[2019] FWCA 2552

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

RND Crewing Pty Ltd
(AG2018/3460)

RND CREWING PTY LTD AGREEMENT 2018

Dredging industry
DEPUTY PRESIDENT SAUNDERS	NEWCASTLE, 12 APRIL 2019

Application for approval of the RND Crewing Pty Ltd Agreement 2018.

Introduction and background

[1] RND Crewing Pty Ltd (RND Crewing) has applied for approval of the RND Crewing Pty Ltd Agreement 2018 (Enterprise Agreement), which covers officers and engineers employed by RND Crewing (Employees). RND Crewing operates dredging vessels in the dredging industry at various locations around Australia. The Employees are covered by the Dredging Industry Award 2010 (Dredging Award).

[2] Prior to addressing RND Crewing’s application for approval of the Enterprise Agreement, it is necessary, by way of background, to say something about an earlier application by RND Crewing for the approval of an enterprise agreement also known as the RND Crewing Pty Ltd Agreement 2018 (Earlier Agreement). 1 The Earlier Agreement was the subject of a successful vote on 15 January 2018 and an application for approval by RND Crewing to the Fair Work Commission (Commission) on 17 January 2018. Following the filing of submissions by the Australian Maritime Officers Union (AMOU) and the Australian Institute of Marine and Power Engineers (AIMPE) opposing the approval of the Earlier Agreement, RND Crewing decided to formally end the bargaining process in relation to the Earlier Agreement and enter into new negotiations with the Employees for a new enterprise agreement.2 RND Crewing notified the Employees, in writing, of its decision in that regard on 3 April 2018.3 RND Crewing formally withdrew its application for approval of the Earlier Agreement on 24 May 2018.

Making the Enterprise Agreement and applying for approval

[3] On 3 April 2018, RND Crewing provided a copy of the proposed Enterprise Agreement to the five Employees it employed at that time who would be covered by the Enterprise Agreement. The only difference between the Enterprise Agreement and the Earlier Agreement was an amendment to clause 3.2.

[4] On 4 April 2018, RND Crewing provided a notice of employee representational rights (NERR) to the five Employees it employed at that time who would be covered by the Enterprise Agreement. In the period between 4 and 6 April 2018, each of those five Employees notified RND Crewing that they had appointed themselves as their own bargaining representative for the Enterprise Agreement.

[5] On 24 May 2018, AIMPE sent RND Crewing a “notice of intention to commence bargaining”. RND Crewing responded to that notice by informing AIMPE that each of its employees had appointed themselves as their own bargaining representative, with the result that AIMPE was not their bargaining representative.

[6] On 18 June 2018, RND Crewing provided a new Employee with a copy of the Enterprise Agreement. On 21 June 2018, the new Employee notified RND Crewing that he wanted to act as his own bargaining representative in relation to the Enterprise Agreement.

[7] The vote for the Enterprise Agreement took place from 10 to 12 July 2018. At that time, RND Crewing employed six full-time Employees who would be covered by the Enterprise Agreement. Each of those six Employees voted to approve the Enterprise Agreement. The application for approval of the Enterprise Agreement was filed in the Commission on 26 July 2018 (Application).

[8] The Application was assigned to my chambers on 5 November 2018. RND Crewing provided six written undertakings on 18 February 2019 to address issues I had raised in relation to the Application (Undertakings). A copy of those Undertakings is annexed to this decision and marked “A”.

[9] There is no dispute that neither the AMOU nor AIMPE are bargaining representatives in relation to the Enterprise Agreement. On 28 November 2018, each union contacted the Commission and requested to be heard in relation to their opposition to the approval of the Enterprise Agreement. Following the filing of submissions on the question of whether the unions should be heard in relation to the Application, I exercised my discretion under s 590 of the Fair Work Act 2009 (Cth) (Act) to hear from the AMOU and AIMPE in relation to the Application on 6 December 2018.

[10] On 11 December 2018, I made directions permitting the filing and service of submissions, documents and witness statements in relation to the Application. The AMOU and AIMPE filed submissions separately on 8 January 2019. RND Crewing filed submissions and a witness statement by Mr Johnny Madsen, its Australia/New Zealand Area Manager, on 22 January 2019. RND Crewing also requested that the Application be listed for a hearing in the Commission. I acceded to that request and listed the matter for hearing on 12 February 2019. Mr Madsen attended the hearing, but was not required by either union for cross examination.

[11] At the hearing Mr Mahendra of counsel appeared, with permission, for RND Crewing. Mr McEvilly, Industrial Officer, appeared for the AMOU. Mr Matthey, National Organiser, appeared for AIMPE. The six Employee bargaining representatives were notified of the hearing, but did not appear.

[12] AIMPE and the AMOU raised a number of objections to the Application for approval of the Enterprise Agreement. I address each of those objections below.

Good faith bargaining

[13] The unions submit that there is no proof of genuine bargaining for the Enterprise Agreement. The unions also contend that no genuine bargaining could have taken place in the period from when RND Crewing issued the NERR to Employees on 4 April 2018 and the commencement of the “access period” on 7 April 2018, at which time RND Crewing explained the terms of the Enterprise Agreement and the effect of those terms to the Employees. I reject these contentions for the following reasons.

[14] First, the Act does not require a party to bargain in a particular manner, subject to the requirement to meet the good faith bargaining requirements prescribed in s 228 of the Act. 4 Bargaining involves communication about the terms of a transaction.5 Bargaining may conclude quickly where one party communicates an offer to the other party and that offer is accepted without delay or further discussion.6 In the present case, RND Crewing communicated the terms of its proposed Enterprise Agreement to Employees on 3 April 2018 and invited the Employees to provide any comments in relation to the proposed Enterprise Agreement. No such comments were provided. That is unsurprising in circumstances where there had been prior negotiations in relation to the Earlier Agreement and the proposed Enterprise Agreement provided to Employees on 3 April 2018 was in the same terms as the Earlier Agreement (save for an amendment to clause 3.2).7 The Enterprise Agreement was put to the vote in the period from 10 to 12 July 2018, at which time it was unanimously approved by the Employees. I am satisfied on the evidence adduced that genuine bargaining took place in relation to the Enterprise Agreement and RND Crewing met the good faith bargaining requirements.

[15] Secondly, the “access period” did not commence on 7 April 2018. The “access period” is the seven day period ending immediately before the start of the voting process. 8 The voting process for the Enterprise Agreement commenced on 10 July 2018. Accordingly, the “access period” commenced on 3 July 2018, which was three months after RND Crewing notified the Employees that they were re-commencing bargaining and provided the Employees with a copy of the proposed Enterprise Agreement.

[16] I reject AIMPE’s contention that there was no proper process to allow Employees to select and consult with a bargaining representative. The evidence does not support such a finding. The evidence reveals that the Employees were given a copy of the NERR and then decided to appoint themselves as their bargaining representative for the Enterprise Agreement.

[17] I reject AMOU’s contention that RND Crewing “may have been acting with the intention of undermining freedom of association and collective bargaining”. 9 The evidence does not support such a finding. In circumstances where each Employee appointed themselves as their bargaining representative, RND Crewing was entitled to bargain directly with the Employees. RND Crewing criticised the unions in their correspondence to Employees dated 3 April 2018.10 That criticism related to the approach taken by the unions to the application for approval of the Earlier Agreement. In the same communication, Employees were informed of their option of appointing themselves as their bargaining representatives or involving a union in the bargaining.11 In my view, neither the correspondence sent to Employees on 3 April 2018 nor any other conduct of which I am aware on the part of RND Crewing on the evidence before me undermined freedom of association or collective bargaining.

Default bargaining representative

[18] AIMPE submits that it was the default bargaining representative for the Enterprise Agreement and RND Crewing failed to recognise its rights as a default bargaining representative, with the result, so it is contended, that the Enterprise Agreement cannot be approved. 12

[19] The question of whether AIMPE is or was a bargaining representative for the Enterprise Agreement is governed by s 176 of the Act. It relevantly provides that if an employee is a member of an employee organisation which is entitled to represent the industrial interests of the employee in relation to work that will be performed under an enterprise agreement, then the employee organisation will be a bargaining representative of the employee unless the employee has appointed another person as their bargaining representative, or has revoked the status of the organisation as their bargaining representative.

[20] The Commission received confidential evidence from AIMPE which establishes that it has had, at all times since at least 1 July 2017, more than one member whose industrial interests it is entitled to represent and who was employed initially by RN Dredging Pty Ltd (RN Dredging), a related entity to RND Crewing, and later (from about early 2018) by RND Crewing. There was no objection by RND Crewing to the Commission receiving such evidence on a confidential basis.

[21] There is no dispute between RND Crewing and AIMPE that AIMPE is not currently a bargaining representative for its members employed by RND Crewing, because those members appointed themselves as their bargaining representatives and have not revoked those appointments. However, there is a dispute as to whether AIMPE was, at any time, a bargaining representative for its members employed by RND Crewing during bargaining for the Enterprise Agreement. 13

[22] Bargaining for an enterprise agreement begins when the employer agrees to bargain or initiates bargaining. 14 Bargaining involves communication about the terms of a transaction.15

[23] RND Crewing sent an email to its employees on 3 April 2018 in the following terms:

“Dear all

As you know RND Crewing Pty Ltd (RND) lodged the RND Crewing Pty Ltd Agreement 2018 (EA) for approval on 17 January 2018, and the EA has been awaiting approval by the Fair Work Commission (FWC) since then…

Amended Agreement

While RND disagrees with the unions’ submissions about the EA, we also want to avoid letting the unions draw out the approval process by forcing us to deal with their arguments at a formal hearing with evidence and submissions (which may take a number of months).

Accordingly, we have decided to:

1. formally end the bargaining process in relation to the original EA; and

2. enter into a new negotiation with you (or your nominated bargaining representative) in relation to an undated EA.

The updated EA is on identical terms to the original EA (which RND employees have already agreed to) except for an amendment to clause 3.2 of the EA (Updated EA). The effect of the amendment is to remove any scope for argument about what the words mean and make it clear that the National Employment Standards under the Fair Work Act will continue to apply to you under the enterprise agreement.

A marked up and clean version of the Updated EA is attached to this email to show the few changes we propose. By re-making the EA we aim to deal with the unions’ argument that you were not employees during the bargaining process (which is not the case), and relating to the content of the agreement, without having to spend time defending those arguments in a lengthy hearing.

Making the Updated EA

Unfortunately, the unions’ opposition means we will have to go through the formal steps required for making the Updated EA, including:

• re-issuing the Notice of Employee Representational Rights (which I will do by separate email);

• receiving your self-appointment as bargaining representative, if it remains your preference to bargain with RND directly rather than via your union (which I will also email you about separately); and

• conducting the vote for the Updated EA.

I do apologise for having to put you through the agreement-making process again. However, unfortunately this is the quickest way to deal with the unions’ ongoing tactics to interfere with the approval of the agreement and your right to bargain with us directly.

I will shortly email you the NERR and the bargaining representative form in separate emails.

Please do not hesitate to contact me if you have any questions in the meantime.”

[24] A copy of the “Updated EA” was attached to Mr Madsen’s email of 3 April 2018.

[25] In the period from 4 to 6 April 2018, RND Crewing received written confirmation by Employees (including members of AIMPE) that they had appointed themselves as their bargaining representatives. 16

[26] On 7 April 2018, Mr Madsen sent a further email to the Employees in the following terms:

“Gents,

Thank you for providing me with the appointment of bargaining representative.

Explanation of terms

As I mentioned in my email of 3 April 2018, the attached updated RND Crewing Pty Ltd Enterprise Agreement 2018 is identical to the agreement RND previously made with you on 15 January 2018, save for the amendment to clause 3.2, which we have amended to make it clear that the National Employment Standards under the Fair Work Act will continue to apply to you.

As for an explanation of the remaining terms of the agreement, I refer to my discussions with you in Fremantle during the period 28 December 2017 to 4 January 2018, and to my email to you of 24 January 2018 (extracted below). Please note there was a typo in my email at point 9 – employees under the agreement are entitled to an additional 42 hours of annual leave per swing (not 14).

As always, please don’t hesitate to contact me if you have any questions about the agreement.

Bargaining

To formally open bargaining: please let me know by Monday, 9 April 2018 whether you have any comments about the attached agreement.

If I do not hear anything from you by that time, I will assume you are happy with the agreement, and RND will move to conduct the formal vote for the agreement.

Please let me know if you have any questions.”

[27] In the form F17 statutory declaration filed in support of the application for approval of the Enterprise Agreement, Mr Madsen declared, on 26 July 2018, that the notification time (that is, the date RND Crewing initiated or agreed to bargain) was 3 April 2018. In his witness statement dated 22 January 2019, 17 Mr Madsen stated:

“[22] … on 3 April 2018 I communicated RND Crewing’s decision to the employees to:

a) formally end bargaining for the Withdrawn Agreement; and

b) commence bargaining in relation to a new agreement.

…

[55] … bargaining for the Withdrawn Agreement concluded on 3 April 2018 and bargaining for the Agreement commenced that same day…”

[28] RND Crewing’s submissions dated 22 January 2019 (at [9], [10] and [39]) made the same points.

[29] In its submissions dated 3 April 2019 opposing AIMPE’s application to be covered by the Enterprise Agreement, RND Crewing:

• asserted, for the first time, that the F17 statutory declaration made by Mr Madsen contained a typographical error, in that the notification date was stated as 3 April 2018 whereas it should have stated 7 April 2018; and

• submitted that bargaining did not commence until 7 April 2018, by which time each Employee had appointed themselves as their bargaining representatives, with the consequence that AIMPE was not, at any time, a bargaining representative.

[30] I do not accept RND Crewing’s submissions dated 3 April 2019 as to when bargaining commenced. I find that on 3 April 2018, RND Crewing informed the Employees of its agreement to bargain and initiated bargaining for the Enterprise Agreement. My finding in this regard is based on the following:

(a) in his email dated 3 April 2018, Mr Madsen informed the Employees that RND Crewing “had decided to … enter into a new negotiation with you (or your nominated bargaining representative) in relation to an updated EA”;

(b) in his email of 3 April 2018, Mr Madsen communicated to the Employees his views about the effect of the amendment which had been made to the Enterprise Agreement (referred to as the “updated EA”);

(c) a copy of the Enterprise Agreement was attached to the email of 3 April 2018 “to show the few changes we propose”; and

(d) Mr Madsen’s email of 3 April 2018, including the attached Enterprise Agreement, constituted the commencement of bargaining because it was a communication about the terms of a transaction, the purpose of which was to arrange or settle a matter by mutual agreement. 18 Indeed, the email dated 3 April 2018, including the attached Enterprise Agreement, was a proposal or offer made in the course of bargaining for an enterprise agreement.

[31] It follows that there was a short period of time from 3 April 2018 until the Employees who were members of AIMPE provided RND Crewing with their written nomination appointing themselves as their bargaining representatives (4 to 6 April 2018) when AIMPE was the bargaining representative for its members employed by RND Crewing, pursuant to s 176(1)(b) of the Act. AIMPE’s role as a bargaining representative for its members ceased when the Employees appointed themselves as their bargaining representatives (s 176(1)(b) of the Act).

[32] Notwithstanding the operation of s 176(1)(b) of the Act, AIMPE also contends that it was a bargaining representative for the Enterprise Agreement generally, not just during the short periods between 3 April 2018 and receipt by RND Crewing of the notices of written confirmation by Employees that they had appointed themselves as their bargaining representatives. The basis for AIMPE’s contention that it was generally the default bargaining representative for the Enterprise Agreement is (a) it had attempted to bargain with RND Crewing on a number of occasions, (b) it attended a bargaining meeting with RND Crewing, and (c) it had been genuinely trying to reach an agreement with RND Crewing. 19 I reject these contentions; they ignore the effect of s 176 of the Act. Section 176 governs when a person (including an employee organisation) becomes a bargaining representative and ceases to be so. Attempting to bargain, attending a meeting, and genuinely trying to reach agreement do not qualify a person as a bargaining representative under the Act. The evidence does not reveal any failure by RND Crewing to meet with any union, or otherwise recognise any rights of any union, during the short periods of time when AIMPE was the bargaining representative for its members employed by RND Crewing.

[33] Further, the bargaining meeting to which AIMPE refers took place in June 2017. At that time, RND Crewing did not have any employees and RND Crewing had not commenced bargaining in relation to the Earlier Agreement, let alone the Enterprise Agreement.

[34] RND Crewing did receive correspondence from AIMPE in May 2018 in relation to AIMPE’s intention to commence bargaining for an enterprise agreement. RND Crewing responded to that correspondence by pointing out that each Employee had appointed themselves as their bargaining representatives. RND Crewing did not receive any further relevant correspondence from AIMPE in relation to bargaining for the proposed Enterprise Agreement.

NERR

[35] There is no dispute that the NERR issued by RND Crewing on 4 April 2018 was in the correct form and contained the correct content.

[36] The unions submit that the NERR issued by RND Crewing to Employees on 4 April 2018 is invalid because the Earlier Agreement was made in January 2018 and the application for approval of the Earlier Agreement was still before the Commission and had not been withdrawn at the time the NERR was issued for the Enterprise Agreement. The unions did not rely on any particular provisions of the Act in support of this contention.

[37] The unions contend that bargaining cannot recommence for the same agreement after the first agreement was made and the terms and conditions of employment in the first agreement are being applied to employees, notwithstanding the agreement has not been approved by the Commission. 20

[38] If an enterprise agreement is “made” in accordance with s 182 of the Act, it covers an employee or employer if the enterprise agreement is expressed to cover the employee or employer. 21 However, an enterprise agreement does not apply to an employee or an employer until it has been approved by the Commission and is in operation.22

[39] The Earlier Agreement was the subject of a successful vote on 15 January 2018, but never commenced operation because the application for approval was withdrawn. There is a question as to whether the Earlier Agreement was “made” in accordance with s 182 of the Act, because the NERR issued by RND Crewing in relation to the Earlier Agreement was allegedly defective. 23 If the Earlier Agreement was “made” in accordance with s 182 of the Act, then, arguably, the making of the Earlier Agreement resulted in the bargaining process coming to an end.24 As a matter of fact, the evidence in this case demonstrates that bargaining for the Earlier Agreement ceased when a majority of employees voted in favour of the Earlier Agreement on 15 January 2018.

[40] Whether or not the Earlier Agreement was “made” in accordance with s 182 of the Act, RND Crewing sought to avoid a debate about the validity of the NERR it issued in December 2017 by notifying Employees on 3 April 2018 that it had decided to “formally end the bargaining process in relation to the” Earlier Agreement and “enter into a new negotiation … in relation to an updated EA”. 25 By so doing, RND Crewing acted in a manner consistent with the following observation by the majority of the Full Bench in Uniline Australia Limited:26

“Artificial though it may be, an employer that discovers it had issued an invalid Notice, would cease bargaining with its employees and would agree to bargain or initiate bargaining afresh thus triggering a notification time and a new period within which a valid Notice may be issued.”

[41] The email sent by RND Crewing to Employees on 3 April 2018 notified Employees that RND Crewing agreed to bargain, and had initiated bargaining, for a proposed enterprise agreement. It follows that 3 April 2018 was the notification time for the Enterprise Agreement (s 173(2)(a) of the Act). RND Crewing then complied with its obligation under s 173(1) of the Act to give a NERR to “each employee who will be covered by the agreement and is employed at the notification time for the agreement”. The NERR was issued to Employees on 4 April 2018, thus complying with the requirement in s 173(3) of the Act.

[42] Contrary to the unions’ contention, the bargaining that took place from 3 April 2018 in relation to the Enterprise Agreement was not bargaining for the “same agreement”. The Earlier Agreement is not the same as the Enterprise Agreement. Amendments were made to clause 3.2 between the voting for the Earlier Agreement in January 2018 and the communication of the proposed Enterprise Agreement to Employees on 3 April 2018. 27 In any event, even if the Enterprise Agreement had been in the same terms as the Earlier Agreement, there would have been no difficulty in RND Crewing ceasing bargaining and initiating bargaining afresh to overcome, or avoid, an issue in relation to a potentially invalid NERR.28

[43] In my view, the fact that the application for approval of the Earlier Agreement remained on foot in the Commission until it was formally withdrawn on 24 May 2018, did not prevent the establishment of a new notification time in accordance with s 173(2) of the Act, nor did it preclude bargaining from taking place for the Enterprise Agreement. Indeed, RND Crewing could have pursued its application for approval of the Earlier Agreement, continued with negotiation for the Enterprise Agreement and then sought approval of the Enterprise Agreement. If the Earlier Agreement had been approved by the Commission and then some weeks or months later the Enterprise Agreement was approved by the Commission, both agreements would have covered the Employees, 29 but only one agreement could have applied to an Employee at a particular time.30 Assuming the Earlier Agreement was approved before the Enterprise Agreement, the Earlier Agreement would have applied to the Employees until it passed its nominal expiry date, at which time the Enterprise Agreement would have applied to the Employees, assuming the Enterprise Agreement had not, at that time, passed its nominal expiry date.31

[44] For the reasons given, I reject the unions’ contention that the NERR issued on 4 April 2018 is invalid.

Explanation of Enterprise Agreement

[45] The unions contend that RND Crewing failed to comply with its obligation under s 180(5) of the Act to take all reasonable steps to ensure that the terms of the Enterprise Agreement, and the effect of those terms, are explained to the Employees, and the explanation is provided in an appropriate manner taking into account the particular circumstances and needs of the Employees. In particular, the unions submit that “other than clause 3.2 and clause 23.4 which would be ambiguous for employees to comprehend … [RND Crewing] did not explain the differences between the terms of the” Enterprise Agreement and the previous agreement that covered these employees. 32

[46] The evidence demonstrates that RND Crewing took the following steps to comply with its obligations under s 180(5) of the Act:

• Four of the six Employees covered by the Enterprise Agreement were employed by RND Crewing at the time it negotiated the Earlier Agreement. 33 Given that the only difference between the Earlier Agreement and the Enterprise Agreement is the change to clause 3.2, the explanation provided by RND Crewing to those four Employees in relation to the Earlier Agreement is relevant to my assessment of the steps RND Crewing took to comply with s 180(5) of the Act in relation to the Enterprise Agreement. Those steps were as follows:

o Attending meetings with the four Employees on 30 December 2017 and 31 December 2017 to explain the terms of the Earlier Agreement; 34 and

o Explaining the key terms of the Earlier Agreement to the four Employees in an email dated 5 January 2018 and inviting the Employees to ask any questions of Mr Madsen in relation to the Earlier Agreement; 35

• Mr Madsen’s email of 3 April 2018 explained the effect of the amendments to clause 3.2 of the Enterprise Agreement; 36

• Mr Madsen’s email of 7 April 2018 to five of the six Employees referred to his discussions with employees in about late December 2017 concerning the terms of the Earlier Agreement, provided a further explanation of the effect of the amendments to clause 3.2 of the Enterprise Agreement, included a copy of his 5 January 2018 email in which he explained the key terms of the Earlier Agreement, and invited employees to contact him with any questions; 37

• Mr Madsen provided the explanatory emails to a new (sixth) Employee, Mr Lee, on 18 June 2018; 38 and

• Mr Madsen did not receive any comments or questions from Employees about the Enterprise Agreement. 39

[47] Also of relevance to the steps taken by RND Crewing to explain the terms of the Enterprise Agreement, and the effect of those terms, to Employees, is the fact that each of the Employees is highly experienced in the dredging industry, appointed themselves as their own bargaining representative, and comes from an English speaking background. 40

[48] Four of the six Employees covered by the Enterprise Agreement were, prior to about late 2017 or early 2018, employed by RN Dredging. 41 RND Crewing was established for the purpose of employing crew to work on RN Dredging’s vessels.42 During their employment with RN Dredging, the four Employees were covered by an enterprise agreement known as the RN Dredging Pty Ltd and AIMPE Contract Propelled Dredging Enterprise Agreement 2013 (RN Dredging EA). The terms of the RN Dredging EA are materially different to the terms of the Enterprise Agreement.

[49] There is no legislative or other requirement that in every case an employer must explain to its employees the differences between the terms of a proposed enterprise agreement and an existing enterprise agreement or underlying award. Whether such an explanation is required for an employer to satisfy its obligation under s 180(5) of the Act to take all reasonable steps to ensure that the terms of the proposed enterprise agreement, and the effect of those terms, are explained to relevant employees, will depend on the circumstances. 43

[50] Despite this issue concerning an absence of explanation of the differences between the Enterprise Agreement and the RN Dredging EA being squarely raised by AIMPE in its written outline of submissions, 44 no party addressed the question of whether the RN Dredging EA continued to cover and apply to the four Employees after they ceased employment with RN Dredging and commenced employment with RND Crewing. The answer to that question is governed by sections 311 to 313 of the Act.

[51] I am satisfied that the RD Dredging EA covered and applied to the four Employees at the time they commenced employment with RND Crewing, for the following reasons:

• the employment of the four Employees with RD Dredging terminated when they became employees of RND Crewing (s 311(1(a) of the Act);

• within three months after the termination of their employment with RN Dredging, the four Employees became employed by RND Crewing (s 311(1)(b) of the Act); 45

• the work the four Employees perform for RND Crewing is the same, or substantially the same, as the work the Employees performed for RN Dredging, namely operating RN Dredging’s vessels (s 311(1)(c) of the Act); 46

• there is the necessary connection between RN Dredging and RND Crewing because (a) they are associated entities 47 and/or (b) in accordance with an arrangement between RN Dredging and RND Crewing, RND Crewing has the beneficial use of assets (dredging vessels) that RN Dredging owned or had the beneficial use of and that relate to, or are used in connection with, the transferring work48 (s 311(1)(d), (3) & (6));

• accordingly, there was a transfer of business from RN Dredging to RND Crewing within the meaning of s 311 of the Act. It follows that the four Employees became transferring employees within the meaning of s 311(2) of the Act and the RN Dredging EA covered RND Crewing and the transferring Employees after they became employed by RND Crewing (s 313(3) of the Act).

[52] The RN Dredging EA only covers casual employees. 49 The four Employees were casuals when they were employed by RN Dredging and during the initial part of their employment with RND Crewing.50 However, by the time the vote took place for the Enterprise Agreement from 10 to 12 July 2018, each of the Employees was engaged by RND Crewing as a full time employee.51 Because the RN Dredging EA only covers casual employees, it did not cover or apply to any of the Employees at the time they voted for the Enterprise Agreement. It follows that the Employees were covered by the relevant modern award, namely the Dredging Award, at the time they voted for the Enterprise Agreement. RND Crewing did not provide Employees with any explanation of the differences between the Enterprise Agreement and the Dredging Award.

[53] Notwithstanding the fact that RND Crewing did not provide Employees with an explanation of the differences between the Enterprise Agreement and either the Dredging Award or, in the alternative, the RN Dredging EA, I am satisfied that RND Crewing complied with its obligation under s 180(5) of the Act to take all reasonable steps to ensure that the terms of the Enterprise Agreement, and the effect of those terms, were explained to the Employees, and the explanation was provided in an appropriate manner taking into account the particular circumstances and needs of the Employees. My reasons for reaching this state of satisfaction are as follows:

(a) RND Crewing explained the effect of the key terms of the Enterprise Agreement to Employees in writing and orally; 52

(b) each of the Employees is highly experienced in the dredging industry, appointed themselves as their own bargaining representative, and comes from an English speaking background; 53

(d) there was a significant period of time between the commencement of negotiations for the Earlier Agreement in December 2017 and the vote for the Enterprise Agreement in July 2018.

Genuine agreement

[54] The unions submit that the Enterprise Agreement could not have been genuinely agreed to because there was already an agreement with substantively identical terms that had been “made”. 55 For the reasons set out in paragraphs [35] to [43] above, I reject this submission. Further, I am satisfied on the evidence that there are no reasonable grounds for believing that the Enterprise Agreement has not been genuinely agreed to by the Employees (s 188(1)(c) of the Act).

Overriding the NES

[55] AIMPE contends that clause 5.1 of the Enterprise Agreement breaches the NES because it purports to require an Employee to fund their own leave, including annual leave, personal/carers leave and long service leave. AIMPE submits that the Enterprise Agreement fails s 194 of the Act, because it is attempting to override the NES.

[56] AMOU contends that the Enterprise Agreement “fails to identify what parts of the NES are contained in the annual salary and what sections of the NES are not contained in the annual salary”. AMOU also submits that “clause 12.2 and clause 12.3 show that the NES is not incorporated into this agreement or annual salary as both these entitlements (personal leave and compassionate leave) are entitlements taken from annual leave”.

[57] I reject these contentions. It is clear from clause 3.2 of the Enterprise Agreement that it does not expressly exclude the NES. Pursuant to s 55 of the Act, it is permissible for an enterprise agreement to include terms that:

• are ancillary or incidental to the operation of an entitlement under the NES or terms that supplement the NES, but only to the extent that the effect of those terms is not detrimental to an employee in any respect, when compared to the NES (s 55(4) of the Act); or

• have the same (or substantially the same) effect as provisions of the NES, whether or not ancillary or supplementary terms are included (s 55(5) of the Act).

[58] Clause 12.1 of the Enterprise Agreement confers on full-time Employees an express entitlement, in respect of each Swing (being the four weeks an employee is rostered on during the eight week roster cycle), to 4 x 84 hours of annual leave to be taken during the four weeks that immediately follow the Swing and an additional 42 hours of annual leave. This term is more beneficial to Employees than the NES entitlement in respect of annual leave.

[59] Clauses 12.2 and 12.3 confer on Employees entitlements to personal leave/carer’s leave and compassionate leave, which are not less beneficial to Employees than the NES.

[60] As to long service leave, clause 3.2 of the Enterprise Agreement makes plain that it does not expressly exclude “laws dealing with long service leave”. Moreover, clause 10 of the Enterprise Agreement provides that: “In addition to the Employees’ statutory long service leave entitlements RND Crewing will increase Permanent Employees’ annual salary by the amount set out below upon completion of the specified Qualifying Service …” It follows that the Enterprise Agreement provides for long service leave entitlements for Employees which are no less beneficial than the statutory minimum.

[61] As to the contentions that the Enterprise Agreement “purports to require an Employee to fund their own leave” and “fails to identify what parts of the NES are contained in the annual salary and what sections of the NES are not contained in the annual salary”, clause 5.1 of the Enterprise Agreement provides that “Permanent Employees will be paid an annual salary … [which] includes payment for all ordinary hours, reasonable additional hours, penalty rates, allowances, gazetted public holidays, shift penalties, and all forms of leave (including annual leave, personal/carer’s leave and all other forms of leave however described).” On its proper construction, clause 5.1 of the Enterprise Agreement makes clear that Employees will be paid their “annual salary” throughout the year, whether they are working, or on annual leave, personal/carer’s leave or any other type of leave.

Better Off Overall Test (BOOT)

[62] I will commence with a discussion of general principles relevant to the BOOT and then analyse the various BOOT issues raised by the unions in their opposition to the application for approval of the Enterprise Agreement.

General principles

[63] I must be satisfied that the Enterprise Agreement passes the BOOT before I can approve it. 56 Section 193(1) of the Act provides that an enterprise agreement passes the BOOT if the Commission is satisfied, as at the test time, that each award covered employee, and each prospective award covered employee, for the enterprise agreement would be better off overall if the enterprise agreement applied to the employee than if the relevant modern award applied to the employee. The “test time” is when the application for approval of the enterprise agreement is made.57

[64] In Armacell Australia Pty and Others 58the application of the BOOT was explained by the Full Bench in the following manner:

“The BOOT, as the name implies, requires an overall assessment to be made. This requires 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.”

[65] The BOOT is not applied as a line by line analysis. It is a global test requiring consideration of advantages and disadvantages to award covered employees and prospective award covered employees. 59 An enterprise agreement may pass the test even if some award benefits have been reduced, as long as overall, those reductions are more than offset by the benefits of the enterprise agreement.60

[66] Ultimately the application of the BOOT is a matter that involves the exercise of discretion, and it involves a degree of subjectivity or value judgement. 61

[67] It is clear from the references to “each … employee” in section 193(1) of the Act that every employee to whom the enterprise agreement will apply, if approved, must be better off overall than if the relevant modern award applied to the employee. It is not enough that a majority or most of the employees to whom the enterprise agreement will apply, if approved, will be better off overall than if the relevant modern award applied. 62

[68] Section 193(7) of the Act is a facultative provision which permits the Commission to be satisfied, in particular circumstances, that all employees in a class of employees will be better off if the agreement applied to that class than if the relevant modern award applied to that class. Section 193(7) provides as follows:

“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.”

[69] Section 193(7) was explained in the Explanatory Memorandum to the Fair Work Bill 2008 as follows:

“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.”

[70] The selection of a class for the purpose of s 193(7) of the Act will only be of utility if the enterprise agreement affects the members of the class in the same way such that there is likely to be a common BOOT outcome. 63

[71] It is also important to recognise that the BOOT is hypothetical, because it requires an assessment of whether each employee, and each “prospective award covered employee”, would be better off overall if the enterprise agreement applied to him or her than if the relevant award did. 64 The hypothetical nature of the BOOT analysis was explained in the following illustrative example in the Explanatory Memorandum to the Fair Work Bill 2008:65

“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.”

Clause 3.2 of the Enterprise Agreement

[72] Clause 3.2 of the Enterprise Agreement provides:

“Entire Agreement

This Agreement is the entire agreement between the Parties. The Parties expressly exclude, to the extent permitted by law, any other statutory laws, awards or agreements that pertain to the employment relationship between RND Crewing and its Employees other than the NES and laws dealing with long service leave, work health and safety, workers’ compensation and training and any employment contract. For the avoidance of doubt, none of the documents referred to in this subclause are incorporated by reference into this Agreement.”

[73] The unions submit that clause 3.2 is unenforceable and ambiguous and no employee would understand what the clause meant, particularly insofar as it relates to “other statutory laws, awards …” The unions also contend that clause 3.2 would exclude many sections of “Maritime Law such as the Navigations Act 2012 and national Marine Orders” and “may be read to have excluded the” National Employment Standards (NES). 66

[74] I reject the contention that clause 3.2 of the Enterprise Agreement excludes the operation of the NES. Clause 3.2 expressly carves out of the exclusion the NES.

[75] At the hearing I raised with RND Crewing a concern about the potential for clause 3.2 to exclude, to the extent permitted by law, legislation relevant to the maritime industry such as the Navigation Act1912 (Cth) and the Seamen’s Compensation Act1974 (Cth), and thereby result in Employees being worse off than under the Dredging Award. 67 In response to my concern, RND Crewing provided the following undertaking:

“(Undertaking One) RND Crewing undertakes that it will not read or rely on the words “statutory laws” in clause 3.2 of the Agreement, and that those words will have no effect.”

[76] This undertaking resolves my concerns. I am satisfied that clause 3.2 of the Enterprise Agreement, read together with Undertaking One, will not, either on its own or in combination with other matters, result in Employees being worse off under the Enterprise Agreement compared to the Dredging Award.

[77] AIMPE contends that, notwithstanding Undertaking One, clause 3.2 of the Enterprise Agreement would still be difficult for the average worker to understand. Whether a clause may be difficult to understand is not a proper basis to dismiss an application for approval of an enterprise agreement. In any event, I am satisfied that clause 3.2, as amended by Undertaking One, is relatively straightforward to understand.

Personal accident insurance

[78] Clause 15.13(c) of the Dredging Award provides:

“Except where it is provided, the employer will reimburse an employee for a personal accident policy for death risk, loss of limbs and corresponding benefits to the value of $163,798. This amount is payable in addition to the amounts payable under the Seamen’s Compensation Act1974 (Cth).”

[79] This benefit is not replicated in the Enterprise Agreement. The unions contend that the absence of this benefit in the Enterprise Agreement will make Employees potentially worse off under the Enterprise Agreement compared to the Dredging Award.

[80] I am satisfied that the following undertaking given by RND Crewing addresses this concern:

“(Undertaking Five) RND Crewing undertakes that if an Employee would be entitled to receive a greater benefit under clause 15.13(c) of the Dredging Award than is available to that Employee under RND Crewing’s workers compensation cover or professional indemnity insurance, RND Crewing will top up the benefit provided (if any) to the value of the benefit that the Employee would have received (if any) under clause 15.13(c) of the Dredging Award.”

Part-time employees

[81] AMOU and AIMPE contend that clause 4.1 of the Enterprise Agreement does not give part-time status to employees, which is provided for under clause 10 of the Dredging Award. I reject this submission. Clause 4.1 of the Enterprise Agreement permits employees to be employed as a “Permanent Employee or as a Casual Employee”. The expression “Permanent Employee” is defined in clause 2 of the Enterprise Agreement to include an employee who is engaged on a part-time basis. The Enterprise Agreement provides for benefits and entitlements for part-time employees. 68

Overtime

[82] AMOU contends that clause 5.1 of the Enterprise Agreement cannot pass the BOOT because what is considered reasonable overtime has not been identified or defined. AIMPE makes a similar submission about clause 5.1 and what is considered reasonable.

[83] Clause 5.1 of the Enterprise Agreement provides:

“5.1 General

(a) Subject to the provisions of this subclause, Permanent Employees will be paid an annual salary in accordance with their classification, as set out in clause 5.2 below.

(b) The annual salary includes payment for all ordinary hours, reasonable additional hours, penalty rates, allowances, gazetted public holidays, shift penalties, and all forms of leave (including annual leave, personal/carer’s leave and all other forms of leave however described)…”

[84] Clause 9 of the Enterprise Agreement sets out the circumstances in which overtime is payable to a Permanent Employee and a Casual Employee. A Casual Employee who is required to work more than 12 hours during any shift is entitled to a loading of 100% of their hourly rate in respect of the additional time worked. A Permanent Employee who is required to work outside their ordinary hours of work is entitled to a loading of 100% of their hourly rate in respect of the additional time worked. Ordinary hours of work are governed by clause 7.1 of the Enterprise Agreement:

“7.1 Ordinary Hours of Work

RND Crewing operates an 8 week roster cycle as follows:

(a) Employees work 4 weeks on, 4 weeks off in a “duty/leave cycle”;

(b) when Employees are rostered on they work 12 hour shifts on each of seven days per week;

(c) the dayshift will be worked between 0600 and 1800 and the night shift will be worked between 1800 and 0600 with a shift change over at 0600 and at 1800; and

(d) the ordinary hours of work for a full–time Employee will be an average of 84 hours per week over the Swing.”

[85] “Swing” is defined in clause 2 to mean “the 4 weeks an Employee is rostered on during the 8 week roster cycle pursuant to clause 8.1”.

[86] The obligation on an Employee to work reasonable additional hours is governed by clause 7.2 of the Enterprise Agreement:

“7.2 Reasonable Additional Hours

(a) Employees are required to work reasonable additional hours in order to meet RND Crewing’s operational and maintenance requirements subject to the NES and fatigue Management to meet work health and safety legislation. Payment for any reasonable additional hours is included in the Employee’s annual salary.

(b) Each Employee is required to be ready to embark the vessel they are required to man as directed by RND Crewing (including any replacement vessel or crew change vessel) before the official start of the Employees shift.”

[87] It is apparent from these provisions that the Enterprise Agreement distinguishes between ordinary hours, reasonable additional hours, and hours worked in excess of ordinary hours. Overtime is payable in respect of work undertaken in excess of a Permanent Employee’s ordinary hours. The annual salary paid to Permanent Employees includes payment for ordinary hours and reasonable additional hours, but not for hours of work which attract overtime rates (i.e. hours worked in excess of ordinary hours).

[88] Ordinary hours of work for a full–time Permanent Employee are an average of 84 hours per week over the 4 weeks the Permanent Employee is rostered on during the 8 week roster cycle. Permanent Employees are not rostered to work in the 4 weeks immediately following a 4 week work cycle. Accordingly, if one were to look at ordinary hours of work over the 8 week roster cycle (4 weeks on and 4 weeks off), it is apparent that a Permanent Employee’s ordinary hours of work would be an average of 42 per week (4 x 84 + 4 x 0 = 336, divided by 8 = 42).

[89] The Enterprise Agreement does not define “reasonable additional hours”, nor does it expressly set out the relationship between ordinary hours, reasonable additional hours, and overtime. The fact that overtime is defined by the Enterprise Agreement to be work outside ordinary hours and subject to a 100% loading, together with the reference in the Enterprise Agreement to “reasonable additional hours”, in respect of which no additional remuneration is payable (above the annual salary), suggests that “reasonable additional hours” must be something other than work outside ordinary hours. That is, “reasonable additional hours” must be part of “ordinary hours” (as defined). Section 62 of the Act is a relevant contextual consideration; it deals with the concept of “additional hours” and defines them for a full-time employee to be hours in excess of 38 hours per week. Having regard to the fact that the Enterprise Agreement is made pursuant to the Act and the relevant provisions of the Enterprise Agreement set out above, I am of the view that “reasonable additional hours” within the meaning of the Enterprise Agreement are hours in excess of 38 hours per week but not more than an average of 84 hours per week over the 4 weeks the Permanent Employee is rostered on during the 8 week roster cycle.

[90] I raised with RND Crewing a concern about Employees being required to work an average of 84 hours per week during a four week period. RND Crewing has given the following undertaking to address this concern:

“(Undertaking Three) RND Crewing undertakes that, notwithstanding clause 7 of the Agreement, an Employee may refuse to work additional hours beyond 38 hours in a week if they are unreasonable. In determining whether additional hours are reasonable or unreasonable, the factors in s 62(3) of the Fair Work Act must be taken into account.”

[91] The fact that the Enterprise Agreement, on its proper construction, effectively defines “reasonable additional hours” to be hours in excess of 38 hours per week but not more than an average of 84 hours per week over the 4 weeks the Permanent Employee is rostered on during the 8 week roster cycle, is not determinative of whether such hours are reasonable or unreasonable. Pursuant to Undertaking Three, an Employee may refuse to work additional hours beyond 38 hours in a week if they are unreasonable. In determining whether additional hours are reasonable or unreasonable, Undertaking Three requires the factors in s 62(3) of the Act to be taken into account. Further, it is important to appreciate that Undertaking Three goes to the NES requirement that full time employees can refuse to work more than 38 hours in a week if the additional hours are unreasonable, rather than the issue of payment for such hours and whether employees are better off overall under the Enterprise Agreement than the Dredging Award. The question of payment for “reasonable additional hours” within the meaning of the Enterprise Agreement is governed by clauses 5.1(b) and 7.2 thereof.

[92] In view of the matters set out in paragraphs [83] to [91] above, I reject the unions’ contention that clause 5.1 of the Enterprise Agreement cannot pass the BOOT or is otherwise a reason why the Enterprise Agreement should not be approved. I will address separately below the question of whether Employees covered by the Enterprise Agreement will be better off overall than if they were covered by the Dredging Award.

Allowances

[93] AIMPE and AMOU contend that the Enterprise Agreement does not provide for the following entitlements, which the Dredging Award does provide for, with the result that the Enterprise Agreement does not pass the BOOT:

(a) Casual loading less than the Dredging Award;

(b) Job search entitlement;

(d) Special rates;

(e) Ship keep allowance;

(f) Duel Certificate allowance;

(g) Firefighting allowance;

(h) Shiftwork allowance;

(i) Cashing out of annual leave;

(j) Overtime meals; and

(k) Maximum hours of work.

[94] RND Crewing has provided the following undertaking to address some of these concerns:

“(Undertaking Six) RND Crewing undertakes that Employees will not perform work that would entitle them to:

a. a special rate under clause 15.5 of the Dredging Award;

b. a shipkeeping allowance under clause 15.7 of the Dredging Award; or

c. a dual certificate allowance under clause 15.8 of the Dredging Award.”

[95] The Enterprise Agreement provides for a casual loading of 20% (clause 5.4), whereas the Dredging Award provides for a casual loading of 25%. Because the rates payable under the Enterprise Agreement are substantially higher than the Dredging Award (see comparison table below), I am satisfied the 5% differential in casual loadings will not result in casual Employees being worse off under the Enterprise Agreement than the Dredging Award, save for circumstances in which casual Employees may be required to work significant hours which would attract shift loadings under the Dredging Award but not the Enterprise Agreement. I raised this issue with RND Crewing. In response, they provided the following undertaking, together with calculations which, I am satisfied, substantiate their contention that the undertaking will ensure casual Employees remain better off overall under the Enterprise Agreement:

“(Undertaking Two) RND Crewing undertakes that it will pay a Casual Employee who commences a shift at or after 6:00pm a loading of eight percent (8%) in addition to their casual loading under clause 5.4 of the Agreement.”

[96] As to maximum hours of work, the Enterprise Agreement provides for Employees to work four weeks on and then have four weeks off. During the four week period of work, Employees will be rostered to work 12 hour shifts, 7 days per week (clause 7.1 of the Agreement). Clause 7.2 of the Enterprise Agreement provides for Employees to be required to work “reasonable additional hours” 69 in order to meet RND Crewing’s operational and maintenance requirements. Importantly, the obligation to work “reasonable additional hours” is subject to “the NES and fatigue management to meet work health and safety legislation” (clause 7.2 of the Enterprise Agreement). Overtime may also be worked by Employees (clause 9 of the Enterprise Agreement). As set out above, in response to a concern I raised with RND Crewing in relation to Employees being required to work an average of 84 hours per week during a four week period, RND Crewing has given the following undertaking:

[97] The Dredging Award provides for employees working on fully operational vessels to work 12 hours per day on each of the seven days per week, together with the potential for overtime, but with a limit on 18 hours continuous work (clauses 20 to 22 of the Award).

[98] I am satisfied that Undertaking Three and the protective measures within clause 7.2(a) of the Enterprise Agreement will ensure that Employees are not worse off under the Enterprise Agreement compared to the Dredging Award in relation to the hours, or maximum hours, they may be required to work.

[99] As to the balance of the allowances and entitlements identified by the unions, I am satisfied that the substantially higher annual salary payable under the Enterprise Agreement compared to the Dredging Award, together with superannuation contributions of 13.5% (clause 11 of the Enterprise Agreement), will more than compensate Employees for the occasions on which they might otherwise have been entitled to the allowances and entitlements identified by the unions. As to the differences between the annual salary payable under the Enterprise Agreement and the Dredging Award, RND Crewing submits that the premium payable under the Enterprise Agreement is between $385.98 and $647.62 per week, depending on the Employee’s classification, whereas the analysis conducted by Commission staff shown in the table below suggests a slightly lower range of premiums. In either case, I am satisfied that the premium, together with the other benefits under the Enterprise Agreement, is sufficient to ensure Employees will be better off overall.

Weekly rate comparison

Modern Award Classification	Enterprise Agreement Classification	Modern Award Rate	Enterprise Agreement Rate	Percentage Difference
Trailer Master	Trailer Master	$2,530.6	$2,888.67	14.15%
Trailer mate	Mate	$2,139.6	$2,714.92	26.89%
Trailer Mate	2nd Mate	$2,139.6	$2,546.16	19.00%
Chief Engineer	Chief Engineer	$2,530.6	$2,830.98	11.87%
First Engineer	1st Engineer	$2,443.4	$2,714.92	11.11%
Second Engineer	2nd Engineer	$2,163.9	$2,546.16	17.67%

Conclusion on BOOT

[100] I have had regard and given due weight to the terms of the Enterprise Agreement which are more beneficial for an Employee and the terms which are less beneficial for an Employee compared to the Dredging Award. Many of those more beneficial and less beneficial terms are specifically addressed in this decision, while others are identified in the F17, the table attached to the F17 and/or the submissions made by RND Crewing and the unions in this matter. Having regard to all those matters, together with the Undertakings, my overall assessment is that, as at the test time, each employee and prospective employee covered by the Dredging Award would be better off overall if the Enterprise Agreement applied to them than if the Dredging Award applied to them. I am particularly persuaded by my assessment that the higher pay rates (annual salary) and superannuation entitlements under the Enterprise Agreement outweigh the less beneficial terms in the Enterprise Agreement compared to the Dredging Award.

Misleading Form F17

[101] The unions submit that the Form F17 statutory declaration filed by RND Crewing is misleading in various respects, including:

(a) in relation to the “Project Allowance” because it does not exist in the Enterprise Agreement for all Employees covered by it;

(b) in relation to clause 10 (long service incentive) because it has nothing to do with long service leave, yet is mentioned in the Enterprise Agreement with long service leave;

(c) in relation to its portrayal of an Employee’s accrual of 378 hours of annual leave per Swing. AIMPE contends that this would equate to 2,268 hours of annual leave per year. AIMPE submits this is not “annual leave” but is accrued leave due to hours of work. Further, AIMPE submits that “if this is annual leave, then no annual leave loading has been added into salary. Once annual leave loading is added into salary then this rate is less than the Award rate”; and

(d) in relation to “cashing out of annual leave as this is significantly less than the” Dredging Award.

[102] I reject each of these allegations of misleading statements in the F17, for the following reasons.

[103] As to the “Project Allowance”, the table attached to the F17 summarises the improvement as follows:

“Permanent employees who perform work on the Modi R on a dredging project other than the Cockburn Cement project at Owen anchorage will be paid an allowance of $120 per day for that work.”

[104] Any Employee who read the F17 could not have been misled about the range of Employees to whom the Project Allowance would be paid.

[105] As to clause 10 (long service incentive), the table attached to the F17 summarises the improvement as follows:

“Permanent employees will receive an annual salary increase of $6,000, $8,800, $10,152 and $11,832 for continuous service of 3, 5, 7 and 9 years on vessels operated by RND Crewing or its related entities.”

[106] There are a number of connections between the “long service incentives” and long service leave. First, both benefits accrue to Employees as a result of their continuous service with RND Crewing. Secondly, clause 10 governs an Employee’s entitlement to “long service incentives” and requires the Employee to complete the specified “Qualifying Service”, which is defined in clause 2 as follows:

“Qualifying Service means service with RND Crewing under this Agreement by an Employee that:

(a) is continuous service within the meaning of the State or Territory long service leave legislation applicable to that Employee (such that if the service continued, it would entitle the Employee to long service leave in accordance with that legislation); and

(b) has been performed exclusively on a vessel operated by RND Crewing or a Related Company of RND Crewing.”

[107] As to the accrual of annual leave, the Enterprise Agreement confers on an Employee, in respect of each four week period of work, an entitlement to take the following four weeks off work as annual leave and an additional 42 hours of annual leave (clause 12.1(a) of the Enterprise Agreement). The table attached to the F17 summarises the improvement as follows:

“For each Swing worked the EA entitles employees to 378 hours of annual leave, as opposed to the NES minimum under the Award.”

[108] This description of the improvement is not, in my view, misleading. An Employee working during a four week Swing works 84 hours per week. Over a period of four weeks that equates to 336 hours. Once the additional annual leave accrual of 42 hours per Swing is combined with the 336 hours, the total becomes 378 hours accrued per Swing. Those calculations are explained in clear terms in clause 12.1(a) of the Enterprise Agreement. Further, whether the four week period immediately following a four week Swing is described or characterised as annual leave, as it is in the Enterprise Agreement, or paid leave in recognition of the hours worked during a Swing, as the unions contend, it is a benefit which must be considered and given due weight as part of the better off overall analysis. Any reasonable Employee reading the F17 and/or the Enterprise Agreement would not be misled as to the hours they would be required to work during a Swing and the paid time off they would have in the four weeks immediately following a Swing (together with the additional 42 hours of annual leave accrued during the Swing). Even if the entitlement to 4 weeks paid leave immediately following a Swing was characterised as paid leave rather than annual leave, the accrual of 42 hours of annual leave per Swing would exceed the NES (and Award) entitlement to annual leave, having regard to the fact that there are 8.5 x eight week periods in a year (52 weeks). Finally, it is not suggested in the F17, the table attached to it, or the Enterprise Agreement that an Employee is entitled to annual leave loading.

[109] As to the cashing out of annual leave, it is shown in the table attached to the F17 as a “reduction” compared to the Dredging Award, which is correct. The Enterprise Agreement limits the amount of annual leave which may be cashed out to seven days per annum, compared to the Dredging Award limitation of two weeks in any period of 12 months. The table attached to the F17 goes on to state that limiting the cashing out of annual leave to seven days per annum “enhanc[es] the amount of leave available to the employees”. While this is a true statement, whether such a limitation is in a particular Employee’s interest will depend on their personal circumstances and whether they prefer to take leave or have it cashed out. Employees are able to make judgments of that kind and are not likely, in my view, to be misled by such statements in the F17.

[110] AIMPE also contends that clause 23.4 of the Enterprise Agreement is misleading “in regards to what it actually means and what employees understand it to mean”. I reject this submission. Clause 23.4 is clear in its terms. Even if it were difficult to understand, that would not be a proper basis to reject the Application for approval of the Enterprise Agreement.

Satisfaction of other requirements

[111] I am satisfied that the effect of accepting the Undertakings is not likely to:

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

(b) result in substantial changes to the Enterprise Agreement.

[112] The views of each person who the Commission knows is a bargaining representative for the Enterprise Agreement have been sought in relation to the Undertakings.

[113] Pursuant to subsection 190(3) of the Act, I accept the Undertakings.

[114] Subject to the Undertakings, I am satisfied that each of the requirements of ss 186, 187, 188 and 190 as are relevant to this application for approval have been met.

[115] AIMPE, being a former bargaining representative for the Enterprise Agreement, has given notice under s.183 of the Act that it wants the Enterprise Agreement to cover it. In accordance with s.201(2) of the Act, I note that the Enterprise Agreement covers AIMPE.

[116] The Enterprise Agreement is approved and, in accordance with s.54 of the Act, will operate from 12 April 2019. The nominal expiry date of the Enterprise Agreement is 11 April 2023.

DEPUTY PRESIDENT

Appearances:

D. Mahendra, Counsel, for the Applicant

M. McEvilly, Industrial Officer, for The Australian Maritime Officers’ Union

B. Matthey, National Organiser, for The Australian Institute of Marine and Power Engineers

Hearing details:

2019.

Newcastle:

February 12.

Final submissions received on 11 April 2019.

Annexure A

1 AG2018/139

2 Exhibit A1 (Witness Statement of Johnny Madsen dated 22 January 2019) at p.39

3 Ibid

4 Endeavour Coal Pty Ltd v APESMA [2012] FCA 764 at [34]

5 Fair Work Australia v Union of Christmas Island Workers (2012) 218 IR 182 at [72]

6 Ibid at [43]

7 Ex A1 at [10]-[13]

8 Section 180(4) of the Act

9 AMOU’s outline of submissions dated 8 January 2019 at [34]

10 Ex A1 at p.39

11 Ex A1 at p.40

12 AIMPE’s outline of submissions at [64]

13 CFMMEU v Collinsville Coal Operations Pty Limited[2014] FWCFB 7940 (Collinsville) at [45]-[46]

14 Ibid at [42]

15 Fair Work Australia v Union of Christmas Island Workers (2012) 218 IR 182 at [72]; see, too, Endeavour Coal Pty Ltd v APESMA (2012) 206 FCR at [38]-[41]

16 Ex A1 at [23]-[27] and pp.63-67

17 Exhibit A1

18 Fair Work Australia v Union of Christmas Island Workers (2012) 218 IR 182 at [72]; Endeavour Coal Pty Ltd v APESMA (2012) 206 FCR at [38]-[41]

19 Ibid at [56]-[59]

20 AIMPE’s outline of submissions at [69]-[75]

21 Section 53(1) of the Act

22 Section 52 of the Act

23 AMWU v Broadspectrum[2018] FWCFB 6556 at [21]-[24]; Ex A1 at [14], [19]-[22], pp.21-22 & p.30

24 AMWU v Broadspectrum[2018] FWCFB 6556 at [17]

25 Ex A1 at p.39

26 [2016] FWCFB 4969 at [113]

27 Ex A1 at [23]

28 Uniline Australia Limited [2016] FWCFB 4969 at [113]

29 Section 53 of the Act

30 Section 58(1) of the Act

31 Section 58(2) of the Act

32 AIMPE outline of submissions at [77]-[78]

33 Ex A1 at [9]-[13]

34 Ex A1 at [13]

35 Ex A1 at pp.69-70

36 Ex A1 at p.39

37 Ex A1 at pp.68-69

38 Ex A1 at p.77

39 Ex A1 at [29]

40 Ex A1 at p.98

41 Ex A1 at [4]-[8] & pp.27 & 36-38

42 Ex A1 at [8]

43 Diamond Offshore General Company v Baldwin & Ors[2018] FWCFB 6907 at [28]-[37]

44 AIMPE outline of submissions at [76]-[79]

45 Ex A1 at pp.27 & 34-38

46 Ex A1 at [8]

47 Ex A1 at [3]-[6]

48 Ex A1 at [8]

49 Clauses 1, 2.1 and 7 of the RN Dredging EA

50 Ex A1 at p.39

51 Ex A1 at p.102; counsel for RND Crewing also informed the Commission during the hearing that the Employees were full-time employees at the time of the vote. No objection was taken to the provision of this information from the Bar table.

52 See paragraph [33] above

53 Ex A1 at p.98; s 180(6) of the Act

54 See paragraph [33] above

55 AIMPE outline of submissions at [65]

56 s.186(2)(d) of the Act

57 s.193(6) of the Act

58 [2010] FWAFB 9985 at [41]

59 SDA v Beechworth Bakery Employee Co Pty Ltd[2017] FWCFB 1664 at [12]

60 Re Australia Western Railroad Pty Ltd T/A ARG – A QR Company [2011] FWAA 8555 at [8]; NTEIU v University of New South Wales[2011] FWAFB 5163 at [47]

61 TWU v Jarman Ace Pty Ltd[2014] FWCFB 7097 at [28]

62 Loaded Rates Agreements [2018] FWCFB 3610 at [100]

63 Loaded Rates Agreements [2018] FWCFB 3610 at [115(2)]

64 SDA v Aldi Foods Pty Ltd [2016] FCAFC 161 at [33] per Jessup J, who was in the minority but no issue was taken by the majority with this part of Jessup J’s reasons.

65 At item 818 in the illustrative example

66 AMOU outline of submissions at [54]-[55]

67 See the specific reference to this legislation in the Dredging Award at, for example, clause 15.13.

68 See, for example, clause 5(g) of the Enterprise Agreement

69 See paragraphs [69] to [76] above as to the proper construction of the expression “reasonable additional hours”

Printed by authority of the Commonwealth Government Printer

RND Crewing Pty Ltd

[2019] FWCA 2552

12 APRIL 2019

DECISION

Introduction and background