FEDERAL COURT OF AUSTRALIA

Fair Work Ombudsman v Construction, Forestry, Maritime, Mining and Energy Union (MV Portland Case) (No 2) [2020] FCA 1138

ORDERS

THE COURT ORDERS THAT:

1.    The parties bring in minutes of proposed orders or seek a relisting of the proceeding in accordance with the observations made at [77] of the Court’s reasons for judgment.

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

REASONS FOR JUDGMENT

BROMBERG J:

INTRODUCTION

1    At all relevant times, ASP Ship Management Pty Ltd (“ASP”) operated a business in which it provided technical ship management services as well as crew management services to owners and operators of ships or other vessels. In relation to crew management services, ASP was in the business of providing and managing the ships’ crew for each of the vessels under its management. ASP was engaged by Alcoa Portland Aluminium Pty Ltd (“Alcoa”) to operate and crew the maritime vessel, the MV Portland. On 23 October 2015, ASP notified the second to tenth respondents (“Employee Respondents”), who were crew members (“ratings”) employed by ASP on the MV Portland, that Alcoa planned to take the MV Portland out of service during the fourth quarter of 2015. On 13 November 2015 the Employee Respondents were notified that the MV Portland would sail to Singapore for handover to its new owner and that thereafter the positions of the crew members would be made redundant. The applicant (“FWO”) alleges that the Employee Respondents then took unlawful industrial action between 14 November 2015 and 13 January 2016 by refusing to sail the MV Portland to Singapore.

2    The FWO asserts that by reason of the industrial action taken or organised, the respondents have contravened s 417 of the Fair Work Act 2009 (Cth) (“FW Act”). Section 417 of the FW Act, relevantly and in substance, provides that an employee or employee organisation “covered by” an enterprise agreement must not organise or engage in industrial action in the period between when the enterprise agreement is approved and its nominal expiry date.  Broadly stated, the FWO’s case is that the Employee Respondents were crew employed by ASP on the MV Portland, were “covered by” the ASP Ship Management Pty Ltd Seagoing Ratings Enterprise Agreement 2012 (“2012 Agreement”) and that whilst so covered the Employee Respondents engaged in industrial action organised by the First Respondent (“CFMMEU”). Accordingly, the FWO alleges that various contraventions of s 417 of the FW Act occurred over many days. The FWO seeks declarations of contravention of s 417 of the FW Act and the imposition of pecuniary penalties.

3    On 13 June 2018, I made an order pursuant to r 30.01 of the Federal Court Rules 2011 that the Court hear and determine three “separate questions”:

(a)    Whether, on or by 13 November 2015, the MV Portland had ceased to “operate in the trade” within the meaning of clause 4 of the [2012 Agreement] referred to in paragraph 6 of the Statement of Claim.

(b)    If the answer to question (a) is “yes”, whether, from 13 November 2015, the [2012 Agreement] ceased to cover the 2nd to 10th Respondents.

(c)    Whether the 2nd, 3rd, 4th, 9th and 10th Respondents who are not named in Schedule 3 of the [2012 Agreement] are covered by the Agreement within the meaning of clause 4.

4    It is convenient to deal with some preliminary “housekeeping” matters at the outset.

5    Separate question (c) was not pressed at the hearing and I made an order that it be vacated.

6    The CFMMEU appeared for itself and on behalf of all of the Employee Respondents except the 8th and 10th Respondents. The 10th Respondent did not appear at the hearing. The 8th Respondent was separately represented at the hearing. The 8th Respondent broadly supported the submissions made by the CFMMEU. In referring to the submissions of the CFMMEU, I mean to refer to the submissions of all of the respondents other than the 10th respondent.

7    Late in the hearing of the separate questions the FWO submitted that it had proceeded on the understanding that it was not in dispute that the Employee Respondents were employed by ASP within the period of the asserted industrial action – 13 November 2015 to 13 January 2016 – as integrated ratings or chief integrated ratings assigned to the MV Portland. As it turned out those employments were not conceded. Consequently and by leave of the Court, the FWO filed further material for the purpose of proving that the Employee Respondents remained employees of ASP for the relevant period. For the reasons later given, it is not necessary that I determine that issue.

8    In the material before me, ASP Ship Management Pty Ltd is variously referred to as ‘ASPSM’ or ‘ASP’. I will refer to it as ASP.

had the mv portland ceased to “operate in the trade”?

9    Separate question (a) is concerned with the meaning of “operate in the trade” in cl 4 of the 2012 Agreement which states (emphasis added):

This Agreement relates to the employment arrangements for and work performed by ratings and caterers who may be members of the Maritime Union of Australia and are employed by [ASP] as specified in the schedules to this Agreement on the day of lodgement of this Agreement, pursuant to the provisions of the Award, the Enterprise Employment Agreement, the Act and the Navigation Act 1912, and all industry regulations whilst these vessels continue to operate in the trade.

“Operate in the trade” is not defined in the 2012 Agreement and its meaning falls to be determined according to established principles of construction of an industrial instrument.

10    It is not in contest that the predecessor provision to cl 4 of the 2012 Agreement was cl 4 of the enterprise agreement which preceded that Agreement, the ASP Ship Management Pty Ltd Seagoing Ratings Enterprise Agreement 2008 (“2008 Agreement”). The 2008 Agreement, like its successor, was negotiated by representatives of ASP and the CFMMEU. Enterprise agreements are commonly made upon the foundation of a predecessor agreement. Such an approach was here taken to the negotiations of the 2012 Agreement. The evidence called by both parties from persons involved in the negotiations for the 2012 Agreement confirmed that the terms of cl 4 of the 2012 Agreement were not the subject of any specific consideration in the negotiations of the 2012 Agreement. The terms of cl 4 of the 2008 Agreement which addressed the “Application” of that agreement were, in substance, carried over and included as cl 4 of the 2012 Agreement, which also addressed the “Application” of that agreement.

11    There is, however, one relevant point of difference between cl 4 of the 2012 Agreement and its predecessor. The additional words of relevance in cl 4 of the 2008 Agreement are emphasised in the following extract of cl 4 of the 2008 Agreement:

This Agreement relates to the employment arrangements for and work performed by ratings and caterers who may be members of the Maritime Union of Australia and are employed by [ASP] on vessels manned and/or operated by [ASP] as specified in the schedules to this Agreement on the day of lodgement of this agreement, pursuant to the provisions of MISA, the Enterprise Employment Agreement, the Act and the Navigation Act, 1912, and all industry regulations whilst these vessels continue to operate in the trade.

12    The parties accepted that the words emphasised were not intended to have been excluded and they agree that the reference in cl 4 of the 2012 Agreement to employees employed by ASP is an intended reference to employees employed by ASP on vessels, manned and/or operated by ASP as specified in the schedules to the 2012 Agreement.

13    Before turning to consider the proper construction of cl 4 of the 2012 Agreement, the reason that the meaning of the phrase “operate in the trade” in cl 4 is important to the resolution of the proceeding needs to be further explained.

14    The prohibition imposed by s 417(1) of the FW Act upon a person engaging in industrial action only relevantly operates against “an employee … who is covered by the agreement”: s 417(2)(a). To establish that the employees contravened s 417(1), the FWO must establish that at the time the industrial action allegedly taken by the employees was taken, those employees were “covered” by the 2012 Agreement.

15    The meaning of cl 4 of the 2012 Agreement is important because that clause serves to determine whether or not the employees were “covered” by the 2012 Agreement (within the meaning of s 417(2)(a)) at the time they are alleged to have engaged in industrial action.

16    Clause 4, as its heading states, deals with the “Application” of the 2012 Agreement. Clauses setting out the application, scope or coverage of an agreement are commonly found in enterprise agreements. Their purpose, ordinarily, is to define the boundaries of the agreement’s operation or application. The obligations imposed by an enterprise agreement are operative only in relation to the persons, work or other circumstances covered by an enterprise agreement as specified in its “application” clause.

17    Clause 4 defines the boundaries of the operation or application of the 2012 Agreement by reference to a number of indicia. Relevantly, the operation of the 2012 Agreement is confined to the work performed by “ratings and caterers … who are employed by [ASP] [on vessels manned and/or operated by] [ASP] on the vessels as specified in the Schedules to [the] Agreement … whilst these vessels continue to operate in the trade”.

18    For the purposes of the resolution of separate question (a), the parties accepted that an employee of ASP employed on a vessel specified in the Schedule to the 2012 Agreement was not “covered by the agreement” for the purposes of s 417 of the FW Act where the vessel upon which the employee was employed was not, at that time, a vessel which “continue[d] to operate in the trade” within the meaning of cl 4 of the 2012 Agreement.

19    The FWO contended that at the time the alleged industrial action was taken, each of the employees was employed on the MV Portland, a vessel specified in the schedules to the 2012 Agreement. The FWO contended that at that time, the MV Portland operated “in the trade” within the meaning of cl 4. It was contended that, on its proper construction, the phrase “operate in the trade” refers to any operations of the MV Portland whilst certified and under ASP management. That was said to encapsulate the crew of the MV Portland sailing the MV Portland to Singapore for the vessel to be sold.

20    In oral submissions, the FWO submitted that the word “business” falls within the ordinary meaning of “trade” and that “the trade” as used in cl 4 is an intended reference to ASP’s business. On that construction, employees of ASP are covered by the 2012 Agreement where the vessel upon which they work is specified in the schedules of the Agreement and the vessel “continues to operate in the trade”, meaning, as the FWO would have it, continues to operate in ASP’s business or trade. The contest between the parties as to the proper construction of cl 4 was essentially this – the FWO contended that “the trade” was an intended reference to ASP’s business or commercial activities, whilst the CFMMEU contended that the phrase “the trade” was an intended reference to the usual trade or commercial activity of the particular vessel identified in the schedules to the 2012 Agreement.

21    The applicable principles for interpreting an enterprise agreement were recounted by a Full Court in WorkPac Pty Ltd v Skene (2018) 264 FCR 536 at [197] (Tracey, Bromberg and Rangiah JJ) in a passage recently endorsed by Bromberg J at [235] and White J at [637] of WorkPac v Rossato [2020] FCAFC 84:

The starting point for interpretation of an enterprise agreement is the ordinary meaning of the words, read as a whole and in context:  City of Wanneroo v Holmes (1989) 30 IR 362 (Holmes) at 378 (French J). The interpretation “turns on the language of the particular agreement, understood in the light of its industrial context and purpose”: Amcor Limited v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241 (Amcor) at [2] (Gleeson CJ and McHugh J). The words are not to be interpreted in a vacuum divorced from industrial realities (Holmes at 378); rather, industrial agreements are made for various industries in the light of the customs and working conditions of each, and they are frequently couched in terms intelligible to the parties but without the careful attention to form and draftsmanship that one expects to find in an Act of Parliament (Holmes at 378–9, citing Geo A Bond & Co Ltd (in liq) v McKenzie [1929] AR (NSW) 498 at 503 (Street J)).  To similar effect, it has been said that the framers of such documents were likely of a “practical bent of mind” and may well have been more concerned with expressing an intention in a way likely to be understood in the relevant industry rather than with legal niceties and jargon, so that a purposive approach to interpretation is appropriate and a narrow or pedantic approach is misplaced:  see Kucks v CSR Limited (1996) 66 IR 182 at 184 (Madgwick J); Shop, Distributive and Allied Employees’ Association v Woolworths SA Pty Ltd [2011] FCAFC 67 at [16] (Marshall, Tracey and Flick JJ); Amcor at [96] (Kirby J).

22    The reference there made to the observations of Kirby J at [96] of Amcor is a reference to his Honour’s remarks that the construction to be given to a clause in an industrial instrument “should not be a strict one but one that contributes to a sensible industrial outcome such as should be attributed to the parties who negotiated and executed the Agreement”.

23    There are a number of reasons why I consider that the construction of cl 4 contended for by the FWO is unpersuasive. Before turning to each of those reasons, there are a number of observations about cl 4 which should be noted at the outset.

24    First, the words “whilst these vessels continue to operate in the trade” are words of limitation or restriction. They seek to limit or confine the application of the 2012 Agreement by reference to the subject matter that those words address. That limitation must have been included for a purpose. Identifying that purpose will assist in better understanding the subject of the limitation.

25    Second, the limitation imposed is both temporal and locational. So far as it is locational it is concerned with the place or setting that the vessels operate “in”.

26    Third, each of the competing constructions of cl 4 uses the word “trade” as a noun and not as a verb. Each construction contends that “the trade” is a reference to a set of commercial activities engaged in by or belonging to an entity or object, that is, the commercial activities of ASP or, alternatively, the commercial activities of the particular vessel. Although, as I will later explain, the vessels specified in the schedules to the 2012 Agreement all sailed on shipping routes along the coast of Australia, neither party contended that “the trade” is a short-hand reference to that coastal trade.

27    The FWO’s construction confronts a number of textual difficulties.

28    First, to use the phrase “the trade” as a descriptor of the business or the commercial activities of ASP is not a natural or ordinary use of that expression. It is possible that the word “trade”, when used as a noun, may be used synonymously with “business”, but ordinarily that would only be so where “trade” is used to refer to a person’s occupation when pursued as a business or calling. Whilst ASP has a business it does not have a trade. Nor are its commercial activities apt to be described by the noun “trade”.

29    Second, the locational limitation in the phrase “whilst these vessels continue to operate in the trade” is, as indicated above, directed to the place or setting in which the vessels must continue to operate “in”. The idea that the vessels “operate in” the business or commercial activities of ASP is inconsistent with the commercial reality of the arrangement. To the contrary, the commercial activities of ASP are provided to the vessels and, in that respect, it is ASP’s business activities which operate in the commercial activities of the vessels.

30    Additionally, there is nowhere else in the 2012 Agreement (or the 2008 Agreement) where the term “the trade” is used to describe the business or the commercial activities of ASP. Putting to one side the phrases “trade skills” and “trade union” used in the 2012 Agreement, the word “trade” or “trading” is used in the Agreement in connection with the activities of vessels rather than the commercial activities of ASP. The following are examples (emphasis added):

    “it is the intent of all parties to this Agreement that: … work continues normally and the fleet continues to trade without interruption from industrial stoppages, bans and/or/limitations, whilst the disputes procedure outlined below is put into effect”: cl 9.1

    “It is the intention of all parties that work shall continue and that vessels continue to trade pending determination of any matter or dispute in accordance with the above procedures”: cl 9.6

31    Where the 2012 Agreement seeks to refer to ASP’s activities by reference to the vessels to whom ASP provides those activities, it does not use the term “the trade” or “ASP’s trade” or any like expression. It does so as follows:

    “Vessels managed by [ASP]”: cl 5(iii)

    “ASP vessels”: cl 7.2

    “Within the group of vessels managed by [ASP]”: cl 14.2

    “Within [ASP] group of managed vessels”: cl 14.4

    “The ASP Fleet”: cl 38

    “The [ASP] Fleet”: cl 5 of Sch 3

32    All of those textual indications tend against the construction contended for by the FWO. There are other indicators which confirm the conclusion that “the trade” is not an intended reference to ASP’s business or its commercial activities.

33    On the FWO’s construction, the limitation imposed by the expression “whilst these vessels continue to operate in the trade” has no work to do additional to limitations which are already put in place by the preceding text of cl 4. It is clear from those preceding words (as clarified by the agreed position of the parties as set out above at [12]), that the 2012 Agreement operates only in respect of the employments of employees employed by ASP to work on vessels specified in the schedules to the Agreement which are manned and/or operated by ASP. That limitation would essentially be repeated if, on the FWO’s construction, the closing words of cl 4 meant that the 2012 Agreement only applied whilst the vessels on which ASP’s employees worked continued to operate in ASP’s business or, in other words continued to be operated by ASP. On the construction contended for by the FWO, the closing words add nothing to the limitations already dealt with by cl 4. A construction that gives the closing words some work to do should be preferred (see by analogy and in relation to statutory construction Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at [71] (McHugh, Gummow, Kirby and Hayne JJ)).

34    For reasons I will further address, the CFMMEU’s construction of the closing words to cl 4 is not without some difficulty. However, that construction does give the expression in question a purpose and some sensible work to do. On the CFMMEU’s construction, cl 4 operates to limit the operation of the 2012 Agreement to the employments of ASP employees working on a vessel specified in the schedules manned or operated by ASP but with the additional limitation that the vessel on which those employees work is operating the regular trading route of that vessel.

35    The proposition that the 2012 Agreement contemplates that vessels specified by the schedules will be engaged in trading on particular routes is somewhat supported by the text of the Agreement but also finds support in the factual matrix in which the 2012 Agreement as well as the 2008 Agreement were made.

36    The 2012 Agreement variously speaks of the vessels specified by the schedules as “trading” or continuing “to trade”. Examples are given at [30] above. Perhaps the best example of the 2012 Agreement referring to a vessel trading on a particular route is in Schedule 1 where cl 2 deals with the applicable swing arrangements (a “swing” being the number of consecutive days or weeks an employee is required to work on a vessel) and states:

If the vessel is trading on the Kwinana to Adelaide run the following shall apply:

…

If the vessel is trading on the East coast run …

37    There are four schedules to the 2012 Agreement. Each deals with a particular fleet of vessels belonging to a particular entity. Little may be drawn from two of the four schedules to the 2012 Agreement because the evidence is that those schedules were only included in anticipation of ASP acquiring contracts to manage the fleets there dealt with but those contracts did not eventuate. Each of the remaining schedules sets out terms and conditions specific to the fleet of vessels dealt with by the schedule. The conditions addressed are of primary importance and include the salaries to be paid to employees and the applicable swing arrangements. The vessel or fleet specific structure of the 2012 Agreement is also made apparent by the text of cl 6.4 which states:

This Agreement comprises two parts, Part A which contains general provisions which apply to all Seafarers and Part B which contains specific schedules which apply to either client companies or named vessels. Provisions in Part 8 apply to Seafarers serving on specific vessels and prevail over provisions in Part A to the extent of the inconsistency. Provisions in Part B only apply while the Seafarer is serving on the specific vessel or named client.

38    Schedule 1 to the 2012 Agreement deals with the “BP Shipping Fleet”. The BP Shipping Fleet had been the subject of Schedule 2 of the 2008 Agreement. The vessels in that fleet sailed around the Australian coast delivering petroleum products.

39    Schedule 3 to the 2012 Agreement dealt with the Alcoa Fleet which, as the schedule identifies, comprised two vessels – the Lindesay Clark and the MV Portland. Clause 1.1.1 of Schedule 3 stated that its object was to outline specific employment conditions for persons employed and working on those two vessels. The Alcoa Fleet had been the subject of Schedule 4 of the 2008 Agreement. The Lindesay Clark sailed between Geelong in Victoria and Kwinana in Western Australia. The MV Portland sailed between Kwinana and the smelter at Portland, Victoria. At the time the 2012 Agreement was made, the Alcoa Fleet had been plying the same coastal routes for 27 years.

40    In support of its contention that vessels specified by the schedules to the 2008 and 2012 Agreements conducted “trading” along established routes on the Australian coast which were well known to those who negotiated those Agreements, the CFMMEU also relied on the following matters relating to the 2008 Agreement:

(a)    the operation of the QAL Steam Fleet, referred to in Schedule 1 of the 2008 Agreement, whose vessels sailed between Weipa (a bauxite mining town) in Queensland and Gladstone in Queensland (where an aluminium smelter is located);

(b)    the operations of the Vigsnes, referred to in Schedule 3 of the 2008 Agreement, which sailed between Melbourne, South Australia and Tasmania carrying a range of cargoes; and

(c)    the operation of the Rio Tinto Dry Cargo Fleet, referred to in Schedule 5 of the 2008 Agreement, whose vessels sailed between Weipa and Gladstone in Queensland.

41    The FWO challenged the proposition relied upon by the CFMMEU that vessels referred to by the schedules to the 2012 Agreement had established, well-known routes which the closing words of cl 4 contemplate to be “the trade of each vessel”.

42    First, the FWO submitted that in relation to the MV Portland, there was no express reference in the 2012 Agreement to that vessel having any particular route. So much may be accepted, but the factual matrix relied upon by the CFMMEU must be taken into account. The FWO did not relevantly contest that factual matrix in relation to the MV Portland or otherwise.

43    Second, the FWO pointed to the terms of some of the clauses in the 2012 Agreement to contend that the Agreement contemplated that the vessels would or may make voyages along irregular voyaging patterns and overseas voyages beyond Australian coastal routes.

44    However, the clauses in question, examined in their proper context, are dealing with exceptions to the usual or ordinary voyaging of the vessels that the 2012 Agreement seems to contemplate. Thus, cl 12 acknowledges that a vessel may be “diverted to another port” and addresses the implications for the swing arrangements should, it must be inferred, a diversion from a usual port occur. Clause 10.2 addresses the implications for leave arrangements as a result of the “irregular or overseas voyaging pattern” of a vessel. Again, that clause seems to be addressing an irregularity as distinct from that which is the norm. Clause 22 deals with the “Dry-docking/repair periods” of a vessel, the evidence being that the dry-docking of vessels occurs overseas. Overseas voyaging is also possibly contemplated by cl 38 which provides for specific conditions of employment when a new vessel about to join “the ASP fleet” is being collected.

45    However, the fact that voyages of those kinds are contemplated is no more than a recognition that some voyages are necessary to be undertaken in order to facilitate the normal operations of a vessel. None of these indicators serve to deny the proposition that the 2012 Agreement was made on the basis that work the subject of regulation by it would ordinarily be performed on a vessel plying a regular route or routes along the Australian coast.

46    That the 2012 Agreement should be limited to the regulation of specific vessels ordinarily plying specific routes along the Australian coast makes good industrial sense. That is because working conditions vary as between different vessels and as between vessels plying different routes. That different pay is provided for the same category of employee in the different schedules to the 2012 Agreement is likely to be a product of the different work and different working conditions upon those ships. In that regard, the vessel’s size is probably a determinant of working conditions. Pay rates in the then underlying award, the Seagoing Industry Award 2010 were, and still are, at least partly based on the size of the vessel upon which work is performed.

47    Swing arrangements, another important condition of work for a seafarer, must necessarily be calibrated to fit in with the duration of a vessel’s ordinary or regular voyage. The terms of the schedules dealing with swing arrangements indicate as much. Those observations serve to explain why specific conditions are provided for in the schedules to both the 2008 and 2012 Agreements in relation to pay and also in relation to swing arrangements.

48    On the FWO’s construction of cl 4, the 2012 Agreement would regulate the terms and conditions of employment of ASP employees on any journey to anywhere in the world, so long as those employees were employed on a vessel managed by ASP. To take one example, if Alcoa had decided that, instead of trading between Kwinana in Western Australia and the smelter at Portland in Victoria, the MV Portland would ply its route between Kwinana and a smelter in Cape Town, South Africa, on the FWO’s construction of cl 4, so long as ASP managed the vessel, the 2012 Agreement would apply. That the framers of the 2012 Agreement intended that result is highly unlikely because of the very different conditions of employment which would be brought about by the substitution of the usual domestic voyaging of the vessel for the international voyages required by the new arrangements. The very existence of the schedules to the 2012 and 2008 Agreements, in which different terms and conditions including swing arrangements, are specified for different vessels plying different routes suggests that in the context of ASP’s activities across a wide range of vessels and routes, bespoke vessel/route arrangements were regarded as industrially appropriate.

49    All of that serves to suggest that the construction contended for by the FWO makes little industrial sense whereas an industrially sensible purpose for a limitation upon the coverage of the 2012 Agreement based on the usual trading of a vessel is available to support the construction of the closing words of cl 4 for which the CFMMEU contends.

50    That the terms of the 2012 Agreement recognise the possibility of the vessel specified in the schedules making ancillary voyages (as referred to above) does need to be reconciled with the terms of cl 4. The CFMMEU sought to do that by contending that “the trade” of the vessel to which cl 4 refers must be construed to refer to the vessel’s ordinary voyaging as well as those voyages ancillary thereto (such as to a dry dock) which the terms of the 2012 Agreement specifically address.

51    In that respect, the CFMMEU relied upon there being no provision which dealt with the decommissioning of a vessel and any voyage consequent thereto and contrasted that absence with the fact that the 2012 Agreement specifically dealt with the commissioning of a vessel and its initial voyage as well as overseas voyages required to take a vessel into a dry dock.

52    The FWO did not contend that a voyage to an overseas destination on the decommissioning of a vessel should be regarded as an ancillary voyage encompassed by the CFMMEU’s construction of the closing words of cl 4. The FWO did however contend, in addition to its primary submission about the proper construction of cl 4, that from the provisions which specifically address the potential commissioning and decommissioning of vessels it may reasonably be inferred that the 2012 Agreement was intended to cover the collection and delivery of vessels and is therefore not confined to the operations of the vessels whilst travelling particular routes with particular cargoes. In that respect the FWO relied on cl 38 of the 2012 Agreement to which I have already referred dealing with the commissioning of new vessels. Whilst that clause clearly contemplates that the 2012 Agreement will cover a voyage consequent upon the commissioning of a new vessel, it says nothing about coverage of a voyage consequent upon decommissioning. The other clause relied upon by the FWO was cl 6.1 in Schedule 3 to the 2012 Agreement which provided for specific redundancy entitlements “as a consequence of the decommissioning and sale off the coast of a vessel”. That clause deals with redundancy and in so doing acknowledges that redundancies may occur in circumstances where a vessel is decommissioned. Whilst the possibility of a vessel being decommissioned is adverted to, the clause says nothing at all about the regulation of any voyage consequent upon a vessel being decommissioned. The terms of cl 38 and those of cl 6.1 of Schedule 3, do not support the Court drawing the inference contended for by the FWO.

53    The FWO also contended that the CFMMEU’s construction of the closing words of cl 4 would result in industrially unsound outcomes because the employees covered by the 2012 Agreement would fall back to the inferior conditions of the underlying award should the vessel they work on be allocated to sail a different route. However, the assumption here made is not supported by the evidence. First, for one-off journeys to an unusual destination such as to deliver a vessel manned by ASP employees to an overseas port, the evidence called by the CFMMEU was that the terms and conditions of employment for such a journey would be determined by negotiation between ASP and the CFMMEU. Second, for a change to the usual trading route of a vessel, the history of industrial arrangements in relation to employees of ASP suggests that a new enterprise agreement would be made or the existing agreement would be varied. I say that because the evidence before me demonstrated a propensity for ASP and the CFMMEU to negotiate bespoke enterprise agreements for a particular vessel or fleet of vessels.

54    I do see some force in the FWO’s contention that if the CFMMEU’s construction was intended by the closing words of cl 4, the text utilised is grammatically imperfect. However, the difficulty is explicable.

55    The definite article in the phrase “the trade” sits uncomfortably with the plural “vessels” which precedes it. The CFMMEU’s construction would have been grammatically clearer if the term “their trade” rather than “the trade” had been used. The grammatical inelegancy may be the result of a typographical slip. It is necessary to appreciate that I am dealing with a clause which the parties themselves agree is missing some of its intended text. Further, the 2012 Agreement was unlikely to have been drafted by a skilled draftsperson, so it is appropriate to apply the oft-cited wisdom of Madgwick J in Kucks v CSR Ltd (1996) 66 IR 182 at 184, that the evident purpose of a clause in an award or enterprise agreement should not be denied by infelicities of expression.

56    Tellingly and for the reasons already explained, an evident purpose for the closing words of cl 4 is apparent on the construction contended for by the CFMMEU but no purpose is available to support the contention contended for by the FWO because on the FWO’s construction the words are superfluous. Additionally, the FWO’s construction seeks to use the term “the trade” as a descriptor for ASP’s commercial activities in a manner inconsistent with the text utilised elsewhere by the 2012 Agreement to describe those activities. Furthermore, whilst each of the competing constructions contended for requires textual accommodation, the FWO’s construction requires the language utilised by the closing words of cl 4 to be substantially strained without providing any contextual or purposive justification as to why the language should be so read.

57    For all of those reasons, the CFMMEU’s construction should be preferred and separate question (a) must be answered “yes”.

58    I should add that the FWO bears the onus of proving that s 417(1) is engaged because the respondents are “covered” by the 2012 Agreement. To discharge that onus the FWO required a negative answer to separate question (a). Even if I had not been satisfied that the CFMMEU’s construction of the closing words of cl 4 of the 2012 Agreement was correct, a negative answer would not have been appropriate unless I was satisfied that the construction contended for by the FWO was correct.

59    I say that because in a case like the present, where evidence of the factual matrix to the making of an enterprise agreement has a significant bearing upon the proper construction of a clause in that agreement, there is authority for the proposition that a party whose case relies upon the construction of an enterprise agreement for which it contends bears the onus of establishing that its construction is the correct construction of the clause in question: Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Qantas Airways Limited [2001] FCA 547 at [66] (North J); National Tertiary Education Union v La Trobe University [2014] FCA 1330 at [48] (Tracey J); and see National Tertiary Education Union v La Trobe University (2015) 254 IR 238 at [105]-[106] (White J).

did the agreement cease to cover the employee respondents?

60    Separate question (b) is as follows:

If the answer to question (a) is “yes”, whether, from 13 November 2015, the Agreement ceased to cover the 2nd to 10th Respondents.

61    The FWO contended that even if the MV Portland only operated “in the trade” until 13 November 2015 and accepting that “in the trade” is to be construed as the CFMMEU contended it should be, on or after 13 November 2015, the 2012 Agreement continued to cover the employment of the Employee Respondents because their jobs as “ratings” were described by the terms of the 2012 Agreement.

62    At the heart of the FWO’s contention is the proposition that an enterprise agreement covers an employee if the job performed by the employee is described by the terms of the enterprise agreement.

63    The proposition is without merit. It entails the novel idea that, for the purposes of the FW Act, the only prerequisite to be satisfied for an enterprise agreement to cover an employee is that the enterprise agreement include a job title or job description which accords with the job title or description for the job in which the employee is employed. On this view, limitations upon the agreement’s coverage such as those commonly found in agreements which confine coverage to a particular industry, a particular employer, or a particular workplace would be irrelevant for determining whether, for the purposes of the FW Act, the employee was covered by the enterprise agreement in question.

64    The proposition is said by the FWO to be supported by s 53(6) of the FW Act. The terms of that provision relevantly provide that:

A reference in this Act to an enterprise agreement covering an employee is a reference to the agreement covering the employee in relation to particular employment.

The FWO contended that by reason of that provision “enterprise agreement coverage of an employee, whether by name or class, attaches to the employee’s job”.

65    The FWO also relied upon what was said by Kiefel CJ, Bell, Keane, Nettle, Gordon and Edelman JJ in ALDI Foods Pty Limited v Shop, Distributive and Allied Employees Association (2017) 262 CLR 593 at [31] that:

…the natural meaning of the reference in s 53(6) to “particular employment” of an employee is to the description of the employee’s job in the agreement…”

66    The word “employment” has several connotations. It can mean a particular job or alternatively, it can be used to refer to the state of being employed. The observations made by the majority in ALDI is that the word “employment” in s 53(6) is used in the former rather than the latter sense. That observation of itself is of no support to the FWO’s novel proposition.

67    Nor are the terms of s 53(6) supportive of that proposition. That provision does not purport to exhaustively state the criteria determinative of whether or not an enterprise agreement covers a particular employee for the purposes of the FW Act. It does not purport to suggest that a job title or job description is the only relevant criterion for determining coverage of particular employment by an enterprise agreement.

68    Section 53(1) of the FW Act provides:

(1)    An enterprise agreement covers an employee or employer if the agreement is expressed to cover (however described) the employee or the employer.

69    The manner in which or the criteria by which an enterprise agreement may be expressed to cover an employee or employer is not conditioned or qualified. That criteria is left to the agreement to specify save that ss 53(2), (3), and (4) provide, inter alia, that orders of the Fair Work Commission, or of a court, or that another provision of the FW Act may also regulate the extent to which an enterprise agreement covers an employee, employer or an organisation.

70    In that context, it is not possible to read s 53(6) as the FWO would construe it. The function of s 53(6) is to say that when the Act speaks of an enterprise agreement covering an employee, it means that the employee is covered by the enterprise agreement in relation to the particular job held by the employee which is covered by the enterprise agreement. The provision is dealing with the extent to which an enterprise agreement covers a particular employee. An employee is only covered by the agreement in relation to the job held by the employee to which the agreement applies. Section 53(6) is not purporting to specify the basis or criteria for whether the enterprise agreement applies to the job in question.

71    The FWO sought to support its submission by also contending that the criteria for the coverage of an enterprise agreement is not absolute. It is not clear to me how this aspect of the submission sought to serve or support that aspect of the submission made by reference to s 53(6) of the FW Act, but in any event this aspect of the FWO’s case is also misconceived.

72    It was said by the FWO that the CFMMEU’s insistence on a vessel operating in its trade as a prerequisite to the 2012 Agreement covering a voyage, cannot be correct. That construction was said to result in coverage by the 2012 Agreement being lost “any time an employee performs a single task outside coverage as defined [by] an enterprise agreement”. The FWO contended that “coverage of an enterprise agreement does not come and go depending upon whether the prerequisites for coverage of an employee’s job are met from moment to moment”. In support of that proposition the FWO sought to rely on a number of authorities which have held or have supported the proposition that an industrial instrument may continue to cover an employee even though the duties performed by the employee do not fully accord with the duties of a job covered by the instrument. The authorities in question are authorities which address a principle well known in industrial law and which is often referred to as the principle of “major and substantial employment”. I discussed that principle and surveyed many of the longstanding authorities in Choppair Helicopters Pty Ltd v Bobridge [2018] FCA 325 at [64]-[68].

73    It is not necessary to venture into that topic in any great detail. It is sufficient to say that the principle in question is an organising principle used to help determine whether a particular industrial instrument applies to a particular job or which of two possible instruments have coverage over a particular job, where the duties performed by an employee in a job do not precisely accord with the duties specified for the job covered by the instrument or instruments in question. Broadly stated, the principle provides that, taking both a quantitative and qualitative approach, where the duties performed by the employee substantially accord with the job description specified by an industrial instrument, the industrial instrument will cover the job. It is in that context that an employee may be found to be covered by a particular industrial instrument in relation to that employee’s job despite the employee performing some duties or tasks which are outside of the job description specified by the instrument.

74    To say, as the FWO contended, that that is an illustration of the fact that it is not necessary for the prerequisites for coverage by an industrial instrument to be satisfied at all times for the instrument to cover an employee, is to misunderstand the nature of the prerequisite for coverage in question. What the cases dealing with the principle of major and substantial employment illustrate, is that the requisite condition for coverage of a job by an industrial agreement is not that the tasks or duties actually performed by an employee in the job precisely correspond with the job description given by an industrial instrument, because all that is required for the industrial instrument to cover the job is substantial rather than complete correspondence.

75    For all those reasons, the answer to separate question (b) is “yes”.

76    To answer separate question (b) it has not been necessary to resolve the issue addressed at [7] above as to whether the Employee Respondents were employed as ratings assigned to the MV Portland in the period 14 November 2015 to 13 January 2016. Presuming in favour of the FWO that the employees were so employed, the answer to separate question (b) remains “yes”.

conclusion

77    Having resolved the separate questions in favour of the respondents and given the critical nature of the answers given to the FWO’s case, it would seem to follow that the proceeding should be dismissed. However, and although I have received some submissions on this issue, that preliminary view ought not to deny the FWO any further opportunity it may seek to contend for a different consequential outcome. The parties should confer, agree on appropriate orders and provide proposed orders on or before 14 August 2020. If there is no agreement, I will have the matter re-listed and receive the submissions of the parties as to the disposition of the proceeding.

Associate:

Dated: 7 August 2020

SCHEDULE OF PARTIES