1
Fair Work Act 2009
s.604 - Appeal of decisions
Skilled Offshore Pty Ltd
v
Australian Manufacturing Workers' Union; Communications, Electrical,
Electronic, Energy, Information, Postal, Plumbing and Allied Services
Union of Australia; and The Australian Workers' Union
(C2015/6917)
VICE PRESIDENT HATCHER
DEPUTY PRESIDENT BULL
COMMISSIONER SAUNDERS SYDNEY, 2 NOVEMBER 2015
Appeal against decision [[2015] FWC 6727] of Deputy President Gostencnik at Melbourne
on 5 October 2015 in matter number B2015/1253.
Introduction
[1] This appeal relates to a decision issued by Deputy President Gostencnik on 5 October
20151 (Decision) to make a protected action ballot order (PABO) in response to an application
for such an order (Application) by the AMWU, CEPU and AWU2 (collectively, the Unions).
[2] Skilled Offshore Pty Ltd (Skilled Offshore) lodged an amended notice of appeal on 21
October 2015 in which it sought permission to appeal against the Decision and the PABO
made by the Deputy President3 pursuant to s.604 of the Fair Work Act 2009 (FW Act).
[3] The appeal was heard by the Full Bench on an expedited basis on 26 October 2015.
Mr Wood QC and Mr O’Neill of counsel appeared for Skilled Offshore. Mr Hammond of
counsel appeared for the Unions. Representation by counsel for both parties was permitted
pursuant to s.596(2)(a) of the FW Act.
Background
[4] Skilled Offshore supplies labour in the form of crew to vessels operating in the
offshore oil and gas industry.
1 [2015] FWC 6727
2 Australian Manufacturing Workers’ Union (AMWU), Communications, Electrical, Electronic, Energy, Information, Postal,
Plumbing and Allied Services Union of Australia (CEPU), The Australian Workers’ Union (AWU)
3 PR572477
[2015] FWCFB 7399
DECISION
E AUSTRALIA FairWork Commission
[2015] FWCFB 7399
2
[5] An enterprise agreement known as the Skilled Offshore Western Australia and
Northern Territory Offshore Construction Projects Agreement 2011–2015 (Current
Agreement) applies to Skilled Offshore and its employees engaged in the classifications set
out in clause 12 of the Current Agreement who are engaged to work on Offshore Construction
Projects off the Western Australian or Northern Territory coasts. The nominal expiry date of
the Current Agreement was 19 August 2015.
[6] The Current Agreement was negotiated in 2011 as a greenfields agreement, following
“industry framework” negotiations. In those negotiations, an enterprise agreement was
negotiated between the Unions and a single employer (Brunel Technical Services Pty Ltd),
and then after the involvement of national union offices that enterprise agreement was
adopted in almost identical form by numerous employers in the offshore industry.
[7] Clause 5 of the Current Agreement provides that:
“The Company agrees that at least three months prior to the conclusion of the
Agreement that the parties shall collectively bargain in good faith for an extension of
the Agreement for a further four years.”
[8] On 19 June 2015 the AMWU informed Skilled Offshore that it wished to commence
negotiations for “the replacement of the current enterprise agreement”.4
[9] On 5 August 2015 the Unions served a combined log of claims on Skilled Offshore in
relation to “the renewal of the” Current Agreement.5
[10] In the period between 5 August 2015 and about 7 September 2015 the parties
participated in discussions about whether they would bargain for a new enterprise agreement
to replace the Current Agreement or they, in addition to other employers in the industry
(represented by the AMMA6), would participate in bargaining in relation to an industry
framework agreement which would form the basis of individual enterprise agreements
between employers such as Skilled Offshore and their employees. Skilled Offshore preferred
the latter course. The Unions, at least initially7, preferred the former course but were willing
to listen to Skilled Offshore’s and the AMMA’s proposal that an industry framework
agreement should be negotiated first.
[11] It is necessary to note at this point that s.173 of the FW Act relevantly requires an
employer to issue a Notice of Employee Representational Rights (NERR) no later than 14
days from the time the employer agrees to bargain or initiates bargaining for an enterprise
agreement. Skilled Offshore on a number of occasions during this period declined to issue a
NERR to its employees despite being requested to do so by the Unions.
[12] On 2 September 2015 the Unions filed the Application.
4 Email from Glenn McLaren to Mark Wakelin dated 19 June 2015 1:13pm (GM-3 to the witness statement of Glenn
McLaren dated 9 September 2015).
5 Email from Matthew Dixon to Simon White dated 5 August 2015 7:06pm (MWD-2 to the witness statement of Matthew
Dixon dated 9 September 2015).
6 Australian Mines and Metals Association
7 As evident from the combined log of claims served on Skilled Offshore on 5 August 2015.
[2015] FWCFB 7399
3
[13] Skilled Offshore contended that the Unions first indicated they would not be prepared
to participate in negotiations over an industry framework agreement on 7 September 2015.
[14] On 9 September 2015 Skilled Offshore agreed to issue a NERR to its employees.
Skilled Offshore issued the NERR to its employees on 14 September 2015.
[15] Deputy President Gostencnik heard the Application on 15 September 2015 and 25
September 2015. The Deputy President’s Decision and Order were issued on 5 October 2015.
Submissions
[16] Skilled Offshore relies on five grounds of appeal in its amended notice of appeal.
Grounds 1 to 3 focus on the proper construction and identification of the “proposed enterprise
agreement” within the meaning of the FW Act, as well as the implications of the NERR issue
date. Ground 4 concerns an allegation that the Unions failed to “specify” the nature of the
proposed industrial action in the Application. Ground 5 relates to the proper construction of
the expression “industrial action” in the Application.
Grounds 1 to 3
[17] Grounds 1-3 of Skilled Offshore’s appeal focused upon the contention that the Unions’
application for a PABO was not valid because it did not comply with the requirements of
s.437, and that the Deputy President erred in determining otherwise. Section 437(1) of the FW
Act provides that a bargaining representative of an employee who will be covered by a
“proposed enterprise agreement” may apply to the Commission for a PABO. Section
443(1)(a) requires an application to have been made under s.437 in order for the Commission
to be empowered to make a PABO.
[18] Skilled Offshore submitted that the Deputy President erred in finding (at [40] of the
Decision) that “at least on and from 5 August 2015, the enterprise agreement proposed by the
Unions was clearly identified”. In particular, Skilled Offshore submitted that, although the
Unions had on 5 August 2015 presented a log of claims, the issue of whether negotiations
would be pursuant to an industry framework agreement remained current until 7 September
2015. In the circumstances, Skilled Offshore contended that there was no possibility of
certainty in relation to which proposed enterprise agreement the Application related to at the
time it was filed on 2 September 2015. It followed, on Skilled Offshore’s argument, that
because there was no identified “proposed agreement” as at 2 September 2015, there was no
valid protected action ballot order application pursuant to s.437 of the FW Act.
[19] In the alternative, Skilled Offshore submitted that if the Unions had proposed an
enterprise agreement by as early as 5 August 2015, then Skilled Offshore had agreed to
bargain for the agreement more than 14 days before the NERR was issued by Skilled Offshore
on 14 September 2015, with the result that the NERR was invalid because it was not issued in
the time required by s.173, and any enterprise agreement negotiated following the issue of
such a notice would not be capable of being approved by the Commission.8 Skilled Offshore’s
agreement to bargain for the Unions’ proposed agreement was signified, it was submitted, by
the fact that it had engaged in bargaining with the Unions in relation to whether bargaining
8 See Transport Workers’ Union v Hunter Operations Pty Ltd [2014] FWC 7469
[2015] FWCFB 7399
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about that proposed agreement should occur or whether bargaining should take place within
an industry framework. It followed, on Skilled Offshore’s argument, that:
(a) there was no “proposed enterprise agreement” within the meaning of s.437 (as it
would not be an agreement capable of being made and approved under the FW Act
by reason of the failure to comply with s.173);
(b) the Unions cannot have been genuinely trying to make such an agreement; and
(c) any industrial action pursuant to the Application would not be employee claim
action as it will not be for the purpose of supporting or advancing claims in
relation to the agreement (s.409(1)), will not be organised or engaged in against an
employer that will be covered by the agreement, and the bargaining representative
will not be genuinely trying to reach an agreement (s.413(3)).
Ground 4
[20] Sections 414(6) and 437(3) of the FW Act both require that the “nature” of the action
(being the proposed industrial action the subject of the protected action ballot) must be
specified. Skilled Offshore submitted that the form of question 1 to be put to employees in the
protected action ballot did not allow for the employees to properly assess the particular
protected industrial action in relation to which they would be voting, or the nature of that
action.
Ground 5
[21] Skilled Offshore submitted that “industrial action” within the meaning of the FW Act
ought not be construed as including action which would be in breach of occupational health
and safety law. The Deputy President erred, so it was contended by Skilled Offshore, in
holding (at [67]) that “industrial action” includes such action.
[22] Skilled Offshore also submitted that, in circumstances where the application included
questions describing conduct that would breach or would have a real and tangible possibility
of breaching an employee’s obligations to perform duties under occupational health and
safety law, the notice failed to specify the “nature of the industrial action” as required by
s.437(3)(b); it specified conduct of a different character.
[23] The Unions submitted that the Deputy President’s decision was not infected with error
of the type identified in House v The King9, and there was no basis to grant leave to appeal. In
relation to the specific grounds of appeal, the Unions submitted:
The Deputy President applied the correct test as to what constituted a “proposed
enterprise agreement” for the purposes of a PABO application.
The uncontradicted evidence supported the Deputy President’s finding that the
Unions had identified the proposed enterprise agreement well prior to the PABO
application.
9 (1936) 55 CLR 499 at [504]-[505]
[2015] FWCFB 7399
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The Deputy President correctly found that Skilled Offshore did not agree to
commence bargaining prior to 9 September 2015.
The form of the PABO questions was clear and consistent with previous case
authority.
The Deputy President’s analysis of the relationship between the statutory scheme
in the FW Act and occupational health and safety legislation was correct, and in
any event there was nothing in the PABO questions which suggested that the
industrial action proposed would involve any contravention of occupational health
and safety legislation.
Consideration
Grounds 1 to 3
[24] The object of Division 8 of Part 3-3 of the FW Act is set out in s.436 as follows:
The object of this Division is to establish a fair, simple and democratic process to
allow a bargaining representative to determine whether employees wish to engage in
particular protected industrial action for a proposed enterprise agreement.
[25] Section 437(1) of the FW Act governs who may apply for a protected action ballot
order:
A bargaining representative of an employee who will be covered by a proposed
enterprise agreement, or 2 or more such bargaining representatives (acting jointly),
may apply to the FWC for an order (a protected action ballot order) requiring a
protected action ballot to be conducted to determine whether employees wish to
engage in particular protected industrial action for the agreement.
[26] Section 443(1) of the FW Act sets out the circumstances in which the Commission
must make a protected action ballot order:
(1) The FWC must make a protected action ballot order in relation to a proposed
enterprise agreement if:
(a) an application has been made under section 437; and
(b) the FWC is satisfied that each applicant has been, and is, genuinely trying
to reach an agreement with the employer of the employees who are to be
balloted.
[27] We agree with the views expressed by the Full Bench of the Commission in Mermaid
Marine Vessel Operations Pty Ltd v The Maritime Union of Australia10 as to the proper
construction of the expression “proposed enterprise agreement” (footnotes omitted):
10 [2014] FWCFB 1317
[2015] FWCFB 7399
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“[42] It is to be observed from the above, that the Act variously makes reference to a
“proposed agreement”, or the ”proposed enterprise agreement” and “proposed single-
enterprise agreement” to describe in a particular context the same concept, that is, the
agreement that is being proposed by a party wishing to bargain or by one that is
actually bargaining. That this is so seems to be confirmed by the Explanatory
Memorandum to Fair Work Bill 2008 and its description of the use of the phrase
“proposed enterprise agreement” in Parts 2-4 and 3-3 as “a generic term” , and its
reference to the decision in Wesfarmers Premier Coal Ltd v Automotive, Food, Metals,
Engineering, Printing and Kindred Union (No 2) in which French J referred to the use
of the words “proposed agreement” in s. 170MI of the Workplace Relations Act 1996
as a “generic term [that] allows for a variety of possibilities”. The content of a
proposed agreement need not be settled nor need the scope of a proposed agreement be
agreed between the bargaining parties for that which is proposed by one party to bear
the character of a proposed agreement or proposed enterprise agreement for the
purposes of the Act.
…
[46] When read in context, “a proposed enterprise agreement” in s.438(1) seems to us
to mean no more than the agreement the bargaining representative applying for an
order under s.447 [sic; should say s.437] is proposing at the time the application for a
protected action ballot order is made. It is that agreement to which the ballot will relate
and it is employees represented by the bargaining representative who fall within the
scope of that agreement (or a group of such employees) who will vote on questions of
particular industrial action. That the Appellant does not agree with the scope of the
proposed agreement or would prefer a broader scope or that the bargaining parties
have bargained for a broader scope previously is, for the purpose of identifying the
proposed enterprise agreement to which s.438(1) might relate, irrelevant in
considering whether s.438(1) prohibits an application being made.”
[28] A central element of Skilled Offshore’s contention in relation to the implications of
the NERR issue date is that the expression “proposed enterprise agreement” in ss.437(1) and
443(1) of the FW Act mean a proposal for an enterprise agreement that is capable of being
approved in accordance with Part 2-4 of the FW Act, with the result that a NERR must have
been issued in relation to the “proposed enterprise agreement” in accordance with s.173 of the
FW Act.
[29] We reject this submission for the following reasons. Sections 437(1) and 443(1) do not
define the expression “proposed enterprise agreement”, nor do they refer to provisions
associated with approval of enterprise agreements such as s.173 of the FW Act. The
requirements of s.173, for example, must have been satisfied in relation to an enterprise
agreement which has been “made” under s.182 and in relation to which an application for
approval has been lodged under s.185, but there is no requirement under the FW Act for the
“proposed enterprise agreement” being considered at the time of an application for a protected
action ballot order to satisfy the conditions that must be met in order for an enterprise
agreement to be approved. All that is relevantly required in order for there to be a “proposed
enterprise agreement” within the meaning of ss.437(1) and 443(1) of the FW Act is an
“agreement [which] the bargaining representative applying for an order under [s.437] is
proposing at the time the application for a protected action ballot order is made”.11 It would be
11 Mermaid Marine Vessel Operations Pty Ltd v The Maritime Union of Australia [2014] FWCFB 1317 at [46]
[2015] FWCFB 7399
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an unwarranted gloss on the statute to read into it the later requirements associated with
approval of an enterprise agreement that has been “made”.
[30] Accordingly, in our view, the date on which the NERR was issued by Skilled Offshore
is irrelevant to the question of whether there was a “proposed enterprise agreement” within
the meaning of ss.437(1) and 443(1) of the FW Act at the time the Unions made the
Application.
[31] In light of our conclusion as to the proper construction of the expression “proposed
enterprise agreement” in ss.437(1) and 443(1) of the FW Act, it is not strictly necessary for us
to determine when Skilled Offshore agreed to bargain, or initiated bargaining, “for the
agreement” within the meaning of s.173(2) of the FW Act. It is sufficient to say that we are
not satisfied that Skilled Offshore has demonstrated that the Deputy President’s conclusion
that s.173 had been complied with was in error. In that respect, we consider that Skilled
Offshore’s express refusals to issue a NERR prior to 9 September 2015, contrary to the
Unions’ requests, supported the inference that it did not agree before that date to bargain for
the agreement proposed by the Unions and instead was pushing for an industry bargaining
framework.
[32] As to Skilled Offshore’s contention that the discussions between the parties
concerning the possibility of bargaining proceeding by way of industry framework
negotiations meant there was no certainty in relation to which proposed enterprise agreement
the Application related to at the time it was filed, we agree with the Deputy President’s
findings and conclusion. In particular, by the time the combined log of claims was served on
Skilled Offshore on 5 August 2015, the proposed enterprise agreement being propounded by
the Unions was clearly identified. Until 7 September 2015, the Unions were willing to listen
to the proposal by Skilled Offshore and the AMMA that bargaining proceed by way of
industry framework negotiations. However, at no time did the Unions retract or withdraw
their log of claims. Accordingly, as was found by the Deputy President, at the time the
Application was filed (2 September 2015) there was a clearly identified “proposed enterprise
agreement”, being the log of claims served by the Unions on 5 August 2015.
Ground 4
[33] The Unions proposed that the employees to be balloted be asked the following
questions:
“For the purposes of supporting or advancing claims in respect of the proposed
enterprise agreement with your employer, do you endorse the following protected
industrial action against your employer (to be taken either separately, concurrently
and/or consecutively):
1. An unlimited number of stoppages on the performance of work between 30
minutes and up to and including 24 hours? (excluding work that is required
by trained and qualified persons of the emergency response teams as
required by occupational health and safety legislation and regulations)?
2. Bans on the performance of administrative work (except for the
performance of any work required to be undertaken by legislation including
[2015] FWCFB 7399
8
any action, process or work consistent with Occupational Health and Safety
legislation)?”
[34] There is no appeal in respect of question 2.
[35] As to question 1, we agree with the Deputy President’s findings that the question (a) is
sufficiently clear to enable the employees to make an informed choice about whether to
approve the nature of the industrial action identified in the question and (b) describes the
industrial action in such a way that employees are capable of responding to it.12 The fact that
the expression “taken either separately, concurrently and/or consecutively” appears in the
preamble to the questions, rather than separately in each question, does not, in our view,
create a “misleading impression” or make unclear the “outer limits” of the proposed industrial
action. Accordingly, we reject Skilled Offshore’s arguments in relation to ground 4.
Ground 5
[36] We do not accept that the questions in the PABO made by the Deputy President seek
approval for any form of industrial action that is beyond the scope of what is industrial action
under the FW Act. The expression “protected industrial action” appears in the preamble to the
questions in the PABO and is used to encompass the categories of action specifically
identified in the questions, and we see no reason to assign a meaning to that expression which
is different to or broader than the same expression used in the FW Act. Indeed, the application
of the principle of legality would require the PABO to be read as if incorporating the proper
construction of the expression “industrial action” within the meaning of the FW Act.
Accordingly, regardless of whether the expression “industrial action” in the FW Act, on its
proper construction, excludes action which would be in breach of occupational health and
safety law, as contended by Skilled Offshore, or does not, as found by the Deputy President,
we reject Skilled Offshore’s argument that the Application failed to specify the “nature of the
industrial action” as required by s.437(3)(b) of the FW Act.
[37] Although it is not therefore necessary for us to decide the point, we are of the view
that the expression “industrial action” in the FW Act does not, on its proper construction,
exclude action which might or would result in a breach of occupational health and safety law.
There are three primary reasons for our opinion in that regard:
(a) First, Parliament clearly had in mind risks to occupational health and safety when
the definition of “industrial action”, and the exceptions to “industrial action”, were
drafted for inclusion in the FW Act (see s.19(2)(c)(i) and (ii) of the FW Act). It
would have been a simple matter for a further exception to be included in
s.19(2)(c) of the FW Act for action that would or might result in an employee
breaching an occupational health and safety obligation, had that been the intention
of Parliament;
(b) Secondly, as was found by the Deputy President, other provisions of the FW Act,
particularly ss.424, 431 and (to some extent) 415 tell against the construction
advanced by Skilled Offshore. There would be little or no point in empowering the
Commission to make an order (s.424), or the Minister to make a declaration
(s.431), terminating protected industrial action on the basis that such action has
12 John Holland Pty Ltd v AMWU and AWU [2010] FWAFB 526 at [19]
[2015] FWCFB 7399
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“threatened,… is threatening, or would threaten… to endanger the life, the
personal safety, or the welfare, of the population or of part of it” if the proper
construction of “industrial action” excluded action which might or would result in
a breach of occupational health and safety law; and
(c) Thirdly, in our view, there is no inconsistency between, on the one hand, the
definition of “industrial action” in the FW Act and the provisions of the FW Act
that give employees the right to take protected industrial action in particular
circumstances and, on the other hand, the obligations imposed on employees under
Federal and State legislation to maintain a safe workplace.
[38] We would also observe that the questions in the PABO do not identify any industrial
action which would necessarily or even likely involve a contravention of any relevant
statutory occupational health and safety obligation, and the exclusions in the two questions in
the PABO appear to us to adequately answer any practical occupational health and safety
concerns.
Conclusion
[39] In light of the public interest in the question of the proper construction of the
expression “proposed enterprise agreement” in ss.437(1) and 443(1) of the FW Act, we grant
permission to appeal but dismiss the appeal for the reasons set out above.
VICE PRESIDENT
Appearances:
S. Wood QC and R. O’Neill counsel for the Appellant.
T. Hammond counsel for the Respondents.
Hearing details:
2015.
Sydney:
26 October.
Printed by authority of the Commonwealth Government Printer
Price code C, PR573339
OF THE FAIR WORK MISSION THE
