Skilled Offshore Australia Pty Ltd v Maritime Union of Australia

[2015] FWC 7479

[2015] FWC 7479

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739 - Application to deal with a dispute

Skilled Offshore Australia Pty Ltd
v
Maritime Union of Australia
(C2015/1953)

COMMISSIONER CLOGHAN PERTH, 2 NOVEMBER 2015

Alleged dispute about any matters arising under the enterprise agreement.

[1] This is an application by Skilled Offshore Pty Ltd (Skilled or Employer) to deal with a dispute in accordance with a dispute settlement procedure (DSP).

[2] Skilled is in dispute with the Maritime Union of Australia (MUA).

[3] The application is made pursuant to s.739 of the Fair Work Act 2009 (FW Act).

[4] The DSP is contained in the Offshore Marine Services Pty Ltd Integrated Rating, Cooks, Caterers and Seafarers (Offshore Oil and Gas) Enterprise Agreement 2010 (2010 Agreement).

[5] At the hearing, Skilled was represented by Ms A Mansini, Director Legal and Migration Services, Australian Mines and Metals Association. Evidence on behalf of Skilled was given by:

• Mr M Wakelin, General Manager – Industrial Relations and Employee Relations; and



• Mr P Barrow, General Manager of Human Resources, Farstad Shipping (Indian Pacific) Pty Ltd.

[6] The MUA was represented by Ms E Palmer, Industrial Officer Evidence of behalf of the MUA was given by:

• Mr M Doleman, Deputy National Secretary; and



• Mr D Heath, the then Assistant State Secretary of the Western Australian Branch.

[7] This is my decision and reasons for decision on Skilled’s application.

RELEVANT BACKGROUND TO THE DISPUTE

[8] On 26 February 2015, Mr Paul, Skilled’s Industrial Relations Advisor communicated to Mr Heath that “the client would like to charter flights for the following vessels and days”. The email set out the days (17 and 18 March 2015) and vessels in which the crew change would be undertaken by a charter flight from Karratha to Perth.

[9] Mr Heath responded to Mr Paul on the following day that subclause 32.10 of the 2010 Agreement set out obligations for the Employer to consult with both the MUA and “its members”. Further, he stated, consultation required far more than an exercise of Polarcus informing the MUA (via Skilled), what it would like to do.

[10] The vessels, Polarcus Amani and Polarcus Asima, are deployed off the northwest coast of Western Australia and are operated by Polarcus Ltd. Skilled provides crew to the vessels.

[11] Mr Heath concluded his response to Mr Paul by advising him that the MUA would be “instructing our members not to get off the Polarcus vessel until they are booked onto a commercial flight from Karratha to Perth”. 1

[12] On 9 March 2015, Skilled made application (C2015/2001) pursuant to s.418(2)(b) of the FW Act, for an order that the MUA and its members, or employees who are eligible to be members of the MUA, employed on the Polarcus Amani and Polarcus Asima, not commence, engage in, or threaten to engage in any industrial action.

[13] On 12 March 2015, I issued an Interim Order in application C2015/2001 (PR561944) that industrial action not commence or be engaged in or threaten to be engaged in, until the application was finally determined.

[14] Applications C2015/2001 and C2015/1953 are intertwined.

THE DISPUTE

[15] The parties agree that Skilled have consulted with the MUA as required by paragraph 32.10(a) of the 2010 Agreement. 2

[16] The MUA does not agree that Skilled have consulted with the relevant employees as required by paragraph 32.10(a) of the 2010 Agreement. 3

[17] The parties do not agree on the meaning or intention of paragraph 32.10(a) of the 2010 Agreement. 4

[18] The parties agree that the DSP has been followed to enable the Fair Work Commission (Commission) to resolve the dispute by way of arbitration.

[19] Reduced to its basics, this dispute is focused on the meaning of subclause 32.10 of the 2010 Agreement and the Employer’s direction to employees on 17 and 18 March 2015, that they would travel from Karratha to Perth by charter aircraft.

RELEVANT PROVISIONS OF CLAUSE 32.10 OF THE 2010 AGREEMENT

[20] Clause 32.10 of the 2010 Agreement relevantly is as follows:

“32.10 Flights

(a) Commercial airlines and accepted charter operators will be the normal mode of transport to and from the vessels. However, in the event that it is deemed necessary to charter aircraft this shall be subject to a process of consultation with the Union and the affected Employees.

(b) Fully serviced, economy fare commercial airlines will be used wherever possible.

(c) …”

SUMMARY OF EMPLOYER’S CASE

[21] Skilled submit that the normal mode of transport is both commercial and accepted charter operators. In addition, the only “qualifier” to the normal circumstances is a process of consultation. 5

[22] Skilled acknowledge that the 2010 Agreement does not provide a definition of “commercial airlines” nor “charter operators”. The word (put in the grammatical sense) “accepted” implies that the drafters of the 2010 Agreement acknowledged or understood that not all charter operators would be acceptable. 6

[23] As a consequence of there being no definition of “accepted”, the Employer submits that subclause 32.10 is ambiguous and uncertain and the Commission should have regard to prior negotiations of the parties.

SUMMARY OF MUA’S CASE

[24] The MUA submit that subclause 32.10(b) of the 2010 Agreement should be interpreted in its plain and ordinary meaning, and that, “commercial airlines will be used wherever possible”. The MUA further submit that subclause 32.10(b) is mandatory with no exceptions and supported by the Oxford Dictionary of English (ODE) which defines “wherever” as meaning “in every case when” and “emphasizing a lack of restriction”. The ODE defines “possible” as “able to be done or achieved”. In summary, the MUA contend that commercial airlines must be used in every case where the use of commercial airlines is able to be accessed or achieved. 7

[25] The MUA submit that its interpretation regarding 32.10(b) is supported by the use of the word “necessary” in subclause 32.10(a) of the 2010 Agreement. In summary, the use of charter operators can only occur where it is needed or essential. Finally, the use of charter operators is conditional upon consultation with the MUA and affected employees. 8

[26] The MUA contend that the provisions of 32.10 of the 2010 Agreement are not ambiguous. However, if it is necessary to consider surrounding circumstances to ascertain the meaning of the subclause, the surrounding material supports the MUA’s contentions.

CONSIDERATION

[27] The core of Clause 32 of the 2010 Agreement is “Travelling”. Subclause 32.10 is concerned with “flights”

[28] With respect to flights, there is a duality – that is, commercial airlines and charter operators. However, they are not binary opposites in the sense of “good” and “evil” but like Romeo and Juliet – a couple – in this case, a mode of airline operations.

[29] A plain and ordinary meaning of subclause 32.10(a) is that both commercial airlines and charter operators will be the “normal” or prevalent mode of airline operation in which employees travel. However, the word “accepted” precedes “charter operator”.

[30] For reasons which will become apparent later in this Decision, I am satisfied that the word “accepted” in subclause 32.10 was meant to be used in the adjective sense to describe charter operators. In my view, the word “accepted” could be replaced with similar words such as “credible” or “tenable”.

[31] The MUA submit that the word “accepted” means a charter operator that has been “consented to or tolerated by the parties”. 9 Skilled submit that, “on the face of the subclause” a plain meaning is not readily apparent, especially in the absence of a definition of “accepted charter operators”.

[32] The parties, in their respective cases, set out, in my view, the difficulties and uncertainties, with subclause 32.10(a) of the 2010 Agreement. The context to the word “accepted” is that charter operators will be one of the two means of airline operations which bring employees to and from Perth. I cannot derive from subclause 32.10(a) what is to be done to make “accepted charter operators”, acceptable. Put differently, what has to take place to differentiate between an acceptable charter operator and an unacceptable charter operator? For this reason, I am satisfied, consistent with Golden Cockerel, 10that subclause 32.10(a) of the 2010 Agreement is uncertain and has potentially more than one meaning.

[33] Having determined that subclause 32.10(a) is susceptible to more than one meaning, evidence of surrounding circumstances is admissible to aid the interpretation of the 2010 Agreement.

[34] The predecessor to the 2010 Agreement was the Total Marine Services Pty Ltd – Integrated Ratings, Cooks, Caterers and Seafarers Agreement 2006-2009 (2006 Agreement). Clause 29 of the 2006 Agreement is entitled “Travelling”. Subclause 29.12 is headed “Charter Flights” and reads:

“29.12.1 The parties agree that commercial airlines and accepted charter operators will be the normal mode of transport to and from vessels. However, in the event that it is deemed necessary to charter aircraft the provisions of clause 1.2 (sic) shall apply.

29.12.2 Deviations from the normal practice shall be subject to a process of consultation with the relevant Branch of the union and the affected employees.”

[35] Mr Barrow gave evidence that he had been involved in Human Resources and Employee Relations for approximately 40 years in the maritime industry. Mr Barrow has been involved in numerous negotiations in the offshore vessel operator industry. A number of these negotiations for enterprise agreements were “industry” negotiations with the MUA and resulted in a common set of industry terms and conditions of employment.

[36] Mr Barrow gave detailed evidence of negotiations leading to the 2006 Agreement. The vessel operators response to the MUA’s “Comfort Claim” is set out as follows:

“7. Charter Flights Outcome 4/8/05

Agreed the following wording

Charter Flights

1.1. The parties agree that commercial airlines and accepted Charter operators will be the normal mode of transport to and from the vessels. However in the event that it is deemed necessary to charter aircraft the provisions of clause 1.2 shall apply.

1.2. Deviations from the normal practice shall be subject to a process of consultation with the relevant Branch of the union and the affected employees.

1.3. Fully serviced commercial airlines will be used wherever possible.

MUA to respond”

[37] Paragraph 11 of Mr Barrow’s witness statement, set out below, was the subject of cross examination by Ms Palmer.

“On 24 August 2005, I attended another negotiating meeting in which the MUA responded with a counter proposal which sought to limit the “normal” mode of transport to exclude charter flights. The employers rejected the MUA’s counter proposal because it was not practical. The MUA’s proposal was not practical because there were Ports that were not able to be serviced other than by charter flight. For example, Portland in Western Victoria which has serviced both seismic and normal rig supply operations in excess of three decades. The focus at the time was to ensure the provision of toilets facilities with a degree of privacy, food and soft drink for the employees when in flight on a charter service. Attached and marked as follows are the relevant records:

a) Annexure PB-5 is a true copy of the attendance record from the August 2005 meeting; and

b) Annexure PB-6 is a true copy of the MUA’s counter position and a note of our response.”

[38] The parties eventually agreed in the 2006 Agreement to the following subclause:

“29.12 Charter Flights

29.12.1 The parties agree that commercial airlines and accepted Charter operators will be the normal mode of transport to and from vessels. However, in the event that it is deemed necessary to charter aircraft the provisions of clause 1.2 shall apply.

29.12.2 Deviations from the normal practice shall be subject to a process of consultation with the relevant Branch of the union and the affected employees.

Fully serviced commercial airlines will be used wherever possible.”

[39] As can be seen, the subclause is identical to that proposed by the vessel operators.

[40] The MUA assert that subclause 32.10(b) of the 2010 Agreement provides that “commercial airlines must be used in every case when use of commercial airlines is able to be done or achieved”. 11 The MUA contend that support for this submission lies in the fact that commercial airlines operate from Karratha to Perth and back, and therefore, commercial airlines are possible – and consequently, commercial airlines must be used in every case.

[41] The MUA’s assertion above in paragraph [40] is totally defined in terms of commercial airlines existing and operating between Karratha and Perth. The proposition by the MUA is that the Employer agreed, with foresight, to a provision in which it was effectively “handcuffed” to commercial airlines, irrespective of cost, schedules or any other operational requirement. I am not prepared to give such a narrow definition of the words “wherever possible”.

[42] The nature of enterprise agreements is that they never can provide for all the imaginable possibilities in the workplace; it is for this reason that terms are drafted in such a way to reflect open contextual circumstances.

[43] Try as they do, the parties to enterprise agreements cannot go down every “nook and cranny” of what potentially could occur in the workplace. There is often potential vagueness or doubt, which has to be considered in context.

[44] The context in this application in that Polarcus Ltd advised the Employer that it was no longer viable to use commercial airlines. 12 The basis of the non-viability related to cost, coordination and the management of 55 people moving in each direction from the vessels.13

[45] I am satisfied from the cross examination that, at the time the 2006 Agreement was made, both parties were aware of, and accepted, that in some instances, travelling by commercial airlines was not possible and there was a need to travel by charter operators. Secondly, I am satisfied that charter operators provided the vessel operators with flexibility to respond to operational changes. 14

[46] Mr Doleman was unable to give the same detailed documentary evidence as Mr Barrow. 15 However, I am satisfied, on his evidence, that in the late 1980s and the 1990s, employers had difficulties in accessing, or if able to do so, timely commercial flights. In not being able to do so, employers turned to charter operators. Although charter operators became the normal means of travel in some journeys, it led to the uncontested description of the MUA’s “Comfort Claim” in the 2006 Agreement negotiations. As its name suggests, the claim was concerned with the adequacy of amenities and services on particular charter flights.

[47] I consider it fair to say that, in the passage of time, conditions have changed in relation to charter operators between Karratha and Perth.

[48] It appears with the exception of one event in February 2015, there is no evidence relating to disputes concerning subclauses 29.12 in the 2006 Agreement or 32.10 in the 2010 Agreement, since 22 March 2006 when the 2006 Agreement commenced.

[49] In the absence of almost no controversy regarding both subclauses since 22 March 2006, I consider it fair to say that both subclauses have existed without contention.

[50] What does “deemed necessary” mean? In the context of subclause 32.10(a), the normal state of travel is by airlines and accepted charter operators. However, notwithstanding this normal state of affairs, if it is “deemed necessary” to “charter aircraft”, this action is subject to consultation.

[51] At this point, I consider it useful to consider the use of the words “shall” and “will” in subclauses 32.10(a) and (b). The parties have tended to approach both words as if they are interchangeable. While both words are concerned with the future, I am unable to agree that they are interchangeable.

[52] In the sentence, “However, in the event it is deemed necessary to charter aircraft this shall be subject to a process of consultation with the Union and the affected employees”, the word ‘shall” denotes an obligation or condition that, where it is deemed necessary to use charter aircraft, there shall be a “process of consultation’. 16

[53] However, in respect to the two other sentences in subclause 32.10(a) and (b), the word “will” is used, as opposed to, “shall”.

[54] In the sentence “Commercial airlines and accepted charter operators will be the normal mode of transport”, the obligatory “shall” is not inserted and is replaced with the word “will”. “Will” denotes a future condition in terms of, a “willingness”, “desire” or “wish”. 17

[55] I consider that the word “will” in the above sentence in paragraph [54], both on the evidence, and inferentially, is intended to be a future expression of the present condition. The present condition being, commercial airlines and accepted charter operations, are the normal mode of transport.

[56] I now move to the use of the word “will” in the sentence, “Fully serviced, economy fair commercial airlines will be used wherever possible”. Similarly, I find that the meaning of the sentence reflects that the parties agreed to a term, in which the present condition was that commercial airlines were the preferred mode of airline operations. However, there was a willingness to condition, or qualify, the normal situation [commercial airlines] with the condition, “wherever possible”. I am unable to agree that this term should be interpreted to read, “commercial airlines shall be used in all instances” because that would rewrite the term.

[57] There is a subtle, but nevertheless distinction, between “shall” and “will”. The word “will” is used in preference to “shall”, where a mandatory direction is not appropriate.

[58] I shall attempt to demonstrate this subtle difference, most probably inadequately, with the following statements; “Vasilka has the will to live” and “Vasilka shall live”. The latter statement is more certain and direct, than the former.

[59] In subclause 32.10(b) of the 2010 Agreement, it appears that the parties deliberately moved away from the mandatory “shall” and expressed a willingness or desire to use commercial airlines “wherever possible”. The phrase “wherever possible”, of itself, is indicative of the parties acknowledgement that, in certain circumstances, it is not possible to always use commercial airlines.

[60] “Wherever possible”, means that it is desirable, where possible, that commercial aircraft will be used when employees are travelling. The term acknowledges that in some circumstances, it is not possible.

[61] Put differently, travelling by commercial airlines by employees is conditional on it being possible.

[62] The word “possible” is defined in the ACOD as that which can “exist”, “be done” or “happen”, “that is likely to happen” and “that is acceptable for want of better”.

[63] In the context of the surrounding evidence, I am satisfied that “wherever possible” was intended to be interpreted in such a way that commercial airlines are the preferred means of travelling, but acknowledging that this was not always possible, and charter operators could be used in the alternative.

[64] Adopting binary opposites as I did earlier in this Decision, the term is not phrased, “commercial airlines will be used unless it is impossible not to use them”.

[65] At the time the 2006 and 2010 Agreements were made, the parties already accommodated the alternative to commercial airlines [charter operators] hence rather than phrase the term in “unless it is impossible”, the parties agreed to a more practical approach which can be translated into a term that travelling by commercial airlines is desirable, but if, for whatever reason, it cannot be done, the use of charter operators can exist.

[66] I now turn to the obligatory requirement, that in the event charter aircraft is deemed necessary, it shall be the subject of a “process of consultation”.

[67] Mr Doleman gave evidence that, in his view, consultation is to “sit down” with the other party and “try and find a consensus view in regards to the subject matter”. His evidence was that “genuine consultation” is not advising “someone that you intend to do something”. In summary, “consultation is about two people or two parties arriving at an amicable conclusion”. 18

[68] The Employer’s evidence is quite simple; it did not consult with affected employees. 19 Skilled’s reason for not consulting with employees is plausible. Mr Wakelin gave evidence that the Employer is not aware of how many of its employees are members of the MUA but considers a fair assumption would be that 100% are members of the MUA. Further, that the MUA have indicated, through its State Secretary, that it would be futile for the Employer to attempt to communicate directly with its employees “because essentially they will only listen to the MUA”.20

[69] With respect to the evidence, I am not able to agree with Mr Doleman’s assessment of the meaning of consultation, nor, as practical as it may be, Mr Wakelin’s approach to consultation with affected employees.

[70] I am satisfied that the words “process of consultation” in subclause 32.10(a) of the 2010 Agreement with “affected employees”, is focused on the course of action to inform both the MUA and employees, that it is necessary to use charter aircraft.

[71] The parties agree that the Employer has met its mandatory obligation with respect to the process of consultation with the MUA. In the case of the MUA, there is no dispute that:

• the Employer, on 26 February 2015, informed the MUA that it intended to use charter flights on 17 and 18 March 2015;



• the MUA responded to that information on 27 February 2015;



• Mr Wakelin further discussed the matter with the State Secretary of the MUA on 3 March 2015;



• Mr Wakelin reduced, in part, his conversation with the State Secretary to an email to him on 4 March 2015;



• on 4 March 2015, the Master of the Polarcus Amani received an email from MUA members on board the Polarcus Amani who had been made aware that Polarcus was to use charter flights between Karratha and Perth on 17 March 2015 and “it is the unanimous decision of the MUA members on board that we are not prepared to accept a charter flight”; and



• on 5 and 6 March 2015, Mr Wakelin discussed the matter further with Mr Heath.

[72] Clearly, the process of consultation adopted by the Employer was, in plain English:

• this is what our clients intend to do;



• these are the reasons why our client is adopting this course of action; and



• a response was received from the MUA; and



• the MUA objected to the intended course of action.

[73] The reasons for the MUA’s objection can be seen in Mr Heath’s email; which is in his usual florid style:

“Polarcus’ desperation to stick our members on a dirty stinking charter flight which involves leaving members on the tarmac in Karratha for hours (and delaying their flight home) is not acceptable to the MUA and is in breach of Clause 32.10. If it was impossible to utilise a commercial airline, we would give due consideration to their request. It is eminently possible to use commercial airlines in this instance.” 21

[74] There is no evidence that the Employer was going to stick its employees on a “dirty stinking charter flight”. In fact the two charter operators, who I will not name, are well known and reputable airlines.

[75] Mr Wakelin’s evidence of what he considered to be the MUA’s objection was more forthright, and it was not contested in cross examination. It is:

“Based on these discussions [with Mr Heath and Mr Cain], I understand the MUA’s objection to simply be that SKOA [Skilled] must provide a commercial flight unless the MUA agrees to it [charter aircraft].”

[76] Despite Mr Heath’s description of charter aircraft, I agree with Ms Palmer that the relevant merits of charter operators are not relevant to an interpretation of subclause 32.10 of the 2010 Agreement.

[77] What is relevant is that there is a process of consultation. That has taken place with respect to the MUA but not with affected employees.

[78] A plain and ordinary meaning of the process of consultation in subclause 32.10(a) of the 2010 Agreement, cannot be interpreted that the parties have to reach agreement or consensus as envisaged by Mr Doleman, or that the MUA has a right of veto on the use of charter aircraft. For the MUA to read the subclause in such a way, may be what it considers appropriate, but it is not what is contained in the subclause.

[79] In summary, I am satisfied that in relation to the meaning and application of subclauses 32.10(a) and (b) of the 2010 Agreement, are as follows:

• at the time the terms were made, the present situation which existed was that commercial airlines and accepted charter operators were the normal mode of aircraft travel;



• this normal mode of airline travel had existed, in the context of an enterprise agreement, since, at least 22 March 2006;



• the first sentence of 32.10(a) reflects a willingness of the parties to continue with present arrangements that, commercial airlines and accepted charter operators, would continue into the future;



• the word “accepted” in “accepted charter operators” is used in the adjective sense to describe that the charter operators would need to be “credible” or “tenable”. I do not find that the word “accepted”, should be read, as if it was the end view of a process of consensus between the parties;



• the adjective sense of “accepted” is supported by the fact that it would only be the Employer, or its client to find it “necessary” to use charter aircraft. It would not make sense to suggest that an employee, or the MUA, deem it necessary that employees travel by charter aircraft;



• however, in the future, after commencement of the term, if it was deemed necessary to use charter aircraft, there had to be a mandatory process of consultation with the MUA and affected employees;



• the parties agree that the MUA has been consulted;



• the affected employees were not consulted;



• the process of consultation ordinarily requires affected employees to be advised of what is proposed, when and why. The “affected employees” should be able to respond within a reasonable timeframe. It is for the Employer to take the employees’ response into consideration and proceed accordingly. A plain and ordinary meaning of the subclause does not require consensus of the parties, or consent by the MUA/affected employees, to the proposed Employer’s course of action;



• in subclause 32.10(b) there was a desire or willingness to continue with commercial airlines “wherever possible”, which acknowledges that in some cases, it would not be possible;



• the words “wherever possible” should be given an open contextual meaning and not interpreted as “commercial airlines will be used unless it is impossible not to use them”. Consistent with the Employer, or its client deeming it necessary to use charter aircraft, the inappropriateness to use commercial airlines may be for a number of reasons. However, the Employer or client’s decision to use a charter aircraft should be taken within the context of the desirable situation being the use of commercial airlines.

[80] My Associate will contact the parties for a conference to determine how application C2015/2001 is concluded.

COMMISSIONER

Appearances:

A Mansini on behalf of Skilled.

E Palmer, on behalf of the MUA.

Hearing details:

2015:

Perth,

1 April.

Final written submissions:

Applicant: 18 May and 25 August 2015.

Respondent: 21 July 2015.

 1   Exhibit A1 (2)

 2   Exhibit A2 (4)

 3   Exhibit A2 (5)

 4   Exhibit A2 (3)

 5   Applicant’s outline of submissions, paragraph 3

 6   Ibid, paragraph 6

 7   MUA outline of submissions, paragraphs 16 and 17

 8   Ibid, paragraphs 18 to 20

 9   MUA outline of submissions, paragraph 24

 10   The Australian Meat Industry Employees Union v Golden Cockerel Pty Ltd [2014] FWCFB 7447

 11   MUA outline of submissions, paragraph 17

 12   Transcript PN74

 13   Transcript PN78

 14   Transcript PN77

 15   Transcript PN196

 16   ACOD

 17   ACOD

 18   Transcript PN199

 19   Transcript PN83

 20   Transcript PN96

 21   Exhibit A1 (4)

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