott’) where a Full Bench said at [32] and [35]:

‘[32] There is no issue that enterprise agreements were intended by the legislature to be capable of covering casual employees, the difficulty is ascertaining when a casual employee ought be regarded as an employee “employed at the time” within the meaning of s.181(1). In relation to permanent employees it is relatively straight forward exercise.

…

[35] The Commissioner was of the view that there was something wrong with the vote occurring while employees were not actually performing or being paid for performing work at the time of the vote. This in our view was incorrect; the status of the 36 casual employees at the time of the vote is a natural and expected phenomenon of being employed on a casual contract as per the Full Bench decision in Smiths Snackfood. In our view it would be inappropriate and counter intuitive to disenfranchise casual employees of a right to vote on an agreement that determines their wages and conditions on the basis that they were not rostered on to work on the day/s of the vote, or during the 7 day access period. 22 There are obvious implications for voting manipulation adopting this approach. Swinburne is not authority for the proposition that a casual employee is only “employed at the time” they are rostered to work and are being paid. Swinburne eschewed the proposition that employed at the time included “usually employed”.’

[106] Mr McCarthy contended that the facts of this case were even more telling than in McDermott. All the Casual employees here will be covered by the Agreement when performing work on board vessels operated by the applicant as either a GPH/Deckhand or a Host/Hostess. Their employment is regular and systematic. This is evidenced by:

• a 7 year ferry service contract with the NSW Government requiring ongoing crew for the applicant’s vessels;

• timesheets for all 49 employees demonstrate work rosters in advance;

• timesheets show when employees are absent on unpaid leave;

• all 49 employees worked both before and after the vote;

• employee start dates are identified and employees (including long term) are expected to return to work after recorded leave absences; and

• the applicant recognises that the employees have unfair dismissal rights as regular and systematic Casuals.

[179] I did not invite further submissions from the parties arising from ‘One Key’, because I was satisfied that the applicant had taken reasonable steps to ensure the terms of the Agreement, and their effect, had been explained to the employees consistent with One Key. That finding is manifest by the long history of negotiations, the active involvement of the Union itself, in explaining the effect of the Agreement’s terms, and more specifically the detailed 17 page Summary and Explanation of Changes (Annexure 6 to the F17) sent to all relevant employees. I note also a paid Employee Information Session for all employees on 2 July 2017. In my view, these were all reasonable steps taken by the applicant, which satisfy s 180(5) of the Act and are consonant the One Key judgement.

[180] As will be evident from Ms Doust’s submissions, the Union maintains that there is doubt about these two preconditions, given the entire workforce are Casual employees; there is a substantial turnover of labour; and more Casual employees were employed before the vote. Reliance was had on the generally well established view that each casual engagement is a separate contract of employment; see: Shortland v Smiths Snackfoods [2010] FWAFB 5709 at [10]. This is not the case here. It is clear the Casual employees were engaged by the applicant on an ongoing basis with regular and systematic employment. The evidence is that 77.5% employees who voted, had worked for the business for at least six months. All 49 employees who voted, had been working for Noorton in the previous financial year; (see: Group Certificates).

[181] It is obvious the employer considers the employees are regular and systematic Casual employees. The employees are all engaged according to rosters, and employees make known to the employer (and may seek approval before) when making a request to have time off without pay. There is evidence the employees, after any period of extended time off, are re-engaged upon their return.

[182] In my view, Swinburne does not assist the Union’s arguments. The evidence establishes that employees are not just ‘usually employed’ - they are employees who comfortably fit within the expression ‘employed at the time’.

[183] Further, I reject the Union’s claim that there has been a substantial turnover of labour and that new Casual employees were engaged immediately before the vote. The evidence does not support either claim. I hazard a guess that if a casual Union member was dismissed, the Union would strongly assert they are covered by the unfair dismissal provisions under the Act and are regular and systematic employees. Mr Ford’s position is that is exactly how he treats the workforce.

[184] To support its submissions, the Union asserted that nine of the 49 employees who voted in the ballot, were ineligible to do so. It undertook an examination of the rosters and work performed by each employee to substantiate its assertion. I accept that of the nine employees:

(a) 5 of the employees were absent on a period of leave at the time of the vote. They were employees No. 2, 6, 11, 16 and 38.
(b) All 5 employees on leave were expected to resume work and all 5 employees did resume work for the Company after their period of leave.
(c) Employee No. 6 – who was on leave – did not vote.
(d) Employee No. 12 – is a Ticket Seller who also performs shifts as a Deckhand and was therefore entitled to vote.
(e) Employee No. 20 worked on the day of the Vote as a Deckhand and was entitled to vote.
(f) Employee No. 33 worked as a Deckhand on the day of the Vote and was entitled to vote.
(g) Employee No. 37 is a Ticket Seller who also performs shifts as a Deckhand and was therefore entitled to vote.

[185] In addition, given the factual employment profile of the nine employees said to be ineligible to vote, I accept that these employees were employed at the time of the vote, (irrespective of whether they were rostered off on the days of the vote), and meet the second precondition of being employees who are to be covered by the Agreement.

[186] Further, I do not accept the Union’s claim that the question posed by the ballot was not specific to the Agreement, but meant a non-specific agreement and was therefore inconsistent with s 182. By the use of the article ‘a’, as distinct to ‘the’, is a difference without a distinction. The Agreement the GPHs and Hosts were asked to approve was the one that had been distributed to them as the ‘last and final offer’. There was no other Agreement relevant in any practical or statutory sense. Moreover, there could have been no confusion as to what the employees were voting on. No evidence was adduced from any employee that they were confused, or did not understand what Agreement they were being asked to approve.

Issue 4 - Whether there were other reasonable grounds for believing the Agreement had not been genuinely agreed by the employees (s 188(c)) (the ‘no other reasonable grounds’ issue).

[187] The Union set out its concerns going to ‘other reasonable grounds’ as follows:

(a) The ongoing dispute about the applicable reference instrument;

(b) the misrepresentation by the applicant as to the true identity of the employer of the relevant employees;

(d) new employees were engaged before the vote and other employees were not employed at the time of the vote.

[188] Ms Doust submitted that the Commission would have concerns with to the ‘authenticity’ and ‘moral authority’ of the Agreement; see: Construction, Forestry, Mining and Energy Union v The Australian Industrial Relations Commission [2001] HCA 16; 203 CLR 645 (‘CFMEU v AIRC’). It will be seen that I have dealt with the above matters elsewhere in this decision. Having regard to the protracted history of this matter, the comprehensive and detailed material provided by the applicant and its intention to comply with all statutory obligations, I cannot identify any behaviour or conduct which would lead me to have concerns the employees did not ‘genuinely agree’ to the Agreement. More specifically, the ongoing dispute as to the appropriate Modern Award reference instrument has been an open disagreement from the outset, which was never going to be resolved by the parties themselves. Mere disagreement does not amount to egregious or unreasonable behaviour. The facts and circumstances go nowhere close to those identified in CFMEU v AIRC or Toys-R-Us (1995) 37 AILR 3068 Print L9066.

Issue 5 - Whether the Ports Award is the only Award which would otherwise cover the work performed by employees of Noorton Pty Ltd (the ‘single Award’ issue).

[189] There is no doubt that an employer’s enterprise can be covered by one or more Modern Awards. For example, a factory in which the employer has manufacturing, transport and clerical functions and where employees do not move outside their respective award coverage, is covered by the respective Modern Awards. Less common, but not rare, are enterprises which, for seasonal or operational reasons, employees may move between the coverage of two or more Modern Awards; for example a farm on which produce is grown and harvested and then stored and distributed. Employees are involved in the horticultural industry and the storage/warehousing industries. In the maritime industry, there have been disputes concerning whether employees are engaged under the Seagoing Industry Award or the Ports, Harbour and Enclosed Water Award. Closer to home, it is common ground that the majority of work to be covered by this Agreement (although the exact percentage is disagreed) would fall within ‘ferry’ work and be otherwise covered by the Ports Award. The Union insists that this means the Ports Awardis the only relevant instrument for the purposes of the BOOT. Where there are disputes about which Modern Award reference instrument applies for the purposes of the BOOT, it is invariably the case that the rates and conditions under a proposed agreement may not meet one reference instrument, but will meet another. But that is not the situation in this case. As I understand the evidence, the employees will be ‘better off’ whether the test is against the Marine Tourism Award or the Ports Award, (save for whale watching, which no party claims is not tourism work).

[190] In other words, the Union’s claim as to the Ports Award being the only Award to be applied for the purposes of the BOOT, is an arid argument. It makes no difference as to whether the Agreement passes the BOOT. In any event, there is no statutory prohibition on the Commission finding that two Modern Awards are the relevant reference instruments for the purposes of the BOOT. I am satisfied that this is the position in respect to operations of Noorton's on-board vessel operations. I shall return to the Union’s BOOT submissions shortly.

Issue 6 - Whether the Agreement satisfies the Better Off Overall Test (the ‘BOOT issue’).

[191] A critical statutory provision in this case concerns whether the Agreement passes the BOOT. The relevant provisions are set out in section 193 and read:

“193 Passing the better off overall test

When a non greenfields agreement passes the better off overall test

(1) An enterprise agreement that is not a greenfields agreement passes the better off overall test under this section if the FWC is satisfied, as at the test time, that each award covered employee, and each prospective award covered employee, for the agreement would be better off overall if the agreement applied to the employee than if the relevant modern award applied to the employee.

FWC must disregard individual flexibility arrangement

(2) If, under the flexibility term in the relevant modern award, an individual flexibility arrangement has been agreed to by an award covered employee and his or her employer, the FWC must disregard the individual flexibility arrangement for the purposes of determining whether the agreement passes the better off overall test.

When a greenfields agreement passes the better off overall test

(3) A greenfields agreement passes the better off overall test under this section if the FWC is satisfied, as at the test time, that each prospective award covered employee for the agreement would be better off overall if the agreement applied to the employee than if the relevant modern award applied to the employee.

Award covered employee

(4) An award covered employee for an enterprise agreement is an employee who:

(a) is covered by the agreement; and

(b) at the test time, is covered by a modern award (the relevant modern award) that:

(i) is in operation; and

(ii) covers the employee in relation to the work that he or she is to perform under the agreement; and

(iii) covers his or her employer.

Prospective award covered employee

(5) A prospective award covered employee for an enterprise agreement is a person who, if he or she were an employee at the test time of an employer covered by the agreement:

(a) would be covered by the agreement; and

(b) would be covered by a modern award (the relevant modern award) that:

(i) is in operation; and

(ii) would cover the person in relation to the work that he or she would perform under the agreement; and

(iii) covers the employer.

Test time

(6) The test time is the time the application for approval of the agreement by the FWC was made under section 185.

FWC may assume employee better off overall in certain circumstances

(7) For the purposes of determining whether an enterprise agreement passes the better off overall test, if a class of employees to which a particular employee belongs would be better off if the agreement applied to that class than if the relevant modern award applied to that class, the FWC is entitled to assume, in the absence of evidence to the contrary, that the employee would be better off overall if the agreement applied to the employee.”

[192] The applicant has proposed a number of undertakings. The section dealing with undertakings and their effects are found at section 190 and 191 as follows:

‘190 FWC may approve an enterprise agreement with undertakings

Application of this section

(1) This section applies if:

(a) an application for the approval of an enterprise agreement has been made under subsection 182(4) or section 185; and

(b) the FWC has a concern that the agreement does not meet the requirements set out in sections 186 and 187.

Approval of agreement with undertakings

(2) The FWC may approve the agreement under section 186 if the FWC is satisfied that an undertaking accepted by the FWC under subsection (3) of this section meets the concern.

Undertakings

(3) The FWC may only accept a written undertaking from one or more employers covered by the agreement if the FWC is satisfied that the effect of accepting the undertaking is not likely to:

(a) cause financial detriment to any employee covered by the agreement; or

(b) result in substantial changes to the agreement.

FWC must seek views of bargaining representatives

(4) The FWC must not accept an undertaking under subsection (3) unless the FWC has sought the views of each person who the FWC knows is a bargaining representative for the agreement.

Signature requirements

(5) The undertaking must meet any requirements relating to the signing of undertakings that are prescribed by the regulations.’

[193] As I have found that both Modern Awards are relevant reference instruments for the purposes of the BOOT, it needs to be emphasised that on the evidence before the Commission, the Agreement passes the BOOT, whichever Modern Award is used as the BOOT comparator. The Union’s submissions and its position in recent times is that the Ports Award is the only relevant instrument for the purposes of the BOOT. Whatever is the Union’s policy intent in respect to its insistence on this proposition, it is not relevant in this application in the BOOT context. In Beechworth, the Full Bench said at para [12]:

‘[12] The application of the better off overall test is not to be applied as a line by line analysis. Rather it is a global test requiring consideration of advantages and disadvantages to award covered employees and prospective award covered employees of an agreement’s application compared to the application of a relevant modern award. The application of the better off overall test therefore requires the identification of terms of an agreement which are more beneficial to the relevant employees when compared to the relevant modern award, the terms of an agreement which are less beneficial or detrimental when compared to the relevant modern award and then an overall assessment of whether each relevant employee would be better off under the agreement.’

[194] Since the decision was reserved in this matter, a five member Full Bench has clarified a number of matters going to the application of the BOOT, particularly in respect to loaded rates agreements; see: Loaded Rates Agreements [2018] FWCFB 3610. A number of extracts from that decision are relevant for present purposes. At paragraphs 101, 106 and 111 the Full Bench said:

‘[101]In the case of anything other than small employers, it would be an exhaustive task to examine the circumstances of each individual employee to reach a state of satisfaction that the BOOT is passed. Section 193(7) substantially relieves the Commission of this burden by permitting it to assume, if a class of employees to which a particular employee belongs would be better off under the agreement than under the relevant modern award, that the employees would be better off overall in the absence of evidence to the contrary. Paragraph 818 of the Explanatory Memorandum to the Fair Work Bill 2008 contains some information as to how this provision was envisaged to operate as follows (emphasis added):

“818. Although the better off overall test requires FWA to be satisfied that each award covered employee and each prospective award covered employee will be better off overall, it is intended that FWA will generally be able to apply the better off overall test to classes of employees. In the context of the approval of enterprise agreements, the better off overall test does not require FWA to enquire into each employee's individual circumstances.

Illustrative example

Moss Hardware and Garden Supplies Pty Ltd makes an enterprise agreement to cover approximately 1800 employees working at its national chain of retail garden and hardware supplies outlets. All of these employees are 'award covered employees'. The seven classifications under the agreement broadly correlate to seven classifications under the relevant modern award. Because there will be many employees within each classification under the agreement and the agreement affects each employee within a classification in the same way, FWA could group employees together when assessing the employees against the better off overall test. It is intended that FWA could assess a hypothetical employee in each of the classifications under the agreement against the relevant classification under the modern award.

If FWA were satisfied that the agreement affected each employee within the classification in the same way, and that the agreement passed the better off overall test for the hypothetical employee within the classification, FWA could be satisfied that the agreement passed the better off overall test for each award covered employee and prospective award covered employee within that classification.”

…

[106] Where a substantial disparity of this nature exists between the current workforce as at test time and the class of prospective employees to whom the agreement might apply in the future, such that useful predictions as to future employment patterns may not readily be drawn from the way in which the existing workforce operates, the starting point must necessarily be an examination of the terms of the agreement in order to ascertain the nature and characteristics of the employment which the agreement provides for or permits. In accordance with established principles of the construction of agreements, the express provisions of an enterprise agreement may be approached on the basis that they were intended to establish binding obligations and have a practical field of operation and are not otiose. Thus, for example, if an enterprise agreement makes express provision for employees to be required to work ordinary hours on weekends, that provision cannot be ignored for BOOT purposes simply on the basis that the employer asserts that it does not currently, and does not intend to, make use of that provision. There may be objective evidence available which might support the conclusion that, notwithstanding an express provision of the agreement which apparently permits something to be done, it cannot in fact be done or is extremely unlikely to be done. For example, a provision in an agreement applying to a retail business allowing for ordinary hours of work to be performed at identified unsociable hours might reasonably be disregarded for BOOT purposes if applicable laws concerning retail trading hours prohibits work being done at the relevant times. However this is not likely to be a common circumstance.

[111] The submission made by the ARA that the requirement to assess the BOOT as at the “test time” (being the time at which the application for approval of the relevant agreement is made) means that only the operational circumstances of the employer (such as its work rosters) as at that time may be considered is also rejected. The requirement to assess the BOOT in respect of prospective as well as existing employees tells against the adoption of such an approach. Because, as the Full Court decision in John Holland made clear, it is open to make an enterprise agreement covering classifications, occupations and work locations that are not part of the employer’s operations as at test time, the requirement to assess the BOOT with respect to prospective employees who might fall within such future classifications, occupations and/or work locations must necessarily take into account how the agreement might in practice apply when such employees are engaged in the future. The application of the BOOT would be rendered nonsensical and ineffective with respect to such prospective employees if only the employer’s existing operations, which did not involve the use of prospective employees in the categories permitted by the agreement, could be taken into account. The statutory purpose of the requirement to assess the BOOT as at the test time is, we consider, to permit rates of pay and other conditions of employment in the agreement and the relevant award to be compared at a fixed point of time when the terms of both are known. Absent such a temporal requirement, the application of the BOOT would require speculation about future changes to the provisions of the award, in circumstances where the agreement to be assessed may also involve agreed changes such as increases in rates of pay at defined intervals, and would involve the impossible task of making multiple comparisons for the whole of the period in which the agreement remains in operation.’(citations removed)

[195] The Full Bench set out 11 Principles which apply to the application of the BOOT to a loaded rates agreement. These are:

‘(1) The BOOT requires every existing and prospective award covered employee to be better off overall under the agreement for which approval is sought than under the relevant modern award. If any such employee is not better off overall, the agreement does not pass the BOOT.

(2) Section 193(7) permits the Commission to assume that if a class of employees to which a particular employee belongs would be better off under the agreement than under the relevant modern award, then the employee would be better off overall in the absence of evidence to the contrary. However the selection of class for the purpose of s 193(7) will only be of utility if the agreement affects the members of the class in the same way such that there is likely to be a common BOOT outcome. If the Commission is not satisfied on the evidence that an existing or prospective award covered employee is not better off overall, the Commission cannot approve the agreement, at least not without undertakings or in the confined circumstances set out in s 189.

(3) The application of the BOOT to a loaded rates agreement will, in order for a meaningful comparison to be made, require an examination of the practices and arrangements concerning the working of ordinary and overtime hours by existing and prospective employees that flow from the terms of the agreement. This will likely require classes to be identified based on common patterns of working hours, taking into account evening, weekend and/or overtime hours worked.

(4) The starting point for the assessment will necessarily be an examination of the terms of the agreement in order to ascertain the nature and characteristics of the employment for which the agreement provides or permits. For example if an enterprise agreement makes express provision for employees to be required to work ordinary hours on weekends, those provisions cannot be ignored for BOOT purposes simply because the employer asserts it does not currently utilise those working hours or roster patterns.

(5) In the case of existing employees, this may involve an examination of existing roster patterns worked by various classes of employees as at the test time. The use of sample rosters to compare remuneration produced by a loaded rates pay structure compared to the relevant modern award may be an effective method of doing this. There may be objective evidence that a particular pattern of working hours or roster pattern permitted by an enterprise agreement is not practicable, or cannot or is unlikely to be worked.

(6) In the case of prospective employees, the assessment will necessarily involve a degree of conjecture. In the case of an enterprise operating at a defined workplace or workplaces, the Commission may be in a position to make sensible predictions about the basis upon which prospective employees might be engaged based on the roster patterns worked by existing employees. However if a business is small and/or still at the development stage, or the agreement would cover a wider range of classifications, work locations and/or roster patterns that are not in existence as at the test time, useful predictions may not readily be drawn from the way in which the existing workforce operates. In that situation the assessment will require an examination of the terms of the agreement in order to ascertain the nature and characteristics of the employment which the agreement provides for or permits.

(7) If the information concerning patterns of working hours needed to assess whether a loaded rates agreement passes the BOOT is not contained in the employer’s Form F17 statutory declaration accompanying the approval application, it may be necessary for the Commission to request or require the production of such information.

(8) The BOOT involves the making of an overall assessment as to whether an employee would be better off under the agreement, which necessitates identification of the terms in the agreements which are more and less beneficial to the employee than under the relevant award.

(9) The overall assessment required will essentially be a mathematical one where the terms being compared relate directly to remuneration. The assessment will be more complex where the agreement contains some superior entitlements which are non-monetary in nature, accessible at the employee’s option or which are contingent upon specified events occurring.

(10) In respect of non-monetary, optional or contingent entitlements in an agreement, the assumption cannot readily be made that they have the same value for all employees. In the case of a contingent benefit, it will be necessary to make a realistic assessment about the likelihood of the benefit crystallising during the period in which the agreement will operate.

(11) Where a loaded rates agreement results in significant financial detriment for existing or prospective employees compared to the relevant award, it is unlikely that a non-monetary, optional or contingent entitlement under the agreement will sufficiently compensate for the detriment for all affected employees such as to enable the agreement to pass the BOOT.’

[196] While on one view, the Agreement here is strictly not a loaded rates agreement, because the intention is for an agreement which ‘blends and averages’ the two Awards, for abundant caution, I shall determine whether to approve this Agreement in respect to the BOOT, by reference to these Principles.

[197] In my view, the following matters are pertinent background to this process.

[198] The applicant has gone to extraordinary lengths through an analysis of the rosters, payslips and assumptions advanced by both parties to justify its BOOT modelling and remodelling, including providing the modelling to other members of the Commission, by producing precisely what section 193(1) requires – that each award covered employee and each prospective award covered employee would be ‘better off’ if the Agreement applied. In my experience, few employers, for obvious practical reasons, undertake the BOOT for prospective employees; see: Construction, Forestry, Mining and Energy Union v John Holland Pty Ltd [2015] FCAFC 16. In this case, Noorton has provided calculations on current rosters over a two week period and then produced indicative modelling for Casual, Part-Time and Full-Time employees. It has undertaken the exercise with the expectation that some employees will opt to convert to Permanent Part-Time or Full-Time employment after six months. Obviously, it is pure speculation as to the number of employees who may elect do so. I am confounded by the Union’s criticism of this approach, given it is more likely the applicant would be criticised for not undertaking the BOOT exercise in respect to prospectively covered employees.

[199] Secondly, the applicant has responded to, and addressed concerns identified by the Enterprise Agreement Triage Team and DP Gostencnik by proposing undertakings, which I am prepared to accept. I also intend to invite the applicant to provide undertakings in respect to:

(a) Reimbursement of any work related expenses; see: para [31(4)] above;

(b) Payment of wages to be only weekly or fortnightly; see: para [31(k)] above;

(c) Should Junior employees be rostered to work on a vessel as a GPH, their rate of pay should ensure that they are ‘better off overall’ when compared to the Awards.

[200] Thirdly, there are issues raised by the Union in respect to corresponding provisions of the Ports Award, said to be disadvantageous in comparison, when in fact they are better than the Ports Award, e.g. a minimum of four hours Part-Time engagement, when the Ports Award provides for two hours. Part-time provisions provide for higher rates than either Award. Four hour minimum engagement of casuals (three hours in the Ports Award)

Neutral or not relevant matters

[201] Those matters, which, in my opinion, are neutral in the BOOT analysis are:

(a) transport for employees who start at one location and finish at another; and

(b) the ‘make good’ provision. As the rates of pay are higher than the two Modern Awards and the Agreement meets the BOOT on either Award comparison, ‘Beechworth’ is not relevant. Mr McCarthy described the provision as just providing some surety for employees. I note however, that had the ‘make good’ provision been a relevant matter for the purposes of the BOOT, it would have been inconsistent with Beechworth,given the review period is 6 months. My preference would be to delete a provision which has no practical utility and which may lead to confusion.

[202] Those matters which are not relevant are:

(a) The Agreement does not cover ticket sellers (only GPH/deckhands and hosts/hostesses);

(b) bilge allowance is not applicable;

(d) the allowance when a ship is stranded, wrecked or on fire is not applicable;

(e) higher duties provisions are not applicable.

A small number of other conditions are referable only to the Marine Tourism Award. These are:

(a) part-time provisions in respect to an employee’s regular work patterns and hours;

(b) overtime rates for charter employees.

[203] Fourthly, those matters which are more beneficial include the rates of pay. In addition, there can be no doubt that the applicant’s acceptance of an optional Permanent Part/Full-Time conversion clause for long-standing Casuals is a matter of some significance for many employees. I note that the Full Court of the Federal Court in One Key (para [205] to [206]) said it was a ‘bold submission’ of the employer to put that a casual conversion clause (in other words the reverse of what is proposed here) was a benefit to employees. I agree. In my view, the corollary of this view is when a full casual workforce is offered the advantages of permanent employment, it must be a benefit in the BOOT assessment. I am moved to observe that given the Union movement’s strong opposition to ‘precarious’ employment, including to casual employment, that such a change would be more likely welcomed by the Union, than opposed. It is a matter, in my opinion, that must be taken into account when making an overall BOOT assessment of the Agreement, particularly when there is consideration to the one issue focused on by the Union – the 5am start time compared to the 6am start time under the Ports Award.

[204] In the Loaded Rates Case, the Full Bench discussedthe overall assessment of the terms and conditions in an agreement when considering the BOOT at paragraph [112]:

‘[112] The second proposition is that the BOOT requires an overall assessment to be made. This requires the identification of terms which are more beneficial for an employee, terms which are less beneficial, and an overall assessment of whether an employee would be better off under the agreement. Where the terms required to be compared bear directly upon the remuneration of employees, the assessment is essentially a mathematical one. However the position becomes more complex when an agreement contains provisions superior to or not contained in the reference award conferring entitlements to non-monetary benefits, benefits which are accessible at the employee’s choice, or monetary benefits which are contingent upon specified events occurring. While it is necessary to take such entitlements into account in the BOOT assessment, ascertaining the value they are to be assigned may be a difficult task. This difficulty was adverted to in the Full Bench decision in National Tertiary Education Industry Union v University of New South Wales in the following terms:

“[96] There is an obvious problem of comparing apples with oranges when it comes to including changes to non-monetary terms and conditions into the ‘overall’ assessment that is required by the BOOT. In such circumstances the Tribunal must simply do its best and make what amounts to an impressionistic assessment, albeit by taking into account any evidence about the significance to particular classes of employees covered by the Agreement of changes to non-monetary terms that render them less beneficial than the equivalent non-monetary term in an award.”’ (citations removed)

[205] Having carefully balanced all of the matters posited by the Union as concerns going to the BOOT, I am satisfied that the Agreement is BOOT compliant in that when the test of whether employees and prospective employees are ‘better off overall’, the answer must be in the affirmative.

Other matters

[206] I intend to make further general findings on the other statutory requirements for approval of the Agreement. The Agreement provides for the mandatory flexibility and consultation terms at cls 38 and 39 respectively and a disputes resolution procedure at cl 43 provides for conciliation and arbitration by the Commission. I also foreshadow that pursuant to s 201(2) of the Act, the Construction, Forestry, Maritime, Mining and Energy Union shall be covered by the Agreement. The Agreement will operate pursuant to s 52 of the Act, 7 days after my formal approval.

Disposal of proceedings

[207] The applicant is directed to file further undertakings in respect to the matters set out in para [199] above. Given these were matters raised by the Union, I expect they will meet the requirements of s 190(3) of the Act. However, to avoid falling foul of s 190(4) of the Act, consequent upon receipt of any undertakings, I shall seek the views of the bargaining representatives before formally approving the Agreement.

[208] These proceedings are otherwise concluded.

DEPUTY PRESIDENT

Appearances:

Mr S McCarthy, Solicitor for the applicant.

Ms L Doust, Counsel with Mr A Jacka for the Union.

Hearing details:

Sydney.
2018:
February 12 and 13.

Final written submissions:

For the applicant 16 April 2018.

For the Union 3 April 2018.

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