FEDERAL COURT OF AUSTRALIA

Fair Work Ombudsman v Pocomwell Limited (No 2) [2013] FCA 1139

THE COURT ORDERS THAT:

1.    The application be dismissed.

2.    Within 21 days, if the respondents wish to seek costs, the respondents do file and serve written submissions in support of their application and the applicant then have 21 days to file and serve responsive submissions, whereupon the Court will determine the question of costs on the papers unless either party requires to be heard orally.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

overview

1    At material times between 6 July 2009 and 1 March 2011:

    José Codilla, Zenrey Peteros, Christopher Gelacio and Roel Flores, nationals of the Republic of the Philippines, worked as painters on a drilling rig known as the Nan Hai VI in Australia’s Exclusive Economic Zone (EEZ) in seas off the North-West coast of Western Australia, but outside Australia’s 12 nautical mile territorial limit.

    For a short period, José Codilla and Zenrey Peteros also performed work on the Maersk Discoverer, another drilling rig in the same EEZ.

    Each of the drilling rigs was operated by Maersk Drilling Australia Pty Ltd (Maersk), a corporation incorporated within Australia.

    Each of the drilling rigs was also registered as a ship and flew the flag of a foreign country. The Nan Hai VI flew the flag of China and the Maersk Discoverer flew the flag of Singapore.

2    Each painter was employed by the first respondent, a corporation incorporated in Hong Kong. By the terms of the contract of employment made between each of the painters and the first respondent in the Philippines and governed by the law of the Philippines, each painter was engaged to work a 28 day/12 hours per day working period at the rate of USD900, to be followed by a 28 day non-working period during which a further sum of USD900 would be paid.

3    The third respondent, a corporation incorporated within Australia of whom the fourth respondent was the sole director, shareholder and secretary, hired the painters from the first respondent via the agency of the second respondent, a company incorporated in the Philippines, at a daily rate of AUD92 per day for each painter.

4    Maersk then hired each painter from the third respondent at the daily rate of approximately AUD300.

5    The simple mathematics of the various transactions therefore were that at material times:

    Maersk, as operator of the drilling rigs, paid the third respondent under their labour hire agreement at the rate of approximately AUD300 per day for each of the four painters, which for a period of 28 days would comprise a total of AUD8,400 for each painter.

    The third respondent in that same 28 day period would pay the first respondent, through the second respondent, the sum of AUD2,576 in respect of the hire of each painter.

    For the actual 28 day working period in question, the first respondent would pay each painter a total of USD900 (plus a similar amount for the following 28 day non-working period).

    If one assumes that was the total payment received by each of the painters over the two 28 day periods (assuming it was in total calculated at the rate of 12 hours for each day), then each painter was paid at the rate of approximately USD5.36 per hour. If one assumes that the United States dollar at material times was at or about parity with the Australian dollar, then it could be said that each painter was paid at about the rate of AUD5.36 per hour.

    If one disregards the payment of USD900 in respect of the 28 day non-working period, the hourly rate of pay for each painter while actually working on the relevant rig during the 28 day working period was about AUD2.68.

6    By contrast:

    At material times from 1 January 2010 to 30 June 2010, under the National Minimum Wage Order that applied pursuant to s 293 of the Fair Work Act 2009 (Cth) (FW Act), a worker doing work such as that performed by each of the painters was entitled to be paid at the rate of AUD14.31 per hour.

    At material times from 1 July 2010, a level 1 (basic) employee affected by the Hydrocarbons Industry (Upstream) Award 2010 (Award) applicable under the FW Act, which would include such a painter, was entitled to be paid at the rate of AUD620 per week, plus an “industry allowance” and the various entitlements for living away from their place of residence, working in excess of 38 hours per week, and for weekend and public holiday work.

7    It follows that, if the FW Act extended to the drilling rigs and governed the painters’ pay rates while working on the rigs in the EEZ, then, at material times, the painters were underpaid.

8    By this proceeding, the applicant, the Fair Work Ombudsman, seeks to enforce the FW Act and seeks:

(1)    Declarations that the respondents contravened the FW Act.

(2)    An order pursuant to s 546 of the FW Act that the first respondent pay penalties for contravening the provisions of the FW Act and Award.

(3)    An order pursuant to s 545(2)(b) of the FW Act that the first respondent pay the painters the following underpayments:

(a)    José Codilla – AUD22,433.55

(b)    Roel Flores – AUD17,517.64

(c)    Zenrey Peteros – AUD22,433.55

(d)    Christopher Gelacio – AUD17,410.12

(4)    An order pursuant to s 547 of the FW Act that the first respondent pay the painters interest at such rate as the Court thinks fit on the underpayments ordered.

(5)    An order that the second, third and fourth respondents pay penalties, pursuant to s 546 of the FW Act, for their involvement in the contraventions alleged.

(6)    An order under s 546(3)(a) of the FW Act that all penalties be paid into the consolidated revenue fund of the Commonwealth within 28 days.

(7)    An order that the applicant have liberty to apply to have the matter relisted on three days notice in the event that any of the respondents fail to pay the penalties within 28 days.

9    The respondents deny the applicant is entitled to any such relief.

10    The first and second respondents contend that, when one construes the relevant provisions of the FW Act in light of established principles of international law, the FW Act does not govern the employment of persons, such as the painters, who are foreign nationals and have been engaged under contracts of employment in another country by foreign corporations which have no connection with Australia. The third and fourth respondents make similar, although not identical, submissions in relation to the proper construction of the FW Act in light of principles of international law.

11    In particular, the respondents contend that, if the applicant must rely on reg 1.15E of the Fair Work Regulations 2009 (Cth) (Regulations) to sustain its claims against the respondents, on the basis that each rig is a “majority Australian-crewed ship”, then that regulation should be construed so as not to extend the operation of the FW Act to such a ship in light of principles of international law. Alternatively, they contend that reg 1.15E is ultra vires the FW Act as it is inconsistent with international law.

12    The respondents further contend that, if the FW Act is considered to apply to or is capable of applying to a fixed platform or a majority Australian-crewed ship, notwithstanding the international law principles upon which they rely, then neither of the drilling rigs is a “fixed platform” for the purposes of s 33(1)(b) of the FW Act and, further, that the applicant has failed to prove that either rig was a “majority Australian-crewed ship” at any material time for the purposes of reg 1.15E of the Regulations.

13    The respondents also dispute that the Award covered the first respondent at material times after 1 July 2010, as alleged by the applicant, concluding that the Award only covers “employers throughout Australia”, a category that does not include foreign employers such as the first respondent.

14    The second, third and fourth respondents also submit that, if it is established that the first respondent contravened the FW Act, then none of them should be found to have been knowingly involved in any contravention because, at material times when the employment and labour arrangements were made, they did not know about matters which ought to be regarded as essential elements of the contraventions.

15    For the reasons which follow, the Court finds:

    Section 33(1)(b) of the FW Act and reg 1.15E of the Regulations on their proper construction extend to or are capable of extending to a drilling rig if it is respectively a “fixed platform” or a ship which is a “majority Australian-crewed ship”.

    However, at material times neither drilling rig was a “fixed platform” for the purposes of s 33(1)(b) of the FW Act.

    Nor, on the evidence adduced in the proceeding, is either rig shown to have been a “majority Australian-crewed ship” at material times.

    Accordingly, the proceeding against the respondents should be dismissed.

issues

16    The issues in this proceeding may be stated as follows:

(1)    The first issue concerns the proper construction of the relevant provisions of the FW Act having regard to international law. This issue involves two questions:

(a)    Having regard to international law, should s 33(1)(b) of the FW Act be construed so as not to apply or operate in respect of the employment conditions of the painters?

(b)    Having regard to international law, should reg 1.15E of the Regulations be construed so as not to apply or operate in respect of the employment conditions of the painters or, alternatively, is reg 1.15E ultra vires the FW Act?

(2)    If the FW Act is capable of applying to the employment conditions of the painters under s 33(1)(b) of the FW Act, whether each drilling rig at material times was a “fixed platform” for the purpose of that provision.

(3)    If s 33(1)(b) of the FW Act has no application in the circumstances of this proceeding, and reg 1.15E is found to be capable of extending the operation of the FW Act to each rig, whether each rig, at material times, was a “majority Australian-crewed ship”.

(4)    If either of the rigs if found to be a fixed platform or, alternatively, a majority Australian-crewed ship, whether the Award covered the first respondent at material times.

(5)    If it is found that the first respondent contravened the FW Act, whether the other respondents were knowingly involved in the contravention.

Issue 1: proper construction of the FW Act

17    Introduction: The FW Act is an Act relating to workplace relations and related purposes. The object of the Act, stated by s 3, is to provide “a balanced framework for cooperative and productive workplace relations that promotes national economic prosperity and social inclusion for all Australians” by the means set out in paras (a) to (g).

18    The Act, as explained in the overview provided by s 4(1) (as it applied at material times):

… is about workplace relations. It:

(a)     provides for terms and conditions of employment (Chapter 2); and

(b)     sets out rights and responsibilities of employees, employers and organisations in relation to that employment (Chapter 3); and

(c)     provides for compliance with, and enforcement of, this Act (Chapter 4); and

(d)     provides for the administration of this Act by establishing Fair Work Australia and the Office of the Fair Work Ombudsman (Chapter 5); and

(e)    deals with other matters relating to the above (Chapter 6).

19    Chapter 2, by s 5(1), provides for terms and conditions of employment of “national system employees”. A national system employee is defined by s 13 to be an individual so far as he or she is employed, or usually employed, by a “national system employer”, except on vocational placement.

20    A national system employer is defined by s 14(1) to include a “constitutional corporation”, so far as it employs, or usually employs, an individual. In turn, a constitutional corporation is defined by s 12 to mean a corporation to which s 51(xx) of the Constitution applies. Section 51(xx) of the Constitution applies to “foreign corporations, and trading and financial corporations formed within the limits of the Commonwealth”. Thus, a national system employer may be either an Australian trading or financial corporation or a foreign corporation.

21    This leaves a question, however, as to the circumstances, if any, in which an individual employed by a foreign corporation may be considered a national system employee.

22    Part 2-2 of the FW Act, by s 5(3), contains National Employment Standards, which are minimum terms and conditions that apply to all national system employees.

23    Part 2-3 is about modern awards. By s 5(4), a modern award is one made for a particular industry or occupation and provides additional minimum terms and conditions for those national system employees to whom it applies.

24    The rights and responsibilities of national system employees and national system employers are referred to in s 6.

25    Division 3 of Pt 1-3 of Ch 1 of the FW Act deals with the geographical application of the FW Act. The heading to Div 3 is “Geographical application of this Act”. Section 13(1) of the Acts Interpretation Act 1901 (Cth) (Acts Interpretation Act), as it applied at material times, provided that the headings of the Parts, Divisions and Subdivisions of an Act shall be deemed to be part of the Act.

26    Section 31(1), the first provision in Div 3, expressly provides that a provision of the Act prescribed by the regulations does not apply to a person or entity in Australia prescribed by the regulations as a person to whom, or an entity to which, the provision does not apply. Note 1 to s 31(1) also records that:

Note 1:    In this context, Australia includes the Territory of Christmas Island, the Territory of Cocos (Keeling) Islands and the coastal sea (see section 15B and paragraph 17(a) of the Acts Interpretation Act 1901).

27    Note 1 appears to reflect the proper construction of the FW Act and general principles of interpretation. First, when regard is had to Div 3, its heading and s 31(1), in particular, it appears the FW Act is intended to apply in Australia in a geographical sense.

28    Secondly, s 17(a) of the Acts Interpretation Act (as it applied at material times) defined Australia as the Commonwealth of Australia and stated that, when used in a geographical sense, it includes the Territory of Christmas Island and the Territory of Cocos (Keeling) Islands, but does not include any other external territory.

29    Thirdly, s 15B(1)(b) of the Acts Interpretation Act (as it applied at material times) provided that a reference in an Act to Australia is taken to include a reference to the coastal sea of Australia. Section 15B(4)(a)(i) relevantly provided that the coastal sea includes the territorial sea of Australia. The territorial sea was not defined in the Acts Interpretation Act as it applied at material times. However, in my view, it is clear it had the same meaning as in the Seas and Submerged Lands Act 1973 (Cth) (Seas and Submerged Lands Act) (and see now s 2B of the Acts Interpretation Act as it currently operates), which, by s 3(1), adopts the meaning provided by art 3 and art 4 of the United Nations Convention on the Law of the Sea, opened for signature on 10 December 1982, 1833 UNTS 397 (entered into force 16 November 1994) (UNCLOS). This meaning recognises the territorial sea up to a limit not exceeding 12 nautical miles from the coast.

30    On the face of the FW Act, therefore, the Act does not apply to seas beyond the territorial sea. Section 33 of the FW Act, however, explicitly extends the FW Act to Australia’s EEZ and waters above the continental shelf in the following terms and circumstances:

Extension to Australian ships etc.

(1)     Without limiting subsection (3), this Act extends to or in relation to:

(a)     any Australian ship in the exclusive economic zone or in the waters above the continental shelf; and

(b)     any fixed platform in the exclusive economic zone or in the waters above the continental shelf; and

(c)     any ship, in the exclusive economic zone or in the waters above the continental shelf, that:

(i)     supplies, services or otherwise operates in connection with a fixed platform in the exclusive economic zone or in the waters above the continental shelf; and

(ii)     operates to and from an Australian port; and

(d)     any ship, in the exclusive economic zone or in the waters above the continental shelf, that:

(i)     is operated or chartered by an Australian employer; and

(ii)     uses Australia as a base.

(2)     For the purposes of extending this Act in accordance with paragraph (1)(d):

(a)     any reference in a provision of this Act to an employer is taken to include a reference to an Australian employer; and

(b)     any reference in a provision of this Act to an employee is taken to include a reference to an employee of an Australian employer.

Extensions prescribed by regulations

(3)     Without limiting subsection (1), if the regulations prescribe further extensions of this Act, or specified provisions of this Act, to or in relation to the exclusive economic zone or to the waters above the continental shelf, then this Act extends accordingly.

Modifications relating to extended application

(4)     Despite subsections (1) and (3), if the regulations prescribe modifications of this Act, or specified provisions of this Act, for its operation under subsection (1) or (3) in relation to one or both of the following:

(a)    all or part of the exclusive economic zone;

(b)     all or part of the continental shelf;

then, so far as this Act would, apart from this subsection, extend to the zone or part, or to the continental shelf or part, it has effect as so modified.

(5)     For the purposes of subsection (4), the regulations may prescribe different modifications in relation to different parts of the exclusive economic zone or continental shelf.

31    If each of the drilling rigs in question in this proceeding is a “fixed platform”, as the applicant pleads it is, then, on the face of it, the FW Act will extend to or in relation to that rig while it is in the EEZ, pursuant to s 33(1)(b), as the parties agree each rig was, at material times, in the EEZ. (The applicant does not otherwise contend that any of paras (a), (c) or (d) of subs (1) applies in this case.)

32    There can be little doubt, in my view, that the intent of the Parliament, as to the application, in the EEZ, of s 33(1)(b) has been made abundantly clear. It is intended to apply notwithstanding any principle of international law that might otherwise suggest a reading down of its scope: see Fair Work Ombudsman v Pocomwell Ltd [2013] FCA 250 at [25].

33    If neither of the drilling rigs is a fixed platform for the purposes of s 33(1)(b), but is a “majority Australian-crewed ship”, then, on the face of it, the FW Act will extend to that rig, while it is in the EEZ, pursuant to reg 1.15E of the Regulations. At material times, reg 1.15E provided that:

(5)     For subsection 33 (3) of the Act, the Act is extended to and in relation to a majority Australian-crewed ship in the exclusive economic zone or the waters above the continental shelf.

Note The extension of this Act to emergency licensed ships, general licensed ships, temporary licensed ships, transitional general licensed ships and majority Australian-crewed ships in the exclusive economic zone and the waters above the continental shelf (including provisions relating to compliance and enforcement, administration and right of entry by reason of the extension of the rest of the Act, so far as it relates to the specified provisions) is subject to:

(a)    Australia’s international obligations relating to foreign ships; and

(b)     the concurrent jurisdiction of a foreign State.

34    The respondents question the intended scope of reg 1.15E, and whether, if on its face it is capable of applying to foreign flagged ships in the EEZ, it should be considered ultra vires the FW Act or read down so as not to so apply by reason of principles of international law.

35    The primary contention of the first and second respondents is that the coastal state’s rights in its EEZ are limited on the proper construction of the relevant provisions of the FW Act having regard to relevant principles of international law. They refer to art 56 of UNCLOS which, they say, limits Australia’s interests in the EEZ to the management and exploitation of natural resources. It follows, they contend, that Australia’s jurisdictional competence, as a coastal state, over foreign flagged ships in the EEZ is quite limited. They contend the coastal state has no jurisdiction to prescribe international (or national) standards concerning seafarers’ rights for foreign flagged ships within its EEZ.

36    They also refer to art 92(1) of UNCLOS (which applies to the EEZ by virtue of art 58(2)) which relevantly states that “[s]hips shall sail under the flag of one State only and, save in exceptional cases expressly provided for in international treaties or in this Convention, shall be subject to its exclusive jurisdiction on the high seas”. Further, they observe art 94(3)(b) expressly recognises the obligation of the flag state in relation to the manning of ships, labour conditions and the training of crews, taking into account applicable international instruments.

37    These respondents also draw attention to the Convention on the High Seas, opened for signature 29 April 1958, 450 UNTS 11 (entered into force 30 September 1962) (Convention on the High Seas) to which Australia is a member state. Under the Convention on the High Seas the flag state exercises jurisdiction and control in administrative, technical and social matters over ships flying its flag (art 5(1)), and to ensure safety must take all necessary measures in regard to manning and labour conditions, taking into account applicable international labour instruments: art 10(1)(b). Accountability for incidents of a penal or disciplinary nature rests either with the state of which the person is a national or the flag state in respect of incidents at sea: art 11.

38    The first and second respondents also note that Australia and the Philippines have ratified the Maritime Labour Convention, opened for signature 7 February 2006, 45 ILM 792 (entered into force 20 August 2013) (Maritime Labour Convention), pursuant to which each member state must adopt the laws and regulations specifying the matters that are to be included in the seafarers’ employment agreement “governed by its national law”: para 4 of standard A2.1 of reg 2.1. All seafarers shall be paid for their work in accordance with their employment agreement: para 1 of reg 2.2.

39    The first and second respondents contend that s 15AA of the Acts Interpretation Act requires an interpretation that best achieves the purpose or object of the Act. They note that s 3 states that the object of the FW Act is, inter alia, to take into account Australia’s international labour obligations.

40    Also, the first and second respondents contend, [152] of the explanatory memorandum to the Fair Work Bill 2008 (Cth) (Fair Work Bill) states that limits are recognised as to the extent to which the Bill’s extraterritorial application is possible and appropriate under Div 3 of Pt 1-3 of Ch 1.

41    Further, they say reg 1.15E itself, by the Note, recognises that it is “subject” to concurrent jurisdiction of other states and international obligations owed to foreign flagged ships.

42    Lastly, they draw attention to Barcelo v Electrolytic Zinc Company of Australasia Ltd (1932) 48 CLR 391, in which Dixon J stated, at 423-424, that every statute is to be interpreted and applied as far as its language admits so as not to be inconsistent with the comity of nations or with established rules of international law. Thus, it is to be understood and implied that the legislation of a country is not intended to deal with persons over which, according to the comity of nations, the jurisdiction properly belongs to some other sovereign or state. Furthermore, in Wanganui Rangitikei Electric Power Board v Australian Mutual Provident Society (1934) 50 CLR 581, Dixon J held, at 601, that where an enactment describes acts, matters or general words so that its intended application would be universal, it is to be read as confined to what, according to the rules of international law administered or recognised in Australian courts, is within the province of the law to affect or control. General words should not be understood as extending to cases which, according to rules of private international law administered by the courts, are governed by foreign law.

43    The first and second respondents contend that they and the painters are statutorily obligated to comply with the contractual conditions laid down by the law of the Philippines as applying to such contracts and that includes the level of wage payments made under the respective contracts of employment with the painters. It follows, therefore, they say, that the purpose of the FW Act and s 33 in particular is only to extend the operation of the FW Act to work connected with platforms or ships in the EEZ consistently with Australia’s obligations under UNCLOS and is ultra vires the FW Act.

44    The first and second respondents further submit, however, that, if reg 1.15E is to be construed as enabling action under the FW Act to be taken, not just in respect of Australian employers of majority Australian crewed ships, but as extending to overseas employers who make contracted payments to foreign residents on majority Australian-crewed ships in the EEZ, then reg 1.15E is ultra vires. That is, s 33(3) of the FW Act does not permit the making of regulations that are inconsistent with international law and the concomitant jurisdictional rights of another state.

45    The third and fourth respondents acknowledge that it is open to Australia to pass laws and make regulations which are inconsistent with UNCLOS. However, they submit that a statute is to be interpreted and applied, as far as its language permits, so that it is in conformity and not in conflict with the established rules of international law or with a treaty or international convention to which Australia is a party: Minister for Immigration and Ethnic Affairs v Teoh (1995) 183 CLR 273 (Teoh) at 287-288 (Mason CJ and Deane J); Zhang v Zemin [2010] NSWCA 255; (2010) 79 NSWLR 513 (Zhang v Zemin) at [125]-[129] (Spigelman CJ); Sellers v Maritime Safety Inspector [1999] 2 NZLR 44 (Sellers) at 57.

46    The third and fourth respondents submit that there is nothing in s 33(3) of the FW Act to indicate that Parliament intended to authorise the making of regulations that would be inconsistent with international law. Moreover, that [167] of the explanatory memorandum to the Fair Work Bill contains a positive indication that Parliament did not intend to authorise the making of regulations that would be inconsistent with international law.

47    Accordingly, the third and fourth respondents submit that s 33(3) of the FW Act must be read as authorising only those regulations which are consistent with international law.

48    The third and fourth respondents further contend, however, that, to the extent reg 1.15E(5) purports to extend the FW Act to foreign flagged ships in the EEZ, it violates the exclusive jurisdiction of the flag state and is thus inconsistent with UNCLOS.

49    These respondents submit that the exclusive jurisdiction of the flag state is conferred by art 92 and art 94 of UNCLOS, which apply to the EEZ by virtue of art 58(2). While art 56(1)(a) does confer “sovereign rights” on the coastal state, the other paragraphs of art 56 and UNCLOS read as a whole indicate that the coastal state’s jurisdiction in this regard is not intended to be at large. Specifically, the third and fourth respondents contend that it is clear from art 56(2), art 56(3), art 78(2) and art 79(2) that the sovereign rights conferred on the coastal state over the exploration and exploitation of natural resources in the EEZ and continental shelf are limited rights to be exercised consistently with the rights and freedoms of other states under UNCLOS, including the rights of a flag state over ships flying its flag.

50    The third and fourth respondents then submit that the exclusive jurisdiction of a flag state in the EEZ in administrative, technical and social matters over ships flying its flag (art 94(1)) is not incompatible with the sovereign rights conferred on coastal states for the limited purpose of exploring and exploiting its natural resources. This is the case when it is understood that these sovereign rights are not absolute but are to be exercised with “due regard to the rights and duties of other States” and “in a manner compatible with the provisions of [UNCLOS]” (art 56(2)), and so as not to “infringe or result in any unjustifiable interference with navigation and other rights and freedoms of other States as provided for in [UNCLOS]”: art 78(2).

51    Finally, the third and fourth respondents submit that the role of the flag state in regulating manning and labour conditions on ships flying its flag has been confirmed by the Maritime Labour Convention.

52    The third and fourth respondents acknowledge that it appears from the Note to reg 1.15E that the regulation is not intended to contravene international law. However, they submit that, short of relying on the Note to construe the regulation as not applying to foreign flagged ships (which would give the regulation no work to do since the FW Act already applies to any Australian ship in the EEZ or above the continental shelf by virtue of s 33(1)(a)), it is difficult to see how the regulation can be read down so as not to conflict with UNCLOS and the exclusive jurisdiction of a flag state over foreign flagged ships in the EEZ. For this reason, it should be found to be ultra vires s 33(3) of the FW Act.

53    The applicant commences its submissions by insisting that there is no room for international law to have any operation whatsoever in relation to s 33(1)(b) of the FW Act because the Parliament has unambiguously provided that the FW Act extends to a “fixed platform” as defined in the EEZ. I have already noted above that I accept that argument. It is well understood that a statute is to be given effect according to its terms notwithstanding any principle of international law which might suggest a contrary outcome: see for example Polites v Commonwealth (1945) 70 CLR 60 (Polites) at 68-69 (Latham CJ); Zhang v Zemin [125] (Spigelman CJ).

54    Thus, as indeed do the respondents, the applicant focuses upon the question whether the regulation making power, particularly under s 33(3) of the FW Act, should be read down so as to limit the nature of regulations able to be made. As noted above, the respondents take the view that reg 1.15E is ultra vires the FW Act because the Act does not authorise the making of regulations “inconsistent with international law”. The respondents’ proposition of course depends upon the view being adopted that reg 1.15E is contrary to international law.

55    In that regard, the applicant submits that the third and fourth respondents, at least, effectively conceded in argument that the only fair reading of reg 1.15E is that it affects an extension of the FW Act to majority Australian-crewed, but foreign flagged ships, whilst they are in the EEZ.

56    The applicant disputes the proposition put by the respondents that such an extension is inconsistent with international law.

57    The applicant submits, first, that UNCLOS expressly permits coastal states to regulate all aspects of activities on board ships engaged in activities within the EEZ and in the waters above Australia’s continental shelf for which the coastal state has jurisdiction. In support of this submission, the applicant refers to art 56 and art 77(1). The applicant contends that the grant of sovereign rights encompasses all powers reasonably incidental to the exploration and exploitation of the natural resources of the EEZ.

58    The applicant submits that art 56(2) does not have the effect of requiring coastal states to defer to the flag state in relation to issues of management on board any ship present in the EEZ. Instead, as a matter of practice, coastal states which permit foreign flagged ships to engage in exploration and exploitation of natural resources within their EEZ or their continental shelf do so on conditions which include regulation of a number of matters which would, on the high seas, be the preserve of the flag state. The applicant cites legislation in the United Kingdom, the Netherlands and the United States of America as examples of this “practice”.

59    The applicant also contends that the effect of art 56(2) is not to preserve traditional high seas freedoms to the flag state of ships engaged by permit of the coastal state in exploration or exploitation of the natural resources of the coastal state in the EEZ. Rather, it is to ensure that ships that are not engaged in EEZ related activities are not unduly hindered by the activities of the coastal state, and that freedoms such as freedom of navigation, freedom to lay cables and pipelines and other high seas freedoms are preserved. On a holistic construction of UNCLOS, the applicant contends, it is intended to create a regime in which the coastal state can regulate all aspects of the exploitation of EEZ natural resources, but preserve to other states rights associated with the rights of navigation through the EEZ. The applicant contends that there is no interference with the freedom of navigation in art 87 in this case as the rigs are not engaged in navigation.

60    Secondly, the applicant notes that art 60(1)(b) gives the coastal state an exclusive right to regulate the construction, operation and use of structures for the purposes provided for in art 56. The applicant submits that, whether the rigs are defined as fixed platforms or ships, they are certainly “structures” and thus covered by art 60.

61    Thirdly, the applicant submits that s 33(3) of the FW Act as the source of the regulation making power contains no limitation, whether express or implied, as to consistency with international law. Further, it contends that the language of reg 1.15E and s 33(3) is entirely unambiguous. As such, the Court must give effect to the plain language of the regulation and statute: Polites at 68-69 (Latham CJ); XYZ v Commonwealth [2006] HCA 25; (2006) 227 CLR 532 at [5] (Gleeson CJ); Zhang v Zemin at [125] (Spigelman CJ). The applicant contends that, to the extent that the respondents seek to rely upon international law principles, they must point first to a relevant ambiguity in the legislation. Moreover, the Note to reg 1.15E is not part of the FW Regulations but is an extrinsic aid to the interpretation of the regulation; the words of the regulation are unambiguous.

62    Finally, the applicant submits that precisely the arguments now advanced by the respondents were considered and unanimously rejected by the High Court in Re Maritime Union of Australia; Ex parte CSL Pacific Shipping Inc [2003] HCA 43; (2003) 214 CLR 397 (Re Maritime Union).

63    In response to the submission of the applicant that art 56 of UNCLOS allows a coastal state to regulate labour relations on foreign flagged ships engaged in the exploration and exploitation of the natural resources in its EEZ, the first and second respondents contend:

    The Seas and Submerged Lands Act itself recognises in its heading to Pt II the distinction between “sovereignty” which Australia has over its internal waters and territorial sea and the more limited “sovereign rights” it has in respect of the EEZ.

    Under art 56(2) of UNCLOS the coastal state must have “due regard” to the rights and duties under UNCLOS of other states. The rights of other states are referred to in art 58 and include freedom of navigation under art 87 as well as other high seas rights recognised in art 88 – art 115, insofar as these are not incompatible with art 56. There is no incompatibility between foreign flagged ships exercising jurisdiction under art 94(3)(b) in relation to labour conditions and the sovereign rights given to Australia for the purpose of exploring and exploiting natural resources under art 56(1)(a).

    States enjoy the right of innocent passages in territorial waters of other states (art 17), although coastal states may adopt laws and regulations relating to innocent passage through the territorial sea in respect of the matters referred to in art 21. It follows that, by analogy, foreign states must have rights to at least the same degree in the EEZ.

64    In response to the submission of the applicant that, in considering whether reg 1.15E(5) is inconsistent with international law, regard should be had to the practice of other coastal states, the third and fourth respondents submit:

    The United States legislation to which the applicant refers is confined to artificial islands, installations and presumably similar devices and is therefore unexceptionable as it is entirely consistent with art 60 of UNCLOS.

    Foreign law is a question of fact to be proved by expert evidence or else in accordance with s 174 of the Evidence Act 1995 (Cth): Neilson v Overseas Projects Corporation of Victoria Ltd [2005] HCA 54; (2005) 223 CLR 331 at [115] (Gummow and Hayne JJ); VHAJ v Minister for Immigration and Multicultural and Indigenous Affairs [2003] FCAFC 186; (2003) 131 FCR 80 at [11] (Moore J). The applicant has adduced no such evidence and therefore the Court is not able to have regard to any such practice of other coastal states.

    In any event, the applicant has only adduced two countries in which the so called practice exists and has not produced any decision in which the validity of that legislation has been considered by the courts. The mere fact that two other countries have sought to do what Australia has sought to do can have very little weight in the absence of that legislation being tested.

65    Further, the third and fourth respondents submit that s 13(1) of the Acts Interpretation Act, applicable to the construction of the FW Regulations by s 13(1)(a) of the Legislative Instruments Act 2003 (Cth), indicates that the Note to reg 1.15E is to be considered part of the regulation.

66    The starting point for the Court’s consideration of the issue raised is s 33 of the FW Act which by s 33(1) extends the Act expressly to:

    Australian flagged ships and fixed platforms in the EEZ or over the continental shelf (s 33(1)(a) and (b));

    any ship in the EEZ or over the continental shelf that operates to and from an Australian port and that services or operates in conjunction with a fixed platform in the EEZ or over the continental shelf (s 33(1)(c)); and

    any ship in the EEZ or over the continental shelf that is operated or chartered by an Australian employer and that uses Australia as a base (s 33(1)(d)).

67    As I have stated above, in my view, there is no ambiguity about the intention of the Parliament that the FW Act should apply to the ships or fixed platforms to which s 33(1) refers and so there is no relevant ambiguity concerning the application of s 33(1) and no room for international law to operate to cause that subsection to be read down in any relevant way. As noted above, and as the arguments of the parties have been developed, the focus is on the question of whether s 33(3) should be relevantly read down by reason of the operation of international law, in circumstances where the respondents contend that reg 1.15E(5) is “inconsistent with international law”.

68    Further, I also accept the submission made on behalf of the applicant that the only fair reading of reg 1.15E is that it effects an extension of the FW Act to majority Australian-crewed, but foreign flagged ships, whilst they are in the EEZ.

69    Section 33(3) provides that:

Without limiting subsection (1), if the regulations prescribe further extensions of this Act, or specified provisions of this Act, to or in relation to the exclusive economic zone or to the waters above the continental shelf, then this Act extends accordingly.

70    By reg 1.15E(1) to (4) (as they applied at material times) the FW Act was expressed to extend to:

    “licensed ships” (a ship to which a licence has been granted under s 288 of the Navigation Act 1912 (Cth) (Navigation Act)); and

    “permit ships” (a ship to which a permit has been granted (whether for a single voyage or as a continuing permit) under s 286 of the Navigation Act);

in the EEZ or the waters above the continental shelf.

71    Regulation 1.15E(5) then additionally extended the FW Act to “majority Australian-crewed ships” in the EEZ or the waters above the continental shelf.

72    In reg 1.15B, the expression “majority Australian-crewed ship” was defined as:

majority Australian-crewed ship means a ship (other than an Australian ship, a

licensed ship or a permit ship) of which:

(a)     the majority of the crew are residents of Australia; and

(b)     the operator:

(i)    is a resident of Australia; or

(ii)     has its principal place of business in Australia, or

(iii)     is incorporated in Australia.

73    The reference to a ship “other than an Australian ship…” plainly is intended to refer to a foreign flagged ship in the EEZ which has a majority Australian crew. If reg 1.15E(5) were to be construed as not applying to foreign flagged ships in the EEZ at all it would have no work to do, as the FW Act already extends to Australian flagged ships in the EEZ by virtue of s 33(1)(a). In Minister for Resources v Dover Fisheries Pty Ltd (1993) 43 FCR 565 (Dover Fisheries) at 574, Gummow J noted that it is improbable that the framers of legislation (whether primary or delegated) could have intended to insert a provision which has virtually no practical effect; instead one should look to see whether any other meaning produces a more reasonable result.

74    In this regard, to the extent there is any ambiguity suggested by the phrase used, it is relevant to observe that [60] of the explanatory statement to the Fair Work Amendment Regulations 2009 (No. 1) (Cth), which inserted reg 1.15E (as it then read, which was not materially different to the provision as it applied at material times), stated:

[Reg 1.15E] ensure[s] that all seafarers working regularly in or beyond the waters of Australia’s EEZ and continental shelf will have the benefit of Australian workplace relations laws and a fair safety net of employment conditions in circumstances where there is an appropriate connection with Australia.

(Emphasis added.)

75    In my view, the reference to “all seafarers working regularly in … Australia’s EEZ” indicates that reg 1.15E is intended to extend the FW Act to foreign flagged ships working in Australia’s EEZ, as long as there is an “appropriate connection with Australia” (an indicia which may be considered satisfied if the foreign flagged ship is a “majority Australian-crewed ship”).

76    I find, therefore, that on its face reg 1.15E(5) purports to extend the reach of the FW Act to foreign flagged ships in the EEZ.

77    I should also deal with the contention made on behalf of the applicant that the terms of s 33(3) are quite unambiguous: “if the regulations prescribe further extensions of this Act ... to or in relation to the exclusive economic zone … then this Act extends accordingly”. The applicant says that is exactly what reg 1.15E purports to do. On its face, s 33(3) is an unfettered and unlimited regulation making power.

78    It is arguable, in my view, that the regulation making power could be read down if it could be shown that, depending on how it is exercised, international law might be contravened.

79    Assuming, therefore, the view might be taken that the terms of s 33(3) regulation making power leave some room for debate as to the extent to which regulations can be made, having regard to principles of international law, the fundamental question arises whether reg 1.15E may be considered to lead to any inconsistency with any rule of international law. In this regard, I would accept the proposition that the full import of the Note that follows reg 1.15E will become clear once it is determined whether there is or is not a rule of international law which, in effect, preserves to the flag state the topic of regulation of conditions on board a ship whilst that ship is engaged in the exploration or exploitation of resources of a coastal state in its EEZ. I now turn to that specific issue.

80    The EEZ first acquired legal definition when UNCLOS was opened for signature on 10 December 1982 (although the treaty was not entered into force until 16 November 1994). However, the concept of an EEZ was foreshadowed by developments in state practice throughout the twentieth century, such as the assertion of “exclusive fishing zones” and proclamations of jurisdiction over economic resources on appurtenant continental shelves (for example, the so called “Truman Proclamation” by the United States in 1945). Prior to UNCLOS, though, conventions such as the Convention on the Continental Shelf, opened for signature 29 April 1958, 499 UNTS 311 (entered into force 10 June 1964) (Convention on the Continental Shelf) and the Convention on the High Seas primarily governed activities in what would become the EEZ. It is trite to note, then, that whatever is said in these conventions is to be read subject to UNCLOS. Moreover, given that the EEZ is a sui generis regime, it is important to recognise the primacy of UNCLOS.

81    Subsequent to UNCLOS, there have been a number of international treaties relating to the law of the sea, including the 1995 Agreement for the Implementation of the Provisions of the United Nations Convention on the Law of the Sea of 10 December 1982 Relating to the Conservation and Management of Straddling Fish Stocks and Highly Migratory Fish Stocks, opened for signature 4 August 1995, 2167 UNTS 88 (entered into force 11 December 2001) and the Maritime Labour Convention. This latter convention is relied upon by the respondents in their submissions. However, as the applicant observes, the convention did not enter into force until 20 August 2013. As such, it does not form part of the relevant law as it existed at times material to this proceeding.

82    Part V of UNCLOS is titled “Exclusive Economic Zone”. The rights, jurisdiction and duties of the coastal state in the EEZ are outlined in art 56, which relevantly provides:

1.    In the exclusive economic zone, the coastal State has:

(a)    sovereign rights for the purpose of exploring and exploiting, conserving and managing the natural resources, whether living or non-living, of the waters superjacent to the seabed and of the seabed and its subsoil, and with regard to other activities for the economic exploitation and exploration of the zone, such as the production of energy from the water, currents and winds;

…

2.    In exercising its rights and performing its duties under this Convention in the exclusive economic zone, the coastal State shall have due regard to the rights and duties of other States and shall act in a manner compatible with the provisions of this Convention.

3.    The rights set out in this article with respect to the seabed and subsoil shall be exercised in accordance with Part VI.

83    Pt VI is titled “Continental Shelf”. Two relevant articles within it are art 77 and art 78.

84    The rights of the coastal state in the waters above its continental shelf are addressed in art 77, which relevantly provides:

1.    The coastal State exercises over the continental shelf sovereign rights for the purpose of exploring it and exploiting its natural resources.

2.    The rights referred to in paragraph 1 are exclusive in the sense that if the coastal State does not explore the continental shelf or exploit its natural resource, no one may undertake those activities without the express consent of the coastal State.

…

85    The legal status of the superjacent waters and air space and the rights and freedoms of other states in the waters above a coastal state’s continental shelf are outlined in art 78, which provides:

1.    The rights of the coastal State over the continental shelf do not affect the legal status of the superjacent waters or of the air space above those waters.

2.    The exercise of the rights of the coastal State over the continental shelf must not infringe or result in any unjustifiable interference with navigation and other rights and freedoms of other States as provided for in this Convention.

86    The rights and duties of other states in the EEZ are addressed in art 58, which provides:

1.    In the exclusive economic zone, all States, whether coastal or land-locked, enjoy, subject to the relevant provisions of this Convention, the freedoms referred to in article 87 of navigation and overflight and of the laying of submarine cables and pipelines, and other internationally lawful uses of the sea related to these freedoms, such as those associated with the operation of ships, aircraft and submarine cables and pipelines, and compatible with the other provisions of this Convention.

2.    Articles 88 to 115 and other pertinent rules of international law apply to the exclusive economic zone in so far as they are not incompatible with this Part.

3.    In exercising their rights and performing their duties under this Convention in the exclusive economic zone, States shall have due regard to the rights and duties of the coastal State and shall comply with the laws and regulations adopted by the coastal State in accordance with the provisions of this Convention and other rules of international law in so far as they are not incompatible with this Part.

87    Article 92, in Pt VII (titled “High Seas”) relevantly provides:

1.    Ships shall sail under the flag of one State only and, save in exceptional cases expressly provided for in international treaties or in this Convention, shall be subject to its exclusive jurisdiction on the high seas. A ship may not change its flag during a voyage or while in a port of call, save in the case of a real transfer of ownership or change of registry.

...

88    Article 94, also in Pt VII, relevantly provides:

1.    Every State shall effectively exercise its jurisdiction and control in administrative, technical and social matters over ships flying its flag.

2.    In particular every State shall:

    …

(b)    assume jurisdiction under its internal law over each ship flying its flag and its master, officers and crew in respect of administrative, technical and social matters concerning the ship.

…

3.    Every State shall take such measures for ships flying its flag as are necessary to ensure safety at sea with regard, inter alia, to:

    …

(b)    manning of ships, labour conditions and the training of crews, taking into account the applicable international instruments;

89    Essentially, the parties in this proceeding disagree on the scope of the power conferred by the grant of “sovereign rights” to the coastal state over its EEZ. The applicant says that the grant of sovereign rights encompasses the power to pass laws with respect to labour relations on foreign flagged ships when they are located within the coastal state’s EEZ for the purpose of exploring and exploiting, conserving and managing the natural resources. The respondents disagree, and say that such an interpretation is inconsistent with articles such as art 87 and art 94.

90    It is not in contention that a coastal state’s sovereign rights in relation to its EEZ are more limited than its “sovereignty” with respect to its territorial sea: art 2. Indeed, it appears that the term sovereign rights was deliberately chosen to make a clear distinction between coastal state rights and jurisdiction in the EEZ and coastal state rights and jurisdiction in the territorial sea, where coastal states enjoy a much broader and more comprehensive right of “sovereignty”: Nandan SN and Rosenne S (eds), United Nations Convention on the Law of the Sea 1982: A Commentary (Vol II, Brill, 1993) pp 531-544.

91    Nonetheless, it is apparent that sovereign rights over natural resources means rights which are exclusively exercised by the coastal state. The coastal state is the only state that can exploit them; no other state may pursue any exploitation of natural resources without its authorisation or as per the terms it may have defined. In this respect, it has been said that the “non-living resources rights” in art 56(1)(a) “are exclusive in the fullest sense, and import no requirement for coastal states to share access, let alone benefits from their exploitation”: Rothwell DR and Stephens T, The International Law of the Sea (Hart Publishing, 2010) p 89. Accordingly, in my view it appears as though the coastal state can go as far as deciding not to exploit, or prohibiting the exploitation of, the natural resources of its EEZ. (Compare art 77(2), which applies to non-living resources found in the seabed and subsoil pursuant to art 56(3).) If the coastal state can regulate who can or cannot exploit the natural resources of its EEZ, then it logically follows, in my view, that it can regulate the manner in which, and the terms on which, such resources are explored and exploited, conserved and managed.

92    Furthermore, although the respondents rely on art 94(3)(b) and say that it gives primacy to the flag state in matters relating to labour relations on board ships, in my view such a submission is too broadly drawn. Art 94(3)(b) states that “[e]very State shall take such measures for ships flying its flag as are necessary to ensure safety at sea with regard … to … labour conditions…” (emphasis added). In my view, minimum wage provisions, such as are being attempted to be enforced in the present case, are not measures “as are necessary to ensure safety at sea”. Accordingly, the flag state does not under art 94(3)(b) have jurisdiction to regulate the wage conditions of the crew members of a ship flying its flag when engaged in the exploration and exploitation of the natural resources of a foreign state’s EEZ.

93    In any event, it is important to note that, pursuant to art 58(2), articles such as art 92 and art 94 only apply to the EEZ in so far as they are not incompatible with Pt V. While art 92(1), art 94(1) and art 94(2)(b) (if not art 94(3)(b)) may appear to give primacy to the flag state in matters relating to labour relations on board ships, while a foreign flagged ship is engaged in the exploration and exploitation of the natural resources in a coastal state’s EEZ such provisions need to be read subject to art 56(1)(a). That is, the coastal state retains the sovereign rights to regulate the manner in which the natural resources within its EEZ are explored and exploited, conserved and managed.

94    I accept that a counterargument to the generality of this construction of art 56(1)(a) may be developed when one has regard to a Report of the International Law Commission to the United Nations General Assembly, produced on 4 July 1956. This report led to the drafting of four conventions relating to the international law of the sea: the Convention on the Territorial Sea and the Contiguous Zone, opened for signature 29 April 1958, 516 UNTS 206 (entered into force 10 September 1964); the Convention on the High Seas; the Convention on Fishing and Conservation of the Living Resources of the High Seas, opened for signature 29 April 1958, 559 UNTS 285 (entered into force 20 March 1966); and the Convention on the Continental Shelf. In its commentary on the draft art 68, which became art 2(1) of the Convention on the Continental Shelf (and which is identical to art 77(1) of UNCLOS and similar to art 56(1)(a)), the Commission noted (at p 297):

… the text as now adopted leaves no doubt that the rights conferred upon the coastal State cover all rights necessary for and connected with the exploration and exploitation of the natural resources of the continental shelf.

95    In the same section, on p 298, the Commission noted that the coastal state may interfere with the rights of nationals of other states “when unavoidably necessitated by the requirements of exploration and exploitation of natural resources”.

96    It is arguable that the right of a coastal state to regulate labour relations on board foreign flagged ships engaged in the exploration and exploitation of the natural resources in its EEZ should not be construed as a right “necessary for and connected with the exploration and exploitation of the natural resources of the [EEZ]”, nor an “interference” with a foreign flagged ship which is “unavoidably necessitated by the requirements of exploration and exploitation of natural resources”.

97    Nonetheless, noting that these comments were made in reference to a different treaty, and in the absence of further evidence (no similar evidence regarding the construction of art 56(1)(a) of UNCLOS having been provided by the respondents), I consider, having regard to the above analysis, that a coastal state’s sovereign rights do encompass the right to regulate labour relations on board foreign flagged ships engaged in the exploration and exploitation of the natural resources in its EEZ.

98    This leads to the conclusion that it is unnecessary to read down the scope of s 33(3). Similarly, a conclusion that reg 1.15E is ultra vires the FW Act is not appropriate.

99    What may be stated is that coastal states exercising their sovereign rights must still respect other states’ freedoms of navigation and overflight and of the laying of submarine cables and pipelines, and other internationally lawful uses of the sea related to these freedoms: art 58(1). In contrast to art 88 – art 115, which apply only “in so far as they are not incompatible with [Pt V]”, it appears that the listed art 87 freedoms are akin to those rights as enjoyed on the high seas, although in the exercise of these rights “States shall have due regard to the rights and duties of the coastal State and shall comply with the laws and regulations adopted by the coastal State in accordance with the provisions of [UNCLOS] and other rules of international law in so far as they are not incompatible with [Pt V]”: art 58(3).

100    Notwithstanding these cautionary injunctions, in my view, in the present case, there is no inconsistency with the art 87(1)(a) freedom of navigation, as applies in the EEZ by virtue of art 58(1). The term “navigation” is not defined in UNCLOS. However, the use of the term throughout UNCLOS (see, for example, art 20 and art 90) suggests some act of physical movement through the water, whether on the surface or beneath: Rothwell DR and Stephens T, The International Law of the Sea (Hart Publishing, 2010) p 225.

101    I should note in passing that in this proceeding there is some evidence that at least one of the rigs, the Nan Hai VI, periodically moved around between drilling locations all within the EEZ for the purpose of exploration. Whether this movement constitutes “navigation” for the purposes of art 87(1)(a) may be open to question. However, the relevant movements seem to have been wholly within the EEZ and for the purpose of conducting further exploration in the EEZ. Thus, even if the rigs, by those movements, could be said to have been engaged in “navigation”, having regard to art 58(3) the navigation freedom would not be infringed by requiring these foreign flagged ships to comply with Australian wage conditions while in the EEZ for such a purpose: compare Re Maritime Union at [48]. In such circumstances, Sellers does not assist the respondents, as that case concerned (impermissible) regulation of the freedom to navigate on the high seas, not regulation of the exploration and exploitation of the natural resources in a state’s EEZ.

102    Given my views in relation to the scope of art 56, I do not need to consider further the operation of art 60.

103    There is also no need for me, in these circumstances, to consider further the examples of “state practice” suggested by the applicant and whether evidence of such “practice” is admissible and persuasive.

104    It follows, in my view, that Australia has rights under UNCLOS in relation to the regulation of labour relations on vessels that may be classified as “foreign flagged ships” that are operating in Australia’s EEZ. Regulation 1.15E has such an application and is not, therefore, “inconsistent with international law” and is not ultra vires the FW Act. The extension of the FW Act to foreign flagged ships in the EEZ does not obviate or remove Australia’s international obligations relating to foreign flagged ships that may pass through the EEZ for purposes not connected with Australia’s sovereign rights under UNCLOS. Nor in my view does the extension of the FW Act by reg 1.15E remove any concurrent jurisdiction a foreign state may have in respect of matters for which the FW Act makes provision.

105    I find, therefore, that: reg 1.15E may apply to a foreign flagged ship in Australia’s EEZ (if it is a “majority Australian-crewed ship”); that reg 1.15E is not ultra vires the FW Act; and that s 33(1)(b) applies to any relevant “fixed platform”, as defined, notwithstanding that it may also be considered a foreign flagged ship.

Issue 2: whether the rigs are “fixed platforms”

106    Section 33(1)(b) of the FW Act provides that the Act “extends to or in relation to” any “fixed platform in the exclusive economic zone”.

107    There is no dispute that the rigs were in the EEZ at material times. The question is whether each or one or the other of them was a “fixed platform” at the material times the painters were employed on them.

108    A “fixed platform” is defined in the Dictionary provided by s 12 of the FW Act to mean:

… an artificial island, installation or structure permanently attached to the sea-bed for the purpose of exploration for, or exploitation of, resources or for other economic purposes.

109    It might be accepted at the outset and does not appear to be in dispute that the rigs were “for the purpose of exploration for, or exploitation of, resources”. The question is whether it can be said that each of the rigs was “an artificial island, installation or structure permanently attached to the sea-bed” for that purpose.

110    The evidence does not support the rigs being treated as artificial islands. Each is capable, however, of being considered an “installation” or a “structure” according to the ordinary meanings of those words. “Structure” is perhaps the easiest description. The Oxford Dictionary Online relevantly defines a “structure” as “a building or other object constructed from several parts”. Each of the rigs satisfies this description. The question then is whether in each case the rig, as a structure, at material times was “permanently attached to the sea-bed for the purpose of exploration for, or exploitation of, resources”.

111    Put in non-technical terms, each rig was brought to the EEZ for the purpose of exploration for, or exploitation of, resources. There is no dispute that each rig is not attached to the sea-bed in a particular place from which it never leaves. Rather, each rig is what might be described as “in place” during exploration. The Maersk Discoverer is able to move under its own steam from place to place for this purpose. The Nan Hai VI must be towed from one place to the next. The question arises whether the fact that each rig may relatively easily be disengaged from the place in which it explores for resources and go or be taken elsewhere, means that it is not able to be characterised as an installation or structure “permanently attached to the sea-bed for the purpose of exploration for, or exploitation of, resources”.

112    In this context it is the adverb “permanently” which creates the particular issue of contention. If it did not appear in the definition of “fixed platform”, there would be little doubt or at least less, on the facts, that the rig in each case was a structure “attached to the sea-bed for the purpose of exploration for, or exploitation of, resources”. The question is what effect, if any, does the inclusion of the adverb “permanently” before the word “attached” have on the proper construction of the broader expression?

113    The applicant points out that the expression “permanently attached to the sea-bed” is qualified by the purpose – that is, exploration – which is a finite concept and is “oxymoronic” with the notion of permanency. Thus, the applicant submits the critical issue is whether the rigs were “attached” to the sea-bed for the relevant purpose. It submits the ordinary meaning of “attached” should be applied. Thus, the Nan Hai VI was attached to the sea-bed by the drill string, the well-head housing and related equipment for the duration of the exploratory process and by way of sea anchors. The Maersk Discoverer was likewise attached to the sea-bed through the drill string, the well head housing and related equipment which was cemented into the sea-bed (but not by anchors).

114    The first and second respondents contend the rigs are not fixed platforms, pointing out that they may be moved about from place to place, including to and from Singapore.

115    They rely in particular on the evidence of Mr Colyer, whose evidence they say is uncontradicted and who is a highly qualified expert on semi-submersibles, who explained that the rigs are not attached to the sea-bed through its Blow Out Protector (BOP), which sits on the sea-bed, and that the BOP is not attached to the sea-bed through the drill string and related equipment as the applicant has pleaded. These respondents submit the BOP is separately attached to the well-head during the drilling process. The drill string passes through the BOP and into the well itself only for the purposes of drilling, and the drill string is removed when drilling finishes.

116    These respondents rely on Mr Colyer’s explanation that the well and the rig are different units. The well is a permanent fixture and the connection between the well and the rig itself is via a floating marine riser that is temporarily attached to the top of the well-head. The marine riser is part of the rig and is removed when the rig completes well operations. The base of the rig – its pontoons – is not in contact with the sea-bed and the rig is designed to move around. That is why the rigs are called “mobile off shore drilling units” or “MODUs” in the hydrocarbons industry.

117    Thus, as a matter of evidence these respondents submit each rig is not permanently attached to the sea-bed.

118    The third and fourth respondents make submissions not dissimilar to those of the first and second respondents concerning the proper construction of the definition of a fixed platform, submitting that it is not clear what, if any, meaning is given to the word “permanently” by the applicant.

119    In that regard, these respondents draw attention to the Macquarie Dictionary Online definition of “permanent” as meaning:

lasting or intended to last indefinitely; remaining unchanged; not temporary; enduring; abiding.

They also refer to the Oxford Dictionary Online’s definition to similar effect.

120    These respondents submit that the suggestion of the applicant that a MODU is “permanently attached” to the seabed when drilling deprives the word “permanently” of any effect.

121    They too point out that the Maersk Discoverer uses a dynamic positioning system to remain in place while drilling. The only “attachment” which the Maersk Discoverer has to the sea-bed while drilling is through the BOP stack connected to the well via a well-head connector. However the purpose of the BOP connection to the well is not to hold the Maersk Discoverer in place (as Mr Falconer explained in his evidence in cross-examination); nor is the connection permanent (as Mr Colyer said).

122    These respondents point out that the Nan Hai VI uses an eight anchor point mooring system to remain in place while drilling. The anchors are conventional ships anchors on mooring lines designed to be deployed or retrieved whenever the rig is moved. In an emergency they can be released at “the push of a button”, as Mr Falconer explained.

123    These respondents refer to AAT Case 10,476 (1995) 31 ATR 1264 in which a drill ship which was anchored at a drill site using eight anchors for about six months was said to be temporary, not permanent, during its use in situ; and would always leave that site when its contract was completed. They say the same can be said in this case.

124    These respondents, like the first and second respondents, emphasise that the whole point of a semi-submersible drilling rig is that it can be towed into position by a tugboat and anchored, or moved by and kept in position by its own propellers with dynamic positioning. Once its work is completed, the rig is moved to another location. That is why they are classified in the industry as MODUs. In other words, there is simply no intention that a rig be attached to the sea-bed permanently or for any substantial length of time.

125    I turn then to my consideration of these submissions. In doing so, I recognise, as indeed the parties have, that the duty of the Court is to give the words of a statutory provision the meaning that the Parliament is taken to have intended them to have. Ordinarily, that meaning (the legal meaning) will correspond with the grammatical meaning of the provision. But not always. The context of the words, the consequences of the literal or grammatical construction, the purpose of the statute or the canons of construction may require the words of a legislative provision to be read in a way that does not correspond with the literal or grammatical meaning. See Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355 at [78] (McHugh, Gummow, Kirby and Hayne JJ).

126    This cautionary instruction reflects or develops what is also to be found by way of guidance in the Acts Interpretation Act. For example, s 15AA (as it applied at material times) provided that, in interpreting a provision of an Act, a construction that would promote the purpose or object underlying the Act (whether or not that purpose or object is expressly stated in the Act) is to be preferred to a construction that would not promote that purpose or object.

127    Section 15AB provides for the use of extrinsic material in the interpretation of an Act. It is well understood that by s 15AB(2) a wide range of the materials might be regarded for the purposes of s 15AB(1), including Parliamentary reports, explanatory memoranda and speeches.

128    In this overall setting, the legislative history of a provision in which an expression appears may provide relevant context for ascertaining the legal meaning of a word or an expression.

129    Accepting that there is a certain grammatical and factual attraction to the applicant’s contention that the rigs are permanently attached to the sea-bed for the purpose of exploration if they are attached at the time of exploration, it is useful to consider the origin, or what would appear to be the origin, of the definition of “fixed platform” in s 12 of the FW Act to see if that concept of permanence is made out or some other meaning should be preferred. The definition would appear to be drawn from art 1(3) of the Protocol for the Suppression of Unlawful Acts Against the Safety of Fixed Platforms Located on the Continental Shelf, opened for signature 10 March 1988, 1678 UNTS 304 (entered into force 1 March 1992) (Protocol), a copy of which Protocol is set out in Sch 2 of the Crimes (Ships and Fixed Platforms) Act 1992 (Cth). Article 1(3) of the Protocol states:

For the purposes of this Protocol, ‘fixed platform’ means an artificial island, installation or structure permanently attached to the sea-bed for the purpose of exploration or exploitation of resources or for other economic purposes.

130    The Protocol was done in Rome in March 1988 at the same time as the Convention for the Suppression of Unlawful Acts Against Maritime Navigation, opened for signature 10 March 1988, 1678 UNTS 221 (entered into force 1 March 1992) (Convention), a copy of which Convention is set out in Sch 1 of the Crimes (Ships and Fixed Platforms) Act 1992 (Cth). See also art 17 of the Convention and art 5 of the Protocol.

131    The preamble to the Convention indicates it was made because of concerns about the escalation of acts of terrorism aboard or against ships.

132    The preamble to the Protocol indicates it was made “RECOGNIZING that the reasons for which the Convention was elaborated also apply to fixed platforms located on the continental shelf”.

133    The preamble to the Protocol also indicates that the state parties to the Protocol were parties to the Convention and that the Protocol had been agreed “TAKING ACCOUNT of the provisions of [the] Convention”. Article 1(1) of the Protocol applies the provisions of various articles of the Convention mutatis mutandis to fixed platforms.

134    The Convention and the Protocol are therefore complementary.

135    Article 1 of the Convention contains the following definition of “ship”:

For the purposes of this Convention, ‘ship’ means a vessel of any type whatsoever not permanently attached to the sea-bed, including dynamically supported craft, submersibles, or any other floating craft.

136    I accept the submission made on behalf of the third and fourth respondents that it is clear from the definition of “ship” used here that:

(1)    submersibles and other floating craft, including semi-submersibles, are intended to be covered by the Convention; and

(2)    the definition of “fixed platform” in the Protocol is not intended to apply to such vessels.

137    The Australian Parliament adopted these definitions of fixed platform and ship in enacting the Crimes (Ships and Fixed Platforms) Act 1992 (Cth) to give effect to the Convention and Protocol: see Explanatory Memorandum to the Crimes (Ships and Fixed Platforms) Bill 1992 (Cth) at [9] and [33].

138    The Parliament then used exactly the same definition of fixed platform in s 12 of the FW Act.

139    I consider it is reasonable in all these circumstances to assume that the Parliament intended the definition to have the same meaning in the FW Act as in the Crimes (Ships and Fixed Platforms) Act 1992 (Cth) and the Protocol.

140    It follows, in my view, that the definition of “fixed platform” does not include submersibles or semi-submersibles such as the rigs used in this case. This approach therefore militates against acceptance of the applicant’s preferred construction of the definition.

141    The respondents also contend that the term “fixed platform” has a well understood meaning in the hydrocarbons industry and generally and that it refers to the type of offshore platform commonly used for drilling and production of oil or gas. I need not go to this evidence of specialised usage to construe the expression and would confine my consideration to the legislative context just considered, which I consider appropriate in this statutory setting.

142    It is with this understanding of the background or context to the Parliamentary use of the expression “permanently attached” that I accept that the legal meaning of the words “permanently attached to the sea-bed for the purpose of exploration for, or exploitation of, resources…”, as they appear in the s 12 definition of “fixed platform”, does not include structures such as the rigs in this case which may be taken to make a temporary, not a permanent, attachment to the sea-bed for the purpose of exploration. That construction is also consistent with the expert evidence on which the respondents rely as to the way in which the rigs operate during exploration activities.

143    I find, therefore, that neither of the rigs in question in this proceeding was at material times a fixed platform for the purposes of s 33(1)(b) of the FW Act.

ISSUE 3: WHETHER the RIGS FALL WITHIN REG 1.15E

144    Section 33(3) of the FW Act provides, amongst other things, that, without limiting subs (1), if the regulations prescribe further extensions of the Act or specified provisions of the Act to or in relation to the EEZ then the Act extends accordingly.

145    At all material times reg 1.15E(5) provided:

(5)     For subsection 33 (3) of the Act, the Act is extended to and in relation to a majority Australian-crewed ship in the exclusive economic zone…

146    At all material times, the term “majority Australian-crewed ship” was defined in reg 1.15B as follows:

majority Australian-crewed ship means a ship (other than an Australian ship, a

licensed ship or a permit ship) of which:

(a)     the majority of the crew are residents of Australia; and

(b)     the operator:

(i)    is a resident of Australia; or

(ii)     has its principal place of business in Australia, or

(iii)     is incorporated in Australia.

147    The third and fourth respondents accept that both rigs are “ships” – both within the extended definition of ship in the FW Act and the ordinary meaning of the word “ship”, and that Maersk is a company incorporated in Australia and was at all material times the operator of the Maersk Discovery and the Nan Hai VI.

148    These respondents first question whether reg 1.15E(5) was validly made. That issue has been considered above and the Court has upheld the validity of the regulation.

149    These respondents then question whether, on the facts, the regulation applies in this case. In that regard they question, in respect of each rig: (1) who are the “crew”; and (2) whether the majority of the crew were “residents of Australia” at all material times or at least some material time (and if the latter, at which times).

150    The first and second respondents raise similar issues, although their position as to whether or not each rig was a “ship” is not entirely clear. They make their submissions about reg 1.15E, however, on the basis that each rig is a ship.

151    I should then deal with the “ship” issue at the outset. In my view, there can be little doubt that each of the rigs is a ship, for the reasons that the third and fourth respondents accept they are ships. The definition of a “ship” provided by s 12 of the FW Act states that a ship includes a “barge, lighter, hulk or other vessel”, a broad definition. A “vessel” is relevantly defined by the Shorter Oxford English Dictionary as:

A ship or boat, now usu. one of larger size; a craft.

Certainly each rig would appear to be a “vessel”, in the sense it is a “craft” and so within the extended definition of s 12.

152    The evidence of both Mr Falconer and Mr Flojgaard suggests that each of the rigs falls within the definition of a “ship” as commonly understood. Indeed, the witnesses in the proceeding who spoke with authority about the use of the rigs treated them as ships. Also each rig, as noted above, flies the flag of a country other than Australia as a ship.

153    There is no apparent requirement in the ordinary or extended statutory definition for a ship to be self-propelled or self-navigated. In this case, the Nan Hai VI is towed from place to place while the Maersk Discoverer is self-propelled. In The “Von Rocks” [1998] 2 Lloyd’s Rep 198, the Supreme Court of Ireland considered whether a backhoe dredger which was not self-propelled was a ship within the meaning of the statute which defined “ship” as including every description of “vessel” and “vessel” as including any ship or boat or any other description of vessel used in navigation. The Court there held that the dredger was a ship because it was a structure designed for the purpose of carrying out specific activities on the water, was capable of moving across the water and spent significant periods of time moving across the seas from one contracting site to another. This analysis lends support for the view the rigs are ships on any view.

154    I find therefore each of the rigs is a ship within both the ordinary meaning of the word and the extended s 12 definition and thus for the purposes of reg 1.15E(5).

155    The primary issue is whether each of the rigs was a “majority Australian-crewed ship” in the EEZ at material times. It is accepted that each rig was in the EEZ at material times. The relevant question is whether at those times it had a majority Australian crew. The expression “majority Australian-crewed ship” was defined at material times in reg 1.15B of the Regulations, as set out above. For the purposes of that definition, para (b) is satisfied as, at material times, the operator, Maersk, was a company incorporated in Australia and operated each of the rigs. Thus, the critical question is whether para (a) of the definition is satisfied – that is to say, whether at material times the majority of the crew were residents of Australia. This in turn raises the first question noted above as to the meaning of the word “crew” in reg 1.15E.

156    There is no definition of “crew” in s 12 of the FW Act.

157    The applicant adopts the approach that the evidence of Mr Flojgaard, on behalf of Maersk as the operator of each rig, is that the crew of each rig were the people mentioned in the crew lists provided to the applicant by Maersk and identified by Mr Flojgaard in his evidence. The crew lists list persons in a variety of occupations who were apparently on board the rigs at various times and who were directly employed by Maersk. In essence, the applicant submits that if one needs evidence of who the “crew” of the rigs were, then one asks the operator. The applicant says a subpoena went to Maersk to produce crew lists and they were supplied. The persons mentioned in the lists provided and confirmed by Mr Flojgaard in evidence should therefore be accepted as the “crew”.

158    The respondents take a similarly expansive approach to the range of persons who might comprise the crew for the purposes of the regulation, but contend there is no reason why the persons should be restricted to those persons on board directly employed by Maersk.

159    So far as the ordinary meaning of the word “crew” is concerned, the third and fourth respondents note the Oxford Dictionary Online relevantly defines “crew” as a noun as follows:

A group of people who work and operate a ship, aircraft, etc.

160    They also note the Macquarie Dictionary definition of “crew” includes: (a) a group of people who sail or operate a ship or boat; (b) the common sailors of a ship’s company; and (c) a particular section of a ship’s company. They say that while this definition gives as one of several meanings, a particular section of a ship’s company, that meaning is not found in other dictionaries. They submit that it is apparent that “crew” in reg 1.15E(5) is intended to have a wider meaning than of a particular section of a ship’s company.

161    The third and fourth respondents draw attention to the use of the same expression, “majority Australian-crewed ship”, in the Navigation Act (since repealed), noting that it was acknowledged in the Explanatory Statement to the Fair Work Amendment Regulations 2009 (No. 1) (Cth), which inserted the definition into the Regulations, that this was the source of the expression used.

162    They further note that s 10 of the Navigation Act was inserted in 1981 and, from that time until it was amended in 2012, provided:

Except so far as the contrary intention appears, this Part applies only to:

(a)    a ship registered in Australia;

(b)    a ship (other than a ship registered in Australia) engaged in the coasting trade; or

(c)    a ship (other than a ship registered in Australia or engaged in the coasting trade) of which the majority of the crew are residents of Australia and which is operated in any of the following (whether or not in association with any other person, firm or company, being a person, firm or company of any description), namely:

(i)    a person who is resident of, or has his or her principal place of business, in Australia;

(ii)    a firm that has its principal place of business in Australia; or

(iii)    a company that is incorporated, or has its principal place of business, in Australia;

and to the owner, master and crew of such ship.

163    They also note that the word “crew” is not defined by the Navigation Act, although the word “seaman” is defined in s 6(1) to mean:

a person employed or engaged in any capacity on board a ship in the business of the ship, other than:

(a)     the master of the ship;

(b)     a pilot; or

(c)    a person temporarily employed on the ship in port.

164    These respondents also draw attention to the definitions in the Navigation Act of “passenger” and the fact that Pt 2 of the Act deals with “Masters and seamen”.

165    The third and fourth respondents submit that any reading down of the word “crew” to include only certain persons on board a ship and not others would not be appropriate in relation to the meaning of the word “crew” in reg 1.15B of the Regulations.

166    They submit the word “crew” in reg 1.15B should therefore be read as referring collectively to all persons employed or engaged in any capacity on board a ship on the business of the ship, although they do not include the master, a pilot or person temporarily employed on the ship in port (in this latter regard relying on the definition of “seaman” in s 6(1) of the Navigation Act). They submit that such a meaning is consistent with the ordinary meaning of the word “crew”.

167    These respondents also submit that the purpose of the Regulations is advanced if the word “crew” is not read down to some more select group of persons. They contend the purpose of reg 1.15B to 1.15F is two-fold:

(1)    firstly, to establish an “appropriate connection” between a vessel and Australia; and

(2)    secondly, to extend the FW Act to all seafarers working on vessels having that connection.

168    They contend that, if not self-evident from the reading of the Regulations itself, the Explanatory Statement to the Fair Work Amendment Regulations 2009 (No. 1) (Cth) at [60] provides support for that view.

169    Thus, these respondents submit, the objective of a “close”, “definite” or “appropriate” connection with Australia (all expressions referred to above are to be found in the Explanatory Statement, the Explanatory Memorandum to the Navigation Amendment Bill 1981 (Cth) or the second reading speech on this Bill) are more likely to be met if a majority of all the seamen employed or engaged to work on board a ship are Australian residents. To confine the word “crew” to a section of the persons working on the ship would lead to arbitrary results when applying the majority Australian-crewed ship test and would result in:

(1)    a ship with a large overall majority of persons on board who are not Australian residents nonetheless being caught by the definition because a majority of a section of those on board (that is, those persons meeting a narrower definition of “crew” supplied by the applicant) are residents; and conversely

(2)    a ship with a large overall majority of persons on board who are Australian residents not being caught by the definition because a majority of a section of those on board (meeting a narrow definition of crew) are non-residents.

170    Further, these respondents contend, the definition of crew they advance also advances the second of the purposes referred to above, that of extending the FW Act to all seafarers on vessels having the requisite connection with Australia. They submit that that intention appears from the Explanatory Statement to the Fair Work Amendment Regulations 2009 (No. 1) (Cth) at [57] where it is stated:

The Act will extend to regulate employment relationships on these vessels, whether or not crew members and their employers are Australian.

171    They also note that [57] of the Explanatory Statement has the effect of confirming that there is no requirement that the crew be employed by the operator of the vessel. While the operator must either be a resident of Australia, have its principal place of business in Australia, or be incorporated in Australia, it is apparent from [57] that crew members can be employed by anyone.

172    These respondents also draw attention to [59] of the Explanatory Statement which relates to reg 1.15C (made at the same time as reg 1.15B) and which is concerned with the extension of the FW Act beyond the EEZ and continental shelf; and states:

For paragraph 35 (1) (g) of the Act, the employer of a person who is a member of the crew performing duties on a majority Australian-crewed ship is prescribed as an Australian employer.

173    It is submitted that by reason of s 35(2) of the FW Act, the effect of reg 1.15C is to deem a crew member on a majority Australian-crewed ship to be an “Australian-based employee”. Regulation 1.15F then extends the FW Act beyond the EEZ and the continental shelf to those employees, that is to crew members on the majority Australian-crewed ships.

174    They submit that the word “crew” in reg 1.15C must have the same meaning as it has in the definition of “majority Australian-crewed ship”, given that the term “majority Australian-crewed ship” appears in reg 1.15C and is defined in reg 1.15B.

175    They contend that if a narrow view of the word “crew” as comprising only a section of the seafarers on board a ship were to be accepted, it would confine the effect of reg 1.15C to those persons yet the intention of reg 1.15C, as appears from [60] of the Explanatory Statement, is that “all seafarers” will have the benefit of Australian workplace relations laws where there is an appropriate connection with Australia.

176    They also say that, importantly, [60] of the Explanatory Statement refers to “these regulations” that is, reg 1.15B and reg 1.15E, as well as to reg 1.15C and reg 1.15F which apply beyond the continental shelf and EEZ.

177    It is submitted it is clear from reg 1.15E that that regulation was intended to apply and does apply to all persons on board a licensed ship, permit ship or majority Australian-crewed ship. There is nothing in [60] of the Explanatory Statement to suggest that reg 1.15C is intended to have a more restricted operation than the other regulations there referred to.

178    They contend that the word “crew” in reg 1.15C is not intended to be confined to a section of seafarers employed or engaged on board the ship.

179    The third and fourth respondents submit that once that is accepted, it follows that the word “crew” in reg 1.15B is also not intended to be so confined.

180    They add that construing the word “crew” as applying to all seafarers working aboard a ship, other than the master, or a pilot or a person temporarily employed on the ship in port, gives full effect to reg 1.15C and is consistent with the expressed purpose of the regulation.

181    The applicant responds to these submissions by contending that the Navigation Act deals with the concept of somebody who joins a ship and is there for the duration of a voyage, signs articles, signs on, signs off, is under the direction and control of the officers of the ship, and is protected by the protective provisions of the Navigation Act. Thus, what the Navigation Act plainly is talking about when it talks about a “crew”, are the people who work the ship, who are there on the business of the ship.

182    The applicant submits that, on the third and fourth respondents’ approach, when a helicopter lands on a rig, for example, the pilot, if he steps out of his aircraft, perhaps even if he does not, becomes a person on board and part of the crew. The applicant says the pilot is not crew. Other examples are given to suggest that people who attend for some limited purpose (such as investigating a marine collision) would not be considered members of the crew.

183    These submissions are all made by the applicant with a view to contending that the person who does know who the crew are is the operator and, as noted above, when asked to provide the crew lists and to identify the “crew”, Maersk and Mr Flojgaard did so by reference to the crew lists they prepared.

184    I have some difficulty with the applicant’s approach to the construction of the word “crew” as it assumes that the operator has a proper understanding of what a “crew” constitutes for the purposes of reg 1.15E. That cannot be assumed. Who Maersk may think comprise the “crew” and who the “crew” are for the purposes of reg 1.15E may be different things. Plainly there is a prior legal question to be answered as to who comprises a “crew” under this regulation before determining whether the evidence establishes whether there was a majority Australian-crewed ship in each instance at material times.

185    The ordinary meaning of the word “crew”, as already seen above from the dictionary definitions provided by the third and fourth respondents, can have meanings that go well beyond meanings associated with naval or merchant shipping. In this regard, I consider the definition of the noun “crew” to be found in the Shorter Oxford English Dictionary to be helpful to the task at hand. First, the following general definitions are provided:

2. An organized armed band. 3. A number of people associated together; a company … 4. A number of people classed together; a set, a gang, a mob.

Then, the following specialist definitions are provided:

5. A squad of workers under an overseer; an organized unit of workers. 6. A squad of sailors on a warship under the direction of a petty officer or with some particular duty. 7. A body of people manning a ship, boat, aircraft, spacecraft, train, etc.; such people other than the officers. Also, a person single-handedly manning a yacht etc. 8. A team of people concerned with the technical aspects or a specified technical aspect of making a film, recording etc.

186    In the context of the use of the broader expression “majority Australian-crewed ship” in the Regulations as a whole, I do not consider that the word “crew” carries with it the meaning that only certain people involved, for example, in the movement or navigation of the vessel, are encompassed by the expression. Rather I consider the crew constitutes all those working on board.

187    There is a question, however, whether, in this regulatory context, a distinction should be drawn between persons who are on board as the crew, and a master, pilot or other person temporarily employed on the ship, for example in port, as suggested by both dictionary definitions and expression in the Navigation Act. In my view, the distinctions between “masters and seamen” and “passengers” found in the Navigation Act are of limited assistance when it comes to interpreting the Regulations because of the different regulatory context. However, the dictionary definitions suggest that the crew (except in the case of a person single-handedly manning a yacht etc) does not include a master or pilot; and I accept that is so. Whether other persons on board for some limited temporary purpose are crew will, in my view, always be a matter of fact and degree in each case.

188    More generally, I also accept the submissions of the third and fourth respondents that it is appropriate to have regard to the purpose of the Regulations in construing the noun “crew”. When that is done, it is clear that it is by reference to “seafarers” more generally, that is, persons working on vessels in the EEZ, which vessels have an appropriate connection to Australia, that legal meaning can be given to the expression “crew” for the purposes of the expression, “majority Australian-crewed ship” in reg 1.15E.

189    In my view, having regard to the terms of the FW Act, including the power to make regulations prescribing extensions of the FW Act to or in relation to the EEZ and the apparent intent of the Regulations to apply to broad classes of vessels, no narrow view of “crew” should be adopted. Certainly there is no warrant for restricting the scope of “crew” to those persons on board who are employed (as distinct from being labour hired) by the operator of the vessel.

190    In these circumstances, the question of fact which then arises is whether evidence has been adduced by the applicant to show that each of the rigs, at material times, had a crew of persons ordinarily working on board (not including the master or pilot or other persons temporarily on board who should not be considered part of the crew) of whom a majority were “residents of Australia”.

191    In this regard, the third and fourth respondents contend that the majority Australian-crewed leg of the applicant’s case fails for lack of evidence. They say the applicant has only brought evidence to prove the residency of a subset of persons on board each of the rigs said by the operator to be the “crew”, that is, persons employed by Maersk. They contend the applicant has not attempted to bring evidence to establish that a majority of persons on board the rigs were Australian residents.

192    Dealing first with persons on board the Nan Hai VI, the third and fourth respondents say that a review of all the materials adduced in evidence (personal data forms, passports, visas and Department of Immigration and Citizenship (DIAC) passenger cards) put against POB (persons on board) lists (selected at five intervals commencing with a list for 1 January 2010 on p 871 of the Court book) reveals the following:

193    On this basis, the third and fourth respondents say that the applicant has failed to prove that anywhere near a majority of persons working on board were Australian residents. They say the applicant has failed to provide any documents in relation to the majority of persons on board.

194    As to the Maersk Discoverer, the third and fourth respondents say no POB lists have been produced at all. Yet, Mr Flojgaard, who at material times was the managing director of Maersk, said in evidence that there can be up to 180 personnel on board the Maersk Discoverer.

195    These respondents say the applicant’s aides memoire for the Maersk Discoverer, used in closing submissions, indicate the following number of Australian residents in each “crew” identified on p 856 of the Court book:

196    The third and fourth respondents say these figures include 37 persons for whom there are no documents showing residence.

197    These respondents say, even if those persons are counted as Australian residents, given that there can be up to 180 persons on board and the applicant has failed to produce a list of all persons on board (let alone documents for them), the applicant has again failed to prove that anywhere near a majority of persons working on board the vessel were Australian residents. That is so, even if the 37 persons for whom there are no documents showing Australian residence are included as Australian residents.

198    The third and fourth respondents submit further, and in the alternative, that even if the applicant’s (narrower) definition of crew were to be accepted, the applicant’s evidence in relation to those persons is lacking. In this regard, the third and fourth respondents say the applicant, in the aides memoire, has counted as Australian residents persons for whom there are no documents showing residence. In relation to the Nan Hai VI, they submit the effect is minimal as there are only two such persons. But in relation to the Maersk Discoverer, there are 37 such persons.

199    These respondents note that the applicant asks the Court to infer, from the evidence of the DIAC representative, Ms Vekaria, that the evidence means there are a number of persons identified who have never left Australia and are therefore Australian residents. In this regard Ms Vekaria’s evidence was that because there are no incoming or outgoing passenger cards for the two on the Nan Hai VI and the 37 on the Maersk Discoverer, she believes those persons did not leave or enter Australia in the relevant period. The third and fourth respondents submit the difficulty with the submission made is that there is no basis on which to make the inference sought from the evidence, unless it is assumed that persons travelling between Australia and the EEZ are not required to fill out outgoing and incoming passenger cards – as to which there is no evidence.

200    These respondents say once those 37 persons on the Maersk Discoverer are excluded from the analysis in the applicant’s aides memoire, the following figures result:

201    As a result, the third and fourth respondents say there is not a majority of Australian residents, even among the sub-set of persons on board who the applicant says are the crew of the Maersk Discoverer.

202    As to the crew on the Nan Hai VI, these respondents accept that a majority of persons identified by Maersk as “crew” in the crew lists are Australian residents. The aides memoire for the Nan Hai VI indicate the following:

203    The third and fourth respondents note that, in the case of crews three and four, there is only a small majority but a majority nonetheless.

204    However, they further submit that, as emerged in evidence, the seven pages of Nan Hai VI crew lists which Mr Flojgaard produced were provided to the applicant as Microsoft Excel files, each of which had a date on it, being respectively 6 January 2011, 21 January 2011, 31 January 2011, 18 February 2011, 12 March 2011, 21 March 2011 and 28 March 2011.

205    The third and fourth respondents say that Mr Flojgaard, while deposing in his affidavit that the crew lists he caused to be produced were for the period 1 July 2009 to 31 March 2011, admitted in cross-examination that he obtained the seven pages from “HR” in hard copy, that he had not been given any other information about the crew lists, and that he had not seen the Excel files from which they came. These respondents submit it follows that he did not know that the seven pages of crew lists were dated 6 January 2011 to 28 March 2011 when he deposed to certain facts in his affidavit.

206    The third and fourth respondents note in respect of the rig Nan Hai VI:

    The period in respect of which the prosecution has been brought in this proceeding is the period 1 January 2010 to 1 March 2011.

    From 2 December 2010 until 8 February 2011, the Nan Hai VI was not in the EEZ (and that period has been excised from the claim period).

    From 14 February to 1 March 2011, Mr Codilla and Mr Peteros (the only two painters then working) were on the Maersk Discoverer.

    Thus, it follows that the only relevant period for which a crew list may have been produced by Mr Flojgaard is the five day period 9 to 13 February 2011.

    There is otherwise no admissible evidence as to the crew, let alone the composition of the crew, of the Nan Hai VI.

    It would, therefore, not be safe to infer, from the lists which have been produced, that the composition of the crew would have been the same throughout the previous 12 months, to 1 January 2010.

    The numbers of Australian residents compared with non-residents based on the Nan Hai VI crew lists which have been produced, are not overwhelming.

    In relation to crews three and four there is only a small majority of Australian residents.

    It would only take a small change in the composition in the crew for the balance to change.

207    Thus, the third and fourth respondents say that, save for the five day period 9 to 13 February 2011, there is no evidence as to who the crew (as the applicant would define it) of the Nan Hai VI was or whether a majority of those persons were resident in Australia. Accordingly, even on the applicant’s definition of crew, save for that five day period, there is no evidence that the Nan Hai VI had a majority Australian crew. These respondents say that even that evidence must be treated as unreliable in the absence of a witness to prove that the dates on the Excel files were accurate.

208    The applicant’s response to these evidentiary matters is relatively straight forward, as noted above. The applicant says that, by subpoena, Maersk was required to produce its “crew list” for the relevant period. In response, it produced documents which were said to represent the crew list for the period. Mr Flojgaard, who was at material times managing director of Maersk, made an affidavit annexing the crew lists in which he said, in effect, that the persons listed were the crew of the respective rigs for the relevant period.

209    The applicant, for the sake of argument, then assumes that the lists produced were “snapshots”, that is to say, accounts of the crew on each of the dates they were apparently prepared for from the Excel spread sheets. It does not follow from that fact, says the applicant, in circumstances where there is direct evidence from Mr Flojgaard that they represent the crew for the whole period, that they are not representative of the whole periods in question. Simply because they were the crew for that day – assuming that to be the case – does not mean that this was not the same crew for the earlier period when there is evidence, on oath, from Mr Flojgaard, of Maersk, that that was the case.

210    Senior counsel for the applicant relies too on the fact that it was never put to Mr Flojgaard in cross-examination that there was any difficulty with that evidence. He was in the witness box, he was available and yet the contention put about the crew lists and their non-representative nature was never put to him. Rather, they were kept for closing submissions when Mr Flojgaard’s evidence could not be clarified.

211    Senior counsel for the applicant says that if the respondents had wanted to put a proposition to him that was different to what he had said in his affidavit about the crews at material times, they could have done so. The applicant says, however, the evidence is plain. There are crew lists, the crew lists represent the crew for the relevant period; and at least an evidentiary onus shifts so that a respondent would need to show that the evidence to that effect is wrong – yet nothing was put in cross-examination that might have permitted any re-examination on the issue, rather than leave the issues to debate in closing submissions.

212    Senior counsel for the applicant says that, in any event, the fact that Mr Flojgaard indicated that he had his human resources department pass on the information to the Fair Work Ombudsman (the applicant) and he did not do it himself personally, does not change the substance of his evidence. It is submitted that it was never put to Mr Flojgaard that he himself did not know who the crew were. That proposition was never asked. There was no need to re-examine Mr Flojgaard about any matter in that regard following cross-examination. Senior counsel queried rhetorically what it was he would re-examine on in the cross-examination in such circumstances. Put shortly, senior counsel for the applicant submits:

There’s the list. There’s the evidence. There is nothing that needs to be explained on that evidence.

213    As to the contended for need for Mr Flojgaard to explain the dates on the Excel sheets, the applicant says the only reason that would give rise to a need for explanation would be if there was evidence that there was significant variation from day-to-day or that the witness had not said this is the crew for the period. There is no Jones v Dunkel point (see Jones v Dunkel (1959) 101 CLR 298) that may be raised by the respondents. Nothing was kept from the respondents. Nothing was hidden.

214    Thus, the applicant’s simple submission is that the crew comprises the persons identified by the operator as the crew, listed as the crew, carrying on the business of the ship and there is nothing narrow about that. Simply because it does not involve every person who is on the vessel on any one day does not mean that the groups identified in the crew lists are a subset of a larger number of persons working on board. It is, thus, not the applicant’s case that the FW Act applies only to the crew, as defined. The Act applies once the definition of “crew” is satisfied. In other words, if the crew of the ship is a majority Australian resident, and if the operator is an Australian corporation, then the Act is enlivened.

215    As to the evidence concerning the two Nan Hai VI people on board, and the 37 Maersk Discoverer people on board, the evidence relies on the affidavit of Ms Vekaria. The applicant submits that regardless of one’s nationality, if one leaves Australia by air or returns to Australia by air, one fills in a passenger card. The exercise conducted by Ms Vekaria was to look at Australian passport holders and to see if they were residents. An exercise was carried out which revealed that save for two people on the Nan Hai VI and a larger number on the Maersk Discoverer, all had left Australia or come back in during the relevant period, and all were Australian passport holders. They had all filled in passenger cards. They all said they were an Australian resident returning or leaving temporarily. In the applicant’s submission that establishes the residence of those people by clear inference.

216    The applicant says there was another group who were members of the crew, namely, Australian passport holders who had identified their address as an Australian address.

217    And there was a third group of passport holders who had not left or returned to the country at any time during the period specified.

218    The applicant says what that means is that unless people came from somewhere else by ship or helicopter, which was not in Australia, and landed on the two rigs, they must have been Australian residents. The probabilities of coming from elsewhere must be remote. The standard of proof is on the balance of probabilities, save for matters concerning actual contravention where the standard of proof is the same but the level of satisfaction is that specified in Briginshaw v Briginshaw (1938) 60 CLR 336 (Briginshaw). It is only necessary for the applicant to show that half of the crew plus one were Australian residents in order to show a “majority Australian-crewed ship”.

219    I should first deal with the question of Ms Vekaria’s evidence, before next considering the significance of the evidence of Mr Flojgaard and the third and fourth respondents’ submission that there is an insufficiency of evidence concerning the majority of the “crew” being Australian residents.

220    I accept the applicant’s submission that the evidence of Ms Vekaria supports the drawing of the reasonable inference that the relevant 37 persons identified on board the Maersk Discoverer and the relevant two persons identified on board the Nan Hai VI were Australian residents at material times. The probability is high that the persons concerned were resident in Australia prior to their presence on the rigs at material times. The probability is extremely low that they came from places other than Australia and thus were residents of some other country.

221    The next question concerns the evidence of the crew lists and POB lists provided by Mr Flojgaard and exactly what they may be taken to represent. In relation to this question it is important to note exactly what Mr Flojgaard, who at material times was the managing director of Maersk as operator of the rigs, stated in his affidavit (and subsequent cross-examination). It is as follows:

    Maersk, as operator of the rigs, employed “the crew required to operate both of these rigs (Crew)”.

    The roles and responsibilities of “the Crew” included:

(a)    drill crew, who work in the drilling team, for example, senior to a pusher, derrickmen, floorhands;

(b)    maintenance crew, who maintain the rig’s equipment, for example, electronic technicians, electricians, mechanics;

(c)    marine crew, who look after the ballast, for example, barge engineers, control room operators; and

(d)    catering crew, who prepare meals for the persons on board the rig at any given time, for example, cooks, stewards.

    “The Crew” in the case of each rig were “employed by Maersk”.

    “The Crew for the Nan Hai VI for the period 1 July 2009 to 31 March 2011 are set out in crew lists (Nan Hai VI Crew Lists). Maersk considers that the Nan Hai VI Crew Lists set out the crew for the Nan Hai VI at various times.”

    “The Crew for the Maersk Discoverer for the period 14 February 2011 to 1 March 2011 are set out in crew lists (Discoverer Crew Lists). Maersk considers that the Discoverer Crew Lists set out the Crew for the Maersk Discoverer at the relevant times.”

    “In addition to the Crew there are other people who board both of the Nan Hai VI and the Maersk Discoverer at various times to carry out work. These persons are not employed directly by Maersk and are not considered by Maersk to be part of the Crew but are included in persons on board lists (POB Lists). The POB Lists set out all persons on board the Nan Hai VI at the relevant times.”

222    In the course of cross-examination by counsel for the third and fourth respondents, Mr Flojgaard said that he asked his HR department (that is, Maersk’s human resources department) to gather the information referred to above. He said they were shown to him in the form that they appear in his affidavit. He did not receive any other information about them. He passed them on to the applicant. Or at least the HR department did so. He did not know whether the information was passed on in an Excel format. He said he had only seen the “hard copies”.

223    When one has regard to the Nan Hai VI crew lists and the Maersk Discoverer crew lists and the POB lists identified and produced by Mr Flojgaard, it is clear enough that the crew lists for each rig simply represent those persons who were on board each rig at particular times, and who Maersk considered – because Maersk employed them directly – to be the crew. Persons who were not employed directly by Maersk – including the painters – were not included in any of the crew lists for either rig.

224    This is entirely consistent with what Mr Flojgaard said in his affidavit, that the people “not employed directly by Maersk” are “not considered by Maersk to be part of the Crew”, but are included in the POB lists.

225    When the POB lists are consulted it is plain that at particular times on the Nan Hai VI (for example, Friday 31 July 2009), Mr Peteros and Mr Codilla, not employed by Maersk but by the third respondent, were on board, having arrived on 15 July. A number of non-Maersk employers are listed in respect of a number of other persons shown as on board the Nan Hai VI on that same date.

226    There is nothing in Mr Flojgaard’s affidavit to suggest that a relevant distinction to be drawn, when determining whether a person is a member of “the Crew” at relevant times, is the nature of the work they do. Indeed, when one looks at the POB lists for Friday 31 July 2009 in respect of the Nan Hai VI it may be seen that all manner of work is apparently performed by Maersk employed persons on board, including that of cook, roustabout and mechanic. There seems no particular reason to single out painters as non-crew members on the general definition of crew I have accepted above.

227    In my view, the position just identified was the same at all material times in respect of both rigs.

228    As I have stated above, I consider that the “crew”, for the purposes of reg 1.15E, includes all persons who were present and working on the rigs at material times (save for the persons I consider are excluded from the expression).

229    It may reasonably be inferred from the crew lists for each rig provided by Mr Flojgaard, that each of the crews numbered one to four for the Nan Hai VI, and each of the various crews noted for the Maersk Discoverer, were a crew for a period of time, not just a particular day printed on the Excel sheets relied upon by the third and fourth respondents. This may be drawn from what Mr Flojgaard said in [7] and [9] of his affidavit, that the crew for the rigs for the relevant periods nominated was as set out. The point is that at different periods the crews, according to Maersk, comprised those people in the crew lists that they identified.

230    I therefore reject the submission of the third and fourth respondents that it may be drawn from the Excel sheets that the persons listed in the Excel sheets were only present at a particular point and that nothing more can be drawn from that evidence so far as the engagement of crews over the material period is concerned.

231    But what must then be determined is whether, taking into account information concerning persons on board, the applicant has established, on the balance of probabilities, bearing in mind the Briginshaw standard, that a majority of the crew (comprising not only those persons identified by Maersk as directly employed by them, but also other persons on board employed by others, including the painters in this case) were then residents of Australia. In that regard, I am not satisfied on the balance of probabilities that the applicant has established these facts at material times.

232    In relation to the Nan Hai VI, I accept the submission made on behalf of the third and fourth respondents that a review of all of the materials (personal data forms, passports, visas and DIAC passenger cards) produced by the applicant against sample POB lists reveals that there were 97 persons on board on 1 January 2010, 100 persons on board on 31 March 2010, 100 persons on board on 1 June 2010, 100 persons on board on 1 September 2010, 100 persons on board on 30 November 2010 and 97 persons on board on 1 February 2011. Persons shown on any document as having Australian residence were, in respect of these POB dates, respectively 32, 32, 31, 33, 35 and 36. Thus, I accept the submission in respect of the Nan Hai VI that the applicant has failed to prove that anywhere near a majority of persons working on board the vessels were Australian residents.

233    In relation to the Maersk Discoverer, no POB lists have been produced at all. Yet, as the third and fourth respondents point out, Mr Flojgaard in his evidence stated that “at any one time there can be a maximum of 180 personnel on board the Maersk Discoverer”.

234    The applicant relies on the “crew” identified by Maersk as showing that each of crews one to four comprised respectively, 34, 36, 28 and 25 persons. These include 37 persons for whom, the third and fourth respondents say, no documents show their residence. However, I have rejected that submission above, as I have found that it may reasonably be inferred that these persons were Australian residents. However, I accept the further submission made on behalf of the third and fourth respondents that, even if those persons are counted as Australian residents, given that there can be up to 180 persons on board the Maersk Discoverer and the applicant has failed to produce a list of persons on board in this case, let alone documents for them, the applicant has failed to prove that anywhere near a majority of the crew of that rig were Australian residents.

235    In these circumstances, I find that the applicant has failed to establish that, at material times, either rig was a “majority Australian-crewed ship” for the purposes of reg 1.15E of the Regulations.

Issue 4: whether the award covered the first respondent at material times

236    The respondents also challenge the coverage of the Award.

237    The applicant claims that the entitlements of the painters were subject to the Hydrocarbons Industry (Upstream) Award 2010 identified above, and that the first respondent was covered by it and has contravened its clauses.

238    Clause 4 of the Award is entitled “Coverage” and cl 4.1 states:

This industry award covers employers throughout Australia who are engaged in the hydrocarbons industry in respect of work by their employees engaged in the classifications listed in this award, to the exclusion of any other modern award.

239    Clause 4.2 defines the hydrocarbons industry for the purposes of cl 4 as relevantly including:

(a)     the exploration and/or drilling for hydrocarbons by use of on and offshore drilling rigs or platform drilling rigs or any other means;

…

(d)     provision of services incidental to the activities set out in clause 4.2(a) to (c) above, including:

…     

(f)    the provision of temporary labour services used in the activities set out in clause 4.2(a) … by temporary labour personnel principally engaged to perform work at a location where the activities described above are being performed.

240    The third and fourth respondents (the first and second respondents make similar submissions) say cl 4 is to be read against the background of ss 45-48 and 143 of the FW Act. They say the relevant effect of ss 46-48 is that a person does not contravene a term of a modern award unless the award “applies” to that person (s 46), a modern award “applies” to an employer if, amongst other things, it “covers” the employer (s 47) and a modern award “covers” an employer if it “is it expressed to cover the employer”: s 48.

241    These respondents submit that the Award did not cover the first respondent in respect of its activities in the EEZ.

242    They submit that there is no doubt that to the extent that the FW Act applies, the Australian Industrial Relations Commission (AIRC) (which was responsible for making modern awards) had the power (under Pt 10A of the Workplace Relations Act 1996 (Cth) (WR Act)) to make a modern award applying to employers and employees working in the EEZ.

243    They say to ensure the AIRC had that power, given the more limited extra-territorial provisions in the former WR Act, the Workplace Relations Regulations 2006 (Cth) were amended by reg 501 of the Fair Work (Transitional Provisions and Consequential Amendments) Regulations 2009 (Cth). They say the accompanying Explanatory Statement to these Regulations included the following statement at [61]:

It is intended that the AIRC would be able to make a modern award that is expressed to cover employees and their employers on licensed ships, permit ships and majority Australian-crewed ships under the award modernisation process set out in Part 10A of the WR Act as continued under Schedule 5 to the Act.

(Emphasis in original.)

244    They point out that similar commentary was contained in the Explanatory Statement to the Fair Work Amendment Regulations 2009 (No. 1) (Cth) at [61].

245    The third and fourth respondents say the question which arises is whether the AIRC exercised that power in this case, that is whether the Award is so expressed. In this they point out the Award is expressed to apply to “employers throughout Australia who are engaged in the hydrocarbons industry”.

246    In short, the third and fourth respondents contend that the words “employers throughout Australia” should be construed to only include the geographical area of Australia, ordinarily contemplated by the FW Act, without extension to the EEZ.

247    They contend that, read naturally and in context, the words “employers throughout Australia” can have only two possible meanings:

(1)    The Award applies to employers in respect of their activities in the hydrocarbons industry in any part of Australia, including Australia’s coastal sea. On this construction, the Award would apply to work onshore and offshore but only to the edge of the territorial sea.

(2)    The Award applies to employers in (that is, with a presence in) Australia who are engaged in the hydrocarbons industry in respect of their work by their employees, which may be onshore or offshore.

248    They submit the latter construction fits more easily with the context and purpose of the Award and the grammatical construction of cl 4.1 by giving meaning and effect to all of the words and construing them harmoniously. Such a construction does not lead to any absurd or anomalous results. It is the most appropriate construction and accords with a presumption against extraterritoriality.

249    The third and fourth respondents also argue that the proposition that the Award is not intended to apply to foreign employers in the EEZ is also supported by what occurred during the award modernisation process that resulted in the making of the Award and, at the same time, other modern awards including the Seagoing Industry Award 2010 (Seagoing Industry Award).

250    In particular, the respondents say that in the process of making the modern awards under Pt 10A of the WR Act, the AIRC issued statements, which were effectively reasons for decision, and exposure drafts based on submissions or requests from the Minister at material times. On 17 August 2009, the Minister concerned varied the 2008 award modernisation request under s 576C(4) of the WR Act by including provisions dealing with a modern award covering the maritime industry (not the hydrocarbons industry, which with the present Award is concerned).

251    Then, on 19 August 2009, the AIRC issued a statement specifically in response to the Minister’s request saying that as the AIRC had previously published an exposure draft of the Seagoing Industry Award, in light of the variation to the request it was appropriate to provide an opportunity for further consultation and to publish a further exposure draft.

252    The variation to the Minister’s request did not apply to the hydrocarbons industry.

253    On 4 September 2009, the AIRC issued a further statement in respect of the Seagoing Industry Award saying that further consideration of the exposure draft had been postponed due to legislative changes and that the AIRC would publish a further exposure draft. On 25 September 2009, the AIRC issued a further statement and varied the Seagoing Industry Award. Then, on 4 December 2009, it issued a further statement stating that the AIRC had regard to the effect of application of the relevant modern award beyond the geographical limits of Australia.

254    In the 4 December 2009 statement at [165], the AIRC stated:

We have decided, for now, to maintain two parts to the award. Part A will apply to all ships other than those operating under a permit and remains unchanged from the exposure draft. Part B will apply to ships operating under the permit system. In all of the circumstances we are not able to make an award that would establish a final set of appropriate conditions for foreign ships operating under the permit system. Notwithstanding the limitations in the material before us we have decided to include some basic conditions in Part B which we consider are consistent with some accepted standards in [International Transport Federation] agreements and which are capable of ready application to permit ships.

255    After further discussion at [168] the AIRC stated:

An additional reason for caution is that permit ships have hitherto never been subject to Australian industrial regulation.

256    The third and fourth respondents submit that the Hydrocarbons Industry (Upstream) Award 2010 was made “with much less fanfare”. They say there is discussion of the Award in only two of the AIRC’s award modernisation statements and on neither occasion was there any discussion of the geographic coverage of the Award.

257    So the variation of the award modernisation request made by the Minister on 17 August 2009 was therefore confined to the maritime industry. In contrast with the Hydrocarbons Industry (Upstream) Award 2010, which is expressed to apply to “employers throughout Australia”, the Seagoing Industry Award was expressed to cover “employers which are engaged in the seagoing industry and their employees” in relevant classifications.

258    Thus, the third and fourth respondents say the history of the making of the Seagoing Industry Award and the lack of any Ministerial request or similar process being undertaken in relation to the hydrocarbons industry or the Hydrocarbons Industry (Upstream) Award 2010 confirms that the latter Award is, as it is expressed to be, confined to “employers throughout Australia” and does not apply to foreign employers in the EEZ.

259    The applicant submits that the submissions of the respondents, seeking strictly to construe the coverage of the Award by reference to a narrow reading of the words “employers throughout Australia”, completely ignores the concept of the “national system employer” established by the FW Act and the proposition that there is a very strong real connection with Australia in relation to the operation of the rigs in the EEZ.

260    Senior counsel for the applicant says the short point is, because of the definition of “national system employer” it does not matter where the employer is incorporated and one cannot, from the Award, in any event, seek to circumscribe the statutory reach. When it comes to construing the Award, it is important to note that the language of the instrument must be construed in its context, having regard to the subject matter and the wording of the entire agreement: United Firefighters’ Union of Australia v Metropolitan Fire and Emergency Services Board [2006] FCAFC 84; (2006) 152 FCR 18 at [53].

261    Thus, the applicant submits, it is plain the Parliament intended that the use of the expression “employers throughout Australia” should include the EEZ. In that sense, a geographic restriction should not be imposed on the FW Act or the Award.

262    I would, if necessary, have accepted the submissions made on behalf of the applicant so far as the construction of the Award is concerned. The general principles of construing an industrial award, which is not a statute or legislative instrument, allow for some greater flexibility when it comes to construction. The view may reasonably be adopted, as a result, that when the Award coverage is stated as including “employers through Australia”, the expression “Australia”, having regard to the potential reach of the FW Act discussed above, should be taken to include not only Australia speaking geographically, but also those places, such as the EEZ, where the FW Act may have a permissible reach.

263    I would therefore have found, if it had been necessary, that the Award covered the first respondent, despite the fact that the first respondent is a foreign corporation and the painters, its employees, were not citizens of Australia.

Issue 5: whether it can be said the other respondents were knowingly involved in the contravention of the first respondent, if the first respondent were to be found to have contravened the FW Act

264    For the sake of completeness, I should also deal with the issue of accessorial liability in the event I am wrong about the application of s 33(1)(b) to the fixed platforms, or my findings concerning the rigs not being shown to be “majority Australian-crewed ships”.

265    The applicant alleges that the second, third and fourth respondents were involved in the alleged contraventions by the first respondent, within the meaning of s 550(2)(c) of the FW Act. That provision states:

A person is involved in a contravention of a civil remedy provision if, and only if, the person:

…

(c)    has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention;

…

266    The second, third and fourth respondents deny they were knowingly concerned in or party to any contravention by the first respondent.

267    The third and fourth respondents in particular deny knowing the rigs had majority Australian crews (assuming that were the case).

268    The third and fourth respondents draw attention to what was said in Yorke v Lucas (1985) 158 CLR 661 (Yorke v Lucas) at 670 (Mason ACJ, Wilson, Deane and Dawson JJ), that for a person to be involved in a contravention of s 75B(c) of the Trade Practices Act 1974 (Cth) a person must be an intentional participant in the contravention, the necessary intent being based upon knowledge of the essential elements of the contravention. See also Fair Work Ombudsman v McGrath [2010] FMCA 315; (2010) 195 IR 190 at [23] in respect of s 550 of the FW Act.

269    These respondents also draw attention to what was said in Australian Competition and Consumer Commission v IMB Group Pty Ltd [2003] FCAFC 17 at [135] to the effect that before any accessorial liability will arise, it is necessary to establish the subjective element of knowledge of each of the essential elements of the contravention. The Court there noted that knowledge may be constructive in the sense that it may be possible to show wilful blindness in relation to the elements of the contravention, but absent such a finding it is necessary to establish actual knowledge on the part of the person to whom it is sought to sheet home accessorial liability in respect of a contravention.

270    The third and fourth respondents also say that there was a lack of evidence to show that they were “linked in purpose” with the first respondent in committing any contravention: see Giorgianni v The Queen (1985) 156 CLR 473 at 494 (Mason J).

271    The third and fourth respondents say that unless the rigs are fixed platforms, the alleged contraventions of the minimum wage order and the Award can succeed only if either of them was a “majority Australian-crewed ship”. In those circumstances they submit that the essential elements of the contraventions of which they needed to have knowledge include that the vessels had majority Australian crews. Without that element there is no contravention.

272    These respondents note that the applicant may say that the majority Australian crew requirement only goes to jurisdiction and is not an essential element of the contraventions – so that it is not something of which the third and fourth respondents need to have knowledge to be liable as accessories. They say this raises the question of what matters ought to be regarded as the essential elements of an offence or contravention for the purpose of the rule in Yorke v Lucas.

273    They say they have not been able to find any decision directly on point so they deal with it by reference to principle and here cite Thompson v The Queen (1989) 169 CLR 1 (Thompson) and R v Abdulla [2010] SASC 52; (2010) 200 A Crim R 365 (Abdulla).

274    Further, they say there is no evidence either directly or from which inferences can be drawn that any of the second, third or fourth respondents had actual knowledge that a majority of the crew of either rig were Australian residents.

275    They point out that regs 1.15B and 1.15E had not been made when, between March and July 2009, the third respondent first agreed to provide painters to Maersk.

276    They also say there is no evidence to indicate that the third and fourth respondents became aware of the regulations once they were made or once they commenced on 1 January 2010.

277    There is nothing, they say, to suggest that the third and fourth respondents turned their minds to whether the rig Nan Hai VI was “majority Australian-crewed” at that time either. The same can be said in relation to the Maersk Discoverer.

278    The third and fourth respondents also say they were not wilfully blind and there is no occasion for a Jones v Dunkel inference to be drawn against them.

279    Notwithstanding these submissions, I accept those of the applicant that, if there were contraventions, the elements of it were known by the second, third and fourth respondents. The contraventions constitute the failure to comply with the requirements of the Award. If there were findings that the rigs constituted a fixed platform in each case, or that the rigs constituted a “majority Australian-crewed ship”, then those findings go to the jurisdiction of the Court, not a question of primary liability under knowing involvement. I accept the applicant’s submission in that regard that the decisions in Thompson and Abdulla are not to the point.

280    Similarly, I accept the applicant’s submission that the fact that the relevant respondents did not know about the requirements for a fixed platform or a majority Australian-crewed ship was irrelevant to the question of knowing involvement. What they did know was that they were arranging for men to work as painters on rigs in Australia’s EEZ on contracts at low rates. The evidence justifying that finding is ample and need not be repeated in detail.

281    The elements of a relevant contravention go to whether or not minimum wages required to be paid were in fact paid and whether or not the individual respondents were aware of what was proposed to be paid to each of the painters. In that regard, there is no doubt that each of the second and fourth respondents, as the guiding minds of the first and third respondents respectively (the second respondent as agent for the first respondent), actively organised the hiring of the painters and negotiated the terms of payment. Thus, the second, third and fourth respondents were fully aware of the facts that would have constituted a contravention of the FW Act, if such contravention had been proved.

282    I accept, therefore, that the elements of the contraventions were known by the relevant respondents. What they did not know at certain material times concerned the requirements of Australian law as it applied on each of the rigs. But as I have stated above, that is a matter that goes to jurisdiction, not to the elements of the contraventions.

283    Thus, if I had found on the facts that the rigs constituted fixed platforms or were majority Australian-crewed ships and there had been contraventions of the FW Act, then I would have found that the second, third and fourth respondents were knowingly involved in the contraventions.

conclusion and order

284    By reason of my findings that the rigs were not, at material times, either fixed platforms for the purposes of s 33(1)(b) of the FW Act, or “majority Australian-crewed ships” for the purposes of reg 1.15E of the Regulations, the application should be dismissed.

Associate:

Dated: