Sea Swift Pty Ltd v The Maritime Union of Australia
[2016] FWCFB 651
•30 OCTOBER 2015
| [2015] FWC 6644 [Note: An appeal pursuant to s.604 (C2015/6667, C2015/6668, C2015/7388) was lodged against this decision - refer to Full Bench decision dated 8 February 2016 [[2016] FWCFB 651] for result of appeal.] |
| FAIR WORK COMMISSION |
REASONS FOR DECISION |
Fair Work Act 2009
s.185—Enterprise agreement
Sea Swift Pty Ltd
v
The Maritime Union of Australia and others
(AG2015/2789)
Manufacturing and associated industries | |
COMMISSIONER SIMPSON | BRISBANE, 30 OCTOBER 2015 |
Application for approval of the Sea Swift Ltd Employee Enterprise – Appropriate Awards for BOOT – Whether Agreement genuinely agreed – Undertakings required.
[1] An application has been made for approval of an enterprise agreement known as the Sea Swift Ltd Employee Enterprise (the Agreement). The Application was made pursuant to s.185 of the Fair Work Act 2009 (the Act). It has been made by Sea Swift Pty Ltd (the Applicant). The agreement is a single enterprise agreement.
[2] The Maritime Union of Australia (MUA); the Australia Maritime Officers Union (AMOU), and the Transport Workers’ Union (TWU) all opposed the approval of the Agreement. The Australian Institute of Marine and Power Engineers (AIMPE) in its Form F18 indicated it supported approval however raised significant concerns in its Form F18 about the Agreement. The Australian Workers Union (AWU) supported approval. All five unions gave notice pursuant to s.183 of the Act that they wanted to be covered by the Agreement.
[3] The matter was listed for directions on 26 June 2015 and at the directions hearing a program for submissions was set out and a site inspection and hearing dates were set for 26, 27 and 28 August 2015 in Cairns. At the conclusion of the hearing in Cairns a request for the filing of further written closing submissions was granted, and the last of these submissions were filed on 25 September 2015.
[4] The Applicant was represented by Counsel Mr A Herbert instructed by Livingstones Australia. The MUA and AMOU were represented Mr D Quinn a Solicitor of CRH Law, AIMPE was represented by Mr N Keats a Solicitor of W G McNally Jones Staff, and the TWU was represented by Ms M Cerrato.
[5] The Applicant relied on the Form 16 application for approval of the enterprise agreement, the Form 17 employer’s statutory declaration, and witness statements from Mr Lino Bruno the Chief Operating Officer of the Applicant 1, Mr Robert O’Halloran the Fleet Master of the Applicant2, and Mr Fred White the Chief Executive Officer of the Applicant3. The Applicant filed an outline of submissions.4
[6] The MUA called one witness Mr Bernie Farrelly the National Lead Organiser who provided two statements. 5 6 The TWU called one witness Mr Russell Vieritz.7
[7] The Applicant said it used the Manufacturing and Associates Industries Award 2010 (the Manufacturing Award), Clerks Private Sector Award 2010 (the Clerks Award), Storage Services and Wholesale Award 2010 (the SSW Award) and the Ports, Harbours and Enclosed Water Vessels Award 2010 (the PHEWV Award) for translating classifications and for the Better Off Overall Test (BOOT). The Applicant said that in all cases employees were better off overall except for two. The Applicant said that in the two cases where employees would not be better off overall it would provide an undertaking that the rates would not be less than the relevant Modern Award rate.
[8] The Applicant submitted that the company structure included the following divisions,
● Administration;
● Freight consolidation/transfer facilities (including transport and logistics);
● Maintenance Division (engineering); and
● Marine operations (vessels).
[9] The Applicant has operated since 1990 under a number of industrial instruments, in the Queensland Industrial Relations Commission (QIRC), the Australian Industrial Relations Commission (AIRC), Fair Work Australia (FWA) and Fair Work Commission (FWC).
[10] The Sea Swift Pty Ltd Industrial Agreement (135QGIG1 1 September 1990) was entered into between the Applicant and the Australian Workers’ Union in July 1990 and continued operation (as varied) until it was subsequently replaced on 27 July 2005 by the Sea Swift Pty Ltd Enterprise Award – State 2005. (B224 of 2005) The Sea Swift Collective Agreement 2009 (Agreement 9620566-1) was approved by the Workplace Authority on 11 September 2009 and operated until 18 September 2014. 8
[11] While not all submissions and evidence filed in this matter have been referred to, all of such have been considered.
MARINE OPERATIONS
[12] The main issue in contention in regard to marine awards is whether the appropriate award to apply for the purpose of the Better off Overall Test (BOOT) is the Seagoing Industry Award 2010 (the SGI Award) or the Ports, Harbours and Enclosed Water Vessels Award 2010 (the PHEWV Award).
[13] AIMPEE, the MUA and AMOU all contend the SGI Award and not the PHEWV Award is the relevant award for the purpose of the BOOT. Whilst other awards were referred to by the Unions earlier in the proceedings, all three maritime unions confirmed in closing submissions that they did not press any awards other than the SGI Award for the purpose of the BOOT comparison. 9
[14] For completeness the Applicant addressed in submissions the prospect of the Marine Towage Award having application to the Applicant, however submitted the fact that the Applicant does some contract towage from time to time does not constitute the Applicant being in the industry of marine towage because it is not the whole or substantial part of what the Applicant does, but is in fact an episodic part of what it does. 10 11 For reasons that are dealt with below I accept on the evidence that submission is correct and that the Marine Towage Award does not apply to the Applicant.
[15] The Applicant submits that the PHEWV Award is the appropriate instrument for the purposes of the BOOT.
Evidence and Submissions
Sea Swifts Marine Operations
[16] Robert O’Halloran, Fleet Master of Sea Swift Pty Ltd, provided evidence in relation to the Applicant’s operations. Much of Sea Swift’s operations principally involve the transport and distribution of freight and supplies to a number of destinations in Far North Queensland, Cape York Peninsula, the Gulf of Carpentaria and Torres Strait Island communities. Sea Swift’s Northern Territory operation based in Darwin service Gove, Groote Eylandt and remote Arnhem Land coastal communities. Many of the landing points in these remote communities are simply ramps or the nearby beach, where there is no dedicated wharf or jetty. 12
[17] The Applicant submitted that Sea Swift has a diversified fleet of vessels comprising a number of barges (both self-propelled and non-self-propelled), tugs and lighters and larger freight/passenger vessels (line-haul). 13
[18] The Applicant set out the various vessels in the fleet, their tonnage and speed. A summary of the fleet is as follows:
- 7 tugs
- 7 non-self-propelled barges (which are pushed or towed by tugs)
- 9 self-propelled barges (landing craft)
- 2 line-haul vessels (“MV Trinity Bay” and the “MV Newcastle Bay”)
- 2 Fishery Support vessels (The “Endeavour Bay” and “Kestrel Bay”) 14
[19] The Applicant submitted that the two line haul vessels, the MV Trinity Bay and the MV Newcastle Bay are the principal freight/cargo vessels operating in and out of Cairns and distributing freight to Sea Swift facilities in Cape York and Port Kennedy, where Sea Swift tranship the freight onto landing barges which distribute freight and supplies to the outports throughout the Torres Strait. 15
[20] Furthermore, the Endeavour Bay and Kestrel Bay vessels perform mother-shipping functions for the trawler prawn and fishing fleet in the Gulf of Carpentaria and from Cairns to York Island in the Torres Straits. These vessels generally anchor in quiet sheltered waters in bays or inlets or in the lee of islands, reefs, or headlands to rendezvous with the fishing vessels so as to provide smooth sea conditions for the transfer of the catch from the trawler to the mother-ship and for the replenishment of the trawlers with fuel and supplies. 16
[21] MV Trinity Bay carries freight and cargo and up to 30 passengers and operates from Cairns to Horn Island, Thursday Island, Seisia and return. 17
[22] Both Trinity Bay and Newcastle Bay travel for the whole of their operations either “inside” the Great Barrier Reef (between the reef and the Queensland Coast), or “inside” the Gulf of Carpentaria and Albatross Bay. A substantial part of the steaming distance travelled on their regular journeys is also within Australian internal waters (as defined in the Sea and Submerged Lands Act 1973 as well as the United Nations Convention on the Laws of the Sea. 18) in Albatross Bay, on the East Coast of Cape York and in Torres Strait waters.
[23] The Applicant provided a schedule setting out a breakdown of a typical week depicting the amount of time spent and distances travelled in performing various functions concerned with the operation of the vessels. 19 All loading and unloading and downtime during operational periods within those journeys20 occurs in ports, harbours and/or internal waters, except in the case of the eastern route for the Torres Strait vessels, where the remote loading and unloading operations occur on a beach, ramp, or wharf at the island or community in question, which is invariably in a small bay or lagoon or other sheltered part of the coast of the island or community. In the case of down time on that route (e.g. overnight anchoring to allow for crew rest or to wait for tide or weather changes), this invariably occurs in closed and/or sheltered waters in small bays or lagoons very close by those settlements which may not be declared internal waters, but which are in the lee or the protection of Australian islands or reefs and in sheltered areas adjacent to Australian islands.21
[24] It was said that Sea Swift’s marine operations are wholly conducted in what are regarded as “inshore waters” and in maritime terms the company is considered as a “non-blue water” shipping company. Furthermore, operations take place within sight of land up to a maximum of approximately 15 nautical miles off the coast of Queensland and/or Northern Territory. The journeys are either entirely or almost entirely within Australian Territorial waters (12 nautical miles from the territorial baseline) and most of them are wholly or substantially within Australian internal waters, that is, inside the Australian territorial baseline where that line crosses water. All of the ports visited are in Australia. 22
[25] The Applicant submitted that all of Sea Swift’s vessels are of a small scale compared to vessels that would usually operate on a seagoing venture. None of the barges would be fit for an open ocean voyage, and even the line-haul vessels are very small by sea-going standards. This size restriction is a direct consequence of the nature of the sheltered, shallow and reef-strewn waters in which they must travel in some or all of their voyages.
The SGI Award
[26] The Applicant submits that upon using the correct test of applying a plain and objective meaning to the words actually used, in context, and having regard to the evident purpose of the award, it is clear that the submissions of the Unions in relation to the coverage of the SGI Award and the PHEWV Award must be rejected.
[27] The Applicant contends that the SGI Award by its very scope and terms is plainly intended to deal with large seagoing cargo, research (and sometimes passenger) vessels. More specifically, the Applicant contends that the SGI Award coverage clause (clause 4) contains two components, one being inclusionary and the other exclusionary. The inclusionary provisions are in clause 4.1, 4.2 and 4.3. Those provisions are however intended to be read in conjunction with clause 4.4 which excludes a range of employers and employees from the award.
[28] The Applicant further contends that, when read together, whilst clause 4.1 purports to cover employers who are engaged in the operation of vessels… which, in the course of such trade or operation, proceed to sea on voyages outside the limits of bays, harbours or rivers, those words of inclusion are limited by clause 4.4, and does not operate to cover an employer who ‘is covered’ by any of the awards mentioned in clause 4.4(d). In context, ‘is covered’ must mean that the employer’s activities fall within the coverage provisions of the other award. In such a case, the SGI Award does not apply, irrespective of clause 4.1.
[29] The coverage clause in the SGI Award is as follows:
“This industry award covers employers which are engaged in the seagoing industry and their employees in the classifications listed in clause 13 and clause 24 – Classifications and minimum wage rates to the exclusion of any modern award.”
[30] Clause 4.4 ‘Exclusions’ of the SGI Award provides that the SGI Award does not cover:
(d) employers covered by the following awards:
…………………………….
(vi) the Ports, Harbours and Enclosed Water Vessels Award 2010;
………………………………..
[31] Clause 4.5 of the SGI Award provides:
“4.5 Where an employer is covered by more than one award, an employee of that employer is covered by the award classification which is most appropriate to the work performed by the employee and to the environment in which the employee normally performs the work.”
[32] The SGI Award is an industry award. The industry is defined in the SGI Award as follows:
“seagoing industry means the operation of vessels trading as cargo or passenger vessels which, in the course of such trade, proceed to sea (on voyages outside the limits of bays, harbours or rivers)”
[33] The Applicant made the following further submissions. The FWC in excluding the PHEWV Award in the SGI Award cannot be taken to have been unaware of the fact that the PHEWV Award is capable of covering cargo operations involving travel outside bays, harbours and rivers. 23
[34] Further, that the exclusion provided in the SGI Award at cl 4.4(d) (vi) for the PHEWV Award means that if the operations of an employer meet the criteria in clause 4.4(d)(vi), the SGI Award is not to apply, despite leaving a bay harbour or river by a relevant employer. An inshore domestic maritime operation which conducts relatively small scale coastal and island-hopping supply operations without ever leaving Australian inshore waters, is not considered to be an operation that is appropriate to be covered by the same award that covers large ocean going cargo and passenger vessels and the bulkships and mega tankers that ply the world’s oceans. 24
[35] The Applicant said that the excluded awards listed in clause 4.4(d) of the SGI Award all concern activities undertaken on shore, or on water:
- within and about ports harbours and other bodies of water within the Australian coastline;
- in towage within and between Australian ports;
(iii) dredging (necessarily) close to the coast; and
(iv) in maritime activities associated with the offshore oil and gas industry.
[36] It was submitted that the nature of the operations which are expressly excluded from the coverage of the SGI Award are as instructive as to the intended coverage of the award, as are the actual inclusionary provisions in the award. These exclusions exhibit a clear intention on the part of the FWC to ensure that the SGI Award applies only to large ocean-going cargo vessels, and not to apply to smaller, locally confined vessels of all kinds that stay close to the coast, such as those involved in the operations mentioned (by reference) in clause 4.4(d). The Applicant further contends that this is an important contextual consideration as to the meaning of the words used in the coverage clause of the SGI Award.
[37] It was put that on the same principle, marine towage, dredging operations and offshore oil and gas vessels, are considered to be of a sufficiently small scale and generally a domestic or local nature, to warrant their exclusion from the SGI Award that is designed to cover large scale and/or long distance off-shore operations. The example of the Marine Towage Award 2010 was referred to, that covers:
“(b) movement of contract cargos by combined tug and barge (up to a maximum of 10,000 tonnes) between different ports or locations in Australia (tug and barge operations).”
[38] The Applicant said such voyages required a tug operation (up to 10,000 tonnes) to “go to sea” carrying cargo if moving between ports in Australia, yet the SGI Award also excludes itself from applying to such employers. 25
[39] An interpretation that the application or coverage of the SGI Award is irreversibly triggered by the fact of leaving the confines of for example the Ports of Cairns 26 or Port Kennedy (Thursday and Horn Islands) or Albatross Bay at Weipa was refuted. It was said that this can only be the case if clause 4.4(d)(vi) is ignored in its entirety, and if the Commission accepts that the mere ‘proceeding to sea’ on one occasion is enough to trigger the SGI Award, irrespective of whatever else that operation may entail in terms of geographical areas of travel.
[40] The Applicant claims that on the union’s contentions, operating in one harbour and briefly leaving the limits of that harbour to continue to operate in another nearby harbour would attract the application of the SGI Award, despite the vast majority of the operations being within one or other harbour. The Applicant submits that such a result is contrary to the plain words used in the award, and is also unfair and contrary to common sense.
[41] The Applicant submits that, read as a whole and in context:
- Clause 4 of the SGI Award does not require coverage of an employer merely by virtue of the fact that they operate a cargo vessel which at any time in its operation leaves the confines of a bay, harbour or river; and
(ii) Clause 4 only allows such an outcome to occur if:
(a) The voyage itself is conducted outside the limits of bays, harbours or rivers and there is no substantial component of the journey inside such closed waters; and/or
(b) The employer does not other otherwise fall within the coverage clause of one of the Awards set out in clause 4.4
[42] It was said that the excluded awards listed at 4.4.(d) of the SGI Award all concern activities undertaken on shore, or in water :-
(i) within and about ports or harbours and other bodies of water within the Australian coastline;
(ii) in towage within and between Australian ports;
(iii) dredging (necessarily) close to the coast; and
(iv) in maritime activities associated within the offshore oil and gas industry.
[43] AIMPE submits that there is no reason to confine the coverage of the SGI Award to the largest seagoing cargo vessels and that on its own terms the SGI Award applies to dry cargo vessels up to 19,000 tonnes (clause 13.1(a).
[44] The MUA and AMOU submit that there can be no contention but that Sea Swift’s vessels are engaged as trading, cargo and passenger vessels. Further, the Unions submit that on the evidence of the routes the Applicant is regularly engaged in, there be no suggestion that they do not proceed on voyages outside the limits of bays, harbours or rivers in the course of that trading.
[45] The MUA and AMOU submit that to the extent there could be any manufactured uncertainty about the meaning of ‘sea’, as a simple matter of construction the SGI Award itself identified what the meaning of ‘sea’ is for purposes of its coverage, being ‘voyages outside the limits of bays, harbours or river’.
The PHEWV Award
[46] The PHEWV Award does not refer to ‘voyages’ or ‘bays, harbours or rivers’ as does the SGI Award. It applies by reference to operating wholly or substantially in a port, in a harbour or in “(an) other body of water within the Australian coastline”. The Applicant submitted that this requires regard to be had to the location of the whole or the substantial part of the employer’s vessel operations (as distinct from ‘voyages’).
[47] It was put that the evidence of Mr O’Halloran demonstrates that the Applicant’s fleet is operating wholly or substantially within a body of water which attracts the operation of the PHEWV Award, the extent of which depends upon findings of the FWC as to which bodies of water meet that description.
[48] The PHEWV Award coverage clause includes the following:
“4 Coverage
4.1 This award covers employers throughout Australia in the ports, harbour and enclosed water vessels industry and their employees in the classifications listed in clause 13 to the exclusion of any other modern award. This award does not cover employers and employees wholly or substantially covered by the following awards:
(a) …………………….
(b) The Seagoing Industry Award 2010
…………………………
…………………….......
For the purpose of clause 4.1, ports, harbours and enclosed water vessels industry, means the operation of vessels of any type wholly or substantially within a port, harbour or other body of water within the Australian coastline or at sea on activities not covered by the above awards…”
[49] The Applicant submits that so long as the vessels are wholly or substantially operating in a port or a harbour or in another body of water (that is a body of water that is not a port or harbour) that is “within the Australian coastline,” the PHEWV Award applies to that employer, and the SGI Award does not. 27It is argued that to fall within the description of a relevant location, it is only necessary to be established that the location in which at least the majority of the operations occur is a body of water and is within the Australian coastline.28
[50] On 4 September 2009 the Australian Industrial Relations Commission (AIRC) Full Bench confirmed its decision (AIRC Award Modernisation – Decision [2009] AIRCFB 826, 4 September 2009) to make the PHEWV Award. The PHEWV Award, in its final form, varied and expanded the industry definition from the exposure draft as follows:
“For the purpose of clause 4.1, ports, harbours and enclosed water vessels industry means the operation of vessels of any type wholly or substantially within a port, harbour or other body of water within the Australian coastline or at sea on activities not covered by the above awards.” [emphasis added]
[51] The words “or at sea on activities not covered by the above awards” were added to the industry definition by the Full Bench. The Full Bench said the following in relation to the PHEWV Award:
“Ports, Harbours and Enclosed Water Vessels Award 2010
“[219] The Maritime Union of Australia (MUA) and The Australian Institute of Marine and Power Engineers (AIMPE) sought to retitle the award as the Maritime Industry General Award to reflect a desire that the award apply to vessels which venture beyond ports and harbours. The current scope clause is not so confined but we have decided to make this clearer by adding additional words to the definition of industry…”
[52] The Applicant made the point that the Full Bench had decided of its own motion to expand the coverage of the industry definition to vessels proceeding beyond the limits of ports, harbours and other bodies of water within the Australian coastline to include operations “at sea”. It is also notable that the Full Bench did not share the concern raised by the MUA and AIMPE expressed at the time that, prior to the industry definition being expanded, the language in the exposure draft may not have allowed the future award to apply to vessels which venture beyond ports and harbours.
[53] The Applicant submits that the apparent tension between the mutual exclusivity of the SGI Award and the PHEWV Award is resolved if one interprets the SGI Award as having no application to vessels which, although they may leave a port, harbour or river, at the initial stages of a voyage, nonetheless, revert to ports, harbours and other enclosed waters on a regular and/or a majority of their cargo voyage.
[54] In short, the Applicant submits that the SGI Award is interpreted as:
- Applying to cargo operations which leaves bays, harbours or rivers and which stay outside such places for the duration of the voyage until the conclusion of the voyage; and
- Not applying to voyages which are substantially conducted within the legal equivalent of bays, harbours and rivers (that is within internal waters and the Torres Strait).
What does ‘other body of water within the Australian coastline or at sea on activities not covered by the above awards’ mean?
[55] The Applicant asserts the definition of ‘other body of water within the Australian coastline’ would extend for example to a “bay”, a “bight” a “gulf”, and like bodies of sea water within indentations of the sea coast, and that they, like a port or harbour are partially enclosed by the shoreline of Australia, and are usually totally enclosed by the shoreline and the coastline of Australia. 29
[56] The Applicant said other examples of such bodies of water within the Australian coastline would include straits, channels, tropical lagoons and cays, and channels and passages between and amongst Australian islands and island archipelagos. It is argued that being “within” the coastline is an obvious concept when describing a port, bay, cove, bight, gulf or harbour in relation to which the physical shoreline partially “encloses” the body of water such as Sydney Harbour. 30
[57] The Applicant drew attention to Australian domestic law and International laws of the Sea to state that the physical shoreline is not necessarily the coastline of Australia. The Applicant made the point that the shoreline of Sydney Harbour is not the coastline of Australia for legal purposes.
[58] By the Seas and Submerged Lands Act 1973 (the Seas Act), the Commonwealth enacted into Australian domestic law a set of international standards from which the location of the legal coastline of Australia might be accurately and objectively determined.
[59] Under the Seas Act and the United Nations Convention it applies (Part II Section 2 Articles 2 to 10 inclusive) there are five possible locations for the Australian coastline called the “territorial baseline”, from which other territorial waters calculations are to be measured to seaward:
(a) The normal baseline is the physical shoreline at the lowest astronomical tide low water mark; or
(b) At the mouths of rivers the baseline is drawn across the mouth of the river at the low water mark; or
(c) At the entrance of a bay, a closing line is drawn between the low water marks at the natural entrance, so long as the line is no more than 24 nautical miles. If it is, a 24 mile line is drawn across the bay at the point where it encloses the maximum area of water behind a line of that length; or
(d) In case of atolls or islands with fringing reefs, the baseline is the seaward low water mark of the fringing reef; or
(e) In localities where the coastline is deeply indented and cut into, or there is a fringe of islands along the coast in its immediate vicinity, straight baselines may be drawn across water joining appropriate points, travelling in the general direction of the coast. This means that it is not required to close off each individual bay or island or indentation as per (c) above, but a longer and wider line can be drawn to close off the outer limit of a group of bays or indentations.
[60] The Applicant set out that all waters on the landward side of the baseline, wherever that line is drawn according to (b) to (e) above, form part of the “internal waters” of the country in question. This includes the waters of all ports, harbours, bays, rivers and any other bodies of water “within” a straight baseline which has been drawn in accordance with the protocols in the Seas Act and International Law. 31
[61] The Applicant submitted a large number of such baselines under section 7(2)(c) of the Seas Act have been declared, and in particular has declared large portions of the waters adjacent to northern and eastern Cape York Peninsula, Albatross Bay, the Groote Eylandt region and the Tiwi island areas adjacent to Darwin. The bodies of water to the landward side of such baselines are Australian internal waters, as depicted on the Commonwealth Geoscience chart attached to the affidavit of Mr Robert O’Halloran. 32
[62] The Applicant submits that the baseline (whether it is the LAT mark or a drawn baseline) is the official and legal coastline of Australia for the purposes of both Australian and international law from which all territorial rights are measured to seaward. 33 The Applicant argues that in the case of all baselines, the “internal waters” as described in Article 8 of the Convention on the landward side of the baseline are not offshore waters, but are the domestic territory of Australia. It was submitted that they are in every sense bodies of water inside (or within) the Australian coastline for all legal and practical purposes.34
[63] It was put that straight territorial baselines are established by the Governor in Council, are definite lines on an official chart and are not subject to debate as to their location. They exist to close openings and indentations of all kinds on the coastline, and to give those openings an outer seaward limit or defined “coastline”. 35 The Applicant says that where they exist they provide a sensible and reliable and uniform guide as the precise outer limits of bays, harbours, and other bodies of water indenting the shoreline, and because the lines are the coastline, they enclose a body of water on their landward side within the Australian coastline, which meets the description of the PHEWV Award.36
[64] It is argued that while not all gulfs, bights or bays are closed or enclosed by a declared baseline, they do not need to be so enclosed to be a body of water within the Australian coastline.
[65] The submissions of AIMPE, and the MUA and AMOU are to the effect that the Applicants submissions in regard to the coverage of the respective awards unnecessarily seeks to complicate the matter and that the plain ordinary English words, with plain ordinary English meanings favour the Unions position, and that the Applicants submissions, particularly in regard to the term “sea” and “within the coastline” should be rejected.
[66] In its outline of submissions in reply AIMPE submitted as follows:
“When the word coastline is given its ordinary meaning it simply means where land meets sea. For example off the coast of Cairns is the Coral Sea. If one walks off the land directly into the Coral Sea one has left the coast, and crossed the coastline and entered the sea.”
[67] AIMPE submitted that there is no suggestion in the provisions of the SGI Award that that the ordinary English word “sea” in the phrase “proceed to sea” was intended to take on the more limited meaning of “territorial sea” provided for in the Seas and Submerged Lands Act or exclude from the meaning of “sea” those areas identified with other labels for purposes of international law or Commonwealth and State sovereignty. 37AIMPE made the point that the SSL Act does not alter the meaning of “sea” and instead relies directly upon it, as it continues to use the normal meaning of “sea” to identify “internal waters” as “the sea on the landward side of the baseline of the territorial sea”, as does the Coast Waters (State Powers) Act 1980 and as does the Acts Interpretation Act 1901.38
[68] The Applicant submitted that it is not possible to describe the Australian coastline for these purposes as being every point at which land meets the sea as that would mean that the banks of the Brisbane River, and every other place in Australia where sea water meets land, comprises the Australian coastline. The Applicant contends that if that was the intended meaning there can be no such place as a body of water “within” the Australian coastline.
[69] The MUA and AMOU provided evidence through the statement and oral evidence of Mr Bernie Farrelly who addressed a range of what he described as scheduled open water services across northern Queensland and the Northern Territory, the Torres Strait and Gulf of Carpentaria.
[70] Mr Farrelly in his evidence referred to the Uniform Shipping Laws Code as providing standards for the design, construction and operation of domestic commercial vessels in Australia. He said the USLC is being progressively replaced by the National Standards for Commercial Vessels, produced by the Australian Transport Council. Mr Farrelly said that Commercial vessels are classified under the National Standard for Commercial Vessels Part B General Requirements Chapter 3. 39 He said those requirements were also contained in Transport Operations (Maritime Safety) Regulation 2004 (section 63, Schedules 2, 12 and 13).
[71] Mr Farrelly set out that amongst the classifications in Chapter 3, Service Category 1 applies to passenger vessels and Service Category 2 refers to non-passenger vessels (Table 2, Section 3.1 and Table 4 s.3.5.1.) The classifications are further divided into “Sea-going” and “Sheltered waters” (s.3.4.1). He said that “Sea-going” encompasses all operations seaward from the coast, including “restricted offshore operations” being those less than 30 nautical miles from a coastal “safe haven”. Mr Farrelly went on to set out certain classifications of the Applicants cargo vessels and tugs under the USCL/NSCV. 40
[72] The Applicant refuted much of Mr Farrelly’s evidence in relation to this legislation on the basis that the legislation does not apply in the Northern Territory, and only applies to a select few ports in Queensland. 41
Relevant legislation and principles
[73] The Applicants closing submissions traverse the authorities referred to in Union submissions applying a “substantial character” test and sets out why this is not the correct test to apply. The Applicant referred to the decision of the Full Court of the Federal Court on appeal in TWU v Coles Supermarkets Australia 42 which included the following:
“21. The “substantial character” test is one which was developed and expressed by the High Court in relation to union eligibility rules (see R v Central Reference Board; Ex parte Thiess (Repairs) Pty Ltd [1948] HCA 9; (1948) 77 CLR 123at 135; Re Federated Liquor and Allied Industries Employees’ Union of Australia; Ex parte Australian Workers’ Union (1976) 51 ALJR 266 at 268-9; R v Moore; Ex parte Federated Miscellaneous Workers’ Union of Australia [1978] HCA 51; (1978) 140 CLR 470 at 484-5). In our view the “substantial character” test was not the appropriate test for deciding whether the Transport Award applied.
22. The test that should be applied is to discern the objective meaning of the words used bearing in mind the context in which they appear and the purpose they are intended to serve. Here, the definition in question expressly extended to work ancillary to the principal business. That was the true question for examination.” [emphasis added]
[74] The Applicant also referred to the judgement of French J in City of Wanneroo v AMACSU 43, and the judgement of Madgwick J in Kucks v CSR Ltd44 to support the proposition that the awards in contention in these proceedings are to be interpreted in the manner of a statute, by commencing with the natural and ordinary meaning of the words used, read as a whole and in context.
[75] The Applicant also referred to the following passage in the Full Court of the Federal Court decision in Coles in the context of the different status of modern awards (as compared to awards made by traditional means):
“13. Under the FW Act awards are no longer made in reliance upon the conciliation and arbitration power in section 51 (xxxv) of the Constitution, but under other heads of power, principally the corporations power in section 51 (xx) of the constitution (see the Work Choices case, New South Wales v Commonwealth [2006] HCA 52; (2006) 229 CLR 1). As awards no longer depend on specific employer respondency, the possibility exists for overlap in award coverage. Modern awards (the Transport Award and Retail Award are no exceptions) therefore contain a provision to the following effect:
Where an employer is covered by more than one award, an employee of that employer is covered by the award classification which is most appropriate to the work performed by the employee and to the environment in which the employee normally performs the work.”
[76] Section 193 of the Act relevantly sets out the following:
“193 Passing the better off overall test
When a non greenfields agreement passes the better off overall test
(1) An enterprise agreement that is not a greenfields agreement passes the better off overall test under this section if the FWC is satisfied, as at the test time, that each award covered employee, and each prospective award covered employee, for the agreement would be better off overall if the agreement applied to the employee than if the relevant modern award applied to the employee.
…
…
Award covered employee
(4) An award covered employee for an enterprise agreement is an employee who:
(a) is covered by the agreement; and
(b) at the test time, is covered by a modern award (the relevant modern award) that:
(i) is in operation; and
(ii) covers the employee in relation to the work that he or she is to perform under the agreement; and
(iii) covers his or her employer.
Prospective award covered employee
(5) A prospective award covered employee for an enterprise agreement is a person who, if he or she were an employee at the test time of an employer covered by the agreement:
(a) would be covered by the agreement; and
(b) would be covered by a modern award (the relevant modern award) that:
(i) is in operation; and
(ii) would cover the person in relation to the work that he or she would perform under the agreement; and
(iii) covers the employer.
Test time
(6) The test time is the time the application for approval of the agreement by the FWC was made under section 185.
FWC may assume employee better off overall in certain circumstances
(7) For the purposes of determining whether an enterprise agreement passes the better off overall test, if a class of employees to which a particular employee belongs would be better off if the agreement applied to that class than if the relevant modern award applied to that class, the FWC is entitled to assume, in the absence of evidence to the contrary, that the employee would be better off overall if the agreement applied to the employee.”
Consideration
[77] In determining the appropriate Award for the purposes of the BOOT, I am required to consider the ordinary meaning of the words used in the relevant awards, read as a whole and in context.
[78] Sea Swift is principally involved in the transport and distribution of freight and supplies to a number of destinations in Far North Queensland, Cape York Peninsula, the Gulf of Carpentaria and Torres Strait Island communities. The nature of its marine operations can be characterised as being relatively unique as it provides larger shipments of cargo from areas such as Cairns, to be distributed to relatively remote areas such as in North Queensland, the Northern Territory and Torres Strait. The nature of these operations is such that the Applicant utilises vessels of varying sizes and capacity, from long-haul ships to small self-propelled vessels. As the business operates vessels of all sizes and capacities, it would be inaccurate to describe the company as traditional ‘blue water’ or ‘deep water’ shipping company. It is worth noting approximately half the workforce is land based and are not engaged in marine based roles.
[79] On first glimpse the SGI Award’s intended coverage is plainly stated in that it simply covers employers “engaged in the operation of vessels… which, in the course of such trade or operation, proceed to sea on voyages outside the limits of bays, harbours or rivers”.
[80] As pointed out by the Applicant, there is more to consider and it is a combination of the inclusive and exclusive provisions of the SGI Award (clause 4.4(d) that are instructive as to the intended coverage of the award. Upon reading clause 4.4 it is apparent that as only one of the Awards outlined in clause 4.4(d) of the SGI Award can potentially apply to Sea Swift the potential coverage of each ought to be considered. In the present case, it is a question of whether the PHEWV Award provides the appropriate coverage to Sea Swift’s marine operations.
[81] It becomes necessary to consider whether the primary nature of Applicant’s marine operations fall within or substantially within the coverage of the PHEWV Award.
[82] A key question that is in dispute is whether the Applicant’s marine operations can be described as falling within the intended meaning of the ‘the operation of vessels within a port harbour or other body of water within the Australian coastline, or at sea on activities not covered by other awards’ [emphasis added].
[83] The evidence given by Mr O’Holloran in relation to the nature of the Applicant’s marine operations was largely uncontested by the unions and I accept Mr O’Halloran’s evidence in relation to the nature of Sea Swift’s operations.
[84] Mr O’Halloran’s evidence shows that a significant portion of the Applicant’s marine operations are conducted within locations that are clearly intended to be covered by the PHEWV Award, being in ports and harbours. It is also apparent from the evidence that a significant portion of Sea Swifts vessels operate at times outside the confines of ports and harbours but inside the territorial baseline.
[85] I am persuaded by the Applicants argument that Australia’s internal waters on the landward side of a territorial baseline, fall within what was intended by the Full Bench to be caught by the expression “or other body of water within the Australian coastline”. The logic is compelling; given the territorial baseline is by force of law effectively the Australian coastline. The Applicant’s marine vessels when operating within the territorial baseline are for much of the time in relatively shallow waters and within sight of the Australian coast.
[86] It is implicit in accepting that waters within the territorial baseline were intended by the Full Bench to be fall inside the definition of “or other body of water within the Australian coastline”, that I do not accept the argument that the term “within” was intended by the Full Bench to simply mean within a “coastline”, that being a point where lands meets water, and any water beyond that point (i.e internal waters) is the sea, and therefore is not an “other body of water within the Australian coastline”. 45
[87] The Applicant has also argued that the bodies of water surrounding the islands of the Torres Strait are also intended to be included within the meaning of the expression “or other body of water within the Australian coastline”. The Applicant set out that in the Torres Strait barges visit the islands in regular runs, land on a sheltered beach/and or within lagoons or fringing reefs, and often anchor nearby in the lee of such islands. It was said the territorial baseline does not commence at the shoreline, but at the closing line of the bay or lagoon or reef connected to the island. 46
[88] The evidence in Mr O’Halloran’s statement demonstrates by reference to the operations that occur in internal waters alone (being ports, bays, harbours, and or behind straight baselines) all but one of the operating vessels of the employer spend either the whole, or at least the substantial majority, of their operating hours each week, in waters referred to in the PHEWV Award. 47
[89] The definition of the seagoing industry as set out in clause 3.1 of the SGI Award contains the phrase “proceeds to sea (on voyages outside the limits of bays, harbours or rivers)”. [emphasis added] The term voyage is not contained in the PHEWV Award and the use of the term in the SGI Award provides assistance in the proper construction of the Award.
[90] The Oxford Dictionary within its definition of the word ‘voyage’ includes “a long journey involving travel by sea or in space”. The Macquarie Dictionary definition of the term ‘voyage’ includes “a passage, or course of travel, by sea or water, especially to a distant place”.
[91] The term ‘voyage’ does not sit neatly with the shorter relays that are part of the regular transhipping through a number of ports, harbours or locations of the like visited by the Applicants vessels. Further, the words “(on voyages outside the limits of bays, harbours or rivers)” which qualify the words “proceed to sea” indicate the substantial part of the voyage is ‘at sea’, until the voyages conclusion when it reaches its destination. The evidence of Mr O’Halloran demonstrates the clear majority of operational hours of the Applicants vessels are inside Australian internal waters, close to the coast or an island, and often involve movement in and out of waters described in the PHEWV Award. When considered in the full context of the SGI Award, the use of term ‘voyage’ supports the Applicant’s view that the SGI Award is intended to cover vessels that (usually) embark on substantial, deep water journeys at sea and is not intended to cover a business of the nature of the Applicant.
[92] It was not intended by the Full Bench that the SGI Award cover any vessel that ‘proceeds to sea’ as a feature or part of its operation. The nature of that award is such that the provisions of the PHEWV Award must also be considered, and in the present circumstances, a significant portion of the Applicant’s operation can be considered to fall within the coverage intended by the PHEWV Award. The Applicant’s operations substantially or wholly fall within bays and other types of enclosed waters, and in circumstances where its vessels proceed outside of those enclosed waters, they for the main remain in waters that are within the meaning of ‘other body of water within the Australian Coastline’.
[93] There are also circumstances where the Applicant’s vessels do in fact venture into sea, and those circumstances were foreshadowed by the Full Bench in their inclusion of the phrase “or at sea on activities not covered by other awards”. On the evidence, I am satisfied that the SGI Award does not cover the Applicant’s marine operations, and on that basis, any instance that their vessels are at sea is still intended to be covered by the PHEWV Award.
[94] There was considerable material put before me, including in the evidence of Mr Farrelly in regard to the SGI Award previously being relied upon for the purpose of applying the BOOT as part of the approval process of previous enterprise agreements made with other employers since the commencement of Modern Awards. The Unions and the Applicant produced examples which they claimed supported their differing interpretations of the Awards. I have placed little weight on this material in arriving at my conclusions as firstly, in the examples referred to by both the Applicant and the Unions, the businesses of the particular employer are not directly comparable to that of the Applicant, which is a business that is quite unique given what it does and where it operates. Secondly, none of these matters involved a contested proceeding resulting in a decision issued by the Commission with reasons addressing the same matters as the nature of the matters before me.
[95] For all of the above reasons, I am satisfied that, in accordance with s.193 of the Act, the Ports, Harbours and Enclosed Water Vessels Award 2010 is the appropriate Award to be applied to the Applicant’s marine operations for the purposes of the BOOT.
[96] On a separate matter, the notes contained underneath the table of pay rates for Marine employees at Schedule A of the Agreement state that the rates for marine employees other than cooks are calculated on the basis of an average of 42 rostered hours per week with overtime calculated for rostered hours in excess of 38. Marine employees are paid a daily rate. The Applicant in its Form F17 at question 3.5 proposed an undertaking to increase the daily rate for Cooks to $131.30 per day. It will need to be clarified as to whether overtime is incorporated in the Cook’s daily rate, and this may or may not require an undertaking to address this concern.
ADMINISTRATION
[97] The Applicant says that administration employees are principally engaged in the Head Office in Cairns, undertaking a range of tasks under the classification set out in Schedule A – Administration to the Agreement. The Applicant said these employees are otherwise covered by the Clerks Private Sector Award 2010 (the Clerks Award), and this was not in issue. 48
[98] It appears that a Level 3 Administrative Assistant who would receive $19.51 under the Agreement as at 1 July 2014 would receive marginally less than the Clerks Modern Award rate of pay at the time of $19.64 for a Level 2, year 1 employee.
FREIGHT CONSOLIDATION/ TRANSFER FACILITIES AND TRANSPORT LOGISTICS
[99] The Applicant said employees engaged at its freight consolidation/transfer facilities (freight sheds) are engaged under the classifications in Schedule A – Operations, with the majority of these employees coming under Levels 2 or 3 of the Agreement. These employees are said to perform a range of diverse functions and the Applicant contends that these employees are otherwise covered by the Storage Services and Wholesale Award 2010 (the SS&W Award) with the possible exception of some driver employees.
[100] The Applicant said that none of these employees perform shift work or carry out any work pattern that would match the description of a “shift worker” in clause 26.3 of the SSW Award or clause 29.1(a) of the Road Transport and Distribution Award 2010 (RT&D Award). It was said that at some outlying ports limited weekend hours are worked as part of ordinary hours, dependent upon the timetable of vessels. It was said that employees in Cairns rarely, if ever, work weekends and do not undertake shift work.
[101] The Applicant said it did not conduct a road transport business, and the use of vehicles to move freight from the vessels to the freight sheds and vice versa, or the final delivery of sea freight to some customers in some remote outports, is incidental to, and wholly supports, the Applicants marine freight operations. The Applicant said that no cargo is carried by road for any purpose other than to start or complete a marine transport operation related to that same freight. 49
[102] Mr Bruno gave evidence for the Applicant that the value of the fleet of vessels currently operated by it was $53 million dollars whereas the transport vehicles (trucks) operated by the Applicant was around $600,000 dollars. 50
[103] Mr Bruno gave evidence about the extent of truck driving performed by employees. 51 His evidence was that the truck drivers in Cairns spend approximately 80% of their time driving trucks.52 Mr Bruno gave evidence that general hands will occasionally drive trucks.53 His evidence indicated the Applicant did not engage shiftworkers.54
[104] The Transport Workers’ Union of Australia (“TWU”) submitted that the Applicant has not identified the correct relevant reference instruments for the purposes of the BOOT for truck drivers and distribution facility employees, and that the Agreement does not pass the BOOT when compared against the correct relevant reference instruments for truck drivers and distribution facility employees. The TWU further submitted that the extent of undertakings that would be required in order for the Agreement to be approved would result in substantial changes to the Agreement.
[105] Mr Veritz, an official of the TWU gave evidence about the nature of truck driving performed by employees of the Applicant, and classifications under the RTD Award that he believed truck drivers would fall within. 55
[106] The TWU contends the Applicants employees who are truck drivers and distribution facility employees are not covered by the SS&W Award as asserted by the Applicant. The TWU says that Applicant is a transport company, and it is neither primarily a storage company nor a wholesale company. It is submitted by the TWU that employees who work in the Applicant’s distribution facilities and who drive trucks are covered by the RT&D Award.
[107] The TWU argues that the transport of goods by road is clearly ancillary to the principal business of the Applicant which is the transport of goods by sea. Further, materials which are transported by sea and road by the Applicant are clearly received, handled and stored in the Applicant’s distribution facilities which fit the definition under the RT&D Award which is as follows:
“distribution facility means a facility from which goods are distributed by road (and at which such goods may be stored for the purposes of subsequent distribution) which is operated by an employer as part of or in connection with a road transport business of that employer.”
[108] The TWU in submissions 56 referred to the definition of ‘road transport and distribution industry’ in the RT&D Award and specifically subparagraph (b) which reads as follows:
“(b) the receiving, handling or storing of goods, wares, merchandise, material or anything whatsoever whether in its raw state or natural state, wholly or partly manufactured state or of a solid or liquid or gaseous nature or otherwise in a distribution facility;”
[109] The TWU argued that all the activities conducted in the distribution centres are done for the purpose of transporting goods. The TWU said that the Applicant is not a storage company, and it is a transport company. 57 The TWU argued that the fact of the Applicant being predominantly a sea transport company was irrelevant because of language found at subparagraph (a) in the definition of industry in the RT&D Award that read as follows:
“(a) the transport by road of goods, wares, merchandise, material or anything whatsoever whether in its raw state or natural state, wholly or partly manufactured state or of a solid or liquid or gaseous nature or otherwise, and/or livestock, including where the work performed is ancillary to the principal business, undertaking or industry of the employer;”
[110] On the matter of truck drivers The TWU said that the SS&W Award has no classifications which could cover the truck drivers employed by the Applicant. The SS&W Award excludes coverage of employees covered by the RT&D Award. The only truck driver classifications contained in the SS&W Award cover ‘steel distributing employees’. The Applicant does not employ ‘steel distributing employees’.
[111] The Applicant addressed the TWU case in regard to the RT&D Award applying to the distribution centres in closing submissions. 58 The TWU in support of its argument has relied on the definition of ‘distribution facility’ in the RT&D Award. The Applicant states that firstly the definition of ‘distribution facility’ in the RT&D Award refers to a facility operated by an employer ‘as part of or in connection with a road transport business of that employer’. The Applicant also made the point that the TWU’s reliance of the expression “including where work performed is ancillary to the principal business, undertaking or industry of the employer” in subparagraph (a) in the industry definition is misplaced, as the words from subparagraph (a) describe a particular vocational activity within a larger, and different, business undertaking by the employer.
[112] The Applicant says that this means that the RT&D Award can apply to an ancillary activity of transport by road of goods etc, that is, an activity which is ancillary to the principal business undertaking or industry of the employer to which the award otherwise cannot apply. In such a case the award covers and applies to the employer and those employees engaged in the actual transport by road of goods etc, even where the employer’s business is sea transport. 59
Consideration
[113] I accept that the RT&D Award does not cover employees including general hands working in the Applicants storage facilities as they are not operated by the Applicant as part of, or in connection with the road transport business of the employer. The business of the Applicant is not the transport of goods or other material by road. I also accept given the evidence concerning the nature of the work performed at these facilities when compared to the coverage of the SS&W Award, including the definition of industry in that Award, that the SS&W Award is the appropriate Award for the purposes of the BOOT.
[114] It is the case however, as acknowledged by the Applicant in the course of the matter that to the extent that employees are engaged in ancillary road transport activity, such employees are covered by the RT&D Award and not the SS&W Award. The matter of who falls within this group was not made entirely clear from the evidence. The Applicant claimed in submissions they are few in number. 60
[115] It also appears in the Operations stream that a Level 1 Groundsman on $17.52 per hour under the Agreement would receive less than the SS&W Award level 1 rate of $18.02. The same issue arises for a cleaner under the Agreement who would receive $17.77, but $18.02 under the SS&W Award.
MAINTENANCE DIVISION
[116] The Applicant said that employees engaged in the Employers maintenance operations are otherwise covered by the Manufacturing and Associated Industries and Occupations Award 2010. The Applicant said that these employees are engaged exclusively on the maintenance and repair of the Employer’s vessels and, in isolated cases, may be rostered to work an afternoon shift when a vessel is undergoing major repair or refit, and has been taken out of service for such work. The Applicant said that no employee is required to work a pattern of work that fits the description of a “shift-worker” within clause 41.3 of the Manufacturing Award. It was said maintenance (engineering) classifications are at Schedule A – Engineering of the Agreement. 61
[117] The rates of pay for employees in the engineering group are paid in excess of the rates in the relevant modern award.
OTHER MATTERS
National Employment Standards
[118] The TWU submitted that the Agreement does not provide for the fifth week of annual leave for shift workers pursuant to s.196 of the Act.
[119] The Form 17 indicated in response to question 2.16 that shift workers can be employed under the agreement. The Agreement does not provide for the fifth week of annual leave for shift workers. Section 196 of the Act provides that if a Modern Award applies to an employee and defines or describes that employee as a shift worker for the purposes of the fifth week of annual leave, that employee must also be entitled to the fifth week of annual leave under an Enterprise Agreement. That is, the definition of shift worker for the purpose of the fifth week of annual leave must not be detrimental when compared with the relevant Modern Award definition.
[120] The Agreement provides for the working of an afternoon shift at clause 4.1.6. The RT&D Award, SS&W Award and the Manufacturing & Associated Industries and Occupations Award 2010 all provide for an entitlement to a fifth weeks annual leave in certain circumstances.
[121] Section 196 of the Act requires that:
“196 Shiftworkers
Application of this section
(1) This section applies if:
(a) an employee is covered by an enterprise agreement; and
(b) a modern award that is in operation and covers the employee defines or describes the employee as a shiftworker for the purposes of the National Employment Standards.
Shiftworkers and the National Employment Standards
(2) The FWC must be satisfied that the agreement defines or describes the employee as a shiftworker for the purposes of the National Employment Standards.
Note: Section 87 provides an employee with an entitlement to 5 weeks of paid annual leave if an enterprise agreement that applies to the employee defines or describes the employee as a shiftworker for the purposes of the National Employment Standards.”
[122] The evidence of witnesses for the Applicant in the hearing supported the submission made by the Applicant that the Applicant did not engage any shift worker’s. The Applicant made the case in both its written 62 and oral submissions63 that it does not engage shift workers. Whilst the F17 in response to question 2.16, indicated the Agreement could cover shift workers, the evidence is that it will not, and that there are no shift workers employed. On that basis the Agreement does not offend s.196 and there is no requirement for an undertaking to address this issue.
[123] The TWU submitted that Clause 5.3 Personal Leave only allows the use of personal leave for ‘carer’ purposes where an immediate family or household member is ill or injured, however the NES entitles an employee to use personal leave in circumstances where a member of the employee’s immediate family or household has an unexpected emergency (which may not be an illness or injury). Further the TWU submitted that the Agreement does not provide for unpaid personal leave for casual employees, or for employees who have exhausted their accrued entitlements. The TWU also submits that Clause 5.4 Compassionate leave does not provide for unpaid leave for casual employees.
[124] The TWU also submitted that Clause 10.3 provides that severance pay will not be paid where the employer has obtained ‘acceptable alternative employment’ for the employee. Section 120 of the Fair Work Act 2009 (“the Act”) provides that severance payments cannot be withheld in these circumstances unless the Employer has applied to FWC to reduce severance payments and has obtained an Order from FWC to reduce redundancy payments. Section 122 of the Act provides that in transmission of business situations, an employee may apply to FWC if they believe the decision to withhold severance payments affects them unfairly.
[125] The TWU conceded that whilst the Agreement does incorporate the NES, the fact that the Agreement contains provisions that are detrimental to the NES could mislead employees, who are unlikely to be aware of the legislative provisions and/or that those provisions override the provisions within the Agreement.
[126] The Applicant submits that the NES is incorporated in the Agreement (see clause 1.5 and 1.6) by the terms of the Agreement itself and that is an adequate means of dealing with the issues raised by the TWU.
[127] It is correct to say the Agreement on its own terms requires that the Applicant must ensure the Agreement and the NES is available to all employees, and more importantly that the NES and the Agreement contain the minimum conditions of employment for employees covered by the Agreement. The Agreement specifically states that the NES contains the minimum employment conditions for employees. I am satisfied that the Agreement does not contravene section 55 of the Act by seeking to exclude the NES in regard to the personal leave and compassionate leave clauses as these clauses do not seek to exclude the NES. It is therefore unnecessary for the Applicant to provide undertakings in connection with those matters.
[128] The language however at Clause 10.3.2(c) appears to seek to provide relief from the employer’s obligation to make severance payments where the employer obtains acceptable alternative employment for an employee, and this appears to be in conflict with, and therefore contravene s.120 of the Act as exemption under the NES is subject to an application and determination. This would appear to be a matter that requires an undertaking.
Genuinely Agreed
[129] Section 188 of the Act reads as follows:
“188 When employees have genuinely agreed to an enterprise agreement
An enterprise agreement has been genuinely agreed to by the employees covered by the agreement if the FWC is satisfied that:
(a) the employer, or each of the employers, covered by the agreement complied with the following provisions in relation to the agreement:
(i) subsections 180(2), (3) and (5) (which deal with pre approval steps);
(ii) subsection 181(2) (which requires that employees not be requested to approve an enterprise agreement until 21 days after the last notice of employee representational rights is given); and
(b) the agreement was made in accordance with whichever of subsection 182(1) or (2) applies (those subsections deal with the making of different kinds of enterprise agreements by employee vote); and
(c) there are no other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees.”
[130] The Unions raised both in submissions and the course of the hearing a number of issues in relation to an argument that employees have not genuinely agreed to the proposed Agreement. These came under the broad headings of the coverage of the Agreement; the group of employees not being fairly chosen; the role of senior managers in bargaining; alleged coercion, misrepresentation and adverse action; and communications with particular groups of employees. I will deal with each matter in turn.
Coverage of the Agreement
[131] The Applicant refers to the application clause of the Agreement that reads as follows:
“1.3 Application
This Agreement will apply to Sea Swift Pty Ltd and to the Employees of Sea Swift Pty Ltd in respect of all company operations for whom classifications and pay rates are contained in the Agreement.”
[132] The Applicant also referred to clause 1.6 that reads as follows:
“1.6 The National Employment Standards and this Agreement
The NES and this Agreement contain the minimum conditions of employment for Employees covered by the Agreement. This Agreement is a stand-alone Agreement and covers all terms and conditions of employment and no other Agreement or Award shall apply.”
[133] The Applicant refers to Schedule A of the Agreement that provides for Level 7 Managers in the Engineering, Operations, and Administration Streams, whose classification it argues is apt to cover senior managers in the business. The Applicant submits that it is sensible and permissible for the Agreement to cover managers in relation to their conditions, but for the manager to be paid a salary in excess of the minimum rate prescribed in the Agreement.
[134] It is asserted in submissions of the MUA and AMOU that the Agreement does not in reality apply to senior managerial employees and correspondingly those employees were not entitled to vote.
[135] On having read the terms of the Agreement and heard the evidence of the witnesses for the Applicant I am satisfied that the Agreement does apply to managers, and such managers were entitled to vote in a ballot for the Agreement. Section 53 of the Act has the effect that an enterprise agreement covers an employee if the agreement is expressed to cover (however described) the employee. I am satisfied the Agreement describes the Applicants employees engaged in management roles. There is nothing about being remunerated at a higher salary then the otherwise applicable minimum pay rate under the Agreement that would remove an employee from being covered. It is worth noting that whilst there is a small number of what were described as ‘senior managers’, of the 283 employees who voted, 169 voted yes, meaning there were 55 more employees who voted in favour of the agreement than against it. Even if it were the case that a small number of ‘senior managers’ are by some means not covered by the classifications of managers in each of the classification groups in Schedule A of the Agreement, given they are so few in number their participation in the vote, regardless of how they voted, could not have changed the result.
Group of employees not fairly chosen
[136] Given my finding that the Agreement covers senior managers, that finding answers one of the elements of the argument that the group of employees was not fairly chosen to the extent that it was put on a basis that the group of employees was less than the totality of the workforce.
[137] AIMPE made submissions to the effect that in the event that the Commission determined all employees were covered, it relied on the Full Bench decision in United Firefighters’ Union of Australia Fire & Emergency Services Board 64for the purpose of arguing the group was not fairly chosen given the inclusion of senior managers. That decision is distinguishable from this matter in that it dealt with a scope order application, and not an agreement approval application.
[138] The decision in the UFU matter dealt with specific issues as they pertained to the management structure of the employer in that case. The argument put here is that the group was not fairly chosen because of the inclusion of senior managers who have different obligations, responsibilities and interests. 65 One example referred to by Mr Quinn for the AMOU and MUA was that of Mr White who is a member of the board, had obligations to act in the best interests of the company.66
[139] On the evidence before me in this matter I am satisfied that the group was fairly chosen. No application for a scope order during negotiations was made and it appears negotiations proceeded on the basis of the Applicants preferred scope from commencement of negotiations. The evidence has not disclosed any obvious unfairness because of the inclusion of a small number of senior managers within the scope of the Agreement covering a wider workforce of some 350.
Role of senior managers as bargaining representatives
[140] The MUA and AMOU referred to the Form F16 filed by the Applicant, and the answer to question 5.3 on the Form where Mr O’Halloran and Mr Fitch were identified within a list of persons named as employee bargaining representatives. The Form F16 was completed and signed by Mr Erbacher for the Applicant. The concern raised by the Unions was that both Mr O’Halloran and Mr Fitch hold management positions.
[141] Mr O’Halloran gave evidence that he never completed a nomination for himself as a bargaining representative. Mr Keats for AIMPE submitted in closing submissions that while acknowledging Mr O’Halloran gave evidence he did not nominate as a bargaining representative, the fact of his being named as an employee bargaining representative was inconsistent with his evidence at the hearing and minutes of meetings identifying him as a bargaining representative. Mr Keats said Mr Erbacher could have been called to give evidence in regard to this discrepancy. Mr Keats raised the matter of Mr O’Halloran holding shares in the business in connection with whether he was genuinely independent. 67
[142] It was said Mr Fitch also, according to the evidence of Mr Bruno, was involved in conducting meetings with employees in relation to explaining the Agreement as a representative of management, while also being a nominated employee representative. It was asserted neither Mr O’Halloran nor Mr Fitch were free from control of the employer, and did not meet the test in Fair Work Regulation 2.06. 68
[143] The AMOU and MUA submitted that the managerial staff who acted as bargaining representatives could not be free from control by the employer or free from improper influence when acting in that capacity, as required byregulation 2.06. It was argued that the control or influence was improper because ‘they’ were involved in that role knowing they had no genuine personal interest in the Agreement. AIMPE submissions on this point were of a similar nature to that of the MUA and AMOU.
[144] The Applicant said there was no evidence to support the submission that Mr O’Halloran and Mr Fitch being managers caused the Agreement not to be genuinely agreed. The Applicant said Mr O’Halloran for example was a working master in the fleet as well as a manager. The Applicant said that the application of Regulation 2.06 was misplaced in regard to Mr O’Halloran as Mr O’Halloran was not appointed in writing as a bargaining representative by himself or anyone else. Having heard Mr O’Halloran give his evidence that he did not nominate himself and was not nominated by anyone else in writing as a bargaining representative, I am satisfied that he was not, despite his own confusion on the point, a bargaining representative for the purposes of the Act or regulations. It appears it was an error for his name to have been included on the Form F16 as an employee bargaining representative.
[145] Having read the minutes of the meetings it appears Mr O’Halloran and Mr Fitch did not play a significant role in the course of negotiations themselves. There is no evidence that any employees changed their vote because of the conduct of Mr O’Halloran or Mr Fitch. I was referred to a decision of Roe C in MIDG Pty Ltd t/as Healthy Habits Queens Plaza. 69The facts in that case are distinguishable from this matter as in MIDG the employer was a small business and only one employee was an appointed employee bargaining representative who happened to be a manager and was not covered by the agreement.
[146] The context overall in this case is that five Unions were bargaining representatives and 23 individual employees were nominated as employee bargaining representatives. I am not satisfied the evidence on the particular facts of this case regarding the role of either Mr Fitch participating in the making of the Agreement as an employee bargaining representative whilst holding a management role, or the role played by Mr O’Halloran (albeit not as an appointed bargaining representative) is a basis to conclude the Agreement was not genuinely agreed.
Alleged coercion, misrepresentation adverse action and communications with particular groups
[147] The Unions made much of an email sent by Mr White, the CEO of the Applicant on the eve of the ballot. 70 The proper context of the email sent to all employees by the CEO at 10.27pm on 13 May 2015 on his evidence was that it was sent in response to an email forwarded by Mr Jamie Leitner,71an employee bargaining representative, to certain employees of the Applicant earlier the same day at 3.42pm headed “Vote No Campaign for Seaswift EBA”. Without reproducing Mr Leitner’s email in full it includes subjective commentary critical of the Applicants proposed Agreement which is not unusual for the cut and thrust of enterprise bargaining negotiations.
[148] The CEO, in what was no doubt intended as a ‘return of fire’ as part of the Applicants campaign to have a successful ballot, engaged in similarly subjective commentary seeking to persuade employees to vote yes.
[149] The MUA and AMOU characterised some of the language in Mr White’s email as intimidatory and overblown threats. 72 The conduct that was the focus of the Unions concerns in the body of Mr White’s email on the eve of the vote included the following;
“…Let me be crystal clear. An overall no vote tomorrow will result in not only the above benefits NOT flowing through to all employees and also risk the ongoing nature of the Cadetship program, it will put the very future of the organisation at risk. I made the point clear at the final representative meeting but no doubt this point was not passed through from your union representatives, instead they aim to push for greater membership by encouraging you all to vote no. Let me be clear, a heavily unionised Sea Swift will not and cannot exist in its current form and will be the death warrant to what is a well respected provider of essential services to remote northern Australia – and that’s what I care about above all else, which is why I am encouraging you to vote YES….”
[150] Both parties referred to the decision of Deputy President Asbury in Central Queensland Services 73. The facts in the Central Queensland Services matter are not dissimilar to this matter. The employer in that matter involving a coal mine communicated to employees that if the ballot agreement was not voted up the mine would be closed. The Deputy President concluded in that matter as follows:
“[83] I am also of the view that the fact that an employer makes negative comments about the economic environment in which it is operating in an attempt to persuade employees to approve an enterprise agreement, is not of itself a reasonable ground on which to form a belief that an agreement has not been genuinely agreed. That an employer may exaggerate economic circumstances is also not of itself a sufficient basis to justify such a conclusion that agreement is not genuine. In the present case, there is evidence that information disseminated to employees by the CFMEU about the viability of Daunia Mine may have been exaggerated. In the cut and thrust of bargaining, some conduct of this kind from the participants is not inappropriate and it is certainly not a basis for finding that there are reasonable grounds for believing that an agreement is not genuinely agreed to by employees.
………………………………….
[85] I accept that employees at Daunia Mine may have been under some stress when considering whether to approve the proposed Agreement. They had previously voted to reject an earlier iteration of the proposed Agreement and had been subjected to a “Yes” campaign from BMA and its managers and a “No” campaign from the CFMEU and its members. It is a matter of public record that the coal industry is confronting extremely difficult economic conditions. Employees who work in the Coal industry and live in towns that depend on that industry know first-hand of mine closures or retrenchments of mine workers. I do not doubt that employees at Daunia who voted on whether to approve the Agreement would have considered the possibility of the Mine closing and their jobs being at risk if the Agreement was not approved.
[86] However, I am unable to accept that employees were threatened with the loss of their jobs and the closure of the mine as a direct or indirect consequence of refusing to approve the Agreement. For an employer to state that it requires certainty and that its shareholders view labour costs as an area in which they are not prepared to accept uncertainty, is reasonable, appropriate and undoubtedly factually correct. It is not inappropriate for an employer to state that certainty about labour costs and industrial relations stability is needed in order for a business to continue to operate. Neither is it inappropriate for an employer to state to employees who are considering whether to approve an agreement, that if the agreement is rejected it will not resume negotiations at the level of the rejected offer. These are the statements that BMA managers made to employees and they do not provide reasonable grounds for the Commission to believe that the agreement has not been genuinely agreed to by employees.”
[151] Mr White gave evidence on the email which indicated it was his concern that his message regarding the uncertainties and economic pressures on the Applicant was not getting through to employees. Mr White referred to the cadetship program costing the Applicant $1 million dollars per year. He referred to meetings where he raised concerns about the finances of the Applicant and the future of the organisation being at risk, and that tough decisions would have to be made. 74 Mr White gave evidence that unlike other businesses, Sea Swift cannot close uneconomic aspects of its operations as the communities that receive the essential services provided by Sea Swift cannot survive without it.75
[152] Mr White said that after seeing an amount of correspondence from union parties advocating a no vote, and after he became aware of the email of Mr Leitner, he considered that he should respond, including telling employees the serious nature of their decision, and his concern employees weren’t receiving a balanced view.
[153] The MUA and AMOU said that indigenous employees were specifically targeted by the email sent by Mr White as they worked and lived in the island communities at immediate risk. Further the email directed a threat to union members and employees contemplating joining a union in an explicit threat of adverse consequences in joining a union. 76 77
[154] No doubt the email of Mr White included some hyperbole; however the evidence discloses he had in the course of negotiations raised concerns about the financial position of the Applicant. His comments about the role of Unions within the Applicants business were inappropriate and may be more serious than that, but the sending of the particular email in the context of robust negotiations that had extended over a considerable period is not of itself, clear evidence of reasonable grounds to believe that the agreement has not been genuinely agreed to by employees. In the absence of any evidence that the email persuaded anyone to change their voting intention I am inclined to view the email in a similar way to the approach adopted in the Central Queensland Services matter.
[155] The MUA and AMOU said a further verbal message was communicated by Mr Russell to marine employees that they would lose their even time roster if they did not vote up the agreement. 78
[156] A transcript of a discussion involving Mr Russell and a group of employees, that was apparently recorded without his knowledge was relied upon. The Applicant addressed the specifics of the exchanges between Mr Russell and the crew on one vessel at some length. 79 When read in its entirety Mr Russell’s conduct in explaining his views and responding to employees was not of such a nature that it could be grounds for believing that the Agreement was not genuinely agreed to by employees.
[157] The MUA and AMOU raised as a separate issue that around 16% of the workforce are Aboriginal or Torres Strait Islanders yet the material did not show any steps taken, let alone all reasonable steps to ensure employees fully understood the terms of the Agreement and the effect of those terms. Mr Farrelly gave evidence that there are three distinct language groups within Torres Strait and English is a second language and a significant proportion of those people have difficulty with written English. Mr Farrelly said he requested at a meeting on 19 January that 2015 for the Applicant to arrange for representatives of indigenous employees from the Torres Strait to attend meetings, however Sea Swift refused.
[158] The Applicant criticised the Union submission as patronising and misconceived. The Applicant said it had a lengthy and proud history of engaging indigenous employees in their home islands and waters, in callings up to and including Master and Depot Manager. Mr Bruno gave evidence 80 about the steps taken by the Applicant to ensure employees, and particularly those in outlying facilities had access to relevant information regarding the proposed new agreement. He gave evidence that all indigenous employees speak and understand English and he was aware that all such staff communicate with the company and managers in English. He gave evidence that English is the dominate language for the Applicants indigenous employees, and students attend school just as they do anywhere in Queensland where English is part of the syllabus. Further he said all employees have completed various courses to enable them to perform their roles and language used in these courses is English. Having considered the evidence on this issue, particularly that of Mr Bruno, I am satisfied that the Applicant took all reasonable steps to ensure that the terms of the Agreement were explained to relevant employees including indigenous employees.
Conclusion on genuine agreement.
[159] I have considered each of the arguments put by the Unions as to why the agreement was not genuinely agreed. There was no direct witness evidence that any employee changed their vote, or was influenced to change their vote in relation to the making of the Agreement. The margin in favour of the Agreement was 55 votes. I am satisfied on the evidence the tests in section 188 of the Act have been met.
CONCLUSION
[160] Section 190 of the Act provides that the FWC may approve an enterprise agreement with undertakings. Section 190 states as follows:
“190 FWC may approve an enterprise agreement with undertakings
Application of this section
(1) This section applies if:
(a) an application for the approval of an enterprise agreement has been made under section 185; and
(b) the FWC has a concern that the agreement does not meet the requirements set out in sections 186 and 187.
Approval of agreement with undertakings
(2) The FWC may approve the agreement under section 186 if the FWC is satisfied that an undertaking accepted by the FWC under subsection (3) of this section meets the concern.
Undertakings
(3) The FWC may only accept a written undertaking from one or more employers covered by the agreement if the FWC is satisfied that the effect of accepting the undertaking is not likely to:
(a) cause financial detriment to any employee covered by the agreement; or
(b) result in substantial changes to the agreement.
FWC must seek views of bargaining representatives
(4) The FWC must not accept an undertaking under subsection (3) unless the FWC has sought the views of each person who the FWC knows is a bargaining representative for the agreement.
Signature requirements
(5) The undertaking must meet any requirements relating to the signing of undertakings that are prescribed by the regulations.”
[161] Having made the findings above, I have identified a number of concerns that the Agreement does not met the requirements of s.186(2)(c) and (d). These concerns are;
(i) The daily rate of pay for Cooks given an entitlement to a 38 hour week;
(ii) The rate of pay for a Level 1 Groundsman, (Operations);
(iii) The rate of pay for a Level 1 Cleaner (Operations);
(iv) The rate of pay for a Level 3 Administrative Assistant (Administration);
(v) The rate of pay for Level 2 Truck Drivers who would otherwise be covered by the RT&D Award;
(vi) Clause 10.3.2(c) appears to contravene s.120 of the Act;
(vii) The minimum engagement for casual employees being 2 hours compared to 4 hours in the SS&W Award and RT&D Award, and 3 hours in the Clerks and PHEWV Awards.
[162] It is noted that when the application was filed the Form F17 filed with the application proposed a number of undertakings in answer to question 3.5 that anticipated a number of the issues referred to above. I am prepared to consider undertakings to address each of the matters set out above.
[163] I intend to relist the matter at 10am on Thursday 5 November 2015 in Brisbane to provide the Applicant an opportunity to address each of these matters, and particularly an opportunity for the Applicant and TWU to make submissions concerning the matter of the classifications in the Agreement and how they relate to classifications in the RT&D Award. As I have found that the PHEWV Award is the appropriate Award to be applied to the Applicant’s marine operations for the purposes of the BOOT, and this has been a matter in dispute, the hearing on Thursday will also provide an opportunity for the AIMPE, AMOU and MUA to raise any outstanding issues in regard to the BOOT if those Unions wish to do so.
COMMISSIONER
Appearances:
Mr Herbert counsel for the Applicant instructed by Livingstones Australia:
Mr Quinn CRH Lawfor MUA and AMOU:
Mr Keats W G McNally Jones Staff for the AMPE:
Ms Cerrato for the TWU.
Hearing details:
2015.
Cairns:
26 August
27 August
1 Exhibit 1 Statement of Lino Bruno
2 Exhibit 2 Statement of Robert O’Halloran
3 Exhibit Statement of Fred White
4 Exhibit 12 Outline of Applicant’s Submissions
5 Exhibit 8 Statement of Bernard Farrelly
6 Exhibit 9 Statement of Reply Bernard Farrelly
7 Exhibit 7 Statement of Russell Vieritz
8 Exhibit 12 Outline of Applicant’s Submissions at pp.34-36
9 PN1293-PN1295
10 PN1229-PN1311
11 Exhibit 12 at p.80
12 Exhibit 2 Statement of Robert O’Halloran at pp.3-5
13 Ibid
14 Ibid
15 Ibid at p.6
16 Ibid at p.7
17 Ibid at p.10
18 Ibid at p.12
19 Ibid attachment D
20 Exhibit 2 Statement of Robert O’Halloran Attachment D
21 Ibid at p.16
22 Ibid at p.19
23 Exhibit 12 at p.41
24 Ibid at p.42
25 Ibid at p.44
26 PN1727
27 Exhibit 12 at p.49
28 Ibid at p.50
29 Ibid at p.55
30 Ibid at p.59
31 Ibid at p.63
32 Exhibit 2
33 Ibid at p.65
34 Ibid at p.66
35 Ibid at p.68
36 Ibid at p.69
37 Exhibit 17 at Paragraph 24
38 Ibid at p.25
39 Exhibit 8 Statement of Bernie Farrelly at 8
40 Ibid at p.12
41 PN1269
42 Transport Workers’ Union of Australia v Coles Supermarkets Australia Pty Ltd [2014] FCAFC 148
43 City of Wanneroo v AMACSU [2006] FCA 813
44 Kucks v CSR Ltd [1996] IRCA 166 (19 April 1996)
45 PN 1653
46 Exhibit 12 at p.71
47 Ibid at p.72
48 Exhibit 8 at p.17
49 Ibid at pp.18-20
50 PN 97-PN98
51 Exhibit 1 Statement of Lino Bruno paragraph 5 to 25
52 PN 112
53 PN 119
54 PN 127
55 Exhibit 7 Statement of Russell Vieritzparagraph 18
56 PN 1497-PN1556
57 PN 1507
58 PN 1798 to P1799
59 Applicants Submissions in Reply at p.6
60 Exhibit 12 at p.89
61 Ibid at p.21
62 Exhibit 12 at p.89
63 PN 1344
64 United Firefighters’ Union of Australia Fire Metropolitan Fire v Emergency Services Board and Others [2010] FWAFB 3009
65 PN 1746
66 PN 1751
67 PN1693
68 Exhibit 14 pp. 36-48
69 [2010] FWA 1131
70 Exhibit attachment G1
71 Ibid attachment F
72 Exhibit 17 at p.55
73 [2015] FWC 1554
74 Exhibit 4 at p.17
75 Ibid at 18
76 Exhibit 17 at pp.57-60
77 PN 1769-PN1772
78 PN 1774
79 PN 1405-PN1440
80 Exhibit 1 Statement of Lino Bruno paragraphs 37 to 52
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