FEDERAL COURT OF AUSTRALIA

Sydney Ferries Corporation v Australian Maritime Officers Union [2008] FCAFC 193

INDUSTRIAL LAW – collective agreement between employer and union – whether on proper construction of the agreement employer could unilaterally introduce crew based rosters – interpretation in light of preceding agreement between the parties – no right to alter rosters without agreement – no error in analysis or conclusions of trial judge – appeal dismissed

COSTS – whether costs available in accordance with s 824(2) Workplace Relations Act 1996 (Cth) – application for anti-suit injunction prompted by act of the appellant – whether unreasonable act must have been committed in connection with the proceedings – no error in construction of relevant provisions by the trial judge – appeal against costs order dismissed  

Workplace Relations Act 1996 (Cth) s 824

Ruddock v Vadarlis (No 2) (2001) 115 FCR 229 - applied

Sydney Ferries Corporation v Australian Maritime Officer Union [2007] AIRCFB 909; (2007) 168 IR 122 - referred to

Sydney Ferries Corporation v Australian Maritime Officers Union (2008) 173 IR 223 - referred to

Sydney Ferries Corporation v Australian Maritime Officers Union (No 2) [2008] FCA 954 - affirmed

Sydney Ferries Corporation v Australian Maritime Officers Union (No 3) [2008] FCA 960 - affirmed

SYDNEY FERRIES CORPORATION v AUSTRALIAN MARITIME OFFICERS UNION

NSD 1089 of 2008

BLACK CJ, NORTH AND BUCHANAN JJ

18 DECEMBER 2008

SYDNEY

THE COURT ORDERS THAT:

1.                  The appeal against the order of Sackville J, made on 25 June 2008, dismissing the appellant’s application for a declaration that it had the right to introduce new rosters be dismissed.

2.                  The appeal against the order of Sackville J, made on 25 June 2008, that the appellant pay the costs of the respondent of the motion heard on 30 May 2008 be dismissed.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using eSearch on the Court’s website.

REASONS FOR JUDGMENT

THE COURT:

1                     The Collective Agreement which requires consideration in the present case was entitled “Sydney Ferries Corporation Maritime Officers Enterprise Agreement 2006-2008” (the 2006 Agreement).  It was an instrument created in accordance with the provisions of the Workplace Relations Act 1996 (Cth) (the Act) and lodged with the office of the Employment Advocate in July 2006.  The parties to it were the appellant (SFC) and the respondent (AMOU).  After the nominal expiry of the 2006 Agreement on 30 December 2008 it will be open to either party to ask the Australian Industrial Relations Commission (AIRC) to terminate it (see s 397A of the Act).

2                     The judgments from which the present appeal is brought (Sydney Ferries Corporation v Australian Maritime Officers Union (No 2) [2008] FCA 954 and Sydney Ferries Corporation v Australian Maritime Officers Union (No 3) [2008] FCA 960) dealt, respectively, with a claim for a declaration sought by SFC about the meaning of certain provisions in the 2006 Agreement and the costs of an anti-suit injunction.

3                     The anti-suit injunction had been sought and obtained by AMOU to restrain SFC from litigating in the AIRC about an issue which had, shortly before the proceedings were commenced in the AIRC, been brought to this Court.  The reasons why an anti-suit injunction was granted were explained in Sydney Ferries Corporation v Australian Maritime Officers Union (2008) 173 IR 223.  Neither that injunction, nor the reasons for it, require attention in the present appeal except as background against which the costs issue was argued. 

4                     The three earlier judgments set out in more detail than is here necessary the factual circumstances in which the controversy between the parties arose.  The reasoning of the primary judge, Sackville J, in each of the two judgments under appeal was thorough and correct.  In light of our agreement with Sackville J’s reasons it is not necessary to do more than explain briefly the principal bases upon which, like his Honour, we find against the points of construction argued by SFC and will dismiss the appeal it has brought against the order for costs against it in respect of the anti-suit injunction.

5                     SFC conducts ferry services in the Port of Sydney and its surrounding waterways.  AMOU represents the Masters and Inner Harbour Engineers employed by SFC.  The masters and engineers work according to rosters. 

6                     The 2006 Agreement, by cl 1.3.2, replaced the “Sydney Ferries and Australian Maritime Officers’ Union Enterprise Agreement 2004” (the 2004 Agreement).  Under cl 44 of the 2004 Agreement, SFC had the apparent right to alter the rosters, provided certain preconditions were met.  Clause 44.1 provided:

44.1  Rosters showing ordinary, daily, weekly and fortnightly hours of work of all employees shall be exhibited by the employer at a place reasonably accessible to the employees and unless for good and sufficient reasons shall not be altered and without seven days notice being given to the employee or employees concerned.

7                     Failure to provide the notice required by cl 44 resulted in payment at overtime rates “for the time worked outside the hours previously rostered” (cl 44.3).

8                     Subject to later consideration of an argument by AMOU to the contrary, cl 44.1 of the 2004 Agreement appeared to establish two requirements for alteration of rosters, the first of which assumed a discretion to alter rosters if “good and sufficient reasons” were present.  Neither the apparent right given to SFC by cl 44 of the 2004 Agreement nor any other specific right for it to alter rosters appeared in the 2006 Agreement.

9                     Whereas the 2004 Agreement provided for the payment of an “aggregate wage” which included an amount for overtime (whether worked or not), the 2006 Agreement contemplated the introduction of annual salaries.  It also contemplated the introduction of new rosters “for the purpose of introducing the Maritime Officer Annual Salary” (cl 7.1.1).  The date for the introduction of the annual salary was intended to depend upon “the introduction of the new agreed hours of work and roster arrangements” (cl 6.2.2.1).  It is clear from cll 7 and 8 of the 2006 Agreement that the “new rosters for the purpose of introducing the Maritime Officer Annual Salary” were to be agreed rosters – i.e. agreed with AMOU.  The parties were unable to reach agreement.  SFC approached the AIRC and asked it to arbitrate about the issue under a dispute settling clause in the 2006 Agreement.  For reasons explained in Sydney Ferries Corporation v Australian Maritime Officer Union [2007] AIRCFB 909; (2007) 168 IR 122, first a Commissioner and then a Full Bench of the AIRC decided that the AIRC had no power to conduct the arbitration sought.

10                  SFC then decided it would introduce a new roster without agreement and without introduction of the Maritime Officer Annual Salary.  The primary question for decision by the trial judge was whether SFC had the right to do so under the 2006 Agreement.  The trial judge held that SFC did not have that right.

11                  Clause 7 of the 2006 Agreement provided as follows:

7.                  ROSTERING ARRANGEMENTS

7.1              Rostering Consultation

7.1.1    The Parties are committed to working together to establish and reach agreement as soon as possible on new rosters for the purpose of introducing the Maritime Officer Annual Salary.  Those rosters shall meet the operational needs in relation to timetables and services and offer SFC Maritime Officers adequate time off to enjoy their life outside of their work with SFC and effectively manage fatigue.

7.1.2        The hours of work, rosters and overtime entitlements applying at the time of the signing of this Agreement are set out in Annexure C to this Agreement.  These arrangements are based on a 38 hour ordinary working week.  The provisions set out in Annexure C shall continue until the new agreed rosters and annual salaries are put into operation.

7.1.3        SFC is committed to reviewing rosters on a regular basis and to meet with the Workplace Delegates Council to reach agreement on any proposed changes to the rosters.

7.1.4    The Parties agree that rosters shall be developed to provide equity amongst the Maritime Officers.

7.1.5    The Parties are committed to developing team-based rosters.

7.2       Adherence to Rosters

7.2.1    The Employee is committed to attending work in accordance with his/her roster.  The Employee shall report on and report off at the commencement and completion of each shift as agreed between the Parties.

7.3       Roster Display

7.3.1    Rosters and leave rosters for all Employees shall be exhibited by SFC at a place reasonably accessible to the Employees and shall not be altered without the notice period set out in this Agreement.

7.3.2    Rosters for all Permanent and Temporary Employees shall be prepared on a 4 or 6 weekly cycle based on maximum 12 hour and minimum 6 hour shifts.

7.3.3    Subject to approval by SFC, Employees shall be entitled to vary their leave rosters allocation through the identification of a vacant slot or reaching an agreement to swap with another Employee.

7.4       Roster Disputes

7.4.1    Following the implementation of the new agreed rosters (referred to in Clause 7.1 above) in the event that a dispute arises between the Parties concerning the implementation or proposed implementation of a roster, the dispute shall be progressed in accordance with the provisions roster change of the Disputes Settlement Procedure set out in this Agreement.

7.5       Notification of Roster Changes

7.5.1    SFC shall provide 7 days notice to Maritime Officers of an agreed roster change.

7.5.2    SFC shall provide 24 hours notice to a Maritime Officer undertaking work as a spare where there is a change in shift.

7.5.3    SFC shall provide 21 days notice to Permanent and Temporary Maritime Officers of a significant roster change.

7.6       Variation of Shifts (Concessional Procedures)

7.6.1    Subject to SFC approval and in accordance with SFC Concessional Procedures Employees may exchange shifts (not rosters) by mutual agreement.

7.6.2    In considering a request for an exchange of shift in accordance with SFC Concessional Procedures SFC shall consider any fatigue impact on the Employees who wish to exchange shifts.

12                  Some parts of cl 8 should also be set out:

8.         HOURS OF WORK

8.1       General

8.1.1    The hours of duty shall be set out in the agreed rosters.  The AMOU and the Employees are committed to finalizing the agreed rosters by 1 October 2006 in the interests of SFC operational requirements.  Upon the introduction of the agreed rosters SFC shall introduce the annual salary and notional superable salary for SASS Employees as contained in Annexure A.

8.1.2    Each Maritime Officer shall be entitled to a minimum of 165 Days free of duty and up to 200 days of duty over 365 days per year within an agreed roster.  These hours of work shall be based on a 38 hour ordinary working week.

8.1.3    Employees shall be rostered on and be available for duty as set out in rosters to be developed and agreed between the Parties in accordance with the provisions of this Agreement.

…

8.1.5    The agreed rostered shifts shall be up to a maximum of 12 hours per day with a minimum of 6 hours.

13                  Clause 11 provided:

11.       OVERTIME

11.1     After the Parties agree and introduce new rosters (see clause 7.1) all Permanent and Temporary Employees who are on an Annual Salary will not entitled [sic] to overtime payments.

14                  Pursuant to cl 1.4.1, the 2006 Agreement was to commence on the date of lodgement, which was in July 2006.  It is clear from cll 7 and 8 that it was not contemplated by the parties that SFC would unilaterally introduce new rosters after the commencement of the 2006 Agreement, or have the right to do so.  Rather, the parties would finalise agreed rosters by 1 October 2006 and it was those rosters which would be put into effect (cll 8.1.1, 8.1.2 and 8.1.3).  Furthermore, any proposed change to the rosters was subject to a commitment by SFC to meet with the Workplace Delegates Council to reach agreement on any such proposed change (cl 7.1.3).  Provisions set out in Annexure C were to continue until the new agreed rosters were developed and implemented.  Hours of work, rosters and overtime entitlements were said to be set out in Annexure C (cl 7.1.2).  In fact, it is difficult to see any clear statement in Annexure C of anything which might fairly be described as “rosters” but it seems to us, nevertheless, that the clear intent of cl 7.1.2 was to preserve the existing arrangements until “new agreed rosters” were implemented. 

15                  Some provisions of Annexure C (which was entitled “Work Arrangements at Commencement of Agreement”) do refer to rosters.  For example, cl 1.1 said (as earlier had cl 10.1 of the 2004 Agreement): “The ordinary hours of duty shall be as rostered”.

16                  Clause 2.1 (which applied to Outer Harbour Masters) commenced: “Based on existing rosters …”.

17                  Clause 3 (which applied to Inner Harbour Masters, Engineers and Rivercat Masters/Engineers) commenced: “The aggregate wage includes coverage of normal rostered hours to an average maximum …”.

18                  There was no provision which preserved the apparent right earlier given by cl 44 of the 2004 Agreement to alter rosters.

19                  SFC argued that it had a right, under the 2004 Agreement, to alter rosters.  It relied on cl 44.  It argued that its right to alter rosters continued under the 2006 Agreement, even though there was no provision comparable to cl 44 and despite the fact that cl 44 had clearly been omitted from Annexure C by design.  SFC relied upon an implication said to arise from cl 7.5.3.  It argued that the only limitation upon its right to alter rosters was the necessity to give the required notice and remain within the framework established by Annexure C.

20                  Clause 7.5.3 does not give a right to alter rosters.  Rather it imposes an obligation to provide 21 days notice (rather than 7 days notice) if a roster change is significant.  The provision does not detract from the necessity to reach agreement.  Likewise, the restriction in cl 7.3.1 does not import a right to alter rosters if notice is given.  Rather it prohibits any alteration (even by agreement with AMOU) without notice to the employees concerned in accordance with cl 7.5.

21                  Having regard to the construction of cl 44.1 advanced by SFC on the appeal, and accepting it for present purposes, it should be concluded that the omission of any similar provision from the 2006 Agreement was accepted and agreed by SFC.  It should also be concluded that the parties contemplated that agreement would soon be reached on new rosters and excluded any power of unilateral variation before or after that occurred.  No right, explicit or implicit, to unilaterally vary rosters in the absence of agreement remained.

22                  AMOU denied the existence of any prior right to alter rosters under the 2004 Agreement arising from the operation of cl 44, although, in one sense, if its argument about that is accepted it weakens one of the indications that SFC must be taken to have given up a pre-existing right. 

23                  Attention was drawn to the fact that cl 3.2 of the 2004 Agreement required that agreement to be read in conjunction with the Port Services Award 1998 (the Award).  Part 2 of the Award (which applied specifically to the State Transit Authority of New South Wales – the predecessor to SFC) provided in cll 3.1.3 and 4.2.1 as follows:

3.1.3    The rostered hours of duty in force at the time of the making of the award shall continue, subject to any alteration by agreement between the parties.

…

4.2.1    Rosters showing ordinary, daily, weekly and fortnightly hours of work of all employees shall be exhibited by the employer at a place reasonably accessible to the employees and unless for good and sufficient reasons shall not be altered without seven days notice being given to the employee or employees concerned.

24                  It was argued that those provisions in the Award represented a prior and clear prohibition on unilateral alteration of rosters.  Be that as it may, cl 44.1 of the 2004 Agreement contained a significant alteration from cl 4.2.1 of the Award.  The previous requirement, relating only to notice, was divided into two restrictions on alteration of rosters, one of which assumed a capacity to alter rosters for “good and sufficient reasons”.  It was suggested that the alteration made by cl 44.1 of the 2004 Agreement to the provisions of cl 4.2.1 of the Award should be seen as an accident. 

25                  It is not really necessary to decide whether cl 44.1 of the 2004 Agreement was drafted in that form by accident or whether it was intentional.  On either view, the argument by SFC that the 2006 Agreement contained a power of unilateral alteration or, at least, did not exclude the exercise of such a right arising from the employment relationship, should not be accepted. 

26                  The 2006 Agreement required that agreement be reached.  It prohibited alteration to rosters without the agreement of AMOU.  The removal of SFC’s asserted earlier right to alter rosters was the result of its agreement to that effect.  Having committed itself to the course of events contemplated by the 2006 Agreement, it was not open to SFC to disregard the arrangements to which it had agreed.

27                  The trial judge’s conclusions to similar effect were correct and the appeal against the trial judge’s order dismissing SFC’s application for a declaration that it had the right to introduce new rosters must be dismissed.

28                  The second issue presented by the appeal concerns the order that SFC pay AMOU’s costs of the interlocutory application brought to restrain SFC from proceeding with an application to the AIRC.  Although AMOU succeeded in its interlocutory application, and SFC was thereafter restrained from proceeding before the AIRC, SFC argued, at first instance and on appeal, that s 824 of the Act constituted a legislative bar to an order for costs against it.

29                  Section 824 of the Act provides:

(1)       A party to a proceeding (including an appeal) in a matter arising under this Act … must not be ordered to pay costs incurred by any other party to the proceeding unless the first-mentioned party instituted the proceeding vexatiously or without reasonable cause.

(2)       Despite subsection (1), if a court hearing a proceeding (including an appeal) in a matter arising under this Act (other than an application under section 663) is satisfied that a party to the proceeding has, by an unreasonable act or omission, caused another party to the proceeding to incur costs in connection with the proceeding, the court may order the first-mentioned party to pay some or all of those costs.

(3)       In subsections (1) and (2)

costs includes all legal and professional costs and disbursements and expenses of witnesses.

30                  The trial judge concluded that it was unreasonable of SFC to have commenced proceedings in the AIRC having commenced proceedings in this Court shortly before with a similar objective in mind.  Accordingly he awarded costs against SFC having regard to s 824(2) of the Act. 

31                  SFC’s contention as expressed in ground 7 of its Amended Notice of Appeal was as follows:

7.         His Honour, the learned Judge, erred in holding or concluding that the initiation of proceedings by SFC in the Australian Industrial Relations Commission was an unreasonable act or omission in connection with the proceedings in the Federal Court within the meaning of s.824(2) of the Workplace Relations Act 1996 (Cth) in that s.824(2) is concerned with an unreasonable act or omission in connection with the actual proceedings in the courtand not proceedings in a different tribunal.

(Emphasis added.)

32                  This ground of appeal proceeds upon a misconception about the operation of s 824(2) of the Act.  As the trial judge pointed out, the unreasonable act or omission referred to in s 824(2) is not confined to such an act or omission occurring within the proceedings themselves: [2008] FCA 960 at [21]-[22].  It is enough if the unreasonable act or omission caused another party to the proceeding to incur costs in connection with the proceeding.  There is no doubt that AMOU incurred costs in connection with its application to restrain SFC.  That application was prompted by SFC’s act in commencing proceedings in the AIRC. 

33                  It is well established that the need for an applicant to commence proceedings is a circumstance relevant to the award of costs of those proceedings (e.g. Ruddock v Vadarlis (No 2) (2001) 115 FCR 229 at [12]).  If the proceedings concerning the application for an anti-suit injunction were in a matter arising under the Act there was a clear power to order costs if the conditions in s 824(2) were met.  If they were not in a matter arising under the Act the restrictions in s 824 did not apply to limit the Court’s usual discretion.

34                  On the view most favourable to SFC (that there was some restriction on the power to award costs because the proceeding was in a matter arising under the Act) the statutory conditions for the award of costs were met unless the trial judge was in error to find that SFC’s act was unreasonable.  There is no ground of appeal to that effect and no submission to that effect was made at the hearing of the appeal.  The appeal against the order that SFC pay the costs of AMOU of the motion heard on 30 May 2008 must also be dismissed.

35                  The costs of the appeal itself are also subject to the operation of s 824 of the Act.  However, it is not necessary to address any question concerning costs of the appeal.  There has been no application that SFC should pay AMOU’s costs if its appeal is unsuccessful.  Neither has there been any suggestion that the appeal was instituted vexatiously or without reasonable cause or that some unreasonable act or omission is the cause of AMOU incurring costs in connection with the appeal. 

Associate:

Dated:         18 December 2008