[2011] FWA 4653

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FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.472—Protected action

The Australian Institute of Marine and Power Engineers,
v
Port of Brisbane Pty Ltd
(B2010/3667)

COMMISSIONER SIMPSON

BRISBANE, 23 AUGUST 2011

Application for order related to partial work bans.

[1] This matter deals with an application by the Australian Institute of Marine and Power Engineers (“the Applicant’) under s. 472 of the Fair Work Act (the FW Act) for an Order in relation to partial work bans.

[2] The Application was filed on 2 December 2010 and the Applicant filed an amended application on 31 March 2011 and I granted the application to amend.

[3] The Applicant sought an order that members engaged in partial work bans have the reduction determined by the employer altered from 35% to 4.16% whilst the work bans were in effect, excluding periods of work where such work bans were suspended to ensure safety of vessel, crew and marine environment.

[4] The matter was heard on 25 and 26 May 2011 and closing submissions were made on 24 June 2011. The Applicant provided statements from Mr Aminul Haque 1 and Mr Wayne Smith2 who were not required for cross examination, and Mr Michael Edwards,3 Mr Peter Noble45 and Mr Frank Seymour.6 7

[5] The Respondent provided statements from Mr Alex Aspromourgos  8 who was not required for cross examination, Mr Peter Rumball9 and Mr Peter Nella.10

Legislation

Section 471 of the FW At states:

471 Payments relating to partial work bans

Employer gives notice of reduction in payments

(1) If:

then the employee’s payments are reduced in accordance with subsection (2) in relation to the period (the industrial action period) referred to in subsection (5).

(2) The employee’s payments in relation to the industrial action period are reduced:

and the modern award, enterprise agreement or contract of employment that applies to the employee’s employment has effect accordingly.

(3) The regulations may prescribe how the proportion referred to in paragraph (2)(a) is to be worked out.

(4) If:

then the employee is not entitled to any payments in relation to the period (the industrial action period) referred to in subsection (5).

(4A) If:

(5) The industrial action period is the period:

(6) The regulations may prescribe requirements relating to one or both of the following:

(7) Without limiting paragraph (1)(c) or (4)(c), the employer is taken to have given a notice in accordance with that paragraph to the employee if the employer:

(8) If:

then the employee’s payments for the day are not to be reduced because of the ban.

Section 472 of the FW At states:

472 Orders by FWA relating to certain partial work bans

(1) FWA may make an order varying the proportion by which an employee’s payments are reduced.

(2) FWA may make the order only if a person has applied for it under subsection (4).

(3) In considering making such an order, FWA must take into account:

(4) An employee, or the employee’s bargaining representative, may apply to FWA for an order under subsection (2) if a notice has been given under paragraph 471(1)(c) stating that the employee’s payments will be reduced.

[6] Regulation 3.21 of the Fair Work Regulations says as follows:

3.21 Payments relating to partial work bans — working out proportion of reduction of employee’s payments

For subsection 471 (3) of the Act, the proportion mentioned in paragraph 471(2)(a) of the Act is worked out for an employee or a class of employees by carrying out the following steps.

STEP 1

Identify the work that an employee or a class of employees is failing or refusing to perform, or is proposing to fail or refuse to perform.

Step 2

Estimate the usual time that the employee or the class of employees would spend performing the work during a day.

Step 3

Work out the time estimated in Step 2 as a percentage of an employee’s usual hours of work for a day.
The solution is the proportion by which the employee’s payment will be reduced for a day.

BACKGROUND

[7] I issued a protected action ballot on 4 August 2010.  11

[8] On 1 September 2010 the Applicant gave the Port of Brisbane Pty Ltd (“the Respondent”) notice of intended protected industrial action in the nature of a partial work ban by Marine Engineers on the Trailer Suction Hopper Dredge BRISBANE (“TSHD Brisbane”).

[9] The ban notified by AIMPE was in the following terms:

[10] On 3 September 2010 the Respondent delivered letters to each of the Engineers advising of a 35% reduction in salary for the period during which the ban was implemented. On 7 September 2010 the ban commenced.

[11] On 7 September 2010 the Applicant gave notice of intended protected industrial action in the nature of a 48 hour stoppage of work commencing when the vessel was next secured at birth.

[12] On 7 September 2010, the TSHD Brisbane was dredging material with high clay content at Hay Point. The dredging required a constant use of the jet pumps which needed oil to be constantly topped up to ensure they did not fail. The evidence was that if the TSHD Brisbane had continued to dredge at Hay Point the jet pumps would have failed and permanent damage caused.  12

[13] On 7 September 2010 at 20:00 hours the TSHD Brisbane ceased dredging at Hay Point and voyaged to Cairns arriving at Cairns on 9 September 2010 at 21:55 hours.

[14] On 10, 11, 12 and 20 September 2010, the Engineers performed some limited repairs and maintenance of dredging machinery.

[15] The Engineers continued to undertake maintenance functions outside the scope of the partial work ban during the voyage between Hay Point and Cairns.

[16] The Respondent was required to reimburse North Queensland Bulk Ports a significant amount in compensation for the pro-rata amount of their fixed costs of the dredging program.

[17] On 16 September 2010, the Engineers commenced a 48 hour stoppage which was completed on 18 September 2010.

[18] On 22 September 2010 at 00:00 hours the Engineers ceased the partial work bans.

[19] The Applicant accepts that the Respondent has complied with the Act in providing notices to make the partial reduction however contends the reduction is not the appropriate amount.

[20] The Applicant seeks the following orders;

CONSIDERATION

Scope of Ban

[21] The nature of the partial work ban was to not perfume maintenance and repairs on dredging machinery however it did not extend to propulsion and ship services. The Respondent said the ban restricted the principle function of the TSHD Brisbane which was to operate as a dredge.

[22] The Respondent said employees participating in the ban are not obliged to comply with a lawful and reasonable instruction by their employer to undertake work within the scope of the ban. The instructions to undertake these duties are for the benefit of the employer. 13

[23] The Applicant maintained that the practical effect of the work ban was that the duty engineer would not perform checks on the dredging gear when it was in operation which accounts for up to 1.5 hours or 90 minutes of work per day out of a total of 36 watching keeping hours (12 daily hours per engineer x 3 engineers). The Applicant derived their claim by calculating 30 minutes as a percentage of a 12 hour shift, or 90 minutes as a percentage of 36 hours to arrive at 4.16%. The Applicant said there was no ban in relation to a marine engineer’s specific purpose and typical duties on the ships propulsion machinery and hotel services which are the major proportion of the duties in a day.

[24] Further the Applicant argued that the ban was only in relation to dredging equipment and did not have any purpose or effect when dredging equipment was not in operation and the vessel was voyaging between ports.

[25] In determining the scope of the ban the Respondent said specific regard must be had to the terms “repair” and “maintenance”. The Respondent described “repair” as a reactive engineering activity designed to restore to normal operations a piece of equipment that has broken down or is damaged and “maintenance” as a proactive engineering activity designed to keep a piece of equipment serviceable and in good condition in order to prevent breakdown. 14 Repair and maintenance includes additional activities duties ancillary or incidental to repair and maintenance.

[26] The Respondent set out broad categories of duties of Engineers which were established by the evidence as being;  15 16

[27] The Respondent says the partial work ban as it related to repair and maintenance of dredging equipment placed a ban on duties in (a),(b),(c) and (e) above. The Respondent said the exclusion of (d) was designed to ensure that the Engineers did not breach their statutory duty under the Navigation Act 1912.

[28] The Respondent criticised the Applicant on the basis that it only included planned maintenance within the scope of the ban for the purpose of their calculations. 17

Proportionate Reduction

[29] Section 471 provides for the Employer to give notice of a proportionate reduction. The Respondents evidence is that Mr Nella considered the appropriate reduction in the Engineers’ pay in consultation with Arie Geelhoed the then Senior Manager of Reclamation and Land Development and they made an assessment that a 35% reduction was appropriate. 18

[30] The Respondent subsequently arranged for Mr Peter Rumball, the Manager Dredging Operations, to provide an analyses of the performing of planned maintenance tasks by reference to the planned maintenance scheduling software called “MP2” to gauge whether 35% was appropriate. Mr Rumball’s analysis was attached to his statement  19 and was based on an assessment over a 12 months period. The Respondent opted for an assessment over 12 months as it said any attempt to identify tasks over a 21 day period was inherently unreliable due to the unpredictable nature of the duties concerned.

[31] The Respondent argues using the MP2 planned maintenance system was the best way to identify the proportion of the dredging and non-dredging components of the duties identified in the categories (a) through to (e) above.

[32] Mr Rumball for the Respondent accepted during evidence that he erroneously thought data under the heading “Task Duration” indicated length of time taken to perform a task, and he also accepted that his calculations of engineering dredging tasks as a percentage total of engineering tasks may have incorrectly included some tasks as engineering which were not, and certain repairs or breakdowns which were not part of planned maintenance.

[33] The Respondent provided spreadsheets as attachments to its closing submission based on the evidence of Mr Peter Noble who appeared for the Applicant calculating the proportion of engineering dredging tasks as a proportion of total engineering tasks. These attachments based on the uncontested evidence contained in the MP2 raw data  20 indicates that 41% of engineering tasks are dredging related (where work order types repair (REP), breakdown (BK), inspection (INSP), and testing (TEST) are removed) and 40% where work order types (REP) and breakdown (BK) are removed.

[34] The Respondent emphasised the Applicants calculation of a proportionate reduction of 4.16% wholly ignored a range of engineering activities including unplanned maintenance, breakdown maintenance and administration.  21

[35] The Applicant maintained the days in which the work bans were in force were from 00:01 hours Tuesday 7 September 2010 to 24:00 hours 21 September 2010 except when the work ban was relaxed for periods of time on the 7th, 10th, 11th, 12th and 20th September, periods in which the Applicant says 100% payment of salary should apply.

[36] This relaxation included a period from 20:00 hrs on 7 September during the vessels voyage and arrival in Cairns when full ship and watch keeping duties were performed by engineers and on 10 September 2010 when 100% work was performed to isolate the dredge hydraulic system to ensure a hydraulic oil leak did not pollute the marine environment.

[37] The period on the 11 September 2010 was when the PLC failed; 12 September 2010 to address the water leaking from starboard dredge pump; and 20 September 2010 when power failure on the starboard power pack and central hydraulics disabled the movement of the dredging arm whilst deployed.

[38] The Applicant argued in circumstances described above Engineers attended to the maintenance and repair of dredging plant and equipment and performed 100% duties.

[39] The Respondent says the Applicants assessment of 4.16% is based on a retrospective assessment and does not reflect the duties that may have been performed had the ban not been implemented. The Respondent pointed to the evidence that the jet pumps on the Dredge were leaking and required vigilant monitoring that needed topping up at least three times a day itself amounting to at least 90 minutes per day. 22

[40] The Respondent also made the submission that rostered breaks which are paid but not worked should be excluded for the purposes of calculating the usual hours of the day as required by Regulation 3.21. The Respondent pointed to the evidence of Mr Edwards and Mr Noble that engineer’s breaks totalled in the order of three hours 10 minutes per day. 23 I agree with the Respondent’s submission that break periods should not be included for the purposes of calculating the proportionate reduction on the basis that they are not hours of work for the purposes of Regulation 3.21.

[41] The Respondent also criticised calculations reflected in Mr Nobles evidence 24 because Mr Noble calculated a proportion of the Engineers dredging tasks to all maintenance tasks both maintenance and others and the failure to exclude non-engineering tasks undermines this evidence. I accept that is a fair criticism of the methodology adopted by Mr Noble.

Considerations to Alter Proportionate Reduction

[42] The Applicant argued the terms “nature” and “extent” in s. 472(3)(a) are not defined in the FW Act and if FWA adopts there ordinary meaning then in applying the formula in Regulation 3.21 the extent of the work ban on maintenance and repair of dredging equipment on board the TSHD Brisbane was not 35%.

[43] The Applicant argued FWA must not take into account the effect or impact of the nature and extent of the work not performed as this would be to assess damages which is not the purpose of s.472.  25

[44] The Applicant argues Regulation 3.21 is the prescribed method to calculate the proportion of “work” not performed due to the ban as a percentage of the normal working day 26 and s.471(3) specifically says this.27

[45] The Respondent rejected the Applicants contention that FWA does not have discretion outside the proportional calculations specified in regulation 3.21. The Respondent says this contention ignores and would render meaningless s.472.

[46] The Respondent argues if the legislature had intended to restrict the exercise of FWA’s discretion then it would have done so by referring specifically to the proportional calculation in Regulation 3.21. It did not do so and therefore clearly empowers FWA to consider other matters.

[47] The Respondent referred to the decision of FWA in Transport Workers Union v Department of Territory and Municipal Services (ACTION) [2010] FWA4588 (“ACTION”) which rejected the formula approach under Regulation 3.21 limiting FWA’s discretion under s.472. In that matter Commissioner Deegan said;

[48] The Applicant rejected the approach adopted in that matter as the matter was determined on a measurement of money, not a measurement of “work” and this was not consistent with the Act or Regulation. 28

[49] The Explanatory Memorandum to the Fair Work Bill 2008 says at 1880;

[50] Section 472(3) (a) requires FWA to take into account whether the proportion specified “..was reasonable..”. The Respondent submits that the use of the past tense makes clear the consideration pertains to the time the employer gave the relevant notice, in this case 3 September 2010. On that basis the assessment is prospective in the sense that it is before the partial work ban is initiated in this case.

[51] Because the assessment the employer makes is not retrospective a day by day or hour by hour assessment is not the appropriate method to determine whether the proportion was reasonable. The Respondent said this interpretation is consistent with s.471(5) which requires an employer to give notice of proportionate reduction prior to the partial ban commencing.

[52] The Respondent said making a prospective assessment in this case was difficult because only a small number of tasks of Engineers are known in advance and the work and duties are highly changeable and subject to fluctuation.  29

[53] On that basis the Respondent argues a holistic approach is appropriate where the scope of the ban could not easily be predicted. Further where members of the Applicant undertook dredging maintenance in emergency situations this should not be considered when assessing the reasonableness of the proportion as these duties could not be prospectively assessed.  30

[54] Section 472(3)(b) requires FWA take into account:

[55] The Applicant argues if the 35% reduction cannot be shown to be an accurate reflection of the work during the 21 day period of the ban then “fairness between the parties” cannot be established. 31

[56] The Respondent said determining fairness between the parties requires a retrospective assessment including a consideration of the impact of the work ban on the employer and more generally. The Respondent contends that in the circumstances of this case fairness between the parties establishes 35% is appropriate because:

[57] The Applicant contended no deduction should be made for the period of the voyage between Hay Point and Cairns. The Respondent argued its decision to cease dredging at Hay Point and relocate to Cairns was a direct result of the work ban. This was based on the potential risk to jet pumps which required constant maintenance and if they failed could delay the imminent refit of the vessel.

[58] It was the Applicant’s own evidence through Mr Noble that if the dredge had continued to operate at Hay Point once the partial work ban was imposed due to the high clay content the jet pumps would have failed and permanent damage would have been cause to the dredge.  32 I agree with the Respondent that s.472(3)(b) should not be read so as to prevent me from having regard to the costs incurred by the Respondent due to the partial ban for the purposes of assessing “fairness between the parties”.

Industrial Action Period

[59] The Respondent pointed to s.471(2) that provides that the proportionate reduction will apply for the industrial action period, and that the industrial action period is defined in s.471(5) as “ending at the end of the day on which the ban ceases”. The Respondent argues that as the ban did not cease until midnight 21 September 2010, even if the Engineers undertook their full range of duties there would be no entitlement to full payment.

[60] The Respondent argued FWA does not have discretion to include or exclude certain specified days as the discretion under s.472 only relates to the proportionate reduction specified in s.471(1)(c) and in the employers notice in s.471(1)(c). Therefore any Order would relate to the proportionate reduction for the entirety of the industrial action period.

[61] The Applicants notice said the partial work ban would continue for a period of 21 days which included the period of the voyage from Hay Point to Cairns. The Respondent decided to expedite the voyage but the voyage was always going to occur. The Respondent said if the Applicant had not intended for the ban to operate during the period of voyaging the notice could have been drafted in that way.

[62] Further the Respondent said that because the Engineers may have been fully engaged in the performance of other activities outside the scope of the partial work ban that does not mitigate or in some sense offset the restrictions imposed by the ban.

[63] On the issue of the claim by the Applicant that no reduction should occur for days that Engineers undertook dredging duties to maintain the safety of the vessel, crew, or marine environment the Respondent argued it was not done for the benefit of the Respondent but was done as a result of a moral, ethical, or other obligations imposed upon them. The respondent said the duties were not undertaken for the benefit of the Respondent and during the period of the ban the employees are not obliged to comply with a lawful instruction from the Respondent to undertake work within the scope of the ban. The Respondent says the ban is not lifted or ceased at these times. I would agree that the ban remains in place until such time as the Applicant notifies the Respondent otherwise.

[64] I have had regard to the correspondence exchanged between the Applicant and Respondent between 1 September 2010 and 17 September 2010 including notices under s.414 from the Applicant and under s.471 from the Respondent. 33 I am satisfied the partial work ban remained in place at all times during the notified period.

CONCLUSION

[65] I have had regard to all of the evidence and submission of both parties. It is common ground that appropriate notice of the proportionate reduction was given.

[66] FWA has discretion pursuant to s.472(3) to vary the proportionate reduction taking into account;

[67] I agree with the Respondent’s submission that the assessment of whether the proportionate reduction was reasonable having regard to the nature and extent of the partial work ban is an assessment which is undertaken prospectively at the time of issuing the notice rather than retrospectively after the partial work ban ceases.

[68] I disagree with the Applicant’s submission that FWA’s discretion in applications of this nature is confined to consideration of the proportional calculations by reference to Regulations 3.21. I agree with the views expressed by Commissioner Deegan regarding this issue as set out in paragraph 47 of this Decision.

[69] I believe the holistic approach adopted by the Respondent in this case of looking at an average over 12 months was sensible in light of the evidence about the inherent lack of predictability regarding the nature and extent of the work that would have been required to be performed if not for the partial work ban during the industrial action period.

[70] While it became apparent during the hearing that some errors had been made by the Respondent in the methodology adopted in assessing the 35% by reference to the MP2 planned maintenance system, subsequent evidence provided as attachments 1 and 2 to the closing submissions of the Respondent, in light of evidence during the hearing about how the MP2 operates, satisfies me that the adoption of 35% at the time was not unreasonable.

[71] The Respondent pointed to a range of deficiencies in the Applicants case regarding how the proportionate reduction proposed by the Applicant was arrived at which I have considered above and they include:

[72] The Respondent’s criticisms above have merit, and when I compare the weakness in the methodology adopted by the Applicant to the methodology adopted by the Respondent, I am not satisfied a reduction to the 35% figure is warranted on the basis of nature and extent of the partial work ban. The Applicant has not provided sufficient evidence to satisfy me that I should disturb the 35% proportionate reduction assessed by the Respondent at the time.

[73] My views stated above are reinforced by s.472(3)(b) which requires consideration of fairness between the parties taking into consideration all of the circumstances of the case. I agree with the Respondent that the assessment of fairness between the parties involves a retrospective assessment of the impact of the partial work ban once the ban has ceased. I can see no reason why FWA cannot have regard to the costs incurred by the Respondent as a result of the TSHD Brisbane having to move from Hay Point to Cairns due to the impact of the partial work ban.

[74] The Applicants own witnesses accepted the partial work ban was the reason for the dredge having to relocate as it did and this was the direct cause of significant costs to the Respondent as it was required to pay compensation to North Queensland Bulk Ports. This evidence further satisfies me it would not be appropriate to make an order varying the proportionate reduction of 35% imposed by the Respondent.

[75] The Application is dismissed.

COMMISSIONER

Appearances:

Applicant: The Australian Institute of Marine and Power Engineers represented by Mr G Yates

Respondent: Port of Brisbane Pty Ltd represented by Mr A Aspromourgas from Livingstones Australia

Hearing details:

25 May

26 May

24 June

BRISBANE

2011

 1   Exhibit 1 statement of Mr Aminul Haque dated 30 March 2011

 2   Exhibit 2 statement of Mr Wayne Smith dated 28 March 2011

 3   Exhibit 3 statement of Mr Michael Edwards dated 31 March 2011

 4   Exhibit 4 statement of Mr Peter Noble dated 28 March 2011

5 Exhibit 5 statement of Mr Peter Noble dated 16 May 2011

 6   Exhibit 8 statement of Mr Frank Seymour dated 28 March 2011

 7   Exhibit 9 statement of Mr Frank Seymour dated 16 May 2011

 8   Exhibit 10 statement of Mr Alex Aspromourgos dated 28 April 2011

 9   Exhibit 11 statement of Mr Rumball dated 28 April 2011

 10   Exhibit 12 statement of Mr Peter Nella dated 28 April 2011

 11   Exhibit 10 statement of Mr Alex Aspromourgos attachment AA1

 12   Transcript 25 May 2011 PN319 - 346

 13   Exhibit 19 Respondents outline of submissions paragraph 24

 14   Exhibit 19 Respondents Closing Submission paragraph 29 - 30

 15   Transcript 25 May 2011 PN619 - 679

 16   Transcript 26 May 2011 PN1112 - 1137

 17   Exhibit 19 Respondents Closing Submission paragraph 37

 18   Exhibit 12 Statement of Mr P Nella dated 28 April 2011 paragraph 18

 19   Exhibit 11 Statement of Mr Rumball dated 28 April attachment PR1

 20   Exhibit 11 statement of Mr Rumball dated 28 April attachment PR1

 21   Exhibit 19 Respondents Closing Submission paragraph 60

 22   Exhibit 19 Respondents Closing Submission paragraph 62

 23   Exhibit 19 Respondents Closing Submission paragraph 67

 24   Exhibit 4 Statement of Mr P Noble dated 28 March 2011 Attachment 1

 25   Exhibit 18 Applicant’s Closing Submissions paragraph 38

 26   Exhibit 18 Applicant’s Closing Submissions paragraph 33

 27   Exhibit 18 Applicant’s Closing Submissions paragraph 44

 28   Exhibit 18 Applicant’s Closing Submissions paragraph 63

 29   Exhibit 19 Respondents Closing Submission paragraph 87 -88

 30   Exhibit 19 Respondents Closing Submission paragraph 92

 31   Exhibit 18 Applicant’s Closing Submissions paragraph 36

 32   Transcript 25 May 2011 PN 319 -346

 33   Exhibit 10 attachments AA3 to AA11

 34   Transcript 25 May 2011 PN 670 -619 and transcript 26 May 2011 PN1112 - 1137

 35   Transcript 25 May 2011 PN 478 - 493

 36   Exhibit 5 Statement of Mr Noble and Exhibit 9 Statement of Mr Seymour

 37   Transcript 25 May 2011 PN 549 -572

 38   Transcript 26 May 2011 PN 1050 - 1061



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