Sea Swift Pty Ltd
[2019] FWC 2032
•3 APRIL 2019
| [2019] FWC 2032 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.185 - Application for approval of a single-enterprise agreement
Sea Swift Pty Ltd
(AG2018/5309)
DEPUTY PRESIDENT ASBURY | BRISBANE, 3 APRIL 2019 |
Application for approval of the Sea Swift Pty Ltd Employee Enterprise Agreement.
OVERVIEW
[1] This Decision concerns an application by Sea Swift Pty Ltd under s. 185 of the Fair Work Act 2009 (the Act) for the approval of an enterprise agreement known as the Sea Swift Pty Ltd Employee Enterprise Agreement (the 2018 Agreement). The Form F16 Application for approval states that the following employee organisations were involved in the process of making the Agreement as bargaining representatives:
• Australian Maritime Officers Union (AMOU);
• Australian Institute of Marine and Power Engineers (AIMPE);
• Construction, Forestry, Maritime, Mining and Energy Union, Maritime Union of Australia Division (CFMMEU);
• Transport Workers Union (TWU)
• Australian Workers’ Union (AWU) (collectively the Unions).
[2] The AMOU, AWU and AIMPE have each filed a Form 18 Declaration supporting the approval of the 2018 Agreement. Correspondence was also received from the TWU stating it was not in fact a bargaining representative nor did it assert that it was entitled to be one. On that basis the TWU did not intend to be covered by the 2018 Agreement. The CFMMEU opposes the approval of the 2018 Agreement on the basis of the assertion that it does not pass the Better Off Overall Test (BOOT) when compared to a relevant reference instrument, the Seagoing Industry Award 2010 (the Seagoing Award).
[3] The Commission raised a number of concerns with terms of the 2018 Agreement relating to a range of provisions. Sea Swift has responded to the Commission’s concerns and proposed undertakings which in my provisional view will address the majority of those concerns. The issue pressed by the CFMMEU is that the 2018 Agreement does not prescribe allowances for handling/securing cargo which are provided for in the Seagoing Award. Sea Swift asserts that the handling/securing cargo allowances are not applicable to employees under the 2018 Agreement on the basis that they utilise load shifting or other mechanical devices or means to handle cargo. The CFMMEU maintains that the relevant allowances apply notwithstanding that devices or other mechanical means are used to handle cargo.
[4] In written submissions filed before the hearing on 8 March 2019, Sea Swift contended that if its position with respect to the application of cargo handling allowances is correct, that the 2018 Agreement passes the BOOT. In oral submissions at that hearing Sea Swift stated that if the Commission accepts the CFMMEU’s argument that the cargo handling allowances apply notwithstanding that employees are using mechanical devices, the 2018 Agreement will not pass the BOOT. Sea Swift further stated that it will not agree to provide an undertaking to increase rates for Marine Employees under the 2018 Agreement to the extent that would be necessary to offset the non-payment of cargo handling allowances.
BACKGROUND
[5] Sea Swift and the Unions have been bargaining since 2015 for a replacement agreement for the Sea Swift Collective Agreement 2009 (the 2009 Agreement) which reached its nominal expiry date 2015. The application of the Seagoing Award to the operations of Sea Swift for the purposes of the BOOT was in issue in earlier proceedings before Commissioner Simpson who considered an application for approval of an agreement made in 2015 also known as the Sea Swift Pty Ltd Employee Enterprise Agreement (the 2015 Agreement). One of the issues considered by Commissioner Simpson in the proceedings relating to the application for approval of the 2015 Agreement was whether the relevant award for the purposes of the BOOT was the Seagoing Award or the Ports, Harbours and Enclosed Water Vessels Award 2010 (the Ports and Harbours Award).1 In a decision issued on 30 October 2015, Commissioner Simpson found that the Ports and Harbours Award was the relevant award for BOOT purposes, in relation to employees in Sea Swift’s marine operations.
[6] That Decision was the subject of appeals by the CFMMEU (then known as the MUA), the AMOU and the AIMPE. On appeal a Full Bench of the Commission in a Decision issued on 8 February 2016, determined that the Seagoing Award applies to Sea Swift’s marine operations, described as the transport and distribution of freight and supplies to destinations in Far North Queensland, Cape York Peninsula, the Gulf of Carpentaria, Torres Strait Island communities, Gove, Groote Eylandt and Arnhem Land coastal communities. The Full Bench remitted the matter to Commissioner Simpson to consider whether the 2015 Agreement should be approved.2 Prior to the determination of this matter Sea Swift withdrew the application for approval of the 2015 Agreement.
[7] The matter of an enterprise agreement for Sea Swift was again before the Commission when I dealt with an application by the AIMPE made on 6 July 2018 seeking that the Commission deal with a bargaining dispute in relation to negotiations with Sea Swift for the 2018 Agreement. The matter in dispute was that the 2018 Agreement had been negotiated and distributed to bargaining representatives for consideration and that Sea Swift had refused to put the 2018 Agreement to a ballot of employees. Sea Swift expressed concerns that the 2018 Agreement would not pass the BOOT for all classifications when compared to the Seagoing Award and sought to defer the ballot on the basis that the outcome of the 4 yearly review of that Award may assist in resolution of those concerns by clarifying the competing coverage of various awards and establishing award provisions better suited to the operations of Sea Swift. A conciliation conference was held on 9 August 2018 in relation to the dispute. The CFMMEU, the TWU and the AMOU also sought to participate in the conference. All Unions including the CFMMEU pressed the position that Sea Swift should put the 2018 Agreement to a ballot of employees and maintained that the Agreement would pass the BOOT.
[8] On 10 August 2018 Sea Swift’s representative wrote to the Commission advising that based upon the endorsement of the 2018 Agreement by the Unions and the submissions of the CFMMEU and AIMPE at the conciliation conference on 9 August 2018 to the effect that the Agreement would pass the BOOT, Sea Swift was prepared to proceed to a ballot of employees. On that basis the bargaining dispute was resolved and the file was closed. The ballot was conducted and the 2018 Agreement was approved by a majority of employees. The CFMMEU now opposes the approval of the 2018 Agreement and contends that it does not pass the BOOT. Sea Swift takes issue with the departure of the CFMMEU from its previous position and contends that that had it been aware that the CFMMEU would change position the Company would not have put the Agreement to a ballot of employees.
[9] Sea Swift has also raised issues with the 4 yearly review of a number of awards including the Seagoing Award, the Ports and Harbours Award and the Marine Towage Award 2010 (the Maritime Awards). Sea Swift has been a participant in proceedings before Full Benches of the Commission which have dealt with the 4 yearly review of the Maritime Awards. A Decision of a Full Bench in the 4 yearly review of those Awards was issued on 24 February 2017.3 In that Decision the Full Bench dealt with substantive issues including matters raised by Sea Swift.
[10] The matters raised by Sea Swift in the review were proposed amendments to the Maritime Awards to deal with a purported anomaly arising from an overlap in their coverage clauses. The intent of the variations sought by Sea Swift was to achieve a position whereby each of the Maritime Awards applied to particular operations rather than as determined by the Full Bench in the proceedings in relation to the 2015 Agreement – ie. that the Seagoing Award applied to all of Sea Swift’s maritime operations on the basis that the predominant part of those operations was covered by that Award. Sea Swift also sought to include a Schedule for small ships in the Seagoing Award based on a pre-modern award known as the Self Propelled Barge and Small Ships Industry Award. By majority decision a Full Bench of the Commission refused to vary the Seagoing Award in terms sought by Sea Swift. Sea Swift has also made submissions in relation to a proposal in the 4 yearly review to amalgamate the Maritime Awards seeking what it refers to as a “partitioning” so that separate awards provisions apply to each part of its operations. Those proceedings are ongoing.
[11] I accept that Sea Swift may have legitimate grounds to be aggrieved at an apparent change of position on the part of the CFMMEU. However, I am required to be satisfied that the 2018 Agreement passes the BOOT and it is therefore necessary to consider whether the cargo handling allowance in the Seagoing Award applies in circumstances where employees are using a load shifting or mechanical device to handle cargo. The answer to this question depends on the proper construction of the relevant provisions of the Seagoing Award.
[12] I must also consider this matter in light of the current provisions of the Seagoing Award and not on the basis of an outcome that Sea Swift may be seeking in the 4 yearly review of that Award. The BOOT is conducted at the test time (the time that application for approval of the Agreement was made) as defined in s 193(6) of the Act. Accordingly I do not accept that any outstanding issues in relation to the 4 yearly review are a relevant consideration in determining whether the Agreement should be approved. Further, I am bound by a Decision of a Full Bench of the Commission which found that Sea Swift’s marine operations are covered by the Seagoing Award and that this Award is the reference instrument for the purposes of applying the BOOT to the Agreement.
[13] I conducted a hearing into the application for approval of the 2018 Agreement on 19 December 2018. On 24 January 2019 I caused my Associate to correspond with the parties via email to inform them that I had obtained from the Commission’s Award Modernisation Team additional historical material in relation to the cargo handling allowances in earlier versions of the Award and that based on that material I had formed a provisional view that the allowances apply notwithstanding that employees may be using load shifting or mechanical devices to handle cargo. That material was provided to the parties and they were requested to advise whether they wished to be heard further in relation to this issue.
[14] Sea Swift and the CFMMEU filed further written submissions and the Company indicated that it wished to be heard further. The matter was listed for hearing on Friday 8 March 2018. At that hearing the parties made oral submissions to supplement their written submissions. I have considered all matters raised by the parties. I turn now to consider the application of the cargo handling allowances in clause 14.2 of the Seagoing Award.
APPROACH TO CONSTRUCTION OF INDUSTRIAL INSTRUMENTS
[15] The approach to the construction of industrial instruments such as enterprise agreements was most recently summarised in a Decision of a Full Bench of the Commission in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) v Berri Pty Ltd4 (Berri). That approach can be extrapolated for the purposes of interpreting awards. The relevant principles as set out by the Full Bench in Berri are as follows:
“1. The construction of an enterprise agreement, like that of a statute or contract, begins with a consideration of the ordinary meaning of the relevant words. The resolution of a disputed construction of an agreement will turn on the language of the agreement having regard to its context and purpose. Context might appear from:
(i) the text of the agreement viewed as a whole;
(ii) the disputed provision’s place and arrangement in the agreement;
(iii) the legislative context under which the agreement was made and in which it operates.
2. The task of interpreting an agreement does not involve rewriting the agreement to achieve what might be regarded as a fair or just outcome. The task is always one of interpreting the agreement produced by parties.
3. The common intention of the parties is sought to be identified objectively, that is by reference to that which a reasonable person would understand by the language the parties have used to express their agreement, without regard to the subjective intentions or expectations of the parties.
4. The fact that the instrument being construed is an enterprise agreement made pursuant to Part 2-4 of the FW Act is itself an important contextual consideration. It may be inferred that such agreements are intended to establish binding obligations.
5. The FW Act does not speak in terms of the ‘parties’ to enterprise agreements made pursuant to Part 2-4 agreements, rather it refers to the persons and organisations who are ‘covered by’ such agreements. Relevantly s.172(2)(a) provides that an employer may make an enterprise agreement ‘with the employees who are employed at the time the agreement is made and who will be covered by the agreement’. Section 182(1) provides that an agreement is ‘made’ if the employees to be covered by the agreement ‘have been asked to approve the agreement and a majority of those employees who cast a valid vote approve the agreement’. This is so because an enterprise agreement is ‘made’ when a majority of the employees asked to approve the agreement cast a valid vote to approve the agreement.
6. Enterprise agreements are not instruments to which the Acts Interpretation Act 1901 (Cth) applies, however the modes of textual analysis developed in the general law may assist in the interpretation of enterprise agreements. An overly technical approach to interpretation should be avoided and consequently some general principles of statutory construction may have less force in the context of construing an enterprise agreement.
7. In construing an enterprise agreement it is first necessary to determine whether an agreement has a plain meaning or it is ambiguous or susceptible of more than one meaning.
8. Regard may be had to evidence of surrounding circumstances to assist in determining whether an ambiguity exists.
9. If the agreement has a plain meaning, evidence of the surrounding circumstances will not be admitted to contradict the plain language of the agreement.
10. If the language of the agreement is ambiguous or susceptible of more than one meaning then evidence of the surrounding circumstance will be admissible to aide the interpretation of the agreement.
11. The admissibility of evidence of the surrounding circumstances is limited to evidence tending to establish objective background facts which were known to both parties which inform the subject matter of the agreement. Evidence of such objective facts is to be distinguished from evidence of the subjective intentions of the parties, such as statements and actions of the parties which are reflective of their actual intentions and expectations.
12. Evidence of objective background facts will include:
(i) evidence of prior negotiations to the extent that the negotiations tend to establish objective background facts known to all parties and the subject matter of the agreement;
(ii) notorious facts of which knowledge is to be presumed; and
(iii) evidence of matters in common contemplation and constituting a common assumption.
13. The diversity of interests involved in the negotiation and making of enterprise agreements (see point 4 above) warrants the adoption of a cautious approach to the admission and reliance upon the evidence of prior negotiations and the positions advanced during the negotiation process. Evidence as to what the employees covered by the agreement were told (either during the course of the negotiations or pursuant to s.180(5) of the FW Act) may be of more assistance than evidence of the bargaining positions taken by the employer or a bargaining representative during the negotiation of the agreement.
14. Admissible extrinsic material may be used to aid the interpretation of a provision in an enterprise agreement with a disputed meaning, but it cannot be used to disregard or rewrite the provision in order to give effect to an externally derived conception of what the parties’ intention or purpose was.
15. In the industrial context it has been accepted that, in some circumstances, subsequent conduct may be relevant to the interpretation of an industrial instrument. But such post-agreement conduct must be such as to show that there has been a meeting of minds, a consensus. Post-agreement conduct which amounts to little more than the absence of a complaint or common inadvertence is insufficient to establish a common understanding.”
[16] In CFMEU v Endeavour Coal Pty Ltd T/A Appin Mine5 the Full Bench of the Commission held that the context of an agreement provision is significant. In this regard, the Full Bench set out the explanation of this point by the NSW Court of Appeal in Mainteck Services Pty Ltd v Stein Heurtey SA6 emphasising the following matters:
• Until a word or phrase is understood in the light of the surrounding circumstances, it is rarely possible to know what it means7 and there is always some context to any statement;8
• Language considered in its context will often have a clear meaning and context will often not displace that meaning – “but not always”;9
• To state that a legal text is clear reflects the outcome of an interpretation process and means that there is nothing in the context that detracts from the ordinary literal meaning and cannot mean that context can be put to one side;10
• The phrase used by Mason J in Codelfa “if the language is ambiguous or susceptible of more than one meaning” does not mean that the susceptibility of the language to more than one meaning must be assessed without reference to the surrounding circumstances and in order to determine whether more than one meaning is available it may be necessary to turn to context;11 and
• Context has also been described as surrounding circumstances and the meaning of terms normally requires consideration not only of the text, but of the surrounding circumstances known to the parties and the purpose and object of the transaction12
[17] The case law in relation to the approach to the construction of enterprise agreements makes it clear that context and purpose are relevant to the construction of provisions in an enterprise agreement and must be considered even where the words of the provision being construed appear, on their face, to have a clear and unambiguous meaning. The observations of Madgwick J in Kucks v CSR in relation to the construction of awards are also apposite in the present case:
“It is trite that narrow or pedantic approaches to the interpretation of an award are misplaced. The search is for the meaning intended by the framer(s) of the document, bearing in mind that such framer(s) were likely of a practical bent of mind: they may well have been more concerned with expressing an intention in ways likely to have been understood in the context of the relevant industry and industrial relations environment than with legal niceties or jargon. Thus, for example, it is justifiable to read the award to give effect to its evident purposes, having regard to such context, despite mere inconsistencies or infelicities of expression which might tend to some other reading. And meanings which avoid inconvenience or injustice may reasonably be strained for. For reasons such as these, expressions which have been held in the case of other instruments to have been used to mean particular things may sensibly and properly be held to mean something else in the document at hand.
But the task remains one of interpreting a document produced by another or others. A court is not free to give effect to some anteriorly derived notion of what would be fair or just, regardless of what has been written into the award. Deciding what an existing award means is a process quite different from deciding, as an arbitral body does, what might fairly be put into an award. So, for example, ordinary or well-understood words are in general to be accorded their ordinary or usual meaning.”13
[18] It may be that the provisions of modern awards are subject to greater scrutiny and consideration by the Commission than in the past, given the extensive processes that awards have undergone including restructuring, simplification, modernisation and review. However, there continue to be provisions in awards which have a long established context and meaning and which are transplanted from earlier versions of the award or from earlier awards which have been subsumed by the modern award. It may be that the transplantation process is only partial and that some of the other provisions from the original award are not transplanted. This may remove some of the context in which the provision previously operated or some definitional clause that gave meaning to that provision. As Burchett J eloquently observed in Short v Hercus:14
“The context of an expression may thus be much more than the words that are its immediate neighbours. Context may extend to the entire document of which it is a part, or to other documents with which there is an association. Context may also include, in some cases, ideas that gave rise to an expression in a document from which it has been taken. When the expression was transplanted it may have brought with it some of the soil in which it once grew, retaining a special strength and colour in its new environment. There is no inherent necessity to read it as uprooted and stripped of every trace of its former significance, standing bare in alien ground. True, sometimes it does stand as if alone. But that should not be just assumed, in the case of an expression with a known source, without looking at its creation, understanding its original meaning, and then seeing how it is now used.”15
RELEVANT PROVISIONS OF THE SEAGOING AWARD
[19] Clause 14.2 of the Seagoing Award provides as follows:
14.2 Handling/securing cargo allowances
An employee who is required to perform manual work involving handling cargo in port will be paid an allowance of:
1.17% of the standard rate per hour between 7.00 am and 5.00 pm, unless the work is done outside the employee’s watch on duty if watches are being kept;
subject to clause 0, 1.49% of the standard rate per hour at any other time, or if the work is done outside the employee’s watch on duty, if watches are being kept, or on Saturdays, Sundays or public holidays;
1.17% of the standard rate per hour if the cargo is mail, passengers’ luggage or passengers’ motor cars; or
1.87% of the standard rate per hour between 11.00 pm and 7.00 am (1.54% of the standard rate per hour if the cargo is mail, passengers’ luggage or passengers’ motor cars), in the following circumstances:
after 11.00 pm on any day such work has already extended for at least four hours at 11.00 pm;
after such work has extended for four hours ending at any time between 11.00 pm and 7.00 am or the commencement of ordinary duty on the following day; or
where watches are being kept, for work off watch after 11.00 pm where four hours’ work has already been performed off watch.
In the case of cargo work, consisting of the securing or lashing of cargo, the following rates will be substituted for the rates contained in clause 0:
0.41% for 1.17%;
0.48% for 1.49%;
0.41% for 1.17%; and
0.57% for 1.87% (or 0.49% for 1.54%).
[20] There is a definition of the term “cargo” in clause 3 of the Seagoing Award in the following terms:
“3.1 In this award, unless the contrary intention appears:
…
cargo includes all freight carried in a ship but does not include bunker fuel and other articles carried for the vessel’s use.”
[21] As previously noted the question for determination is whether the allowances apply to employees who are handling cargo using a mechanical device such as a crane or a forklift. In order to answer this question it is necessary to interpret the Seagoing Award and in particular to determine the basis upon which the allowances for cargo handling in that Award are payable.
SUBMISSIONS
Sea Swift
[22] Sea Swift submits that clause 14.2 of the Seagoing Award provides two circumstances in which employees would be entitled to receive a cargo allowance: where required to perform manual work involving cargo in port (clause 14.2(a)) and the securing or lashing of cargo (clause 14.2(b)). The basis upon which Sea Swift contends that the cargo handling allowance in clause 14.2 of the Award does not apply to the majority of work performed by employees covered by the 2018 Agreement (as set out in the Company’s written submissions) is that:
“…the circumstances in which Marine Employees perform cargo work is limited because:
(a) The preparation of cargo is generally undertaken by Shoreside Employees;
(b) The transfer of wrapped pallets and containers is not undertaken manually but by use of mechanised handling equipment; and
(c) The securing of cargo on vessels is by way of latching pallets and containers to vessels.”
[23] This proposition was reiterated in the supplementary submission made by Sea Swift which also contended that the allowance is an additional sum paid to employees whose principal remuneration is elsewhere provided during the period that employees are required to perform a particular type of work while the vessel is in port. Given that the employees concerned (unlike stevedoring employees) are otherwise paid for shipboard duties that do not involve loading and unloading vessels in port, the payment appears to arise as compensation for additional manual work. Sea Swift also contended that to accept the submission of the CFMMEU would be to accept that the physical carrying of manual cargo items or the lifting and carrying of break bulk cargo attracts the same payment under the Seagoing Award as sitting in a crane or forklift cab and operating machinery to perform the actual lifting and carrying of the cargo. It is submitted that this outcome is improbable.
[24] In relation to the historical material to which the Commission directed the attention of the parties, Sea Swift submits that the 1922 and 1937 Awards refer to “handling cargo and/or coal” in an era when physical carrying was a feature; from 1922 to 1989 the Awards distinguished “actual handling” operations from assisting in those operations; and in the 1989 and 1999 Awards the wording changed to the same wording as is currently found in the Seagoing Award. Sea Swift contends that the wording of the current clause insofar as it refers to “manual work involving handling cargo” correlates to the earlier wording in relation to actually handling cargo in an era where such activities (other than handling mail, luggage or customer’s cars) was relatively rare. These items are also of a kind which must be personally or physically handled and this informs the reference in the Seagoing Award to manual work involving handling cargo in port. Sea Swift further contends that the failure to expand the concept of handling cargo to those employees not actually doing this work indicates that groups of employees actually handling cargo were no longer a feature of the industry and there was therefore no reason to include the assistants or supervisors of such a group within the terms of the allowance.
[25] Sea Swift also points to the use of the term “manual” and submits that it must be given some meaning in the context in which it appears in the Seagoing Award and that the meaning to be given to the term is not be contrasted with “mental” work and does not include mechanical handling of cargo. In this context, “manual work involving handling cargo in port” is to be interpreted as the modern emanation of the original expression “actual handling of cargo”.
[26] In its initial written submissions Sea Swift contended that on the basis of its position with respect to the application of the cargo handling allowance and the minimal amount of time that would be spent on this work by marine employees, Sea Swift contended that the benefits provided under the Agreement, in particular the additional week of leave under clause 4.1.6, is sufficient to offset the detriment caused by the non-inclusion of the cargo handling allowance and that employees are better off overall.
CFMMEU
[27] In its initial submissions in opposition to the approval of the 2018 Agreement the CFMMEU referred to what it described as a long recognised distinction between “manual work” and “manual labour” based on the purpose of the work being primarily physical rather than intellectual, and not on whether work is undertaken with or without the use of mechanical aids. According to the CFMMEU submission, tasks involving tools have been considered to be manual work even if the overall job was not reliant on physical activity so as to amount to “manual labour”. In support of this proposition the CFMMEU referred to the High Court Decision in The Australian Insurance Staffs’ Federation and Others v The Accident Underwriters’ Association and Others, and in particular a discussion in the joint judgement of Isaacs and Rich JJ in relation to earlier judgements distinguishing the terms “manual work” and “manual labour”.16The CFMMEU asserts that on this basis, an employee using a mechanical aid to shift a load is nonetheless performing manual work.
[28] The CFMMEU also submitted that the clause in the Seagoing Award was taken directly from its predecessor and replicated by a Full Bench in the award modernisation case. If the phrase “manual work” was the product of a by-gone era and limited to cargo moved without the aid of mechanical devices it would have been “next to irrelevant” and required to be the subject of review by the Commission in that case. The fact that it was not reviewed indicates that all parties understood – as did the Commission – that the allowance was not limited to employees carrying sacks of grain on their backs but reflected modern cargo handling techniques. Further, the CFMMEU submitted that the clause compensates employees for undertaking stevedoring work loading and unloading vessels and it is well established that such work is not limited to a pre-mechanised era but involves skills necessary to drive or operate machinery used in loading or unloading operations.17 The CFMMEU also pointed to OH&S law and its clear recognition that the use of mechanical devices is part and parcel of manual work.
[29] The fact that clause 14.2 of the Seagoing Award refers to the allowance being payable for loading and unloading passenger’s cars which can only be achieved by driving them on and off the vessel and requires no mechanical assistance or heavy labour, further indicates that the allowance is not limited in the manner asserted by Sea Swift. In relation to latching pallets, Sea Swift has not identified what type of securing and lashing is covered by the allowance and does not explain why securing by way of latching containers to the deck of the vessel is not covered.
[30] In its supplementary submissions the CFMMEU contends that there is no evidence before the Commission as to the involvement of seafarers in handling cargo or in relation to what mechanical devices were in use at that time. There is also no evidence to support the assertion by Sea Swift that the cargo handling allowance was introduced to compensate for onerous manual cargo work or in relation to the mechanical devices which were used, other than the words of the awards. Further there is no evidence to support the assertion made by Sea Swift that by 1989 the era of actually handling cargo had passed or that this was the reason for the change of wording in the relevant award. The CFMMEU submits that the only materials the Commission can rely on are the words of the awards which indicate that the allowance was introduced for crews “working cargo” with no indication of the type of work that was included or excluded and there is no suggestion that this term was limited to crew picking up cargo with their bare hands, particularly given the identification of winches and steam driven devices in the provisions setting out the allowance.
[31] The CFMMEU also contends that the cargo handling allowances were introduced for the explicit purpose of removing the financial incentive for employers to use the ship’s crew rather than waterside workers, so as to avoid industrial unrest.18 There was no purpose for the allowance linked to the work being “onerous manual cargo work” as contended by Sea Swift. Further the CFMMEU points to the fact that the term “handling cargo” has included actual handling as well as the use of mechanical devices since 1922. The term “actual handling” has not been defined and must take on its normal meaning of the process of packing, moving, carrying or transporting something. According to the CFMMEU the introduction of the term manual work had no connection with the 1989 or 1999 awards but was introduced in conjunction with changes in the Award in 1973 in order to identify the work involved in “loading, discharging or handling cargo” that an officer was entitled to refuse to undertake.
[32] Accordingly, the term “manual work” was not connected to the notion of handling cargo as it applied to other employees – able bodied seamen now classified as deckhands or integrated ratings – which the CFMMEU’s submission in the current case is concerned with. The CFMMEU also contends that the category of work an officer could not be directed to undertake, although labelled “manual work”, included actual handling and the use of mechanical devices as well as supervision of the cargo handling process. Seen in this light, the use of the word “manual” was used to justify why an officer was entitled to refuse to undertake such work and when that right was removed in 1989, there was no intention to impose any other change in the application of the clause. The history of the provision reinforces the conclusions advanced by the CFMMEU in its initial submission.
CONSIDERATION
Application of cargo handling allowances
[33] As previously noted, the application of the cargo handling allowances in clause 14.2 of the Seagoing Award depends on a proper construction of that Award. The starting point for the construction of an Award provision is to consider the words of the relevant provision in order to determine whether they have a plain meaning. The focus of submissions in the present case was on the first paragraph of clause 14.2(a) of the Seagoing Award which provides that the allowances set out in the clause are payable to employees required to perform “manual work involving handling cargo”. The Award defines “cargo” but does not define “manual work”. The dictionary definition of the term “manual” is “of or done with the hands (manual labour)”. 19 The term “labour” is also defined to include physical or mental work although other aspects of that definition suggest that the work is more physical and involves toil and exertion. The term “work” when used as a noun, means “the application of mental or physical effort to a purpose.” The definition of the term “handling” includes touching, feeling, moving or operating with the hands. 20
[34] There is nothing in the ordinary use of the terms “manual”, “work” and “handling”, either separately or in conjunction, precluding a person undertaking manual work involving handling of cargo from using a mechanical device or implement to assist in the performance of that work. As a matter of common sense, it could not be suggested that a person using a shovel to dig a hole would not be engaged in manual work notwithstanding that the same work could also be described as manual labour. If the shovel was replaced with a backhoe or other mechanical device it would not follow that the person would no longer be performing manual work albeit that the level of exertion may mean that the person is no longer performing manual labour.
[35] Further, the term “handling” as it appears in the clause is separated from the term “manual work” and relates to the term “cargo”. The clause does not state that it applies to employees performing manual handling of cargo but rather “manual work involving the handling of cargo”. This does not preclude the handling being undertaken with a mechanical device. The use of the term “involving” before the term “handling cargo” has the effect of broadening the operation of the provision and emphases that activities within the scope of the provision are broader than an employee physically moving the cargo with his or her hands. Accordingly the provision has a plain meaning. However that is not the end of the matter.
[36] I turn now to consider whether there is any contextual matter to contradict the apparently plain meaning of the provision or otherwise aid in its construction. Clauses 14.2(a)(iii) and (iv) contain a specific provision and allowances “if the cargo is mail, passengers’ luggage or passenger’s motor cars”. It is common ground between the parties that the handling of passenger’s motor cars involves employees driving them on or off a vessel. By implication, the clause provides that such work comes within the term “manual work involving the handling of cargo” notwithstanding that the employee is not lifting or moving the cargo by hand, but rather is using the mechanics of the actual cargo – the car’s engine – to move it. This implication can be drawn from the fact that the words in clauses 14.2(a)(iii) and (iv) do not indicate that the handling of passenger’s motor cars is an additional matter that would otherwise not be encompassed by the phrase “perform manual work involving handling cargo”. Rather, clauses 14.2(a)(iii) and (iv) have the effect of including passenger’s motor cars in the definition of cargo and read in conjunction with the first paragraph of clause 14.2, by driving a car on or off a vessel, employees are performing manual work involving handling cargo.
[37] The same can be said in relation to passengers’ luggage. There is no indication that if passengers’ luggage is moved with a mechanical device that the allowances in clauses 14.2(a)(iii) and (iv) do not apply. Clauses 14.2(a)(iii) and (iv) are a contextual indication that the entitlement of employees to be paid the allowances in clause 14.2 as a whole is not dependent on employees being required to physically lift or handle cargo without the aid of a mechanical device.
[38] I do not accept as submitted by Sea Swift, that clause 14.4(2)(b) assists the Company’s argument. That clause does not require that cargo be lashed in the traditional manner. Rather it refers to “securing or lashing cargo”. Securing cargo may include latching it to the deck of a vessel and I can see no basis for finding that an employee operating a latching system on the deck of a vessel to secure cargo is not performing manual work involving handling that cargo. The definition of cargo is also not limited to non-containerised cargo or cargo described by Sea Swift as break bulk cargo. It would be highly unlikely that employees of Sea Swift would be using their bare hands and no mechanical device to shift containerised or bulk cargo. If the allowances in clause 14.2 were intended to apply to cargo other than bulk or containerised cargo, the drafters of the Seagoing Award (including in earlier iterations of the Award) would have made this clear.
[39] I am also of the view that the context of the relevant provision of the Seagoing Award includes its historical context and the development of the provision through earlier iterations of the Award. A document prepared by the Award Modernisation Team setting out a range of clauses from earlier versions of the Seagoing Award containing the information set out below (or reference to that information) was provided to the parties when I indicated my provisional views about the operation of cargo handling allowances, to enable them to make submissions on this matter. I turn now to consider the material identified by the Award Modernisation Team in light of the responses by the parties to that material.
[40] The earliest reference to cargo handling identified by the Award Modernisation Team is found in an award made in 1911 by the President of the Commonwealth Court of Conciliation and Arbitration, the Honourable Justice Higgins in Federated Seaman’s Union of Australia v The Commonwealth Steamship Owners’ Association and Others21. Under the heading “Overtime” the Award prescribed payments for all labour over the hours of labour. The overtime payments for a seaman “engaged in working cargo” are higher than the general overtime payment. In the judgement preliminary to the making of the Award his Honour said:
“The overtime rates I fix at 1s. 3d. per hour, but for working cargo 1s. 6d. In several ports on the coast of Queensland and Western Australia particularly, there is little or no wharf labour to be had, and the seamen do not object to doing the work, though they do not wish for it. The claim is for the current overtime rates paid at the respective ports to wharf labourers, but not less than 1s. 6.d per hour. …Of course the object of the claim is to take away from the employer any inducement to make the seaman work where there is wharf labour to be had; but I do not think that this is a fit remedy. It might possibly be a fair thing to direct that seamen should not be ordered to work cargo where wharf labour is to be had; but as I understand the High Court decisions, I am precluded from dealing with such a mode of settling the dispute.”
[41] Under the heading “Geographical Limits of the Port” his Honour observed that:
“It has been the custom on many ships entering the geographical limits of a port … to get all hands on deck, including those men taking a sleep after their watch; and these men get no overtime payments for their lost leisure. The men unbatten the hatches, take of tarpaulins, rig the derricks and the gear to discharge cargo, get the baggage and any mails on deck; and when they are near the wharf, they get the mooring lines out…I except from overtime payments the mooring and unmooring of the ship but not the getting out of luggage &c…”. (emphasis added)
[42] In 1922, an Award was made by the Honourable Justice Powers, President of the Commonwealth Court of Conciliation and Arbitration contained the following provision:
“Working Cargo in Port
15.(a) Seamen engaged in handling cargo and/or coal in port between the hours of 7 a.m. and 5 p.m. shall be entitled to such additional payment as will represent the difference between a day’s sea pay plus the victualling allowance, which, for the purpose of this clause, is fixed at 2s. 6d. per day and the minimum rate of pay to wharf labourers employed by them in the port in which the work is done.
(b) Handling cargo shall, for the purpose of this clause, be limited to the following:—Actual handling of cargo, driving winches, attending yardarms, shipping or unshipping hatches, fireman or donkeyman keeping steam for cargo, hatchmen and captains of holds.”22 (emphasis added)
[43] The term “donkeyman” refers to a donkey engine which was a steam-powered winch engine used to load or unload cargo, raise larger sails, or power pumps. In relation to this clause, his Honour observed that:
“A great deal of time was taken up in support of the claim and in opposition to the claim for wharf labourers’ rate for seamen working cargo in port. I have included in the general award clause 15(a) which provides for the equivalent to minimum rate paid to wharf labourers in any port being paid to seamen for the time they are actually engaged in handling cargo or coal in port between 7 a.m. and 5 p.m., where wharf labourers are available because it was contained in the offer of the Inter-State Steamship Owners Association and is the existing custom of the industry at the main ports the Inter-State boats call at.”23
[44] In 1935 the Award –Seamen was varied to provide:
“Working Cargo in Port.
19. (1) Employees shall not be required to handle cargo or to engage in bunkering operations in port if waterside workers are available present and will to do the work at the rates prevailing at the port for waterside workers.
(2) If waterside workers are not so available present and willing, employees may be required to handle cargo or engage in bunkering operations in port and shall be paid therefor an additional wage at the rate of 2s. per hour unless the work is done between 5 p.m. and 7.a.m or outside the employees’ watch on duty if watches are being kept or upon a Sunday or one of the holidays mentioned in clause 29 hereof in any of which cases the additional wage shall be at the rate of 2s. 6d. per hour for mails, passengers’ luggage or passengers’ motor cars and of 3s. 9.d per hour for other cargo.
(3) The work of captains of holds, of firemen or donkeymen in keeping steam for cargo, and of shipping or unshipping of hatches or beams, shall for the purposes of this award be deemed to be seamen’s work and not to be covered by the terms “handle cargo” or “bunkering operations” in this clause.24
[45] In his judgement prior to making the 1935 Award, Chief Justice Dethridge said in relation to this clause:
“The Union now claims to be relieved of this work altogether if waterside workers are available. Originally it claimed waterside workers casual rates per hour for its members doing the work although the latter are permanent employees. The employers say they only desire seamen to do the work in cases where no waterside workers are available. It is clear that in some cases employers cannot obtain waterside workers however they may try to do so, but in other cases they may fail to make reasonable preparations for obtaining such workers. The clause has been framed to meet the position by means of moderate penalty rates if seamen are required to do this class of work. These penalty rates may impose some hardship on employers at times, but appear to be necessary in order to stimulate efforts to obtain shore workers to handle cargo in port.
The clause also makes what I think is a reasonable limitation of the term “handling cargo”, &c. The work referred to in sub-clause (3) seems to be clearly for the seaman of the ship and not for waterside workers.”
[46] In 1937 the Seamen’s Award contained the following provision:
“13. (a) Seamen engaged in handling cargo and/or coal in port between the hours of 7 a.m. and 5 p.m. shall be entitled to such additional payment as will represent the difference between a day’s sea pay plus the victualling allowance which for the purpose of this clause is fixed at 2s. 9d. a day, and the minimum rate of pay to wharf labourers employed in the port in which the work is done.
(b) Handling cargo shall for the purpose of this clause be limited to the following:—Actual handling of cargo, driving winches, attending yardarms, shipping or unshipping hatches and beams, firemen or donkeymen keeping steam forcargo, hatchmen and captains of holds.
(c) For all labour in working cargo on Sundays or holidays when a vessel is actually in port, even within the hours of labour and whether the vessel arrives and leaves the port on the same day, the overtime rate shall be paid.
(d) No cargo gear, derricks or hatches shall be rigged up between dark and daylight prior to the arrival of a ship at an anchorage or a port, except for the purpose of preparing to deliver mails and passengers’ luggage.” (emphasis added)
[47] In 1948 the definition of “handling cargo” in the Seaman’s Award was amended to provide as follows:
“(3) Handling cargo shall for the purpose of this clause be limited to actual handling of cargo and, during such operations, the following—
(i) the driving of winches;
(ii) attending yard arms;
(iii) acting as hatchman or captain of hold.”25 (emphasis added)
[48] In relation to this amendment Commissioner Knight said:
“The Union’s claim in this matter in effect would result in members of the crew receiving special payments whether or not some of them were actually engaged in handling cargo.
I have decided to provide for increases in the present special rates for those of the crew who are required to take the place of waterside workers, but I am not satisfied on the evidence that I should award special rates for members of the crew doing purely seamen’s work, such as a fireman keeping steam for handling cargo etc.
In keeping with the above principle I have decided to extend the application of the special rates to the work of driving of winches, attending yard arms, acting as hatchmen and captain of holds, whilst cargo is being worked by seamen.”26 (emphasis added)
[49] At the same time as the cargo handling clause was being developed in the Awards covering Seamen, there were corresponding developments in Awards applying to the Merchant Service or Officers. Those provisions made clear that persons covered by Merchant Service Awards could not be required to perform “manual work” as to loading, discharging or handling cargo or coal or any duty other than that of a navigating officer or engineer (depending on the classification of the employee concerned).
[50] In 1952, the Award – Merchant Service included a provision in the following terms:
“MANUAL WORK
12. (a) No employee on a seagoing vessel shall be ordered or obliged by agreement or otherwise, except as is provided herein, to perform any manual work as to loading, discharging or handling cargo or coal or any duty other than that of a navigating officer (if he be a navigating officer) or of an engineer (if he be an engineer).
(b) On vessels engaged exclusively in the South Australian coastal trade when at ports where shore labour is unavailable, if the employee agrees to perform manual work as to handling cargo or coal, he shall be paid as follows:-
(i) Between 7 a.m. and 5 p.m. on days other than Sundays or holidays or during hours on watch if watches are being kept an additional payment per hour equal to the additional rate payable to seamen working cargo during such hours under the Seaman’s award.
(ii) Between 5 p.m. and 7 a.m. or outside the employee’s watch on duty if watches are being kept or on Sundays or holidays:-
For mails, passengers’ luggage or passengers’ motor cars- payment at his appropriate overtime rate.
For other cargo- payment at his appropriate overtime rate plus an amount calculated at the difference between the rate applicable to seamen under the said Seaman’s award for working cargo during such hours and the overtime rate otherwise payable to seamen for work during such hours.
For the purpose of this sub-clause “handling cargo” shall be limited to actual handling of cargo and, during such operations, the driving of winches, attending yard arms or acting as hatchmen or captains of hold.”27
[51] In 1973 the Awards for seamen and merchant service (and other maritime employees) were combined and the Maritime Industry Seagoing Award 1973 was made, which included the following provision:
“8. HANDLING CARGO RATES
Officers:
8(a)(i) No officer shall be ordered or obliged by agreement or otherwise, except as is provided herein, to perform any manual work as to loading discharging or handling cargo.
(ii) On vessels trading to ports where shore labour is unavailable or is available but in insufficient numbers, if the officer agrees to perform manual work as to handling cargo he shall be paid for any such work performed at a rate per hour equal to the rate payable to an able seaman for working cargo on the vessel.
(iii) For the purpose of this sub clause (a) ‘handling cargo’ shall be limited to actual handling of cargo and during such operations the driving of winches, attending yard arms or acting as hatchmen or captains of holds or performing the duties normally performed by a shore cargo supervisor.
Other employees:
(b)(i) The employer shall use all reasonable endeavours to secure the services of waterside workers for the purpose of handling cargo in port and employees shall not be required to do this work if waterside workers are available to do it at the rates prescribed at the port for waterside workers.
(ii) If waterside workers are not so available an employee may be required to handle cargo in port and in addition to the salary payable to him for the day under clause 6 thereof shall be paid therefor (except as to the work of securing cargo) at the rate of $1.50 per hour unless the work is done between 5 p.m. and 7 a.m. or outside of the employee’s watch on duty, if watches are being kept or upon a Saturday, Sunday or award holiday for waterside workers in any of which cases the employee shall be paid therefor at the rate of $1.50 per hour for mails, passengers’ luggage or passengers’ motor cars and $1.90 per hour for other cargo. Provided that the foregoing rates shall be increased to $1.99 per hour for mails, passengers’ luggage or passengers’ motor cars and $2.40 per hour for other cargo in the following circumstances-
(a) After 11 p.m. on any day if such work has already extended for at least four hours at 11 p.m.
(b) After such work has extended for four hours ending at any time between 11 p.m. and 7 a.m. or the commencement of ordinary duty on the following day.
(c) Where watched are being kept, for work off watch after 11 p.m. where four hours’ work has already been performed off watch.
Provided however that in the case of cargo work consisting of the securing of cargo, the following rates shall be substituted for those above-mentioned:
…
And provided further that notwithstanding anything contained in the foregoing the following hourly rates shall be paid for cargo work (other than securing of cargo which shall be paid at the rates abovementioned) at the ports set out hereunder-
…
(iv) For the purpose of this sub-clause (b) ‘handling cargo’ means and is limited to actual handling of cargo its stowage and securing and during such operations the driving of winches, attending yard arms or acting as captains of holds, but shall not include loading and discharge of molasses on vessels of CSR where those operations are carried out by means of mechanical pumps.”28
[52] The cargo handling allowance clause continued in essentially the same form in versions of the Maritime Industry Seagoing Award in 1977, 1979 and 1983.29 In 1989 the Maritime Industry Modern Ships Award was made by consent. The Maritime Industry Modern Ships Award applied in modern ships operated in accordance with recommendations of the Shipping Industry Reform Authority and as agreed between employers (who were named respondents) and the Unions party to the Award. The Maritime Industry Modern Ships Award contained the same provisions in relation to handling cargo rates as were contained in the Maritime Industry Seagoing Award. In 1998 as part of a Review of awards pursuant to Item 51 of Part 2 of the Workplace Relations and Other Legislation Amendment Act 1996,the Maritime Industry Modern Ships Award was amended and the Maritime Industry Seagoing Award 1983 was set aside.30 The resulting Maritime Industry Seagoing Interim 1998 contained the following provision at clause 19:
“19. HANDLING / SECURING CARGO ALLOWANCES
19.1 An employee who is required to perform manual work involving handling cargo in port will be paid an allowance at the rate of:
19.1.1$8.19 per hour between 0700 and 1700 hours, unless the work is done outside the employee’s watch on duty, if watches are being kept;
19.1.2 subject to 19.1.3, $10.38 per hour at any other time, or if the work is done outside the employee’s watch on duty, if watches are being kept or on Saturdays, Sundays or Public Holidays; ($8.19 per hour if the cargo is mail, passengers luggage or passengers motor cars);
19.1.3 $13.09 per hour between 2300 and 0700 hours; ($10.77 per hour if the cargo is mail, passengers luggage or passengers motor cars) in the following circumstances:
19.1.3(a) after 2300 hours on any day such work has already extended for at least four hours at 2300 hours;
19.1.3(b) after such work has extended for four hours ending at any time between 23:00 hours and 07:00 hours or the commencement of ordinary duty on the following day;
19.1.3(c) Where watches are being kept, for work off watch after 23:00 hours where four hours work has already been performed off watch.
19.2 In the case of cargo work consisting of the securing or lashing of cargo, the following rates will be substituted for the rates contained in 19.1: …”
[53] The clause was inserted unaltered into the Maritime Industry Seagoing Award 1999. The clause is in essentially the same terms in the Seagoing Award except that twenty-four hour clock references in certain provisions have been converted to standard time and the dollar values of the allowances have been deleted and replaced with percentages of “the standard rate”.
[54] It is clear from these extracts and the potted history set out above, that since the establishment of cargo handling allowances in the predecessor awards to the Seagoing Award, mechanical aids or devices were used to work or handle cargo and that additional payments were made notwithstanding this fact. While it is also clear that an objective of establishing the cargo handling allowances in the Seamen’s Awards was to discourage employers from using seamen to handle cargo when waterside workers were available in a port, it does not follow that seamen handling cargo would not have been entitled to the allowance if they were using mechanical equipment to do so, particularly given the reference in the Award provisions to mechanical devices.
[55] It is also notable that the claims in the 1922 case included a claim that no member of the crew would be called on to work aloft while a strain was on the masts or derricks through working cargo. While it does not appear that this claim was granted, the fact it was made indicates that the term “working cargo” included using mechanical devices from the earliest time at which the awards covering seamen operated. The fact that the cargo handling allowances in the awards were structured to encourage the use of waterside workers rather than ship’s crew, does not mean that when ship’s crew did cargo handling work they were not entitled to the allowance when using a mechanical device.
[56] At various stages, the heading of the clauses prescribing cargo handling contained the word “manual” and notwithstanding this there were references to various mechanical devices used to handle cargo in the clauses and no indication that the allowances for cargo handling did not apply when those devices were used. To the contrary, it is clear that the allowances were payable when mechanical devices were used including to persons who drove or operated the devices (with the possible exception of those employees operating power sources supplying steam to operate the devices). The fact that it was necessary in the clauses providing for cargo handling to distinguish employees operating mechanical devices and those supplying steam to power those devices, indicates that employees actually operating such devices were entitled to be paid cargo handling allowances.
[57] It is also the case that awards covering Officers and later the Maritime Industry Seagoing Award distinguished between Officers who could not be required by the employer to handle cargo but could agree to do so under the conditions set out in the Award and other employees who could be required to handle cargo. This distinction does not change the fact that employees who were handling cargo were entitled to the allowances for cargo handling whether or not they were using mechanical devices and that employees undertaking such work were using such devices. It appears that when the distinction between Officers and other employees for cargo handling purposes was removed the provisions of the clause describing mechanised equipment used for cargo handling were also removed in relation to Officers and other employees at the time that the Maritime Industry Seagoing Award 1998 was made.
[58] There is no evidence that the removal of the definition of handling cargo from the clause that became clause 19 of the Maritime Industry Seagoing Award 1998 was intended to result in a situation where employees would cease to be entitled to be paid cargo handling allowances when they were using mechanical equipment to handle cargo. This would have brought about a significant change to the employment conditions of employees covered by the awards given that the allowances to that point, had been payable when the employees were handling cargo and using mechanical devices to do so. Absent clear evidence that this change was intended to fundamentally alter the operation of the cargo handling provisions I am of the view that the current provisions in clause 14.2 of the Seagoing Industry Award should not be construed in the manner contended for by Sea Swift.
[59] I have also had regard to the broader industrial relations context where there is a well-established distinction between the terms “manual work” and “manual labour”. The distinction is dealt with by the High Court in The Australian Insurance Staffs’ Federation and Others v The Accident Underwriters’ Association and Others31, a case referred to by the CFMMEU in its submissions in the present matter. That case concerned the question of whether a dispute between employers who carried on the business of banking or insurance and their employees as to wages and conditions of employment, was an “industrial dispute” within the meaning of s. 51(xxxv) of the Constitution and the Commonwealth Conciliation and Arbitration Act 1904 – 1921. One of the issues central to the determination of this question was whether the expression “industrial disputes” in s. 51(xxxv) of the Constitution was confined to undertakings carried on wholly or mainly by means of “manual labour”.32
[60] The majority held that s. 51(xxxv) was not so confined. Relevantly, in determining that the dispute was an industrial dispute within the meaning of s. 51(xxxv) of the Constitution, Isaacs and Rich JJ observed that previous references they had made to the legal and medical professions in earlier judgements, were directed to the case where the personal skill of the practitioner was in effect the sole source of productiveness and that a more rigid confinement of the central idea would be in error.33 Their Honours also referred to a series of earlier judgements including one where there was a distinction drawn between “manual work” and “manual labour” including a judgement holding that telegraph clerks and all persons engaged in writing did manual work but did not do manual labour. The cases referred to by Isaacs and Rich JJ generally distinguish between mental and physical labour and the effect of their judgement is that a broad approach should be taken so that both manual work and manual labour were within the meaning of the term “industrial dispute” in s. 51(xxxv) of the Constitution.
[61] The cases considered by Isaacs and Rich JJ are illustrative of the meaning that in my view should be given to the term “manual work” as it appears in clause 14.2 of the Seagoing Award. Those cases indicate that “manual work” has a broader meaning than “manual labour” and in neither case is there a requirement that an employee is not assisted in the performance of such work by a mechanical device in order to be undertaking manual work or manual labour.
[62] For these reasons I have concluded that the allowance in clause 14.2 applies to work performed by employees when they are handling cargo, regardless of whether they are using mechanical devices to do so.
Other BOOT issues
[63] Notwithstanding the position of Sea Swift to the effect that if the cargo handling allowances issue is determined to be contrary to its submissions, that the Agreement will not pass the BOOT, I have considered other BOOT issues for completeness. As previously noted, these issues were raised in email correspondence from the Commission to the Company and the bargaining representatives.
Annual Leave
[64] The Form F17 filed by Sea Swift indicates in response to question 2.16 that shiftworkers can be employed under the Agreement. By virtue of s. 196 of the Act where a modern award that is in operation and covers an employee, defines or describes the employee as a shiftworker for the purposes of the National Employment Standards (NES), the Commission must be satisfied that the Agreement defines or describes the employee as a shiftworker for the purposes of the NES.
[65] Some of the reference instruments referred to in the response to question 3.1 in the Form F17 contain definitions of shift workers for the purposes of the NES as follows:
• Manufacturing and Associated Industries and Occupations Award – clause 41.3
• Road Transport and Distribution Award – clause 29.1
• Storage Services and Wholesale Award – clause 26.4
• Clerks – Private Sector Award – clause 29.2
[66] The Seagoing Industry Award 2010 also provides at clause 20.2 that the leave factor and entitlement to leave in clause 20.1 gives effect, among other things, to annual leave with pay of five weeks per year. The Agreement does not provide for a fifth week of annual leave for shoreside or marine employees who may be classed as shift workers. In relation to leave for Seagoing employees and Marine employees, the Agreement appears to distinguish between these employees. The leave entitlements in part 5 of the Agreement apply to shoreside employees and in part 6 to Marine Employees. There does not appear to be any leave entitlements for seagoing employees (other than the leave categories in Part 7 which may apply to them by default but this is far from clear). Advice was sought from Sea Swift in relation to leave entitlements for Seagoing employees and the source of those entitlements given that the Agreement appears to be silent on this matter. Sea Swift provided a proposed undertaking in relation to this matter in the following terms.
“Annual Leave
1. Not withstanding clause 6.2.1 ofthe Agreement, Marine Employees (other than casual employees) will be entitled to 5 weeks annual leave.
2. For the purposes of clause 5.1 of the Agreement and the additional week of annual leave provided for in s.87(1)(b) of the Act, the following definitions of "shiftworker" will apply:
a. Maintenance, warehouse and road transport employees - a shiftworker is a seven day shiftworker who is regularly rostered to work on Sundays and public holidays; and
b. Administrative employees - a shiftworker is a seven day shiftworker who is regularly rostered to work on Sundays and public holidays in a business in which shifts are continuously rostered 24 hours a day for seven days a week.”
[67] In relation to “Marine Employees”, Sea Swift advised that by virtue of clause 1.4 of the Agreement such employees are those whose role requires them to spend the majority of time at work on board a ship, boat or other water going vessel. Clause 1.4 of the Agreement also provides that “Seagoing Employee means a Marine Employee who, but for the Agreement would be employed under the Seagoing Industry Award 2010”. Sea Swift also submits that by reference to vessel class, this definition applies to employees engaged on line haul vessels and not to employees engaged on tugs, barges or lighters. Sea Swift further submits that Seagoing Employees are engaged under clause 4.1.6 of the Agreement on the basis of an even time roster and accrue a day of leave for each day worked. This leave factor is 1:1 and more beneficial than the 0.926 of a day’s leave accrued under clause 20.1 of the Seagoing Award. I am satisfied that this undertaking addresses the annual leave issue so that the requirements of s. 196 of the Act are met and no BOOT issue arises in relation to this matter.
Classification issues
[68] In the Form F17 Employer’s statutory declaration in support of approval of the Agreement, the classifications of Supervisors, Trade Qualified Managers, Mangers, Workplace Health and Safety Advisors and Accountant in Schedule A have not been matched to a specific award classification and it is not possible to ascertain whether the Agreement passes the BOOT in the absence of a reference instrument.
[69] Attachment B to the Form F17 provides no information in relation to how classifications in the Agreement for Marine Seagoing Employees; Marine Towage Employees and Marine Employees Operating in Ports, Harbours and Enclosed Waters translate to a relevant Award and what the relevant Award is for the purposes of the application of the BOOT to these classifications of employees.
[70] The Commission also questioned the fact that there are classifications in Schedule A of the Agreement which correlate with the Marine Towage Award. This Award is not mentioned as a reference instrument in the Form F17. Further, the Agreement provides at clause 1.2.2 that it does not apply to harbour towage. Sea Swift was requested to provide clarification on the coverage of the Agreement and information in relation to the appropriate reference instrument for the purpose of whether the Agreement passes the BOOT in respect of Marine Towage Employees.
[71] A further issue on which clarification from Sea Swift was sought is the separate definitions for both Marine Employees and Seagoing Employees in the Agreement. It is not clear whether the allowances in clause 3.10 of the Agreement apply to Marine Employees only or to Marine Employees and Seagoing Employees.
[72] In response to questions about classification translation, Sea Swift advised in its submissions that Trade Qualified Managers, Managers, Workplace Health and Safety Advisors and Accountants are award free and accordingly, no reference instrument applies to them. Sea Swift further advised that the relevant reference instrument for maintenance supervisors is the Manufacturing and Associated Industries and Occupations Award 2010. Sea Swift also makes the following submission:
“A Full Bench of the Commission has held that the Seagoing Industry Award 2010 applies to Sea Swift ([2016] FWCFB 651).
However, the classifications relevant to Marine Towage Employees and Marine Employees operating in Ports, Harbours and Enclosed Waters are found in the Marine Towage Award 2010 and the Ports, Harbours and Enclosed Waters Award 2010 respectively. Attached at Appendix B are comparisons of the more and less beneficial conditions and those conditions that are not conferred for the Commission’s consideration.”
[73] Sea Swift also submits that the Agreement applies to marine employees performing towage other than harbour towage and refers to the above submissions in relation to such employees.
[74] The reference by Sea Swift to the Marine Towage Award and Ports and Harbours Award is not consistent with the Full Bench Decision which found that the Seagoing Award is the relevant Award for the application of the BOOT to Sea Swift’s marine employees 34 and the Company has not addressed my concerns in relation to whether the 2018 Agreement passes the BOOT with respect these employees. If the application for approval of the 2018 Agreement proceeds I will require further submissions in relation to this matter.
Part time employees
[75] The Agreement refers to part-time employees receiving pro-rata benefits but does not contain any conditions of employment for such employees. To address the Commission’s concern in relation to this matter Sea Swift offered the following undertaking:
“Part-time Employees
3. In addition to the definition of part-time employee contained in clause 1.4, part-time
Shoreside employees may be employed in any classification in this Agreement on the following basis:
a. A part-time employee is an employee who:
(i) works fewer than full-time hours of 38 per week;
(ii) has reasonably predictable hours of work; and
(iii) receives, on a pro rata basis, equivalent pay and conditions to those of full-time employees who do the same kind of work.
b. At the time of engagement, the employer and the part-time employee will agree in writing, on a regular pattern of work, specifying at least the hours worked each day, which days of the week the employee will work and the actual starting and finishing times each day.
c. Any agreed variation to the regular pattern of work will be recorded in writing.
d. All time worked in excess of the hours as mutually arranged will be overtime.
e. A part-time employee employed under the provisions of this clause must be paid for ordinary hours worked at the rate of 1/38th of the weekly rate prescribed for the class of work performed.
f. Commencement of part-time work and return from part-time to full-time work will not break the continuity of service or employment.
g. An employee who does not meet the definition of a part-time employee and who is not a full-time employee will be paid as a casual employee in accordance with clause 11.4.
h. The employer is required to roster a part-time employee for a minimum of shift as follows:
i. Maintenance, warehouse and road transport employees- 4 hours;
ii. Administrative employees- 3 hours;
4. In addition to the definition of part-time employee contained in clause 1.4, part-time
Marine employees may be employed in any classification in this on the following basis:
a. A part-time employee is an employee who:
i. is engaged to work ordinary hours which are less than the average number of ordinary hours of a full-time employee; and
ii. (ii) receives, on a pro rata basis, equivalent pay and conditions to those of full-time employees who do the same kind of work.
b. For each ordinary hour worked, a part-time employee will be paid not less than the hourly rate of pay for the relevant classification.
c. Before an employee commences part-time employment, an employer must inform the employee in writing of any rostered periods of duty to be worked by the employee.
d. Any agreed variation of the rostered periods of duty must be recorded in writing.”
[76] This undertaking addresses my concerns in relation to part-time employees so that the requirements of s. 196 of the Act are met and no BOOT issue arises in relation to this matter.
Casual employees
[77] Clause 1.4 provides for a minimum engagement of two hours for casual employees. This is lower than in all aligned Awards aside from the Seagoing Award which does not provide for casual employment. Sea Swift proposed an undertaking in the following terms to address this matter.
“5. In addition to the definition of casual employee contained at clause 1.4 of the
Agreement, the minimum engagement of a casual employee will be as follows:
a. Maintenance, warehouse and road transport employees- 4 hours;
b. Administrative employees- 3 hours; and
c. Marine employees- 2 hours.”
[78] I accept that the proposed undertaking addresses the issue of minimum engagement for casual employees who are maintenance, warehouse, road transport and administrative employees. It does not however completely address the situation of marine employees who could not be engaged on a casual basis under the Seagoing Industry Award. If the application for approval of the Agreement proceeds I will require further submissions in relation to this matter.
Shoreside employees
[79] Clause 4.1.15 of the Agreement allows for hours to be averaged for a period of up to one year. It appears from question 3.5 of the Form F17 that those covered by the Storage, Manufacturing, Clerks and Road Transport Awards are Shoreside employees, however this is not clear in the Agreement. If this is the case then the averaging period for hours of work for those employees exceeds those allowed under the relevant reference instruments. Sea Swift has proposed an undertaking in the following terms to address this matter:
“6. Notwithstanding clause 4.1.15 of the Agreement, the ordinary hours for Shoreside employees will be on average 38 hours per week, to be worked on one of the following basis:
a. 38 hours within a cycle not exceeding 7 consecutive days; or
b. 76 hours within a cycle not exceeding 14 consecutive days; or
c. 114 hours within a cycle not exceeding 21 consecutive days; or
d. 152 hours within a cycle not exceeding 28 consecutive days.”
[80] This undertaking addresses my concerns in relation to averaging of ordinary hours so that the requirements of s. 196 of the Act are met and the Agreement will not fail the BOOT on the basis of this matter.
Penalty rates
[81] In relation to penalty rates, the Agreement provides that Shoreside employees receive a 150% penalty for all ordinary hours worked on a weekend (clause 4.1.18); have payment for working Public Holidays factored into their base rates of pay (clause 5.5.2); have different shift time triggers and a lower night shift loading than provided for under the Awards (clause 4.1.17); potentially lower afternoon shift loadings for Clerical employees (clause 4.1.17); and may be affected by less beneficial overtime entitlements (clause 4.1.19). Sea Swift was informed that it is not possible to determine whether these employees will be better off overall, especially as some are paid less than 1% above the relevant Award (Storage, Manufacturing, Clerks and Road Transport).
[82] In response to this concern, Sea Swift provided a series of tables showing wage calculations for Shoreside employees working particular rosters evidencing that they would be better off overall under the Agreement. Provided that rosters actually worked by such employees are consistent with the sample rosters provided by Sea Swift it appears that no BOOT issue arises in relation to this matter. However if the application for approval of the Agreement proceeds, a further undertaking may be required to ensure that the rosters worked by employees will be consistent with the sample rosters provided by Sea Swift for the comparison undertaken.
Allowances
[83] The Commission also raised an issue with Sea Swift to the effect that there are allowances in the Agreement which may not be high enough above the Seagoing, Storage and Manufacturing Awards to ensure employees will be better off overall, namely allowances relating to cargo handing in respect of the Seagoing Award, working in confined spaces and cold temperatures in respect of the Storage Services Award 2010 and the Manufacturing, and Associated Industries and Occupations Award 2010. In response, Sea Swift submitted that Shoreside employees do not work in conditions that expose them to cold temperatures lower than -15.6°C and accordingly no entitlement to a cold temperature allowance would arise under the Storage Services Award 2010.
[84] Sea Swift also submitted that Shoreside maintenance employees do not perform work in conditions that would expose them to cold temperatures less than 0°C and accordingly no entitlement to a cold temperature allowance would arise under the Manufacturing, and Associated Industries and Occupations Award 2010. According to Sea Swift, Shoreside maintenance employees do not work in confined spaces and would not be entitled to a confined spaces allowance under the Manufacturing, and Associated Industries and Occupations Award 2010. The submissions in relation to cargo handling allowance for employees who would be covered by the Seagoing Award is dealt with above.
[85] Other than in relation to the cargo handling allowances, I accept the explanation provided by Sea Swift with respect to the non-application of allowances for work in cold temperatures and confined spaces.
Deductions
[86] Clause 8.5 of the Agreement provides as follows:
“8.5 Settlement of Debts
8.5.1 Any amount owed by the Employee to Sea Swift or by Sea Swift to the Employee will be immediately due and payable on termination of the Employee’s employment.
8.5.2 A certificate from management or payroll will be prima facie evidence of any amount owed by the Employee to Sea Swift.
8.5.3 The Employee specifically agrees to and authorises Sea Swift to deduct any amount certified according to subclause 8.5.2 from any money payable to the Employee on termination of employment.
8.5.4 Payment of an Employee’s final monies on termination may be delayed if the Employee has not returned or adequately accounted for Sea Swifts equipment and /or property that was in the possession of the Employee.”
[87] My concern in relation to these provisions is that the effect of clause 8.5.1 of the Agreement is to create a debt that the employee is liable for on termination of employment. There is no such term in any of the reference instruments. Clause 8.5.3 purports to authorise deductions from employees’ wages of unspecified amounts for matters not identified.
[88] I accept that s. 324(1)(b) of the Act provides that employees can authorise a deduction from their wages in accordance with an enterprise agreement. However I do not accept that an authorisation can be given by an employee for an unspecified amount to be deducted from his or her wages. My concern in relation to this matter is exacerbated by the fact that the Agreement does not specify the matters for which a deduction may be made. These provisions may be inconsistent with the provisions of the Fair Work Act 2009 in relation to deductions from employees’ wages with reference to Part 2 – 9 Division 2. It is also the case that by virtue of s. 326 of the Act terms of an enterprise agreement have no effect to the extent that they permit, or have the effect of permitting, a deduction from wages that is directly or indirectly for the benefit of the employer or related party and unreasonable in the circumstances.
[89] Section 326(4) also renders of no effect provisions of an enterprise agreement that permits, or has the effect of permitting, an employer to deduct an amount from the wages of an employee who is under 18 unless the deduction is agreed to in writing by the parent or guardian of the employee.
[90] A Full Bench of the Commission in AKN Pty Ltd t/a Aitkin Crane Services 35 held that a provision of an agreement that is not consistent with the requirements of the Act with respect to deductions from wages, is not unlawful so that the agreement cannot be approved. The Full Bench in that case also held that provisions for deductions from wages which have a real potential to cause financial detriment to employees can be taken into account in consideration of whether an agreement passes the BOOT regardless of whether or not they are contained in a relevant modern award.
[91] I am of the view that a provision in an enterprise agreement which purports to create a debt an employee is liable for on termination of employment on the basis of a certificate provided by management or payroll, has a real potential to cause financial detriment to employees. I am also of the view that the failure to specify the items for which deductions may be made and/or the amounts that may be deducted has a real potential to cause financial detriment to employees. Accordingly I am unable to be satisfied that employees will be better off overall under the Agreement than they would be under the Award and for this reason I would not approve the Agreement regardless of the other matters I have identified. This issue may be one that can be rectified by the employer providing an undertaking – for example, that Sea Swift would not refer to, rely on or apply the provisions of the Agreement in clause 8.5.
CONCLUSIONS
[92] I accept that Sea Swift has reason to be aggrieved at the conduct of the CFMMEU. The CFMMEU asserted in earlier dispute proceedings before the Commission that the Agreement would pass the BOOT and that the Commission should require Sea Swift to put the Agreement to ballot notwithstanding the Company’s concerns that it would not pass the BOOT. The CFMMEU then departed from that position when the Agreement was before the Commission having been approved by a valid majority of employees. Such conduct does not assist in the bargaining or agreement making process and the efforts of the parties would have been better spent in attempting to negotiate an agreement that they all endorsed and could bring to the Commission for approval, rather than arguing about the application of allowances. However, the same issue was also raised by the Commission and I am bound to consider it regardless of whether the CFMMEU raised it or not.
[93] Further, the conduct of Sea Swift in continuing to press its position about award coverage in the approval proceedings also leaves much to be desired. A Full Bench of the Commission has found that the Seagoing Award applies to the marine operations of Sea Swift. Given that Decision, the analysis placed before the Commission by Sea Swift comparing the Agreement to the Marine Towage Award and the Ports Harbours and Enclosed Water Vessels Award is irrelevant to the matters I am required to decide, as is the state of play in the 4 yearly review of awards. In relation to the position of Sea Swift in that Review, I also note that the Company’s arguments about appropriate award coverage for its marine employees was also rejected in a Decision of a Full Bench issued on 24 February 2017 where a majority rejected the position of Sea Swift in relation to coverage issues in relation to the Maritime Awards. 36
[94] In summary, my conclusions in relation to the application for approval of the Agreement are as follows:
1. On the basis that the cargo handling allowances in clause 14.2 of the Seagoing Award apply to employees handling cargo using a device or mechanical implement, I am unable to be satisfied that the rates in the Agreement for Marine Employees who would otherwise be covered by that Award are sufficiently above those in the Award so that the Agreement passes the BOOT;
2. Issues in relation to annual leave provisions in the Agreement are capable of being addressed by the undertaking proposed by Sea Swift;
3. Sea Swift has not addressed the classification translation issues and has persisted with its submission that the Marine Towage Award and the Ports Harbours and Enclosed Water Vessels Award apply to some employees and are relevant to the application of the BOOT, notwithstanding a Decision of a Full Bench to the contrary;
4. In relation to casual employment the undertaking proposed by Sea Swift addresses BOOT issues for all employees covered by the Agreement other than Marine Employees;
5. In relation to averaging of hours for Shoreside employees the undertaking proposed by Sea Swift addresses relevant BOOT issues;
6. The issues with penalty rates require further consideration on the basis that the calculations to address this issue are based on sample rosters and there is no guarantee that these will be the actual rosters worked;
7. In relation to the clause 8.5 Settlement of Debts I am unable to be satisfied that the Agreement passes the BOOT in light of the real potential for detriment to employees from the operation of the clause.
[95] The parties have 7 days to advise the Commission of their position in light of this Decision. If these matters are not addressed within the 7 day period, I will issue a Decision refusing to approve the Agreement. The views of bargaining representatives should be sought if any undertakings are proposed.
DEPUTY PRESIDENT
Appearances:
Mr A Herbert of Counsel instructed by Mr B Cooper of Livingstones on behalf of Sea Swift.
Mr D Quinn of Holding Redlich on behalf of the CFMMEU.
Hearing details:
Brisbane.
2018.
19 December.
2019.
8 March.
Printed by authority of the Commonwealth Government Printer
<PR706277>
1 AG2015/6644
2 [2016] FWCFB 651.
3 [2017] FWCFB 1138.
4 [2017] FWCFB 3005 at [14].
5 [2017] FWCFB 4487.
6 [2014] NSWCA 184 at [71] – [85].
7 Manufacturers’ Mutual Insurance Ltd v Withers (1988) 5 ANZ Ins Cas 60-853 at 75-343.
8 Kirin-Amgen Inc v Hoechst Marion Roussel Ltd [2004] UKPC 6; [2005] 1 All ER 667 at [64].
9 Project Blue Sky v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355 at [78].
10 Charter Reinsurance Co Ltd v Fagan [1997] AC 313 at 391 per Lord Hoffman, approved in Campbell v R [2008] NSWCCA 214; 73 NSWLR 272 at [48] (Spiegelman CJ, Weinberg AJA and Simpson J agreeing)
11 Franklins Pty Ltd v Metcash Trading Ltd [2009] NSWCA 407; 76 NSWLR 603 at [17] cited in Mainteck Services Pty Ltd v Stein Heurtey SA (2014) 310 ALR at [71] – [85].
12 Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; 219 CLR 165 at [40].
13 Kucks v CSR Limited (1996) 66 IR 182 at 184.
14 Andrew John Short v Hercus [1993] FCA 51; (1993) 40 FCR 511.
15 Ibid at 970.
16 (1923) 33 CLR 517 at 525-6.
17 Electrical Trades Union of Australia v Waterside Workers Federation of Australia (1982) 1 IR 349.
18 FSUA v CSSOA 150 CAR 205 at 209.
19 The Australia Concise Oxford Dictionary
20 See “The Australian Concise Oxford Dictionary”.
21 (1906 – 11) CAR 5 at 175.
22 (1922) 16 CAR 112 at 150.
23 Ibid at 132.
24 (1935 – 36) 35 CAR 397 at 417.
25 (1948) 60 CAR 1516.
26 Ibid at 1514.
27 (1952) 75 CAR 332 at 335.
28 (1973) 150 CAR 205 AT 230.
29 (1977) 198 CAR 74; (1980) 237 CAR 697; M017 A M Print F4185, Melbourne 30 December 1983.
30 Dec.1485/98 S Print Q9604.
31 (1923) 33 CLR 517
32 Ibid at 523 per Isaacs and Rich JJ.
33 Ibid at 524.
34 [2016] FWCFB 651.
35 [2015] FWCFB 1833
36 [2017] FWCFB 1138.
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