Patrick Container Ports Pty Ltd T/A Patrick Port Logistics

[2015] FWCA 248

[2015] FWCA 248 [Note: An appeal pursuant to s.604 (C2015/1598) was lodged against this decision - refer to Full Bench decision dated 17 April 2015 [[2015] FWCFB 2472] for result of appeal.]

FAIR WORK COMMISSION

DECISION

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

Patrick Container Ports Pty Ltd T/A Patrick Port Logistics
(AG2014/8934)

PATRICK PORTS LOGISTICS (CARGOLINK) ENTERPRISE AGREEMENT 2014

Road transport industry
COMMISSIONER CARGILL	SYDNEY, 16 JANUARY 2015

Application for approval of the Patrick Port Logistics (Cargolink) Enterprise Agreement 2014.

[1] This decision concerns an application made under section 185 of the Fair Work Act 2009 (the Act) for the approval of a single-enterprise agreement. The application has been made by Patrick Container Ports Pty Ltd trading as Patrick Port Logistics (PPL). The title of the proposed agreement is Patrick Port Logistics (Cargolink) Enterprise Agreement 2014 (the Agreement).

[2] The application is opposed by The Maritime Union of Australia (MUA) which was a bargaining representative for the Agreement.

[3] The matter was listed for mention and directions by telephone on 24 October 2014. Dates were set for the filing and exchange of witness statements and outlines of submissions. The matter was heard on 16 December 2014. At that hearing PPL was represented by Mr Jauncey and the MUA by Mr Quinn. Both representatives are solicitors and appeared with permission.

[4] Evidence was given on behalf of the MUA by the following witnesses:

Mr Lally Full Container Handler employed by PPL at the Cargolink facility on Fisherman’s Island in the Port of Brisbane. His witness statement dated 19 November 2014 was marked Exhibit MUA 1. Mr Lally was not required for cross-examination;

Mr S McCallum Full Container Handler employed by PPL also based at the Fisherman’s Island facility and member of the MUA. His witness statement dated 19 November 2014 was marked Exhibit MUA 2. His oral testimony is at PN 41-176 of Transcript. Mr McCallum gave his evidence by videolink;

Mr D Monk Receipt and Dispatch Clerk employed by PPL at the Fisherman’s Island facility and member of the MUA. His witness statement dated 20 November 2014 was marked Exhibit MUA 3. His oral testimony is at PN 198-454 of Transcript. Mr Monk gave his testimony by videolink;

Mr T Munday Deputy Branch Secretary of the Queensland Branch of the MUA. His witness statement dated 1 December 2014 was marked MUA 4 and his oral testimony is at PN 476-715 of Transcript;

Mr P Sheehan Assistant Branch Secretary of the Queensland Branch of the MUA. His witness statement dated 26 November 2014 was marked Exhibit MUA 5 and his oral testimony is at PN 723-779 of Transcript.

[5] Two witnesses provided evidence on behalf of PPL. Mr D Nash, PPL’s Regional Manager for Victoria and South Australia provided a statement dated 12 December 2014, Exhibit PPL 10. His oral testimony is at PN 783-820 of Transcript. Mr D Arnold, Queensland State Manager for PPL provided a statement dated 12 December 2014, Exhibit PPL 11. His oral testimony is at PN 821-871 of Transcript.

[6] In order to put the following evidence into context it should be noted that the basis for the MUA’s objection to approval of the Agreement concerns whether it passes the better off overall test (BOOT) in relation to some or all of a particular group of employees who would be covered by the Agreement. The principal issue is the relevant award for the purposes of applying the BOOT. PPL says it is the Road Transport and Distribution Award 2010 (the Transport Award). The MUA says it is the Stevedoring Industry Award 2010 (the Stevedoring Award).

[7] The particular group of employees about whose terms and conditions of employment the objection is made are those who perform work at the Cargolink facility at Curlew Street, Fisherman’s Island. The MUA accepts that the Transport Award is the relevant award for the purposes of applying the BOOT in respect of PPL’s employees who carry out work at the four West Melbourne facilities described in the coverage clause of the proposed agreement.

EVIDENCE

[8] The witnesses provided detailed evidence. The following is a summary of that evidence.

[9] Mr Lally provides evidence about the equipment which he uses to undertake his duties at Fisherman’s Island. He also gives evidence about the hours that he works and his calculations of what he would receive for working those hours under both the Stevedoring Award and the proposed Agreement. Mr Lally’s evidence is that, based on those calculations, he would typically receive an extra $360.67 per week under the award compared with the Agreement. That amount would be higher if he worked additional overtime or worked on a Saturday or public holiday.

[10] Mr Lally’s evidence is that he is not aware of any provisions in the Agreement which would compensate him for this difference in pay.

[11]Mr McCallum gives evidence about the Cargolink facility at Fisherman’s Island. He says that the MX zone is a defining feature of the facility. It provides a direct link to the wharf which enables Cargolink to transfer containers to the wharf for loading onto vessels. Mr McCallum describes this as Cargolink’s essential function.

[12] Mr McCallum provides evidence about the equipment which he uses to carry out his duties. He provides estimates of the percentage of his time which is spent undertaking various duties. Under cross-examination he agreed that about 50% of his day was spent moving containers to and from the MX zone, 25% involved loading and unloading containers on and off trucks and the remainder was spent dealing with the storage of refrigerated containers (reefers). Mr McCallum agreed that, although he had to report maintenance issues in relation to reefers, he didn’t actually fix them.

[13] Mr McCallum provides an overview of the operations at the facility including the movement of containers through the MX zone both inbound from vessels and outbound from trucks, the tracking and storage of containers as well as quarantine procedures for dealing with contaminated boxes.

[14] Mr McCallum’s evidence is that, during his employment with PPL, no other union has approached him or has attempted to become involved in industrial issues at the site. Mr McCallum gives evidence that, on two occasions during 2014, he was involved in taking protected industrial action in the form of a ban on movement of certain types of cargo through the MX zone. In each instance PPL informed him that it estimated that he would usually spend 50% of his time doing that work and consequently his pay was reduced proportionately.

[15] Mr McCallum gives evidence about his usual hours of work and his calculation of what he would receive for working those hours under the Stevedoring Award and the Agreement. He estimates that he would typically receive an extra $171.84 per week if the Agreement was in force compared with what he should receive under the Stevedoring Award. Mr McCallum notes that this amount would decrease if he worked small amounts of additional overtime or worked on Saturdays, Sundays or public holidays.

[16] Mr Monk gives evidence about the layout of the different areas within the Cargolink facility. He notes that it is located directly adjacent to the Terminal operated by Patrick Stevedores Holdings Ltd (PSHL). Mr Monk says that the facility operates independently of the PPL road transport business and notes that it is not physically linked to any of those transport yards.

[17] Mr Monk describes the site as a specialist interchange facility designed to efficiently move containers to and from vessels in order to minimise waiting time on the wharf. He notes that it is not primarily a storage facility.

[18] Mr Monk estimates that about 60% of his role consists of planning the yard, including co-ordinating the movement of containers through the MX zone and their storage. The remainder of his time involves dealing with customers such as exporters, importers and shipping companies. Mr Monk testified that the Clerks decide where containers are to be stored in the yard and where the boxes are placed in each storage block within the yard.

[19] Mr Monk provides evidence about the movement of containers through the facility and the specific processes which are used to deal with imports and exports. These processes include the entry of data into the different IT systems such as PFS and Maximus.

[20] Mr Monk’s evidence is that Cargolink’s quarantine wash facility provides a service which would otherwise be performed as part of the stevedoring operations on the wharf. He notes that, although other stevedores have quarantine facilities at the wharf, PSHL does not.

[21] Mr Monk gives evidence about the processes used to deal with reefers. He notes that PSHL has limited storage facilities for holding reefers on the wharf.

[22] Mr Monk’s evidence is that the facility’s location immediately adjacent to the wharf is essential for its role. The proximity to the wharf results in the facility being able to operate as an extension of the wharf. Mr Monk’s evidence is that the waiting time for trucks delivering containers to Cargolink is much shorter than for those delivering directly to the wharf. He says this is due to the PPL employees performing functions which would otherwise be done by the stevedores.

[23] Mr Monk’s evidence is that Cargolink also provides a much more efficient service for sending empty containers onto vessels for export than could be provided if the containers were stored in a transport yard or container park.

[24] Mr Monk gives evidence that maintenance issues at the Cargolink facility are reported to PSHL which arranges for a qualified person to come and rectify the problem. He understands this is different to the procedure in place at the PPL transport yards at Fisherman’s Island where PSHL is not involved in maintenance.

[25] Mr Monk’s evidence is that, in the period of his employment with PPL, no union other than the MUA has been involved in representing employees at the site and he has not been approached to join any other organisation. Mr Monk provides similar evidence to that of Mr McCallum about the protected industrial action and pay deductions set out in paragraph 14 above.

[26] Mr Monk gives evidence about his usual work pattern. He provides calculations of what he would receive for working the same hours under both the proposed Agreement and the Stevedoring Award. Mr Monk estimates that he would receive an extra $148.12 per week under the Agreement compared with the award. He notes that this amount would decrease if he worked small amounts of additional overtime or on a Saturday, Sunday or public holiday.

[27] Mr Munday’s industrial responsibilities include PSHL’s Terminal operations at Fisherman’s Island. Prior to him becoming an officer of the MUA he was employed as a waterside worker at that Terminal.

[28] Mr Munday provides evidence of the history of Cargolink. He notes that it was set up in around 1999 to provide a “user interface” for Patrick’s Terminal operations in both Melbourne and Brisbane. Mr Munday’s evidence is that, initially, there were no barriers between the Cargolink facility and the Terminal at Fisherman’s Island.

[29] Mr Munday notes that an enterprise agreement to cover the Cargolink facilities in both Brisbane and Melbourne was negotiated between the company and the MUA, the Cargolink Pty Ltd National Enterprise Based Agreement 1999 (the 1999 Agreement). Mr Munday refers to several statements in the preamble to that agreement. His evidence is that Cargolink has always operated as an extension of and in coordination with PSHL stevedoring operations as envisaged in this preamble.

[30] Mr Munday’s evidence is that the Cargolink facility at Fisherman’s Island was established so that part of the stevedoring process of loading and unloading vessels could be done more efficiently. He says that this is reflected in the range of work which is undertaken by PPL employees and the way in which the work is organised. Mr Munday provides a memo and a newsletter which he says demonstrate the overlapping responsibilities of stevedoring and PPL employees, the degree of control of the PPL employees by PSHL Terminal managers and the coordination between the two entities.

[31] Mr Munday’s evidence is that, initially, most of Cargolink’s work consisted of performing quarantine functions for PSHL however the scope of the work has since expanded. These extra functions such as dealing with reefers and empty containers and the import and export of full containers were all previously undertaken by PSHL’s stevedoring employees on the wharf. Mr Munday’s evidence is that these roles are still performed by employees at the other stevedoring companies, DP World and Hutchinson. He says that the heavy equipment used by the PPL Full Container Handlers is similar to that used by stevedoring employees.

[32] Mr Munday’s evidence is that the work of the PPL employees is consistent with that undertaken by stevedoring employees at other PSHL Terminals. Mr Munday notes that the latter are covered by the Patrick Terminals Enterprise Agreement 2012. Mr Munday’s evidence is that there is significant overlap between the classifications under that agreement and those in the proposed Agreement. He says that the shift structure at the Cargolink facility is similar to shifts worked by stevedores at Fisherman’s Island.

[33] Mr Munday gives evidence that each of the stevedoring operators at Fisherman’s Island has its own quarantine facility however he was not aware of any restrictions on the services each could offer.

[34] Mr Munday notes that only one of the Cargolink facilities in Melbourne is directly connected to the wharf area at that port.

[35] Mr Munday gives evidence that, from the commencement of Cargolink’s operations at Fisherman’s Island, it has been an MUA site. No other union has had a presence and the MUA’s right to represent employees has not been challenged by PPL.

[36] Mr Munday notes that the MUA was a party to the 1999 agreement. He also notes that the union has been a party to and covered by successor agreements. During cross-examination Mr Munday agreed that, at the time the 1999 agreement was certified, the MUA acknowledged that the predecessor to the Transport Award was the appropriate award for the then no-disadvantage test. He also agreed that the 1999 agreement contained weekly hours of work, shift loadings and penalty rates which were reflective of the transport award rather than the relevant stevedoring award in place at the time. Mr Munday’s evidence is that the MUA’s position on these issues was based on the Cargolink operation at the time.

[37] Mr Munday’s evidence is that the MUA negotiated the Patrick Logistics (Port Services Yard MUA) Certified Agreement 2006 (the 2006 agreement) which, among others, covered the Cargolink employees at Fisherman’s Island. He agreed that it included hours of work, penalties and loadings which were reflective of the then transport award. He also agreed that the 2006 agreement was signed by an official of the MUA who also provided a statutory declaration which identified the predecessor transport award as being the award which covered the work of employees to be covered by that agreement.

[38] Mr Munday is not aware if the MUA opposed approval of the Patrick Port Logistics (Cargolink) Enterprise Agreement 2011 (the 2011 agreement) on the basis that it did not pass the BOOT. He agreed that the Transport Award is incorporated into the 2011 agreement and that the agreement reflects the “transport industry” terms and conditions.

[39] Mr Sheehan’s role with the MUA has included organising members at Cargolink at Fisherman’s Island and undertaking negotiations for the proposed Agreement.

[40] Mr Sheehan’s evidence is that the facility has always been an MUA site and that the majority of employees there are members of the MUA. No other unions have sought to represent the employees. Mr Sheehan’s evidence is that PPL has never challenged the MUA’s right to represent the employees and he notes that the site has been covered by a series of agreements negotiated with the MUA and to which the union has been a party and/or been covered by.

[41] Mr Sheehan notes that the site of the Cargolink facility was previously part of Patrick’s Terminal. He says that, in effect, the area was just fenced off and given a new name but employees continued to do traditional stevedoring work.

[42] Mr Sheehan’s evidence is that the PPL employees do similar work to the stevedoring employees of the other operators at Fisherman’s Island. They use the same equipment, carry out the same functions and work the same shift patterns as the stevedoring employees including a regular night shift.

[43] Mr Sheehan’s evidence is that the Cargolink facility at Fisherman’s Island is significantly different to the West Melbourne operations in terms of its location and the operations it performs.

[44] Mr Sheehan notes that the proposed Agreement contains higher base rates of pay than the Stevedoring Award. He says however that the Agreement has less favourable ordinary hours of work, penalty rates for afternoon and night shifts and overtime rates. Mr Sheehan provides calculations showing that employees working afternoon and night shifts would earn up to $438.09 less per week if paid under the Agreement compared to the Stevedoring Award.

[45] Mr Nash provides evidence about PPL’s business and its place within the Asciano group of companies. He notes that, generally, the businesses have no, or limited access to the IT systems used by the other parts of the group. Mr Nash says that, in Victoria, PPL’s main services include: transport by road of containerised goods between port operators and exporters/importers; handling and storage of containerised goods awaiting receipt or despatch; handling, storage, repair and cleaning of empty containers; washing of containers and freight for quarantine purposes; and, some unpacking work.

[46] Mr Nash gives evidence that PPL does not operate any port Terminals or employ anyone involved in directly loading or unloading vessels anywhere in Australia. He notes that PSHL operates the Terminal at East Swanson Dock in the Port of Melbourne. Mr Nash’s evidence is that PPL operates a fleet of prime movers and also contracts with a number of owner operators of such vehicles. Its competitors are other businesses which provide road transport services.

[47] Mr Nash provides evidence about the layout of the various yards and areas at the West Melbourne facility and gives a detailed description of the services which PPL undertakes at each of the depots. This is broken down into the types of services which are carried out for exporters, importers, in respect of empty containers and in relation to washing for quarantine.

[48] Mr Nash gives evidence about the roles and duties of PPL’s Container Handlers and Receipt and Despatch Clerks within the overall provision of these services to customers. He states that he considers that the work which is carried out by PPL employees at the Appleton Depot, one of the West Melbourne facilities, to be of a very similar nature to that performed by the employees at the Cargolink facility at Fisherman’s Island and the PPL Container Depot in Brisbane.

[49] Mr Nash’s evidence is that he does not believe that the work undertaken by PPL employees at any of its West Melbourne facilities or by those engaged at the Cargolink yard is of a similar nature to that carried out by the employees of PSHL at its East Swanson Dock Terminal. Mr Nash estimates that about half of the full containers for both import and export are transported to this Terminal. The other half are sent to the nearby DP World Terminal.

[50] Mr Nash gives evidence as to the differences between the work undertaken by the PPL employees at the various West Melbourne facilities and the PSHL employees at the East Swanson Dock. In respect of the Container Handlers he says these differences include the types of machinery and the processes which are used, the requirement for different skills and abilities to operate the various pieces of equipment and the fact that the PSHL employees do not have any duties in relation to quarantine washing.

[51] In respect of the Receipt and Despatch Clerks the differences include the distinct IT systems which are used, the fact that PSHL employees do not have to liaise with customers or road transport providers in respect of quarantine washing or with shipping companies in relation to the storage of empty containers. Further, the PSHL employees do not have to plan high density stacking for medium or long term use and the PPL employees do not have to prepare vessel lading and unlading plans.

[52] Mr Nash provides evidence about PPL’s operations in Sydney and his understanding of the industrial landscape there. He notes that, although PPL has not sought to challenge the MUA’s ability to represent its various employees, it has never accepted that the union has exclusive coverage of those employees.

[53] Mr Nash acknowledged that he had not worked at the Fisherman’s Island facility.

[54] Mr Arnold provides an overview of the PPL business and notes that, in Queensland, its primary services include the transportation by road of containers, both full and empty, the receipt and storage of those containers, unpacking and palletisation of inbound freight, washing and repair of empty containers and washing and fumigation of containers for quarantine purposes.

[55] Mr Arnold’s evidence is that PPL’s main competitors are road transport businesses and enterprises that operate container depots or provide quarantine washing services. He provides evidence about PPL’s trucking fleet and depots and a breakdown of where its employees are located. Mr Arnold says that, of 141 employees in Queensland, about 13, including salaried Supervisors, are engaged at the Cargolink facility at Fisherman’s Island.

[56] Mr Arnold provides a detailed description of the three PPL depots at Fisherman’s Island and describes each of them as being a transport hub. His evidence is that each undertakes similar operations and notes that containers can be moved through or stored at the different depots depending on PPL’s requirements. Mr Arnold’s evidence is that PPL uses the same equipment at each of the depots. He notes that there is one manager responsible for both the Cargolink facility and the depot at Port Drive.

[57] Mr Arnold’s evidence is that PPL is not engaged in loading or unloading vessels anywhere in Australia. He notes that, at Fisherman’s Island, such operations are carried out by stevedoring companies such as PSHL, DP World and Hutchinson. Mr Arnold’s evidence is that he understands that there is some limited exchange of information between the IT systems used by PPL and PSHL but that there is no general “visibility” from one to the other.

[58] Mr Arnold provides detailed evidence about the processes involved in transporting containers for both import and export purposes including the different steps undertaken at the various depots. He also gives evidence about the services which PPL provides in relation to the transportation and storage of empty containers as well as the quarantine washing and fumigation services.

[59] Mr Arnold’s evidence is that none of the Terminal operators at Fisherman’s Island have facilities which can wash and fumigate to the standard provided by PPL and other holders of “Class 1.1” licences. Mr Arnold estimates that about 90% of freight and machinery requiring quarantine services at the Cargolink facility will have been transported there by road. I note that Mr Monk’s evidence was that, although a large percentage comes by road, it would not be as much as 90%.

[60] Mr Arnold’s evidence is that the work of PPL employees at the Cargolink facility is very similar to and, in some cases is identical to the duties of the PPL employees at the other depots at Fisherman’s Island. Those employees are covered by an enterprise agreement which was negotiated with the Transport Workers’ Union of Australia. Mr Arnold says that generally a Clerk is rostered on for night shift at the Port Drive Depot.

[61] Mr Arnold disagrees that the Cargolink facility operates as an extension to PSHL’s stevedoring business or the wharf. He also disagrees that any PSHL manager has any control over PPL employees or that there is any overlap in the responsibilities of PPL and PSHL employees.

[62] Mr Arnold does not agree that the work performed by PPL employees at the Cargolink facility is the same as that done by stevedoring employees of DP World or Hutchinson. He specifically notes that the IT systems, equipment and the customer liaison roles are different and further notes that the Terminals operated by those stevedores do not have a facility similar to the MX zone.

[63] Mr Arnold also disagrees that the work which is done by employees at the Cargolink facility is similar to that performed by PSHL employees. He says that most of the equipment is different and notes that, even though PSHL employees occasionally use forklifts, these are differently configured and used for different purposes to those used by PPL employees. Mr Arnold also notes that the two groups of employees use different IT systems and have different customer liaison and planning roles.

[64] Mr Arnold disagrees that the Cargolink facility operates independently of PPL’s road transport services and says that, on the contrary, it is an integral part of those services. Mr Arnold says that some of the duties which Mr Monk described as being part of his role come within the responsibility of PPL’s Supervisors rather than of the Clerks. Mr Arnold’s evidence is that the role of PPL employees at the Cargolink facility in respect of handling reefers is the same as that of PPL employees at the other depots.

[65] Mr Arnold notes that, on occasion, PPL organises for maintenance work at the facility to be carried out by PSHL but that this is only a contractual arrangment. He says that often it is cheaper for arrangements to be made with another service provider.

MUA SUBMISSIONS

[66] A written outline of submissions was provided prior to proceedings. Mr Quinn also made oral submissions.

[67] The MUA submits that the first issue to be decided is whether PPL is engaged in the stevedoring industry. If that is answered in the affirmative, the Stevedoring Award can cover the Cargolink employees to the exclusion of any other modern award. If however the Transport Award could also cover the employees, the next issue to be determined is which is the most appropriate award. The MUA submits that this question should be considered in light of the history of the facility, the relationship between it and the stevedoring work undertaken on the adjacent wharf and the nature of the work of the PPL employees.

[68] Reference is made to the coverage clause of the Stevedoring Award and the definitions of “stevedoring industry” and “wharf” in clause 3.1 thereof and to Mr Monk’s evidence. The MUA submits that the wharf area at Fisherman’s Island extends at least to the adjacent Cargolink yard in which PPL employees undertake work which is part of the shipping of cargo and, consequently, PPL is engaged in the stevedoring industry.

[69] The MUA relies upon the judgement in Co-operative Bulk Handling v Waterside Workers Federation of Australia (1980) 32 ALR 541 @ 558 (Co-operative Bulk Handling) for the proposition that stacking cargo and loading and transport of containers forms part of loading operations for shipping.

[70] The MUA submits that the Stevedoring Award contains classifications which explicitly cover the work being done by the PPL employees and refers in particular to paragraphs (i) and (vi) of the Grade 3 classification and paragraphs (iv) and (vi) of the Grade 4 classification set out at Schedule B to the award.

[71] The MUA does not dispute that the Transport Award could cover PPL and the relevant employees but says that the classifications in the Stevedoring Award are more appropriate to the particular work and environment at the Cargolink facility.

[72] The MUA submits that the evidence shows that the facility has been carved out of the wharf area to perform stevedoring functions. The only difference is the particular organisation of the work. The MUA submits that Cargolink’s efficiencies are achieved only because it is located immediately adjacent to the wharf and the hours of work of both PPL and PSHL employees are co-ordinated. The operation of the MX zone is a further example of the integration of the facility with the wharf.

[73] The MUA submits that an additional factor in the environment which points to the facility being covered by the Stevedoring Award is the union’s unchallenged history of representation at the site. The MUA submits that the occupation of the PPL employees has been accepted as being that of a waterside worker: Cooperative Bulk Handling @ 551, 553, 555 and 557.

[74] The MUA points to the location, history, intimate connection with the stevedoring operations and nature of the work as giving rise to the employees being waterside workers. Further factors include the nature of the material being worked on, cargo, and the purpose of the work, loading and unloading vessels.

[75] The MUA submits that the Transport Award is very generic and is limited in relation to distribution facilities to those “from which” goods are distributed by road. The more specific nature of the Stevedoring Award points to it being the relevant award.

[76] The MUA submits that the specialised nature of the work of the employees at the Cargolink facility reinforces the appropriateness of the Stevedoring Award. The work carried out in relation to the quarantine washing services and in handling reefers is very specific and is encompassed by the classifications in the Stevedoring Award. Similarly, the work of the Clerks is quite specific and more akin to the classification descriptions in the Stevedoring Award than the Transport Award which does not contain any of these duties within its classification descriptions.

[77] Again, the MUA points to the MX zone as highlighting the integration between the Cargolink facility and the wharf and distinguishing the facility from the road transport distribution yards. The union notes that PPL recognised that movement of goods through the zone amounted to 50% of the work of the employees.

[78] The MUA submits that the primary purpose of the facility is to support the stevedoring operations. This is critical to determining the relevant award coverage: Brand v APIR Systems Limited[2003] AIRC 1161.

[79] The MUA submits that some of the PPL employees who are engaged at the Cargolink facility at Fisherman’s Island would not be better off under the proposed Agreement than they would be under the Stevedoring Award. The major areas of deficit are the shift loadings and overtime rates in the Agreement. Reference is made to the Full Bench decision in Re: Armacell Australia Pty Ltd[2010] FWAFB 9985 @ [41] and the decision in Re:Jellifish! Pty Ltd [2012] FWA 9640.

[80] The MUA submits that the only provisions in the Agreement which are more advantageous than the Stevedoring Award are the base rates of pay. The union notes that the award contains several provisions which are more beneficial than the Agreement including ordinary hours of work, shift loadings, overtime rates, allowances and meal breaks.

[81] The ordinary hours of work in the Agreement are 38 per week compared with 35 per week under the Stevedoring Award. The afternoon and night shift penalties are 17.5% and 30% respectively under the Agreement and 50% and 100% under the award. Saturday and Sunday loadings are 50% and 100% respectively under the Agreement and 100% and 150% under the award, depending upon when the shift is worked. The MUA submits that employees who work afternoon or night shifts or who work at the weekend will be significantly disadvantaged.

[82] Overtime rates under the Agreement are also less beneficial than under the Stevedoring Award. This is a significant disadvantage to employees when considered in conjunction with the expanded ordinary hours of work. Shift workers will be further disadvantaged as overtime in the Agreement is based on the ordinary rates of pay rather those which include the shift loading as in the Stevedoring Award.

[83] The Agreement does not provide for several allowances which are payable in appropriate circumstances under the Stevedoring Award. These include laundry, first aid, footwear and clothing and Terminal operation allowances. The entitlements to breaks under the Agreement are less advantageous than under the award.

[84] The MUA submits that the evidence shows employees would be significantly better off under the Stevedoring Award than under the Agreement based on the present rostering arrangements. This is especially the case for employees working afternoon and night shifts. The union notes that, under present arrangements, the same employees will continue to be most disadvantaged. It notes however that the disadvantage could affect all the employees if PPL changes the rostering system.

PPL SUBMISSIONS

[85] A written outline of submissions was provided prior to proceedings. Mr Jauncey also made oral submissions.

[86] PPL submits that the Transport Award covers its employees at the Cargolink facility at Fisherman’s Island. It refers to the definition of the road transport and distribution industry at clause 3 of the award and, in particular, paragraphs (a), (b) and (d) of the definition. PPL submits that the evidence reveals that it operates a business which employs many drivers and runs a large fleet of vehicles. The business transports by road goods and merchandise, including meat products, for both import and export. It also transports empty containers to and from container depots and goods and machinery requiring quarantine washing. PPL submits that these aspects of the business fall within paragraph (a) of the definition.

[87] PPL rejects the MUA submission that the Cargolink facility is not one from which goods are distributed by road. It notes that the evidence shows that both empty and full containers as well as containers and machinery for washing are all dispatched from the yard by road. It also notes that all of these objects will have been stored at the facility. Further, the facility is operated as “part of or in connection with” PPL’s road transport business.

[88] PPL submits that the relevant employees would fall under the classification structure of the Transport Award as set out in Schedule C to the award. In particular, the primary duty of the Heavy Container Lifters which is to operate a forklift with a 40 tonne lifting capacity, fits exactly within one of the descriptors for a Transport Worker Grade 6.

[89] PPL submits that the skills and abilities required of the Foreman/Clerical employees bring them within the descriptors for a distribution facility employee level 3 in Schedule B of the Transport Award. These employees would then be classified as Transport Workers Grade 7 under Schedule C.

[90] PPL submits that the Stevedoring Award does not cover any of its employees. It also submits that it is not in the stevedoring industry. It refers to the definition of that industry at clause 3 of the award and notes that the focus is on the loading and unloading of cargo on and off a ship rather than some more general idea of “loading operations”. PPL submits that it is clear that neither it nor any of its employees are engaged in loading cargo on or off vessels. That job is done by PSHL employees.

[91] PPL rejects the MUA submission that the Cargolink facility is adjacent to the wharf. It submits that the definition of wharf in the Stevedoring Award would at most only cover the storage areas in the PSHL Terminal and immediately beside. PPL notes that the Cargolink area is fenced off from the Terminal and is physically separated from it by the road and the truck parking bays.

[92] PPL submits that the work performed at the Cargolink facility is much more than just dealing with containers passing through the PSHL Terminal. It submits that a substantial portion of the work relates to the handling and storage of items which are not moved through the MX zone or the Terminal.

[93] PPL also submits that, even if it is accepted that the Cargolink facility is located adjacent to the wharf, the performance of some activities which relate to the stevedoring industry does not mean that PPL itself is engaged in the industry. Reference is made to the judgement of the High Court of Australia in R v Central Reference Board; Ex parte Thiess (Repairs) Pty Limited (1948) 77 CLR 123 @ 134/5 and the “substantial character of the industry” test set out therein. Reference is also made to Transport Workers’ Union Australia v Coles Supermarkets Australia Pty Ltd [2014] FCAFC 148 (Coles Supermarkets).

[94] PPL submits that it is necessary to focus on the nature of its business rather than the activities of the employees. It notes that an employer may be engaged in more than one industry. However it submits that, in order to reach such a conclusion, it is necessary to decide that any separate purposes of an enterprise are each of a substantial character: Dyno Nobel Asia Pacific Limited v Construction, Forestry, Mining and Energy Union[2005] AIRC 622 @ [50] (Dyno Nobel).

[95] PPL submits that the evidence shows that it conducts a single integrated business the primary purpose of which is to provide road transport services to customers. The substantial character of the business is inextricably linked to the road transport and distribution industry.

[96] PPL submits that the MUA’s approach focuses on particular activities but ignores the fact that those activities are part of a broader integrated business. PPL submits that the MUA approach is erroneous: Dyno Nobel @ [59] and [60].

[97] PPL submits that the work of the employees at the Cargolink facility would not in any way properly fit within classifications in the Stevedoring Award. Rather, the classifications in the Transport Award better reflect the work and environment of the employees. PPL submits that when the work is considered in context the Transport Award is the more appropriate instrument.

[98] PPL submits that the evidence establishes that the work undertaken at the facility is closely akin or identical to that performed at its other depots and to that done by employees of other businesses in the road transport and distribution industry. It also submits that the work is carried out for the purpose of PPL’s business in that industry and is different to the work undertaken by employees of the stevedores.

[99] Further, there has been long acceptance that the employees at the facility are covered by the Transport Award. The MUA has previously accepted that the Transport Award was the appropriate award for the purposes of the BOOT as well as the earlier no-disadvantage test.

[100] PPL submits that the evidence supports a finding that the quarantine washing facility is not “intimately connected” with the Terminal as suggested by the MUA. On the contrary, the facility is connected with the road transport services offered by PPL.

[101] PPL submits that the MUA’s eligibility to represent employees is of little relevance to the question of whether their employer is engaged in a particular industry. PPL submits that the BOOT should be applied on the basis that the Transport Award is the relevant award. In the alternative PPL wishes to make further submissions on the extent of any disadvantage there might be and consider the possibility of providing a suitable undertaking.

CONCLUSIONS

[102] Section 186 of the Act provides that the Fair Work Commission (FWC) must approve an enterprise agreement if the requirements of the section and section 187 are met. Section 186(2)(d) provides that FWC must be satisfied that the enterprise agreement passes the BOOT. The nature of the BOOT is set out in section 193 of the Act. Section 193 relevantly provides that:

“(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.

.....

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.”

[103] The main question to be addressed is what is the relevant award against which the proposed Agreement is to be tested in relation to the PPL employees who are engaged to perform work at the Cargolink facility, Curlew Street, Fisherman’s Island in the Port of Brisbane. As noted earlier, there is no dispute that for the other employees who would be covered by the Agreement and who are engaged at the four PPL sites in West Melbourne, the relevant award is the Transport Award.

[104] Clause 2.1 of the Agreement provides that it is to cover the company and its employees who are employed to perform work in accordance with the classifications set out in clause 18 at the four West Melbourne sites, the Brisbane site and at any other similar operation to which the company extends its terms. Clause 18 provides for three classifications: Store Worker; Heavy Container Lifter; and, Foreman/Clerical. It contains descriptors for each classification.

[105] Clause 4 of the Stevedoring Award relevantly provides:

“This award covers employers throughout Australia engaged in the stevedoring industry and their employees in the classifications listed in clause 13 to the exclusion of any other modern award.”

[106] The “stevedoring industry” is defined in clause 3 as meaning:

“the loading and unloading of cargo into or from a ship including its transporting and storage at or adjacent to a wharf”.

[107] “Wharf” is then defined as including:

“a pier, jetty, ramp, or shed, storage or stacking area comprising part of the wharf area for stevedoring industry activities”.

[108] There is no suggestion that PPL is engaged in loading or unloading of cargo into or from a ship. There is however a question about whether its activities are captured by the second part of the industry definition. The Statement of the Full Bench [2009] AIRC FB 450 dealing with the Stage 3 exposure drafts in the award modernisation process indicates that the Stevedoring Award was proposed to cover the land based operations of employers who are involved in loading and unloading vessels.

[109] The decision of the Full Bench which led to the making of the award [2009] AIRCFB 826 notes that parties had not raised any significant concerns with the exposure draft. The bench then states “(s)ome minor changes have been made to the scope clause of the award such as inserting a definition of cargo and confining the list of vessels to “ship” ...”.

[110] There is no specific mention of the additional words which are relevant in this matter, “including its transporting and storage at or adjacent to a wharf”. However, in the absence of any indication that the Bench had intended to do anything other than make “minor” changes to the scope clause, it would appear that the final award covers only employers who are engaged in the loading and unloading of cargo into or from a ship. PPL is not one of those employers and consequently is not in the stevedoring industry and not covered by the Stevedoring Award.

[111] That is sufficient to decide this matter. However, in the event that I am incorrect and the definition of “stevedoring industry” is intended to have wider application, I shall examine whether PPL is nevertheless in that industry.

[112] It is true that the Federal Court in Coles Supermarkets has cast doubt on the applicability of the “substantial character” test in matters concerning whether a particular award applies. At paragraph 22 of its judgment the Full Court states:

“The test that should be applied is to discern the objective meaning of the words used bearing in mind the context in which they appear and the purpose they are intended to serve. Here, the definition in question expressly extended to work ancillary to the principal business. That was the true question for examining.”

[113] It is important to note however that, unlike the terms of the award in question in the matter before the Court, coincidently the Transport Award, the definition of “stevedoring industry” does not contain any such express extension to work which is ancillary to the employer’s principal business. If it did then PPL may very well have come within it. However the absence of such an extension means that, in order for the Stevedoring Award to apply, PPL must be engaged in the industry.

[114] The evidence of the employees was very helpful however it necessarily reflected only the small part of PPL’s operations with which they are familiar. The evidence of Mr Nash and Mr Arnold related to the overall business activities within their respective states. That evidence establishes that, in Queensland and Victoria, the company owns and operates a fleet of approximately 110 prime movers with around 460 specialised trailers. It also establishes that, of approximately 361 direct employees in those two states, about 13 are employed at the Cargolink facility, including salaried Supervisors.

[115] In my view, even if it was accepted that those 13 employees undertake work which involves activities relating to the transporting and storage of cargo at or adjacent to the wharf, this is not sufficient to bring PPL within the stevedoring industry.

[116] Further, it is clear from the evidence that much of the work undertaken by the employees at the facility related to items which have not been imported through and are not intended to be exported through the MX zone to and from the PSHL Terminal. This includes dealing with empty containers coming in and out by road, containers both full and empty which are transported by road to and from the DP World and Hutchinson Terminals and goods and machinery transported by road for quarantine washing.

[117] It follows that PPL is not covered by the Stevedoring Award. The consequence is that the relevant award for the purposes of the application of the BOOT is the Transport Award.

[118] The next issue to be determined is whether the Agreement passes the BOOT. The Form F17 which accompanied the application for approval of the Agreement contains a list of terms and conditions in the Agreement which are more beneficial than the Transport Award and a list of those which are less beneficial. I have considered that material and, more importantly, have compared the Agreement with the Transport Award. I am satisfied that employees and prospective employees will be better off overall if the Agreement applies to them.

[119] In conclusion I record that I am satisfied that each of the requirements of section 186, 187 and 188 as are relevant to this application are met.

[120] As the Agreement does not contain a flexibility term, the model flexibility term is taken to be a term of the Agreement.

[121] I note that the Form F18 from the MUA records that, if the Agreement is approved, it wishes to be covered by it. In accordance with section 201(2) I note that the Agreement covers the organisation.

[122] The Agreement is approved and, in accordance with s.54, will operate from 23 January 2015. The nominal expiry date is 4 April 2017.

COMMISSIONER

Appearances:

S. Jauncey, solicitor, with N. Hill for Patrick Container Ports Pty Ltd trading as Patrick Port Logistics

D. Quinn, solicitor, with P Sheehan for The Maritime Union of Australia

Hearing details:

Sydney,

Brisbane by Video Link.

2014

December 16.

Printed by authority of the Commonwealth Government Printer

<Price code C, AE412171  PR559942>