1
Fair Work Act 2009
s.604 - Appeal of decisions
The Maritime Union of Australia
v
Northern Stevedoring Services Pty Ltd
(C2016/2069)
VICE PRESIDENT HATCHER
DEPUTY PRESIDENT ASBURY
COMMISSIONER SPENCER SYDNEY, 5 APRIL 2016
Appeal against decision [2015] FWC 7342 of Commissioner Simpson at Brisbane on 18
December 2015 in matter number C2015/85.
Introduction
[1] The Maritime Union of Australia (MUA) has lodged an appeal, for which permission
is required, against a decision of Commissioner Simpson issued on 18 December 20151
(Decision). The Decision was made in the exercise of arbitration powers conferred on the
Commission by the dispute resolution procedure in clause 3.3 of the NSS Pty Ltd Agreement
2012 (Agreement), an enterprise agreement applying to Northern Stevedoring Services Pty
Ltd (NSS) and its employees engaged to perform work at the ports of Townsville, Cairns and
Mackay. The MUA is covered by the Agreement. The dispute the subject of the Decision
concerned whether NSS had complied with provisions in the Agreement requiring it not to
carry forward into the following year hours for which certain categories of employees had
been paid but had not worked unless it had first taken all reasonable steps to exhaust those
hours. The MUA contended that NSS had not taken all reasonable steps because it had failed
to comply with provisions in the Agreement which required it to allocate any available work
to permanent employees ahead of supplementary employees. The Commissioner rejected this
contention and thus determined the dispute in favour of NSS.
Relevant provisions of the Agreement
[2] The relevant provisions of the Agreement are complex and accordingly must be
detailed at some length. Clause 4.1 of the Agreement provides for five categories of
employees as follows:
(1) Permanent Shift Work Employees (PSWEs) engaged for 1970 hours’ work per
annum;
1 [2015] FWC 7342
[2016] FWCFB 1926
DECISION
E AUSTRALIA FairWork Commission
[2016] FWCFB 1926
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(2) PSWEs engaged for 1820 hours’ work per annum;
(3) Permanent Day Work Employees (PDWEs) engaged for 2050 hours’ work per
annum;
(4) Guaranteed Minimum Income Supplementary Employees (GMISEs) who are
guaranteed a minimum payment of $2,000 per fortnight; and
(5) Supplementary Employees who are paid an hourly rate which includes a 25%
loading in lieu of any entitlements they may have otherwise had to redundancy,
personal/carer’s leave, annual leave, long service leave or public holidays.
[3] PSWEs and PDWEs are paid annual salaries calculated by reference to the number of
annual hours for which they are engaged. The salary is paid regardless of whether NSS
allocates work to them for all those hours or not. However in the event that a portion of the
hours are not worked in a given year, the Agreement allows for them to be carried forward to
the following year on a limited basis. In relation to PSWEs engaged for 1970 hours, clause
4.1.1 provides:
“4.1.1 Permanent Shift Work Employee (1970)
4.1.1.1 A Permanent Shift Work Employee (1970) is engaged to work nineteen
hundred and seventy (1970) hours per annum, inclusive of public holidays
and annual leave hours. This shall consist of a maximum of four hundred
(400) weekend hours. This will comprise two hundred (200) Saturday hours
and two hundred (200) Sunday hours.
4.1.1.2 Permanent Shift Work Employees (1970) will be allocated fourteen (14)
weekends and twenty (20) days Monday to Friday per annum to be
unavailable for allocation to work, subject to the following:
• No more than 25% of the permanent workforce is unavailable.
• Seven (7) weekends nominated at the start of the EBA year and the
remaining (7) by no later than 15th August of the same year.
4.1.1.3 Permanent Shift Work Employees will be allocated on either the day or
evening shift (completing no later than 24:00) on the day prior to days
rostered off. They will be available to work from the day shift on their next
available day.
4.1.1.4 The Company can allocate Permanent Shift Work Employees to any shift on
their available days.
4.1.1.5 Subject to the Company demonstrating that it has taken all reasonable steps to
exhaust annual hours it may carry forward a maximum of fifty (50) unused
hours from the current year for use in the next year or use fifty (50) in the
current year from the next year. This has no application in the last year of the
agreement.
4.1.1.6 Employees may opt to continue to accumulate hours, take time off or work
according to clause 5.3.2 when they are more than thirty eight (38) hours
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ahead of their pro rata annualised hours. Accrued hours must be taken in the
following pay period and needs to be advised by the employee five (5) days
prior to the commencement of each new pay cycle.
4.1.1.7 Where an employee is entitled to a day off as per 4.2.17 and this coincides
with a rostered day off, an additional rostered day off will be granted.”
[4] Provisions expressed in the same terms as clause 4.1.1.5 apply to PSWEs engaged for
1820 hours per annum (clause 4.1.2.5) and PDWEs (clause 4.1.3.5).
[5] Clause 2.2.7 makes it clear that each year for the purpose of the Agreement, including
for the purpose of the above provisions, commences on 16 February.
[6] Clause 4.2 deals with the allocation of work as follows:
“4.2 Allocation of Work
4.2.1 Employees shall be individually rostered and the allocation and cancellation
and all related circumstances shall be effected on the basis of the individual
Employees at the Company’s discretion.
4.2.2 All Employees have a responsibility to consult the established work allocation
listing daily for details of their working roster.
4.2.3 The Company shall provide a general equity in relation to the mix of shifts for
Permanent Shift Employees. The Company will ensure that there is fair and
equitable opportunity for Supplementary Employees in relation to their skills,
competencies and availability.
4.2.4 Allocations for Monday to Saturday will be notified by 15:00 on the day prior
to the requirement. Allocation for Sunday and Monday Public Holidays will be
notified by 15:00 of the previous Friday. However where required, due to
operational circumstances, such notification can be extended to 18:00.
4.2.5 The Company shall allocate work to meet operational requirements and such
allocation may require various start times and work durations from seven (7) to
twelve (12) hours.
4.2.6 Four (4) hour shifts may be allocated for all Employees for car vessels and
Supplementary Employees only for work as outlined in Clause 5.2.5. Hours
worked in excess of (4) may be increased in increments of one (1) hour,
subject to Clause 4.2.10.
4.2.7 Minimum shifts of four (4) hours may also be allocated for all Employees
utilised for lashing, cleaning, heavy lifts, AQIS washing, train
loading/unloading (excluding zinc concentrate)), and fodder. Extensions
beyond 4 hours for these tasks will be for a minimum of 7 hour shift.
4.2.8 Hours of work, inclusive of maximum shift lengths, start and finish times are
included in the table hereunder.
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Shift
Normal
Commencement
Advance Start Delay Start Extension
Day 08:00 1,2,3* 1,2,3 1,2,3,4,5
Evening 16:00 1,2,3 1,2,3,4 1,2,3,4,5
Night 24:00 1,2,3 1 1,2,3,**
* Advance start at 05:00 is only utilised for initial Shift on vessel or point
of work on a vessel.
** Midnight Shift completions between 08:00 and 10:00 to complete a
point of work or complete a vessel.
4.2.9 The Company may list a shift as “subject to confirmation”. For the purpose of
this clause confirmation shall be either cancellation or variation of the shift and
apply for the following reasons:
for the start of the vessel
completion of a vessel
train unload
tidal berthing window
long weekends
The Company will advise Employees via the established work allocation
listing by 10:00 of the same day for evening and night shifts or by 10:00 the
preceding day for Sunday and Public Holiday day shifts. “Subject to
confirmation” shift start times may be advanced or delayed by up to two (2)
hours. At least 4 hours notice must be provided prior to the new start time
being applicable.
4.2.10 Any increase to a allocated shift length will be advised to the team leader or
individual Employees as required within two (2) hours of shift commencement
for a shift length originally allocated as a four (4) hour shift.
4.2.11 Any increase to a allocated shift length will be advised to the team leader or
individual Employees as required within four and a half (4.5) hours of shift
commencement for a shift length originally allocated as a seven (7) hour shift.
4.2.12 Extensions of normal seven (7) hour Shifts shall be worked for the following
reasons:
(i) To complete a vessel or point of work
(ii) To align shift start times
(iii) Where adequately skilled labour is not available
(iv) Where Permanent Employees fall significantly behind on annualised
hours
4.2.13 The Company may alter any advised extension period by advising either the
team leader or Employees as required within six (6) hours of the shift start time
only for outside the direct control of the Company e.g. weather, machinery
breakdowns.
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4.2.14 Employees may be required to commence work one half (1/2) hour early and
to continue one half (1/2) hour later for the purposes of preparatory and closing
work. In addition to provide continuity between shifts to ensure safe operation
or vessel/cargo. The maximum Shift length is 12 hours.
4.2.15 Employees shall not be required to work more than twelve (12) consecutive
days, of any allowable shift duration or combination.
4.2.16 Employees will not be required to work more than (3) consecutive twelve (12)
hour day or evening shifts or seven (7) consecutive midnight shifts.
4.2.17 Where an employee has worked the maximum allowed shifts as per 4.2.1.5 or
4.2.1.6, the Company will grant the Employee a day off immediately
thereafter.
4.2.18 Employees shall not be required to report for duty at any time earlier than (9)
hours after the time he/she ceased working on any shift except where
operationally required an eight (8) hour turnaround may be required.
Employees engaged on evening shift shall be the last Employee allocated to the
following day shift, subject to no available Employee having the skill required.
4.2.19 Notwithstanding the above, an Employee who finishes work between 01:59
and 09:59 shall have a minimum twelve (12) hour break before recommencing
work.
4.2.20 It is the intention of the Company that Employees only be required to work one
(1) shift per day notwithstanding that this may be affected by the capacity to
advance and retard starts and through shift extensions up to twelve (12) hours
as provided for in this Agreement.
4.2.21 The maximum number of permanent Employees to be off at any given time
shall not exceed 25% of the permanent workforce at any given time. There will
be flexibility to enable more than these numbers if it can be accommodated
operationally.
4.2.22 The maximum number of supplementary Employees to be off at any given
time shall not exceed 25% of the supplementary workforce at any given time.
There will be flexibility to enable more than these numbers if it can be
accommodated operationally.
4.2.23 The order of pick up shall be as follows:
i. Permanent employees with available hours
ii. GMIS’s
iii. Supplementary employees and Permanent employees (who have exhausted
annual hours), who are subject to supplementary point system and skills.”2
2 The reference in clause 4.2.23 to the “supplementary point system and skills” for permanent employees who had exhausted
their annual hours is obscure, and was not dealt with in the parties’ submission or the Decision. We would infer, on the basis
of some of the documents in evidence, that the “point system” relates to the record of the number of hours worked by
permanent employees in a year.
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[7] Clause 5.3.2 provides that permanent employees who work in excess of their annual
allocated hours are to be paid for such work at the penalty rates identified in the clause (which
vary depending on when the additional hours are worked).
The hearing before the Commissioner
[8] The dispute between the MUA and NSS arose out of the allocation of work to PSWEs
employed at the Port of Townsville in the year 16 January 2013 - 15 January 2014 (relevant
year). Some 35 PSWEs were not allocated sufficient work to exhaust their annual hours in
that year, with the result that NSS carried forward up to 50 hours in respect of each person
into the following year (16 February 2014 - 15 February 2015). The employees exhausted all
their hours in the following year, including the hours carried forward, but those additional
hours worked on top of the annual allocation did not attract any additional payment. If those
additional hours worked had not been carried forward, they would have attracted payment at
penalty rates under clause 5.3.2.
[9] The dispute took some time to wend its way to arbitration. Despite issue having been
taken with the carry-forward of hours at the time employees first became aware of it, the
dispute was not notified to the Commission by the MUA until 13 January 2015. The hearing
of the matter did not commence until 15 October 2015, there having been a number of
procedural difficulties including delays in filing evidentiary material, a consent adjournment
of hearing dates, and a failure by the parties to comply with a direction to formulate an agreed
question or questions for arbitration.
[10] The MUA called four witnesses at the hearing: Mr Douglas Jepsen, Mr Peter Downey,
Mr Warren Tunaley and Mr Martin Lawlor. Each of them was a PSWE engaged to work 1970
hours annually. In their evidence they each identified dates in the relevant year on which they
were allocated no work but were available to work, had not exhausted their annual hours, and
on which work was allocated to supplementary employees. They further identified that, to the
best of their recollection, none of the restrictions on working contained in clause 4.2.15,
4.2.16, 4.2.18 and 4.2.19 would have prevented them from working a shift on those dates.
[11] NSS called evidence from Mr Damien Scott, its Bulk and General Manager, and Mr
David King, its Business Support Manager. Mr Scott gave evidence concerning the
procedures by which NSS allocated work to its employees. He gave evidence to the effect that
the “order of pick” requirement in clause 4.2.23 of the Agreement was treated by NSS as only
one of a number of considerations that needed to be considered when deciding who should be
allocated work, including whether a worker was available to work a particular shift, the
various restrictions on working imposed by clauses 4.2.15, 4.2.16, 4.2.18 and 4.2.19, the
hours each worker had worked that year, whether the worker had already been allocated his or
her maximum weekend hours, the requirement in clause 4.2.3 to provide permanent workers
with work on an equitable basis in relation to their mix of shifts and to ensure that
supplementary employees had a fair and reasonable opportunity to work, and the need to pay
special attention to the workload that was anticipated in the immediate future and the skills
required to effectively manage and service that workload. He also said that when he allocated
work he would look at the upcoming shipping schedule, and if there was a busy period ahead
he would not allocate work to permanent employees to ensure that they were available when
there was a heightened workload.
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[12] In reply to the initial witness statements of Mr Jepsen, Mr Downey, Mr Tunaley and
Mr Lawlor, Mr Scott undertook an analysis of the days in the relevant year on which they
asserted that supplementary employees were allocated work ahead of them despite them being
available. His analysis was necessarily ex post facto in nature, since he was not involved in
the allocation decisions in question. In a number of cases he provided what appeared to be an
explanation for the non-allocation of work to the permanent employees on the days in
question, including that the employee had worked excessive hours in recent days, or the
employee was sick or on restricted duties, or there was no work available to be performed at
the employee’s grade. However in the largest number of cases his comment was “Ahead in
hours. It is not NSS’ preference to list employees for work when they are ahead in hours,
especially some months out from the end of the EA year” or something similar. “Ahead in
hours” was a reference to the fact that NSS kept a running total of hours worked by each
employee during the year, and could at any given time compare that with the employee’s
annual hours of work under the Agreement pro-rated for the proportion of the year which had
passed.
[13] Mr King gave evidence that it was necessary for NSS to provide its supplementary
staff with sufficient work to ensure that they remained with the business and were available to
work at peak periods. Fluctuating work requirements meant that it was necessary for NSS to
maintain a pool of supplementary staff in order to continue operating.
The Decision
[14] The Commissioner approached the matter on the basis that there were two questions to
be determined:
(1) What was the proper construction of clause 4.2.23 of the Agreement?
(2) Did NSS fail to take all reasonable steps to exhaust hours of permanent
shiftworkers?
[15] In relation to the first question, the Commissioner rejected the MUA’s submission that
the “order of pick” requirement in clause 4.2.23 was mandatory in all circumstances, and
preferred NSS’s submission that under clause 4.2 the “order of pick” was but one of a number
of competing considerations which NSS was required to take into account under clause 4.2 in
making decisions about the allocation of work. The Commissioner said:
“[76] The use of language in clause 4.2.23 in comparison to language used throughout
the rest of clause 4.2 and its sub-clauses assists in determining whether ambiguity
exists.
Clause 4.2.23 relevantly states:
“The order of pick up shall be as follows:”
…
…”
(emphasis added)
[77] The use of the word ‘shall’, whilst on its own may not be particularly ambiguous,
in context of the totality of clause 4.2 the word assists in establishing that ambiguity
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may exist in clause 4.2.23. I note that ‘shall’ appears in clause 4.2 in the following
clauses: 4.2.1, 4.2.3, 4.2.5, 4.2.12, 4.2.15, 4.2.18, 4.2.19, 4.2.21, 4.2.22.
…
[79] It is clear that the word ‘shall’ can be used to ‘express resolve’, which would
support the MUA’s contentions in relation to the construction of clause 4.2.23. In the
alternative, the word can ‘express intention or expectation’, ‘indicate future likelihood’
or be ‘used in suggestions’, which would favour NSS’s contentions on the
construction of the clause.
…
[82] As previously noted, clause 4.2.23 is one of 23 sub-clauses relating to the
allocation of work. Whilst not a conclusive factor, it is noteworthy that clause 2.2.23 is
listed as the last of the 23 sub-clauses that relate to the allocation of work. It is also of
note that the clause is a new addition to the Agreement.
…
[84] Furthermore, it is important to consider that there are competing obligations
imposed on the employer by the individual provisions within clause 4.2 and that the
strict application of clause 4.2.23 may lead to issues with the proper application of
other sub-clauses of 4.2.
[85] The meaning of the word ‘shall’ may be susceptible to more than one meaning
and therefore may create ambiguity. However, in the present circumstances, when
clause 4.2.23 is considered in its surrounding circumstances and in context, and when
the competing obligations imposed on the employer by clause 4.2 as a whole are
factored in, the meaning of the word ‘shall’ in clause 4.2.23 as a whole is clear and
unambiguous.
[86] I am satisfied clause 4.2.23 has a plain meaning and that the proper construction
of the clause favours NSS’s position. Clause 4.2.23 provides for the order of pick, and
the order of pick is but one of a number of factors to be considered when determining
which employees should be allocated particular shifts for work. It follows that a failure
to follow the order of pick does not automatically go to a failure to comply with the
Agreement.”
[16] In relation to the second question, the Commissioner noted NSS’s concession that it
had not followed the “order of pick” in clause 4.2.23 on every occasion, but said:
“[88] As the proper construction of clause 4.2.23 is settled, whether the employer failed
to take all reasonable steps to exhaust annual hours will depend on the specific
circumstances for a particular employee.”
[17] The Commissioner’s conclusion on the second question was as follows:
“[110] The evidentiary case before the Commission in relation to the issue of the
exhaustion of annual hours is not sufficient to determine in favour of the MUA.
[111] The evidence provided by the MUA’s witnesses tended to show that NSS has
had regard to and applied the rostering principles set out in clause 4.2 and there is no
other evidence to suggest that NSS has failed to take all reasonable steps to exhaust
employees annual hours.
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[112] On the basis of these findings, the answer to the second question as to whether
the company failed to take all reasonable steps to exhaust annual hours of permanent
shiftworkers is no.”
Submissions
[18] The MUA’s primary submission (which was expressed in a number of different ways)
was that the Commissioner erred in his construction of clause 4.2. The “order of pick” in
clause 4.2.23 was, the MUA submitted, plainly mandatory in its effect because of the use of
the word “shall”. No other provision in clause 4.2 operated inconsistently with clause 4.2.23
or overrode it such as to require “shall” to be given less than mandatory effect. In particular,
the general discretion conferred on NSS to allocate and roster work was to be read as
operating subject to clause 4.2.23, and the equity provisions of clause 4.2.3 only required
equity of allocation of work within the separate categories of permanent and supplementary
employees and not between them. Once clause 4.2.23 was correctly construed as mandatory
in nature, the conclusion that NSS had not taken all reasonable steps to exhaust the annual
hours of permanent employees became inevitable. The evidence made it clear, and NSS had
conceded, that NSS did not comply with the “order of pick” on many occasions and that as a
result work which should have been allocated to available permanent employees was instead
allocated to supplementary employees in contravention of clause 4.2.23. A failure to comply
with the provision of the Agreement intended to ensure that permanent employees had priority
of work was, the MUA submitted, a failure to take all reasonable steps to exhaust their annual
hours. In any event, NSS was required under the Agreement to demonstrate that it had taken
all reasonable steps to exhaust annual hours before it carried forward hours into the next year,
and it had not attempted to do so. The Commissioner, it was submitted, gave no consideration
to this requirement.
[19] NSS defended the Commissioner’s reasoning and conclusions concerning the proper
construction of clause 4.2.23 in its submissions. The entire context of clause 4.2 required that
“shall” in clause 4.2.23 not be read as meaning “must”. It was submitted that clause 4.2
contained a range of competing provisions concerning the rostering and allocation of work
which used the word “shall”, and no provision was given any hierarchical status over the
other. In order for the provisions to all operate together, NSS submitted, it was necessary that
the various provisions including clause 4.2.23 be treated not as mandatory but as factors to be
taken into account and balanced by NSS in the exercise of its discretion as to the allocation
and rostering of work under clause 4.2.1.
[20] In any event, NSS submitted, the evidence did not demonstrate that it had failed to
take all reasonable steps to exhaust the annual hours of permanent employees. There were no
records kept of the reason why particular allocation decisions were taken. The employee who
had actually made the decisions at the time had long since retired. The evidence which the
MUA relied upon to demonstrate the alleged failure had been served on NSS very late in the
piece (in September 2015) such that NSS was no longer in a position to properly rebut it by
adducing contemporaneous evidence. However Mr Scott’s evidence, although in the nature of
a reconstruction, could be relied upon to demonstrate that NSS had not acted unreasonably in
all the circumstances. The MUA’s point about an alleged failure by NSS to itself demonstrate
that all reasonable steps had been taken was not raised in the proceedings until closing oral
submissions. Therefore, NSS submitted, it did not properly form part of the dispute the
Commissioner was asked to determine and, in those circumstances, the Commissioner was
correct in not dealing with it in the Decision.
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Consideration
[21] There are three questions which arise for consideration in this appeal:
(1) Was the Commissioner’s construction of clause 4.2.23 of the Agreement
correct?
(2) In the light of the answer to (1), did the Commissioner err in finding that NSS
had not failed to take all reasonable steps to exhaust the annual hours of
permanent employees?
(3) Did the Commissioner err in not considering whether NSS had demonstrated
that it had taken all reasonable steps to exhaust the annual hours of permanent
employees?
Construction of clause 4.2.23
[22] The use of the word “shall” in clause 4.2.23 is prima facie to be taken as imposing an
obligation on NSS to comply with the “order of pick”.3 That presumption would only be
displaced if the context in which clause 4.2.23 appears indicates that 4.2.23 was not intended
to be mandatory in effect. The Commissioner found that the provision did not have mandatory
effect on the basis that other provisions in clause 4.2 which also used the word “shall”
imposed “competing obligations”.4 We take that to mean that the Commissioner considered
that it was not possible for NSS to simultaneously comply with all the provisions in clause 4.2
if clause 4.2.23, and the other provisions which used “shall”, were interpreted to be
mandatory in nature.
[23] We respectfully disagree. We consider that the provisions in clause 4.2, apart from
clause 4.2.23, may be divided into four categories as follows:
(1) the general rostering discretion in clause 4.2.1;
(2) the equity provision in clause 4.2.3;
(3) provisions concerned with when employees may be regarded as available to be
allocated work in clauses 4.2.15 - 4.2.22; and
(4) what may be characterised as machinery provisions in clause 4.2.2 and clauses
4.2.4 - 4.2.14.
[24] We will consider these categories of provisions, and whether they impose any
obligation upon NSS that could not be complied with simultaneously with that in clause
4.2.23 if construed as mandatory in nature, in reverse order.
[25] The provisions in the fourth category, which we have described as machinery
provisions, are concerned with the practical operation of the shift allocation and rostering
3 See DPP v Hiep Huu Le (1998) 86 FCR 33 at 40; Nguyen v Secretary, Department of Health and Ageing [2002] FCA 1441
at [21]; Ridis v Strata Plan 10308 (2005) 63 NSWLR 449
4 Decision at [84]
[2016] FWCFB 1926
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system. They deal with matters such as the means and timing of advice to employees about
rostered shifts, minimum and maximum length of shifts, shift starting times, increases in shift
lengths and extensions to shifts. In no case would compliance with any of these provisions be
inconsistent with compliance with clause 4.2.23. NSS did not contend otherwise.
[26] The same conclusion applies in relation to provisions in the third category. Clauses
4.2.15 - 4.2.20 establish a number of prohibitions upon the allocation of work to employees
who have previously worked identified numbers of shifts in identified time periods. As the
MUA put it in their submissions, those employees who are not subject to any of these
prohibitions constitute the pool of employees to whom work may be allocated. Clauses 4.2.21
and 4.2.22 operate as a limit to the number of employees who, at any given time, can remove
themselves from the pool by going off work. Clause 4.2.23, if read as mandatory in nature,
would operate entirely harmoniously with these provisions in that NSS would, in selecting
who from the pool of available employees should be allocated work, follow the “order of
pick” in doing so.
[27] It may be added that the Commissioner’s conclusion that clause 4.2.23 is “but one of a
number of factors to be considered when determining which employees should be allocated
particular shifts for work” would appear to have the consequence that the provisions in the
third category, in particular clauses 4.2.15 - 4.2.20, are likewise not mandatory in nature but
are only “factors to be considered”. That cannot be accepted. These provisions evidently have
the purpose of addressing the issue of overwork and the attendant dangers of fatigue and
detriment to employee welfare, and that purpose as well as the use of the terms “shall” or
“will” in the provisions demonstrate that they were intended to be mandatory.
[28] The provision in the second category, clause 4.2.3, consists of two separate obligations
set out in separate sentences. The first concerns “general equity in relation to the mix of
shifts” for permanent shift employees. While there is significant room for debate as to what a
“general equity” obligation would require, what is clear is that the equity is as between
permanent shift employees and not between permanent shift employees and any other
category of employees. There is therefore no inconsistency with the “order of pick” in clause
4.2.23. While the first sentence of clause 4.2.3 might require one available permanent shift
employee with available hours to be selected over another permanent shift employee with
available hours for a particular shift (noting, presumably, that no equity consideration could
arise in relation to a permanent shift employee who had exhausted his or her annual hours), it
would never require that a supplementary employee be selected over a permanent employee
with available hours.
[29] The second sentence of clause 4.2.3 is less clear. The “fair and equitable opportunity”
to be afforded to supplementary employees is left undefined except that it is said to be in
relation to their “skills, competencies and availability”. However there is no indication in the
sentence that the opportunity to be provided is to be allocated shifts ahead of permanent
employees with available hours. If that had been the intention then presumably this would
have been made express. Therefore we cannot identify that compliance with clause 4.2.3
would ever require non-compliance with clause 4.2.23 if construed mandatorily.
[30] That leaves clause 4.2.1. It confers on NSS discretion as to how work is to be allocated
and rostered for each individual employee. However, read in context, there is no basis to
construe it as conferring an entirely unfettered discretion. Plainly the discretion is to be
exercised in a way constrained by the other provisions of clause 4.2 - otherwise they would
[2016] FWCFB 1926
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constitute no more than guidelines. It is plain, for example, that clause 4.2.1 is to be read as
subject to the mandatory constraints of clauses 4.2.15 - 4.2.20 for the reasons already stated.
Likewise there is no textual reason why the discretion in clause 4.2.1 cannot be read as
constrained by the “order of pick” in clause 4.2.23.
[31] Therefore we do not consider that clause 4.2 contains “competing obligations” which
would require clause 4.2.23 to be read as non-mandatory in nature, contrary to the ordinary
and usual meaning of “shall”. We consider that the compliance with the “order of pick” by
NSS was obligatory, and that the Commissioner erred in construing the provision otherwise.
Did NSS fail to take all reasonable steps?
[32] The MUA approached the second question on the basis that any failure by NSS to
comply with clause 4.2.23 in the relevant year which caused a supplementary employee to be
allocated work ahead of an available permanent employee who subsequently had hours
carried forward was a failure to take a reasonable step to exhaust the permanent employee’s
annual hours and that such a failure automatically results in circumstances where NSS has not
taken all reasonable steps to exhaust annual hours. We disagree.
[33] The expression “all reasonable steps”, and the case authorities concerning that and
similar expressions were discussed at length in the decision of the Industrial Relations
Commission of NSW in Court Session Bluescope Steel Ltd v The Australian Workers' Union,
New South Wales5. The following propositions may be derived from the Court’s analysis:
reasonable steps are what a reasonable man or woman would regard as being
reasonable steps in the circumstances which apply;
the obligation to take “reasonable steps” depends on the particular circumstances
existing at the time the obligation arises; and
a requirement to take all reasonable steps does not extend to all steps that are
reasonably open in some narrow or theoretical sense (such as, for example,
matters not directly within the particular knowledge or experience of a relevant
party).
[34] Additionally in Parland Pty Ltd & Ors v Mariposa Pty Ltd6 the Tasmanian Supreme
Court said, in relation to a requirement for a party to use its best endeavours to achieve a
particular object, that a failure to take a particular step had to be assessed by reference to its
materiality to the failure to achieve the relevant object. The Court said:
“In any event quite apart from authority it would seem to me to be an untenable
proposition that a party could be held to have failed to satisfy a condition requiring it
to use its best endeavours in relation to an application because it failed to take some
particular step if in fact the application would have been unsuccessful even had that
step been taken.”
5 [2004] NSWIRComm 222; 137 IR 176 at [67]-[71]
6 [1995] TASSC 91; (1995) 5 TASR 121 at 133
[2016] FWCFB 1926
13
[35] That proposition appears to us to be equally applicable to consideration of whether an
obligation to take all reasonable steps has been complied with.
[36] The evidence before the Commissioner demonstrated, we are satisfied, that on a
number of occasions in respect of the four employees the subject of the evidence, clause
4.2.23 was not complied with. It appears to have been conceded by NSS in its closing
submissions before the Commissioner that it did not apply the “order of pick” on 27 occasions
in the case of Mr Downey, 12 occasions in the case of Mr Lawlor, 20 occasions in the case of
Mr Jepsen, and 25 occasions in the case of Mr Tunaley.7 On the face of it, if NSS had
allocated work to them on each of the identified occasions, or even on a proportion of them,
there would have been no deficit in hours.
[37] However, that is a simplistic approach which fails to take into account the
circumstances which applied at the time the various rostering decisions were made and the
considerations set out in clauses 4.1.1 and clause 4.2 of the Agreement. NSS was in a position
where it had to allocate periods where permanent staff would be unavailable in accordance
with clause 4.1.1.2 and ensure that it had enough staff available, including permanent staff
with available hours and supplementary staff, to meet its work demands throughout the year
including during peak periods. If insufficient work was assigned to supplementary staff at
particular times, there was a risk that such staff might no longer be prepared to work for NSS
and thus be available at busy periods. In relation to permanent staff, if they ran out of hours
too soon, they would need to be paid for any additional hours at penalty rates.
[38] It is apparent from the evidence before the Commission and the terms of the
Agreement that operational requirements and the numbers and types of employees needed to
conduct those operations are not static and can vary throughout a year. Agreement clauses in
relation to rostering and allocation of hours reflect the need for constant monitoring and
review of the number and composition of the workforce and the hours they work to meet
operational requirements. In this regard, clauses such as clause 4.1.1.6 (and equivalent
provisions for employees working other rosters) indicating that a running balance of available
hours is maintained and annual hours that are not exhausted are carried over at the end of the
year further evidence that operational requirements and the workforce necessary to conduct
them can change as a year progresses. It is also the case that the question of whether NSS has
taken all reasonable steps to exhaust annual hours does not arise until the end of a year where
hours have not been exhausted for particular employees and are carried over. In the context
of the Agreement read as a whole, any failure to follow the “order of pick” in clause 4.2.23
does not crystalise until the end of a relevant year and in circumstances where an employee’s
hours have not been exhausted and hours are carried over. Notwithstanding that it is
mandatory, failure to follow the order of pick required by clause 4.2.23 is only one of the
factors relevant to whether all reasonable steps have been taken to exhaust hours before those
hours are carried over.
[39] In relation to Mr Downey, Mr Lawlor and Mr Jepsen, Mr Scott’s analysis at least
demonstrated that on the majority of the dates they nominated as being available but not
having been allocated work in accordance with clause 4.2.23, they were well ahead in their
pro rata hours. On the occasions that they were behind, it was only by a small amount in most
instances. Moreover, towards and at the end of the nominated dates, they were either well
ahead or just behind in their pro rata hours. Mr Downey was over 50 hours ahead as at 1
7 Transcript 23 October 2015, PN 1174
[2016] FWCFB 1926
14
November 2013, almost 30 hours ahead as at 14 November 2013, and on the last date, 2
December 2013, he was less than 5 hours behind. By the end of the relevant year (15 February
2014) he was 69 hours behind. In the case of Mr Lawlor, he was over 45 hours ahead towards
the end of October 2013 and remained over 7 hours ahead on the last date of 12 December
2013, but was 71 hours behind by the end of the relevant year. Mr Jepsen was almost 3 hours
ahead on the last date he nominated, 17 December 2013, but ended up 34 hours behind by 15
February 2014.
[40] These facts lead us to conclude that as at all or nearly all of the dates complained
about, a reasonable person with knowledge of the relevant facts would have presumed that Mr
Downey, Mr Lawlor and Mr Jepsen would have comfortably made up their annual hours by
the end of the year notwithstanding that they were not allocated work on those dates. A
reasonable person might also infer that a major cause of those employees not exhausting their
hours might have been a drop-off in work in the period of about two months from mid-
December 2013 to the end of the relevant year on 15 February 2014. However the evidence
said nothing about this, including whether this could have been anticipated or not.
[41] If NSS’s allocator could have fully foreseen the future pattern of work for the whole of
the relevant year, it may have been a reasonable step for the three individuals to have been
allocated work on the days in question. But, as earlier stated, the issue needs to be considered
from the perspective of a reasonable person in the context of the then known and applicable
circumstances. We consider that the limited evidence before the Commissioner was not such
as to permit the conclusion that, on the dates in question, NSS’s allocator could not
reasonably have understood that a failure to allocate the relevant employees with work would
have any material effect on whether they would exhaust their annual hours by the end of the
relevant year. In the case of Mr Downey, it is noted that he took some weeks’ annual leave in
January/February 2014, and that NSS was notified well in advance of this. However the lack
of any evidence concerning work flows after mid-December 2013 makes it impossible to
determine whether it should have been obvious in advance that the leave would make it
difficult or impossible for him to meet his annual hours unless he had a large positive pro rata
hours balance beforehand, or whether that leave presented no real impediment to him
exhausting his annual hours.
[42] In the case of Mr Tunaley, different circumstances applied. Early in the relevant year
he suffered a workplace injury which caused him to be off work, or on restricted duties, for a
significant period. Before the injury he had either been ahead in his pro rata hours or only
slightly behind. Absences from work because of the injury caused him to quickly fall
seriously behind in his pro rata hours. Mr Scott’s analysis was to the effect that, for all the
dates identified by Mr Tunaley after 28 April 2013, Mr Tunaley was either on WorkCover or
on restricted duties. Mr Tunaley gave evidence that his doctor in fact cleared him for normal
duties on 8 October 20138, but elsewhere he said he returned to normal duties on or about 23
October 2013.9 He only nominated two dates after 23 October 2013 on which he was
available but was not given work, and he ended up 85 hours behind by the end of the relevant
year.
8 Witness statement of 14 October 2015, paragraph 10
9 Witness statement of 9 September 2015, paragraph 6
[2016] FWCFB 1926
15
[43] The evidence did not resolve the issues of the date of Mr Tunaley’s clearance or, more
importantly, when it was communicated to NSS.10 It clearly would not have been a reasonable
step to allocate a shift requiring full normal duties to an employee on restricted duties. It
would probably have been a reasonable step to allocate work to Mr Tunaley if he was
available for work, cleared for full duties, and significantly behind on his pro rata hours.
Which situation applied in the period 8-23 October 2013 cannot be determined.
[44] For the reasons we have given, we do not consider that the evidence was capable of
positively demonstrating that NSS failed to take all reasonable steps to exhaust the four
employees’ annual hours. The Commissioner’s finding was in fact that NSS did not fail to
take all reasonable steps11. We doubt whether the evidence permitted this conclusion either,
but to the extent that the Commissioner did not reach the opposite conclusion urged upon him
by the MUA, he did not err. We are also of the view that the state of the evidence is
substantially a result of the lack of definition about the question(s) for arbitration.
Non-consideration of the demonstration point
[45] Having carefully perused the written submissions of the parties and the transcript of
the hearing below, we are satisfied that it was not until its closing oral submissions that the
MUA articulated its contention that the Agreement (in clauses 4.1.1.5, 4.1.2.5 and 4.1.3.5)
required NSS to positively demonstrate that it had taken all reasonable steps to exhaust
employees’ hours before it carried forward any hours. This contention was not articulated in
the Form F10 Application or in the outline of submissions filed by the MUA in response to
the directions issued by the Commissioner. The parties’ evidence did not properly engage
with the demonstration point. Essentially, the entire focus of the MUA’s case at first instance
was on whether failure to follow the “order of pick” in clause 4.2.23 meant that NSS had not
taken all reasonable steps to exhaust hours and as a result, could not carry over hours for
certain employees to the next year. That is the case that NSS responded to.
[46] We therefore accept NSS’s submission that this contention was not properly identified
as an issue in dispute which was to be the subject of the arbitration. This is not to be taken to
be a mere pleading point. The dispute resolution procedure in clause 3.3.1 of the Agreement
empowers the Commission to arbitrate upon an identified matter in dispute, and there is
simply nothing which suggests that this contention by the MUA was ever identified as a
matter in dispute before the closing submissions. It may be added that by raising the
contention so late, the MUA deprived NSS of the opportunity to lead evidence about the
extent to whether it had at any time before the hearing attempted to demonstrate to the
employees that it had taken all reasonable steps to exhaust their annual hours.
[47] In those circumstances we do not consider that the Commissioner erred in not dealing
with the MUA’s contention in the Decision.
[48] If the MUA considers that NSS failed to comply with the putative obligation to
positively demonstrate that it had taken all reasonable steps, it is of course open to it to
institute proceedings to enforce that aspect of the Agreement in an appropriate court or to
initiate a new dispute under clause 3.3.1.
10 See Transcript 15 October 2015, PNs 557-563 and Transcript 23 October 2015, PN1201
11 Decision at [112]
[2016] FWCFB 1926
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Conclusion
[49] Because we consider that the MUA has demonstrated error in the Commissioner’s
construction of clause 4.2.23 of the Agreement, we consider that it is appropriate to grant
permission to appeal. However, for the reasons stated, this error does not alter the ultimate
outcome of the dispute, and accordingly the appeal is not upheld.
[50] We order as follows:
(1) Permission to appeal is granted.
(2) The appeal is dismissed.
VICE PRESIDENT
Appearances:
D. Quinn solicitor for the Maritime Union of Australia.
J. Dwyer of counsel with E. Austin-Woods solicitor for Northern Stevedoring Services Pty
Ltd.
Hearing details:
2016.
Brisbane:
9 February.
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Price code C, PR578416
OF THE FAIR WORK MISSION THE
