Sea Crewing Australia Pty Ltd

[2017] FWCA 2684

[2017] FWCA 2684

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185—Enterprise agreement

Sea Crewing Australia Pty Ltd
(AG2017/686)

SEA CREWING AUSTRALIA PTY LTD ENTERPRISE AGREEMENT 2017

Maritime industry
COMMISSIONER ROE	MELBOURNE, 17 MAY 2017

Application for approval of the Sea Crewing Australia Pty Ltd Enterprise Agreement 2017 - Did the employees have a stake in the Agreement - genuine agreement section 188(c). BOOT issues.

[1] An application has been made for approval of an enterprise agreement known as the Sea Crewing Australia Pty Ltd Enterprise Agreement 2017 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act). It has been made by Sea Crewing Australia Pty Ltd. The Agreement is a single enterprise agreement.

[2] The application to approve the Agreement was the subject of a considerable exchange of correspondence and submissions. There are 57 employees who will be covered by the Agreement and are able to vote on the Agreement. 55 employees voted and all of them voted in favour of the Agreement. 36 employees signed forms appointing themselves or another employee as a bargaining representative. After comparing the union membership records with the list of employees covered by the Agreement and the list of those employees who appointed a bargaining representative, I concluded that The Maritime Union of Australia (MUA) and The Australian Institute of Marine and Power Engineers (AIMPE) had members who were covered by the Agreement who did not appoint another bargaining representative. For this reason if the Agreement is approved I will note that those unions are covered by the Agreement.

[3] This matter was listed for hearing before me on 12 May 2017. The MUA and AIMPE provided submissions and participated in the hearing of this matter. The unions did not submit that there was a lack of genuine agreement because they had been improperly excluded from the bargaining process. In the end the unions raised two objections:

• MUA and AIMPE argue that there was a lack of genuine agreement because the employees did not have sufficient stake in the Agreement and as a consequence the Agreement lacks moral authority and authenticity. (Section 188(c) of the Act)



• AIMPE argue that the Better off Overall Test (BOOT) is not met because the minimum pay rates are less than the rates that would have applied under the Marine Towage Award 2010 (the Award) for the roster type specified by the Agreement. AIMPE submit that a Category 2 officer would be paid $109,529.62 under the Award and this is more than the $105,000 minimum which would apply to that officer under the Agreement should the Staff Policy and Procedure Handbook not apply to that employees. The Staff Policy and Procedure Handbook applies to all current employees so this is only a potential issue should work be obtained and employees be engaged at other ports in the future where the Handbook does not apply.

[4] I am satisfied that apart from these two issues the requirements of the legislation for approval of the Agreement have been met. In particular I am satisfied that:

• The application has been properly made by Sea Crewing Australia Pty Ltd the employer who will be covered by the Agreement.



• The application was made within 14 days of the successful vote.



• The pre-approval requirements including the notification time, the notice of employee representational rights, the access period, the notice for voting, the explanation of the Agreement and its effect on employees, and the majority approval were all met.



• The scope of the Agreement has been fairly chosen. Given that the Agreement does not cover all employees of the employer, I am satisfied that the group is organisationally and or operationally distinct.



• The Agreement does not contain any unlawful or discriminatory or objectionable terms.

[5] Other than in respect to the two matters which remain in contention I am satisfied that each of the requirements of Section 186 and 187 of the Act have been met.

NES and BOOT concerns

[6] In respect to the NES and the BOOT I raised a number of concerns with the Applicant. Some additional concerns arose from the correspondence received from the MUA and AIMPE. The undertakings offered by the employer addressed those concerns to my satisfaction and to the satisfaction of the MUA. I am satisfied that the undertakings offered do not result in a substantial change to the Agreement which had been voted on by the employees. I reach this conclusion because the undertakings sought related to three types of matters:

• Matters which are relatively minor in their impact such as the nominal length of the agreement (i.e. is it four years from commencement or one week less and four years from approval); clarification that the scope of compassionate leave is consistent with the NES, clarification that long service leave legislation in the relevant State or Territory would apply and adjustment to the notice periods required during their probation period to ensure consistency with the Award. This also applies to the undertaking that the company will maintain records of hours worked by its employees (as it is already required to do under the Agreement) and will conduct an annual audit to ensure that the actual salary paid is better than what the employees would have received had they been paid the minimum rates, overtime and penalty rates provided for in the Award. This mirrors the Award salary provision. Given the rates of pay applicable to all employees under the Agreement are currently those specified in the Staff Policy and Procedure Handbook which is incorporated in the Agreement and are much greater than the relevant Award rates this is only an issue in respect to possible future work at other ports.



• Matters which are not relevant to the work currently performed by the company but which might have relevance if circumstances changed such as the allowance for special voyages.



• Matters which clarify what is in fact the clear practice and understanding of the company and employees at the time they voted for the Agreement. This relates to clarification that it is not the intention to allow roster changes to alter the even time roster and 50% leave provisions and that the relevant version of the Staff Policy and Procedure Handbook are incorporated into the Agreement.

[7] I accept the submissions of the Applicant and the evidence of Ms Tanya Pavez, Manager People, Organisation & Development, which demonstrated the above. In particular Ms Pavez gave evidence that all employees who were covered by the Agreement are at the two ports where the relevant Staff Policy and Procedure Handbook incorporated into the Agreement apply and that those conditions apply to all those employees. Ms Pavez gave evidence that employees understood that the Staff Policy and Procedure Handbook are incorporated into the Agreement because the predecessor agreement, the Sea Crewing Australia Pty Ltd Enterprise Agreement 2013 is almost identical to the proposed Agreement and it also provided that the provisions of the Staff Policy and Procedure Handbook were incorporated. In June 2016 the Applicant sought to vary the 2013 Agreement to vary the provision for an annual salary increase in the Handbook so that it provided for a CPI increase in lieu of a 4% increase. Employees voted for a variation to the 2013 Agreement to vary this provision in the Handbook and this variation to the Agreement was approved by the Fair Work Commission. I accept that this is strong evidence that it was the mutual intention of the parties that the identical provision in the Agreement was understood to mean that the Handbook was incorporated. I am satisfied that the provision in Agreement should be read in this way however I requested an undertaking in order to put the issue beyond doubt.

[8] Clause 20.1 of the Marine Towage Award 2010 provides that: “For the purposes of the NES, the ordinary hours of work for full-time employees will be 35 hours per week, which may be averaged over a period of up to one year, and are given effect to in the manner provided under clause 23.2(c)(iv)”.

[9] The other provisions of Clause 20 provide that ordinary hours can be worked between 7:00am and 5:00pm but this spread can be altered by majority agreement. The overtime provision in Clause 22.1 provides that work in excess of ordinary hours or beyond the span of hours is paid at overtime rates as is work on weekends.

[10] The calculations provided by AIMPE are based upon the premise that employees work 7 ordinary hours each day on their roster. This is not correct. Employees can work up to 10 ordinary hours per day (that it the span of hours which can be adjusted by agreement). Even if one assumes that employees work 12 ordinary hours each day for 7 days per week for 26 weeks per year (the maximum possible on an even time roster) then the Category 2 officer (the highest classification rate) would be paid $95,956 under the Award and $105,000 under the Agreement in a year.

[11] The AIMPE calculations include an additional payment of $5,135.50 in respect to 5 weeks of annual leave. Even if this payment is added to the calculation the Agreement still passes the BOOT comfortably. In addition employees under the Agreement enjoy additional paid leave when compared to the Award.

[12] Following the hearing of this matter the Applicant provided a response to the submissions of AIMPE concerning the BOOT calculation and AIMPE provided a further written response. In that response AIMPE raised some new issues. This is procedurally unfair. AIMPE was asked during the proceedings to confirm that the only BOOT issue that they were raising was the minimum rate issue and they confirmed that this was the case and that they otherwise supported the MUA’s position. However, in their further written response AIMPE raises a claim that the undertakings would amount to a substantial change to the Agreement. I have already dealt with that issue. AIMPE also raise an issue concerning an alleged inconsistency between the minimum rest periods in Marine Order 28 and the provisions of the Agreement. I am unable to identify how this is a BOOT issue as the BOOT is conducted against the Award not the Marine Order. AIMPE raise concern about the failure of the company to engage with AIMPE during the bargaining. During the hearing AIMPE confirmed that the only genuine agreement issue being raised was the matter raised by the MUA regarding stake in the Agreement. AIMPE also raise the issue of the disputes resolution process in the Staff Policy and Procedure Handbook differing from the disputes procedure of the Agreement. I have confirmed that the Staff Policy and Procedure Handbook is incorporated into the Agreement and therefore a dispute about a matter arising under the Agreement includes a dispute about the Staff Policy and Procedure Handbook. The Agreement disputes settlement procedure therefore covers any such dispute.

Genuine Agreement concerns

[13] The company submitted that the Agreement provides job security benefits because the lower rates of pay which can apply to work in new ports would enable the company to win new contracts and that having an in term agreement when industrial action is not possible would also assist job security because it will enable the company to get new contracts. The company submits that this is a benefit to employees and it was the reason why employees approved the variation to the 2013 Agreement and why they voted to approve the Agreement. I reject this submission. I am unable to determine that employees supported the Agreement for this reason. I consider it equally likely that employees would consider it contrary to their interests to undermine going rates in the industry given that at some time in the future they might be looking for work with a different employer. I do not consider that the desire of the employer to avoid further collective bargaining and future industrial action which is legitimately available under the Act to be a reason to conclude that the Agreement must have authenticity. Of course there is nothing in the Act which prevents employers from having this motivation for reaching a collective agreement or makes such an employer motivation illegitimate. However, in the absence of credible evidence there is no basis for ascribing this motivation to employees.

[14] In considering whether or not the Agreement has moral authority or authenticity I have considered the following:

• Employees who voted on the Agreement were engaged in all the relevant classifications of the Agreement.



• Employees have been engaged under the relevant conditions for a number of years because the conditions, with some minor variations, are those which applied in the predecessor 2013 Agreement. The employees who voted were not a small number of employees engaged in peripheral or preparatory work but rather they were a significant number of employees who had been engaged in the core work covered by the Agreement for a reasonable period of time.



• The Agreement offers some significant wages and conditions which are superior to those which apply under the Award. In particular the even time roster and the 50% leave provisions are a significant benefit when compared to the Award. The Agreement provides for 182 days free of duty each year whilst the Award provides for 168 days leave per year. The minimum rates of pay are also greater than the Award rates of pay notwithstanding the reduced days of duty.



• Employees are engaged under the conditions of the Agreement. That is the Agreement conditions make a difference to employees. The Agreement protects and makes enforceable the significant over award rates and allowances which are set out in the Staff Policy and Procedure Handbook which is incorporated into the Agreement. These are the actual wages and conditions which apply to the current employees.



• It is possible that employees in the future might be engaged at a different port where the Staff Policy and Procedure Handbook would not apply and where the minimum rates in the Agreement would be relevant. Those minimum rates would provide a protection to employees which is better than the Award.



• The Agreement only relates to one type of work and the scope of one Modern Award. Employees could therefore be expected to have some concern and some regard for the conditions under which they and other employees might be engaged in the future. That is even though the minimum rates do not apply to the current employees at the present time the current employees would have some interest in what might be paid to them and to other employees doing similar work in the future.



• I am satisfied from the evidence of Ms Pavez that the Agreement and its effect were properly explained to employees including the circumstances in which the Handbook applied and the circumstances in which the minimum rates may apply.

[15] For these reasons I do not accept the submissions of the MUA and AIMPE that the Agreement lacks moral authority or authenticity. I am therefore satisfied that “there are no other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees”. (Section 188(c) of the Act)

[16] Therefore, I am satisfied that there has been genuine agreement because there are no other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees and because I am satisfied that the Applicant took all reasonable steps to ensure that the terms of the Agreement and the effect of those terms were explained to the relevant employees and that the explanation was provided in an appropriate manner.

Conclusion

[17] The application will therefore be approved. The Applicant has provided written undertakings. A copy of the undertakings is attached in Annexure A. I am satisfied that the undertakings will not cause financial detriment to any employee covered by the Agreement and that the undertakings will not result in substantial changes to the Agreement.

[18] Subject to the undertakings referred to above, 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.

[19] After the conclusion of the hearing of this matter the AMOU provided a Form F18 to Fair Work Commission, the company and the other bargaining representatives. I have checked the membership list provided by the AMOU and concluded that the AMOU is also entitled to be covered by the Agreement. The AMOU confirmed that they did not wish to make any other submissions but relied on the submissions of AIMPE and the MUA.

[20] The Maritime Union of Australia, The Australian Institute of Marine and Power Engineers and The Australian Maritime Officers’ Union have given notice under s.183 of the Act that they want the Agreement to cover them. In accordance with s.201(2) of the Act I note that the Agreement covers the three organisations.

[21] The Agreement is approved and, in accordance with Section 54 of the Act, will operate from 24 May 2017. The nominal expiry date of the Agreement is 17 May 2021.

COMMISSIONER

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<Price code C, AE424359  PR592960>

ANNEXURE A