[2013] FWCFB 8338

FAIR WORK COMMISSION

DECISION


Fair Work Act 2009
s.604 - Appeal of decisions

Australian Maritime Officers' Union
v
CSL Australia Pty Ltd; VSHIPS Australia Pty Ltd
(C2013/5069)

VICE PRESIDENT CATANZARITI
SENIOR DEPUTY PRESIDENT DRAKE
COMMISSIONER CAMBRIDGE

SYDNEY, 24 OCTOBER 2013

Appeal against decision [[2013] FWC 4033] of Vice President Watson at Sydney on 21 June 2013 in matter number AM2012/346—Modern awards review 2012—Seagoing Industry Award 2010.

[1] This is an application under s.604 of the Fair Work Act 2009 (the Act) by the Australian Maritime Officers’ Union (the AMOU) for permission to appeal and, if permission is granted, an appeal against the decision of his Honour to vary the Seagoing Industry Award 2010 (the Award).

[2] The decision was made as a result of an application by VSHIPS Australia Pty Ltd (VSHIPS) and CSL Australia Pty Ltd (CSL) to vary the Award as part of the modern award review process provided for under Item 6 of Schedule 5 of the Fair Work (Transitional Provisions) Act 2009.

[3] The AMOU lodged a Notice of Appeal on 10 June 2013. The applicants at first instance, VSHIPS and CSL, responded to the appeal, as did the Australian Shipowners Association (the ASA) and Shipping Australia Limited (SAL). The Australian Industry Group (AI Group) sought to intervene and, in proceedings on 26 August 2013, AI Group was admitted as an intervener after no objection from any party to the appeal.

The decision at first instance

[4] At first instance, VSHIPS and CSL sought to vary the preamble to Part B of the Award, and to add a new definition to clause 3 of the Award. The application was made as a result of changes to legislation governing licensing for trading vessels. When the Award was first made, the preamble to Part B read:

“The following provisions are to apply to vessels granted a permit under the Navigation Act 1912 (Cth)”.

[5] In 2012, the Navigation Act 1912 was repealed and replaced by the Coastal Trading (Revitalising Australian Shipping) Act 2012 (Coastal Trading Act). The definition of “coastal trading” from the Coastal Trading Act is as follows:

“7  Meaning of coastal trading

(1)  For the purposes of this Act, and subject to subsection (2), a vessel is used to engage in coastal trading if, for or in connection with a commercial activity:

(2)  Subsection (1) does not apply in respect of the following:

[6] The preamble to Part B of the Award was further varied by Fair Work Australia, as it then was, when it unilaterally updated the Award on 26 October 2012. 1 At the time immediately before the decision at first instance, the preamble to Part B read:

“The following provisions are to apply to vessels granted a temporary licence under the Coastal Trading (Revitalising Australian Shipping) Act 2012 (Cth).”

[7] In the decision issued on 21 June 2013, his Honour granted the application by VSHIPS and CSL, making two variations to the Award. The variations were set out in a determination issued with the decision, the relevant parts of which are extracted below:

“1. By inserting the following definition into Clause 3:

2. By deleting the preamble to Part B and inserting the following:

[8] In the decision at first instance, his Honour considered the interaction between the relevant parts of the Award and some of Part 1-3, Division 3 of the Fair Work Regulations 2009 (the Regulations), which regulates the geographical application of the Act. The relevant parts of the regulations are extracted below:

“1.15B Definitions for Division 3

...

temporary licence has the meaning given by subsection 6(1) of the Coastal Trading (Revitalising Australian Shipping) Act 2012.

temporary licensed ship means a ship:

“1.15E Extension of Act to the exclusive economic zone and the continental shelf—ships

(1) For subsection 33(3) of the Act, the Act is extended to and in relation to each of the following ships in the exclusive economic zone or the waters above the continental shelf:

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

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

Submissions

[9] The AMOU submitted that his Honour erred in varying the preamble to Part B of the Award to give it a different or narrower approach than is provided for by the application of the Act as determined by the Regulations. Regulations 1.15B and 1.15E relevantly arise in relation to Part B of the Award when considering whether a vessel undertaking necessary preparatory work to commence the movement of passengers and cargo is a ship “... that is used to undertake a voyage authorised by a temporary licence”. The variation has the practical outcome of Part B of the Award only applying from the commencement of loading of cargo to the completion of discharge, and therefore his Honour’s variation has the effect of, in one sense, determining a dispute as to the extent of the application of the Act as determined by the Regulations.

[10] The AMOU submitted that his Honour did not attempt to directly resolve the proper interpretation of the Regulations, but instead determined to resolve an ambiguity arising from the interpretation of the Regulations by limiting the application of Part B of the Award. It submitted that the modern award review was not the appropriate forum to make such a determination. Further, full submissions were not made regarding the interpretation of the Regulations, and more importantly no evidence was led on the point.

[11] The AMOU further submitted that the variation to Part B of the Award has the consequence of creating uncertainty as to its application. As the words inserted in that part of the Award differ from those in the Regulations, a situation arises where there is potential that the application of the Award as varied could exceed the jurisdictional capacity of the Commission. There would also be greater potential for disputation regarding the proper interpretation of the Award and Regulations as a result of the variation made.

[12] As a result of the variation, the AMOU contended that his Honour made a determination as to how the Act, through the Regulations, should apply to the Award. It submitted that the coverage of any modern award ultimately depends on the application of the Act, and that the Commission should not seek to cut across the legislative choices of Parliament.

[13] Finally, the AMOU submitted that the variation of the preamble to Part B of the Award has the effect of precluding judicial determination of the proper interpretation and application of Regulations 1.15B and 1.15E. This is because no legal consequences would attach to the interpretation of the Regulations because the Award as varied would apply in any event, therefore his Honour erred in regarding it as open for subsequent judicial determination as to the proper interpretation of the Regulations.

[14] In this appeal, VSHIPS and CSL made submissions jointly. Both parties submitted that there is no appealable error in his Honour’s decision and determination. VSHIPS and CSL submitted that due to the enactment of the Coastal Trading Act and consequential legislation, Part B of the Award required variation to correct an ambiguity. VSHIPS and CSL noted that all parties to the originating proceedings before his Honour were in agreement, or did not contest, that there was an ambiguity in the Award. It was submitted that his Honour therefore varied the Award appropriately within the bounds of the legislation and the objectives of the modern award review.

[15] Joint submissions were also made by ASA and SAL. It was submitted that it was entirely appropriate for the Commission to form a view as to the intended meaning and effect of legislation including the Regulations and the Coastal Trading Act, and that these issues were comprehensibly canvassed in written and oral submissions before his Honour. It was submitted that all parties felt that the relevant Regulations read in isolation were ambiguous. Therefore, by forming a view on the relevant legislation, his Honour followed the modern award objective under s.134(1)(g) of the Act to vary the Award and thus ensure that it was simple and easy to understand.

[16] AI Group similarly submitted that his Honour was within jurisdiction to vary the Award to ensure consistency with the modern awards objective under s.134 of the Act. It further submitted that his Honour was entitled to form a view as to the correct interpretation of the Act and Regulations in order to make a decision in relation to the application before him.

[17] During proceedings, the representative for VSHIPS and CSL referred to advice received from the Fair Work Ombudsman (FWO) in regard to the application of the Award. That advice was published on the Commission’s website on 17 July 2013. The FWO advice included a fact sheet titled Maritime Industry Fact Sheet, which included opinions of the FWO as to when the Act applies in relation to different types of maritime vessels. With regard to vessels operating under a temporary licence, the FWO said the following:

“The Fair Work Act applies to ships engaged in coastal trading (including foreign-flagged ships) if they:

  • are operating under a general, transitional, or emergency licence, or


  • are operating under a temporary licence and have:


    • (See regulation 1.15 of the Fair Work Regulations 2009).

    The Fair Work Act applies from the day that loading begins until the day that unloading ends.”

    [18] Before this appeal was decided by the Full Bench, the parties were given seven days to file any submissions with regard to the FWO advice and whether the material should be considered by the Full Bench.

    [19] CSL and VSHIPS submitted that their submissions at first instance and on appeal are consistent with the advice of the FWO. Further, the functions of the FWO include promoting and monitoring compliance with industrial instruments made under the Act and are therefore relevant.

    [20] The AMOU submitted that the Full Bench should not have regard to the document in determining this matter. The AMOU argued that the Full Bench is not required to have regard or give weight to the opinion of the FWO, and that it was not relied on at first instance. Further, the FWO has not sought to intervene in the proceedings, even though it would have been able to, to make submissions to the Full Bench. The AMOU also submitted that in relation to the content of the FWO opinion, it is recently formed and does not represent any settled position or practice and it contains errors in relation to referencing the relevant Regulations.

    Consideration

    [21] In the decision below, his Honour found that:

    “[25] In my view the Award should have clear provisions as to its scope and application. Important obligations arise from the Award and the need for compliance requires as much clarity as possible. The variations sought essentially utilise the concepts contained in the Coastal Trading Act. Those provisions expressly extend to loading and unloading as well as the voyage in between. It is accepted by all parties that it is unclear whether the concept extends beyond that. However I do not consider that it is desirable or consistent with the modern awards objective for this ambiguity to be left unresolved. If clarification emerges from a judicial determination of the scope of the legislation, this of course would be a basis for reviewing this position.”

    [22] The application at first instance appears to have proceeded on the basis that there was an ambiguity with the scope and application of Part B of the Award and that the modern award review process was the appropriate mechanism by which to resolve the ambiguity.

    [23] This Full Bench is not persuaded that there was sufficient evidence before his Honour to properly conclude that the Award contained an ambiguity and, more importantly, that if there was an ambiguity, the modern award review process was the appropriate vehicle to remedy any alleged ambiguity caused by the interaction between the Award and other legislative instruments.

    [24] The relevant definitions contained in the preamble to Part B of the Award, prior to the variations made by his Honour, do not contain any ambiguity themselves. The difference of opinion between the parties arises from the interaction between the Award, the Regulations and the Coastal Trading Act, and specifically with the definitions contained in the Regulations. This difference of opinion between the parties in turn creates uncertainty as to when and how Part B of the Award applies. We note that this is unsatisfactory and we sympathise with the parties.

    [25] We are persuaded that his Honour by-passed the application of the Regulations with respect to Part B of the Award to remove any ambiguity. We do not see this as being in line with the purpose of the modern award review process.

    [26] The appropriate process for the interpretation of the Regulations and/ or the Coastal Trading Act is a judicial determination, which is of course available to the parties. In the decision below, his Honour conceded that given the differing interpretations of the relevant legislative instruments, if clarification emerges from a judicial determination of the interpretation of the legislation, it would provide a basis for reviewing the variations of the Award as determined by his Honour.

    [27] We reject this approach. Firstly, it is not for the Commission, through the modern award review process, to impose interim determinations with respect to the interpretation of the Regulations and the Coastal Trading Act by way of variations to the Award. Secondly, there is a very real possibility that any future Federal Court proceedings could produce results which would overturn, or cause to be reviewed, the outcome achieved in the initial proceedings. We consider the possibility of such outcomes to involve potential significant change and possible upheaval to the parties which would be unsatisfactory.

    [28] We agree with the AMOU that the amendments to the definitions and the preamble to Part B of the Award, which are different from those appearing in the Regulations, provide for greater potential for the Award to purport to apply in a manner that narrows the application of the Act.

    [29] Due to the complexity of the application, the conflict between the Award and other legislative instruments, and the possible consequences arising from any future Federal Court proceedings, we consider it in the public interest to grant permission to the AMOU to appeal.

    [30] Accordingly, for the reasons outlined above, permission to appeal his Honour’s decision is granted, the appeal is upheld and the decision of his Honour at first instance and the accompanying determination is quashed.

    [31] We do not believe that the variation to the Award sought by the applicants in the initial application is otherwise warranted, and we therefore dismiss VSHIP and CSL’s application for a variation of the Award. Appropriate orders [PR543695] have been issued with this decision.

    VICE PRESIDENT

    Appearances:

    M. Gibian, of Counsel, for the Australian Maritime Officers’ Union.

    S. Zeitz for VSHIPS Australia Pty Ltd and CSL Australia Pty Ltd.

    A Morris for Australian Shipowners Association and Shipping Australia Limited.

    S. Smith for Australian Industry Group (intervening).

    Hearing details:

    2013.

    Sydney:

    August 26.

    Final written submissions:

    Appellant, 2 September 2013.

    Respondent, 2 September 2013.

     1   PR530596

    Printed by authority of the Commonwealth Government Printer

    <Price code C, PR543694>