[2015] FWCFB 1729

The attached document replaces the document previously issued with the above code on 14 May 2015.

The document has been amended to correct the header from page 23 of the decision onwards.

Associate to Vice President Watson

Dated 21 May 2015

Fair Work Act 2009
s.156 - 4 yearly review of modern awards

STEVEDORING INDUSTRY AWARD 2010
(AM2014/90)

Four yearly review of modern awards - Stevedoring Industry Award 2010 - Coverage of Award - Changes to classifications - Ordinary hours of work - Penalty rates - Penalties and leave on public holidays - Fair Work Act 2009, ss. 156, 138 and 134.

Decision of Vice President Watson

Introduction

[1] On 11 November 2014 the President issued a direction that this Full Bench hear and determine the substantive issues raised during the 2014 four yearly review of modern awards with respect of the Stevedoring Industry Award 2010 (the Award). The award review is required to be conducted in accordance with s.156 of the Fair Work Act 2009 (the Act).

[2] Other provisions of the Act are also relevant including s.138 and the modern awards objective in s.134.

[3] This Full Bench has dealt with these provisions and the approach to matters of this type in relation to the four yearly review for the Security Services Industry Award. 1 I propose to apply the approach outlined in that decision to the determination of the issues in relation to this Award.

[4] The issues that this Bench has been directed to determine are set out in Schedule C to the President’s directions as amended on 18 November 2014. The issues addressed by the parties in their submissions filed with the Commission concern the following:

● coverage of the Award - definition of “stevedoring industry”;

● appointment to classification requirement;

● insertion of the phrase “clerical, terminal operating system or information management system” in classifications;

● toggle operators;

● description of maintenance roles;

● ordinary hours of work;

● normal shift length;

● maximum working hours;

● penalty rates; and

● additional day of leave for working on certain public holidays.

[5] The Bench is agreed on the course to be adopted in relation to all of the matters argued before us - except for the issue of penalty rates. Hence the other members of the Bench are issuing a separate decision dealing with penalty rates in particular.

[6] I propose to consider each of the above matters in turn. In doing so, I have regard to the factors required to be considered in the modern awards objective. In particular, I consider whether the Award provides a fair and relevant minimum safety net of terms and conditions and whether the proposed variations are necessary to achieve the modern awards objective. These tests encompass many traditional merit considerations regarding proposed award variations. Given the importance of the modern awards objective to the matters that fall for determination it is appropriate to set out the objective in full:

“134 The modern awards objective

What is the modern awards objective?

(1) The FWC must ensure that modern awards, together with the National Employment Standards, provide a fair and relevant minimum safety net of terms and conditions, taking into account:

(a) relative living standards and the needs of the low paid; and

(b) the need to encourage collective bargaining; and

(c) the need to promote social inclusion through increased workforce participation; and

(d) the need to promote flexible modern work practices and the efficient and productive performance of work; and

(da) the need to provide additional remuneration for:

(i) employees working overtime; or

(ii) employees working unsocial, irregular or unpredictable hours; or

(iii) employees working on weekends or public holidays; or

(iv) employees working shifts; and

(e) the principle of equal remuneration for work of equal or comparable value; and

(f) the likely impact of any exercise of modern award powers on business, including on productivity, employment costs and the regulatory burden; and

(g) the need to ensure a simple, easy to understand, stable and sustainable modern award system for Australia that avoids unnecessary overlap of modern awards; and

(h) the likely impact of any exercise of modern award powers on employment growth, inflation and the sustainability, performance and competitiveness of the national economy.

This is the modern awards objective.”

Coverage of the Award - definition of “stevedoring industry”

[7] At the hearing of this matter the MUA sought an alternative variation to that sought in its original application. It now seeks to replace the existing definition of “stevedoring industry” in clause 3 and insert new definitions of “stevedoring employee” and “stevedoring operations” into clause 3. This proposal affects the coverage of the Award. Clause 4.1 of the Award relevantly provides:

“4.1 This award covers employers throughout Australia engaged in the stevedoring industry and their employees in the classifications listed in clause 13 to the exclusion of any other modern award. The award does not cover employers and employees wholly or substantially covered by the following awards:

(a) the Port Authorities Award 2010;

(b) the Coal Export Terminals Award 2010; and

(c) the Sugar Industry Award 2010.”

[8] In order to apply this clause it is necessary to refer to the definition of “stevedoring industry” in clause 3 which provides:

“stevedoring industry means the loading and unloading of cargo into or from a ship including its transporting and storage at or adjacent to a wharf.”

[9] The MUA seeks to replace this definition with the following:

“stevedoring industry means the loading and unloading of cargo into or from a ship including its transporting and storage at, adjacent to or in the vicinity of a wharf.”

[10] The MUA also seeks to insert the following definitions derived from the Stevedoring Industry Award 1999 into clause 3:

“Stevedoring employee means a person who is employed in stevedoring operations.

Stevedoring operations means:

(a) the loading or unloading of all types of cargo including containers, motor vehicles and bulk liquid or non-liquid cargoes into or from ships;

(b) the loading or unloading, into or from ships, of ships stores, coal or fuel oil (whether bunkers or not), passengers’ luggage or mail;

(c) the receival, delivery, storage, handling or preparation of all types of cargo including containers, motor vehicles and cargo in unit forms or other goods, for the purpose of loading or unloading such cargoes into or from ships, and including the monitoring, maintenance and repair of refrigerated containers and other equipment;

(d) the driving or operation of all mechanical appliances or equipment used in relation to the receival, delivery, storage or handling of all types of cargo (including the moving of rail trucks) or used in relation to the unloading or loading of all types of cargo from and onto ships including the operation of ships gear and all equipment on board a ship used in relation to loading and unloading;

(e) the haulage or trucking of all types of cargo or other goods from wharf sheds, wharf storage or stacking areas to the ship or from the ship to the wharf shed, storage or stacking area;

(f) clerical functions involved in the tallying, receival, delivery, sorting and stacking, storage, or other work connected with the loading or unloading of cargo into or from ships (whether in containers or not) or involved in the receival, delivery, packing, unpacking, loading, unloading or storage of containers in preparation for loading into ships or after their discharge from ships. In connection with the foregoing work it may include those engaged in manifesting, freighting, preparation of ship’s cargo disposition, timekeeping, labour allocation, roster preparation, preparation and distribution of payrolls, maintenance stores functions, computer operation, operation of other equipment used in connection with electronic data processing, or any other clerical work in or in connection with stevedoring operations or a wharf office on a wharf or on a ship;

(g) maintenance, construction and repair work where such work is performed in relation to stevedoring operations by maintenance tradespersons and maintenance tradespersons special class in relation to any vehicles, mechanical and/or electrical equipment, buildings, materials or facilities;

(h) watching, guarding and protection duties in relation to the operational activities and functions specified in this definition;

(i) the supervision, direction, checking and instruction of stevedoring employees;

(j) general functions and duties such as the lashing and unlashing of containers, working in a ships hold, driving of motor vehicles including buses, marshalling, general cleaning, cleaning and attendance to amenities areas and offices, mooring and unmooring of ships, cleaning and maintenance of containers, preparation and maintenance and repair of gear and equipment used in loading and unloading, packing and unpacking of containers, pallets or flats and the sorting, stacking, preparing, or otherwise handling of loose goods and cargo, preparation and cleaning of ships’ holds, removal or replacement of beams or hatches, plugging and unplugging of refrigerated containers, preparatory or closing work in relation to the loading or unloading of ships, the handling of dunnage or ballast, general inspection of vehicles and buildings, general duties in connection with the loading and unloading of ships and the provision of first aid.

(k) work of an employee required to plan, control, co-ordinate and integrate stevedoring operations in connection with vessels, and/or cargoes allocated to the employee by the employer, from time to time, and the work of other stevedoring employees in relation thereto, and to compile records, reports and information in connection therewith, but excluding the work of persons employed as wharf managers, assistant managers, and outside managers;

where any of the foregoing operations, functions or activities are carried out or performed by a stevedoring employee(s) as defined.

Wharf includes a pier, jetty, ramp, or shed, storage or stacking area at, adjacent to or in the vicinity of a wharf.”

[11] The MUA is seeking this variation because of a number of disputes over the scope of the Award at various ports around Australia. The MUA led evidence that it had experienced some stevedoring employers seeking to redefine the industry to make it as small as possible and by utilising subsidiary companies to perform receiver and delivery work which they claim is not stevedoring work and is not covered by the Award. The MUA considers that this approach is leading to the engagement of employees on inferior terms and conditions to those under the Award. The variation appears to intend bringing operations of logistics companies such as those within the Patrick, Toll and Qube groups within the scope of the Stevedoring Award, whereas they had been regarded, at least by those companies as covered by the Road Transport and Distribution Award 2010. The MUA led evidence on these and other matters from the following witnesses:

● Mr Warren Smith

● Mr Thomas Mayor

● Mr Jamie Newlyn

● Mr Jason Campbell

● Mr Kyle McGinn

● Mr Adrian Evans

● Mr Jeff Cassar

● Mr Paul Sheehan

● Mr Trevor Munday

[12] The change is strongly opposed by various employers, employer groups and unions including companies within the Qube Group, the DP World Group, the Patrick Group, the Australian Industry Group, the Toll Group, the Australian Road Transport Industry Organisation, Ports Australia, CSL Australia, Inco Ships, the Transport Workers’ Union and the Australian Workers’ Union. The thrust of these various submissions is that the MUA has failed to produce an evidentiary case that justifies the variations, the proposals represent an attempt to expand the coverage of the Award into areas of employment that have been subject to disputes in an attempt to reverse the position arising from those disputes, and that the expanded scope clause is inappropriate.

[13] The employers and the opposing unions submit that the attempt to clarify or expand the coverage of the Award so that certain operations will no longer be regarded as covered by the Road Transport and Distribution Award cannot be judged as necessary to achieve the modern awards objective because the Road Transport and Distribution Award itself is consistent with the modern awards objective. The employers and others opposed led evidence on these and other matters from the following witnesses:

● Mr Greg Nugent

● Mr Greg Muscat

● Mr Michael Knowles

● Mr Andrew Davies

● Mr Damian Blake Arnold

● Mr Kai-Yuan “Bob” Shueh

● Mr David John Nash

● Mr Ross Duncan

● Mr Paul Nieuwkerk

● Mr Tony Brevi

● Mr Ray Wyat

● Mr Ian Smit

● Mr Tim Dawson

● Mr Peter Biagin

● Mr Daniel Walto

● Mr James Huemmer

[14] The history of coverage clauses in modern awards discloses a largely consistent approach evident from various statements and decisions. Prior to the introduction of modern awards, awards were expressed to apply to nominated employer respondents, and also be binding on members of respondent registered employer organisations. Further, for many awards applying in Victoria, the Australian Capital Territory and the Northern Territory, all employers falling within the scope of the award were bound by it on a common rule basis. This reflected jurisdictional limitations arising from the industrial relations power of the Constitution supplemented in the case of Victoria by a referral of its industrial relations powers.

[15] The modern award system, established on the foundation of a different constitutional head of power, enabled awards to cover all constitutional corporations and other employers subject to a referral of powers by most State governments. Hence awards were mostly established on a national, industry basis, with a coverage clause expressed by reference to a definition of the industry of the employer. The common formulation, of which this Award is an example, was for the award to apply to employers in the industry, as defined, in relation to employees falling within the scope of the classification definitions.

[16] When publishing an exposure draft for the Stevedoring Award the award modernisation Full Bench said: 2

“[169] The Stevedoring Industry Award 2010 is proposed to cover the land based operations of employers who are involved in the loading and unloading of vessels. A number of exclusions have been included. Employees at bulk sugar terminals will be covered by the proposed Sugar Industry Award 2010. Employees at coal export terminals will be covered by the proposed Coal Export Terminals Award 2010...”

[17] The MUA expressed concerns about the draft and said as follows:

“12. In order to address these concerns could we suggest with respect that:

• A definition of ‘cargo’ be inserted in these words: “‘cargo’ includes shops stores, fuel oil (whether for bunkers or not), passengers’ luggage or mails”. The loading of coal is to be covered by a Coal Export Terminals Award 2010; and



• That Stevedoring Industry be defined as “the loading and unloading of cargo into or from a ship including its transporting and storage at or adjacent to a wharf.” Ship is defined in the Exposure Draft and the FWA Act as including “a barge, lighter, hulk or other vessel” causing us to delete the words “or other vessel” from the industry definition.”

[18] In publishing the final award the Full Bench said: 3

“[222] Parties covered by this award did not raise significant areas of concern. Some minor changes have been made to the scope clause of this award such as inserting a definition of cargo and confining the list of vessels to “ship” as this term is defined broadly in the Fair Work Act. We have also excluded maintenance contractors. We have reduced the list of awards which prevail over this award to those of likely relevance.”

[19] The effect of the current provisions is that the Award covers stevedoring employers as defined in relation to those of its employees falling within the scope of the classification structure. In order to be covered by the Award an employer must be involved in the industry of the loading and unloading of cargo into or from a ship, albeit that its operations might also involve the transporting and storage of cargo at or adjacent to a wharf. Insofar as the proposals of the MUA seek to alter this basic structure, the changes are likely to lead to confusion. Even though the coverage clause refers only to the stevedoring industry and classifications of employees, the addition of definitions for “stevedoring employee” and “stevedoring operations” are intended to bear upon the scope of the Award, apparently because aspects of the classification definitions refer to stevedoring employee. It would be most unwise to seek to vary the scope of the Award through such a convoluted drafting technique - even if there was a justification for doing so.

[20] The substantive change to the definition of “stevedoring industry” is also problematical. Although there has been some unfortunate disputation and litigation over the coverage of awards, it is difficult to see how this situation is remedied by the proposed variation. The notion of “transporting and storage at or adjacent to a wharf” is considerably clearer than “transporting and storage at, adjacent to or in the vicinity of a wharf” especially when the target operations sought to be covered include logistics companies that operate some distance from the wharf. Words that delineate the coverage of an award should be as clear as possible. In my view, the proposed variation would be likely to lead to more confusion and disputation than the current formulation.

[21] The parties referred to a recent dispute concerning the coverage of the Award in which Commissioner Cargill was called upon to consider whether the Award was required to be considered for the purposes of the better off overall test for approval of an enterprise agreement concerning Patrick Port Services. In her decision Commissioner Cargill said: 4

“[108] There is no suggestion that PPL is engaged in loading or unloading of cargo into or from a ship. There is however a question about whether its activities are captured by the second part of the industry definition. The Statement of the Full Bench [2009] AIRCFB 450 dealing with the Stage 3 exposure drafts in the award modernisation process indicates that the Stevedoring Award was proposed to cover the land based operations of employers who are involved in loading and unloading vessels.

[109] The decision of the Full Bench which led to the making of the award [2009] AIRCFB 826 notes that parties had not raised any significant concerns with the exposure draft. The bench then states “(s)ome minor changes have been made to the scope clause of the award such as inserting a definition of cargo and confining the list of vessels to “ship” ...”.

[110] There is no specific mention of the additional words which are relevant in this matter, “including its transporting and storage at or adjacent to a wharf”. However, in the absence of any indication that the Bench had intended to do anything other than make “minor” changes to the scope clause, it would appear that the final award covers only employers who are engaged in the loading and unloading of cargo into or from a ship. PPL is not one of those employers and consequently is not in the stevedoring industry and not covered by the Stevedoring Award.”

[22] In exercising our powers to review the operation of the Award we are not simply interpreting the current coverage of the Award. To the extent that there is ambiguity in the operation of current provisions we have the power to remedy that situation. The existence of disputes over award coverage is to be avoided as far as possible by clear words in the coverage clause and related definitions.

[23] The essential nature of stevedoring is the loading or unloading of cargo from a ship. Dictionary definitions reflect this. It can be expected that an employer in the business of loading and unloading cargo from ships would also be involved in the transportation and storage of cargo at or adjacent to a ship. However a business that engages in the transportation and storage of cargo in the vicinity of a wharf is not involved in the stevedoring industry unless it is involved in the loading and unloading of cargo from ships. The essential nature of its business is the transportation and storage of cargo and the award that will usually cover it is the Road Transport and Distribution Award. I note the recent decision of a Full Bench which adopted the same interpretation of the existing coverage clause in dismissing an appeal against Commissioner Cargill’s decision. 5 In my view, the coverage clause of the Award reflects this interpretation. If it does not, applications can be made to vary the coverage clause to remove the ambiguity.

Appointment to classification requirement

[24] The MUA proposes that five identically worded sub-clauses (b) be deleted from the following grades within “Schedule B - Classification Structure”: B.3 Grade 3, B.4 Grade 4, B.5 Grade 5 and B.6 Grade 6. In further submissions filed after the hearing of the matter, the MUA sought that the sub-clause (b) also be deleted from B.7 Grade 7.

[25] In addition to identifying the training required and tasks performed by Grade 3, 4, 5, 6, and 7 employees, the relevant sub-clauses provide that the relevant employees have:

“(b) ... been trained and selected for appointment to the classification of stevedoring employee Grade # in accordance with the operational requirements of the employer’s enterprise.”

[26] The MUA submits that, but for this discretionary selection requirement contained in the sub-clauses, the role of production managers at the Brisbane Patrick Stevedores terminal and other roles within the production team at the Brisbane DP World terminal would be covered by Grade 6 of the Award. The MUA contends that some employers have used the requirement as the basis for taking the view that these employees are not involved in stevedoring operations and so, not covered by the Award. The MUA submits that the proposed variation is necessary in order to ensure that the classifications for Grades 3-7 employees depend solely on the training required and the tasks performed, and capture roles such as those identified above.

[27] The MUA led evidence of disputes that had arisen in relation to these positions and that the employees engaged as production managers are properly regarded as involved in the stevedoring industry and should be covered by the Award.

[28] Various employers, including companies within the Qube group, the DP World Group, and the Patrick Group, are opposed to the variation. The Ai Group is also opposed to the variation. The thrust of these various submissions is that the MUA has failed to produce an evidentiary case that justifies the variations, that the proposals represent an attempt to re-determine individual disputes regarding classification using the award review process rather than the appropriate forum for these matters, that the selection requirement is necessary and appropriate, and that the variation sought would result in uncertainty and require employers to bear a greater administrative and financial burden in classifying and paying employees.

[29] The position of production manager at the Port Botany and Fisherman Island container terminals of Patrick Stevedores was the subject of an arbitrated dispute before Deputy President Sams in 2013. The dispute related to consultation over changes in operations and the scope of the enterprise agreement which is in similar terms to the Award. The Deputy President said: 6

“[44] Thirdly and most importantly, the Port Botany Production Manager’s role is, in my opinion, directly analogous to the same role at Fisherman Islands, where the following evidence disclosed:

(a) the role was first introduced in 2007;

(b) there was no suggestion at the time, or subsequently, that the position was not a management role;

(c) the Union has not sought to agitate a claim for either coverage of the role or its inclusion under the enterprise agreement;

(d) there has been no position put that the persons engaged as Production Managers should not be covered by individual contracts of employment;

(e) there was no evidence to suggest that the role was covered by an existing classification under the Agreement. I note the salary applicable to the role is above the highest Level 6 rate under the Agreement; and

(f) there was no dispute as to the recruitment process of Production Managers at the time, or subsequently, and unlike here, the advertising for the positions excluded internal applicants, seemingly without demur from the Union.

[45] In my assessment, the resemblance of the role to the Production Managers at Fisherman Islands is persuasive evidence telling against the Union’s arguments. However, even putting the Fisherman Islands experience to one side, I have no doubt that the Production Manager’s role at Port Botany is a management position, not contemplated by coverage under the Agreement. Once that finding is made, it seems to me that the Union’s case is doomed. It follows that:

(a) the consultation clause (cl 14) on significant change is not applicable; and

(b) Cl 9 is similarly is not applicable.”

[30] The employers led evidence of the need for the selection requirement. That evidence states that the selection requirement provides an orderly process for the classification of employees in circumstances where duties may change from day to day depending on the different vessel requirements. The employers submitted that the change would result in uncertainty and the likelihood of increased costs in circumstances where no adequate evidentiary case has been made out justifying the variations.

[31] I am not persuaded that an adequate case for the variations has been made out. The drafting technique has a considerable history and is supported by the employers. The arguments for change appear to be for the purpose of expanding award coverage to employees who have been regarded as management employees. I am not satisfied that the change is necessary to achieve the modern awards objective.

Insertion of the phrase “clerical, terminal operating system or information management system” in classifications

[32] The MUA proposes replacing the word “clerical” with the phrase “clerical, terminal operating system or information management system” in the following sub-clauses contained in “Schedule B - Classification Structure”:

● B.2 Grade 2 (e), (f)

● B.3 Grade 3 (a), (a)(iv), (a)(vi)

● B.4 Grade 4 (a), (a)(iii), (a)(iv), (a)(v)

● B.5 Grade 5 (a)(i), (a)(ii)

● B.6 Grade 6 (a)(ii), (a)(iv)

● B.7 Grade 7(a)(ii)

[33] The MUA contends that the introduction of new software and technology has been used by some employers to exclude certain clerical workers from the coverage of the Award, in particular those who oversee the computer-based movement of cargo within the terminal to ensure it goes to its correct destination. The MUA submits that the effect of this variation will be to clarify that the employees who operate the Terminal Operating System, the software program which tracks and manages movement of cargo within a terminal, are covered by the Award.

[34] The various employers, including companies within the Qube group, the DP World Group, the Patrick Group, are opposed to the variation and deny that they have used the introduction of new technology to exclude employees who are properly covered by the Award. The Ai Group is also opposed to the variation. The thrust of these various submissions is that the MUA has failed to produce an evidentiary case that justifies the variations, that the MUA’s submissions are based on a premise that all employees who perform work in which they are required to use a Terminal Operating System are covered by the Award, and that the variation may inappropriately bring employees under the coverage of the Award.

[35] Evidence led by the employers established that managerial employees such as yard planners and supervisors regularly use the Terminal Operating System. They submitted that the mere expansion of the types of equipment used is no basis to expand existing award classifications.

[36] I am not persuaded that a sufficient case has been made out for the proposed variations. Classification definitions need to be carefully considered so that the Award applies to the appropriate classes of employees and the basis of classification is fair and equitable. Any expansion of award coverage requires a detailed evaluation of the implications of the change having regard to the current circumstances. It appears to me that the proposal is not adequately supported by a case that deals with all relevant considerations and may have undesirable consequences, intended or unintended.

Toggle operators

[37] The MUA proposes replacing the word “operational” with the phrase “operational (including toggle operations)” in the following sub-clauses contained in “Schedule B - Classification Structure”: B.5 Grade 5 (a)(i), B.6 Grade 6 (a)(iv) and B.7 Grade 7 (a)(ii).

[38] The MUA contends that the role of toggle operator is a hybrid of both clerical and operational duties and that as automation and the use of computer systems to control machinery increases in the stevedoring industry in coming years, more of these hybrid roles will exist. The MUA further contends that toggle operators are key operational employees who are currently misclassified at a Grade 3 role at the Brisbane DP World terminal and are more appropriately classified at a Grade 5 level. Toggle operators are required to hold a crane operators ticket as well as perform clerical and control room functions in automated terminals. The MUA submits that the variation will clarify that employees performing the work of a toggle operator are covered by the Award.

[39] The toggle operator job title is peculiar to the automated operations of DP World in the Port of Brisbane. The toggle operator observes and when required, manually operates Auto-Stacking Cranes using a hand held device. DP World submits that the Grade 5 classification requires the person to be the key operational employee on a shift. It submits that the use of a toggle for crane operations is not directly relevant to this key classification requirement. It submits that the MUA has failed to justify reclassification based on a proper work value analysis. The Qube Group and Ai Group are also opposed to the variation.

[40] The thrust of the DP World and Qube submissions is that the MUA has failed to produce an evidentiary case that justifies the variations, that the proposals represent an attempt to use the award review process to achieve an outcome in relation to disputes that it has raised outside these proceedings, and that an employee’s classification should be appropriately determined by their skills and responsibilities within a given enterprise which may differ from port to port. The Patrick Group does not presently operate any Auto-Stacking Cranes to which toggle operations relate and submitted that if the Commission was to allow the variation that it should be made clear that it relates only to persons performing toggle operations in connection with Auto-Stacking Cranes and that it does not apply to persons operating other automated machinery.

[41] As I understand the position of the parties, the relevant employer, DP World, does not contest the coverage of toggle operators under the Award. Rather, it currently classifies them at a lower level than the MUA believes they should be classified. It is appropriate in reviews of the Award to ensure that the classification definitions properly reflect the work value of the relevant classifications and adequately deal with changes in technology. Other means are also available to review the classification of employees such as raising a dispute under the award dispute settlement clause.

[42] I do not consider that the MUA has made out a sufficient case for change in the definitions or a change in the grading of toggle operators. Any such case must be based on proper work value comparisons and evidence of the actual duties of the employees concerned. Instead of clarifying coverage under the Award, as the MUA asserts, the insertion of toggle operator terminology in multiple classifications, may cause undesirable confusion. In any event the employer has clarified that the toggle operators fall within the Award classifications.

Description of maintenance roles

[43] The MUA proposes to have sub-paragraph B.6 (a)(iii) contained in “Schedule B - Classification Structure” amended so that the maintenance of new technology introduced in port operations is sufficiently contained in the Award. The clause currently reads:

“A Grade 6 employee is an employee who has attained the level of either stevedoring employee Grade 4 or 5 and who has:

(a) completed additional training and has demonstrated competence in the skills required at this grade and performs such functions as are required by the employer from time to time in relation to:

…

(iii) is a maintenance tradesperson special class as defined;”

[44] The new wording sought by the MUA is as follows:

“A Grade 6 employee is an employee who has attained the level of either stevedoring employee Grade 4 or 5 and who has:

(a) completed additional training and has demonstrated competence in the skills required at this grade and performs such functions as are required by the employer from time to time in relation to:

…

(iii) Is a maintenance tradesperson special class as defined, and is a tradesperson involved in the upkeep and functioning of stevedoring equipment and the mechanical, electrical, electronic, software, communications, and navigation infrastructure that is involved in the operation of stevedoring equipment and the maintenance of the stevedoring terminal site.”

[45] The term “maintenance tradesperson special class” is currently defined in clause B.8 as follows:

“B.8 Maintenance Tradesperson Special Class

A maintenance tradesperson special class is an employee who is a maintenance tradesperson who has completed additional training to the level of an engineering tradesperson – special class level II as defined in the Manufacturing and Associated Industries and Occupations Award 2010, and who exercises the skills and knowledge required of an engineering tradesperson – special class level II.”

[46] The MUA contends that as stevedoring equipment and machinery becomes more integrated with electronics and other information systems, the nature of maintenance tasks required for the proper functioning of stevedoring equipment is changing. The MUA submits that the introduction of new technology and its maintenance is not sufficiently reflected in the Award and therefore the description of maintenance roles needs to be varied to clarify these changes.

[47] Various employers, including companies within the Qube group, the DP World Group, and the Patrick Group, are opposed to the variation. The Ai Group is also opposed to the variation. The thrust of these various submissions is that the MUA has failed to produce an evidentiary case that justifies the variation, that the introduction of the variation would cause confusion given that the term is already defined in clause B.8 of the Award, and that the variation sought would appear to significantly extend the scope of the work of a maintenance tradesperson special class beyond its current scope of persons who have generally completed a Certificate IV in engineering. Hence, it is submitted that the variation may lead to an upward reclassification of employees properly classified as maintenance tradespersons and an extension of the Award to higher level engineering employees. The employers submit that the MUA has failed to advance a sufficient evidentiary case for such changes including the necessary work value analysis.

[48] In my view, an insufficient case for the variation has been made out. The current definition identifies the level of skill required to be classified as a Grade 6 employee. It does not limit the fields of engineering maintenance covered by it and would appear to cover employees required to exercise that level of skill regardless of the particular fields of expertise involved. To that extent the change is unnecessary. However, insofar as the change picks up references from lower classifications and builds in an alternative means of classification related to the types of maintenance that could be involved in a modern stevedoring operation, it may well capture employees whose work value is different to the current classification level. The MUA has not advanced a sufficiently sound case to justify this change.

Ordinary hours of work

[49] The Stevedoring Employers (comprised of the Qube Group and the DP World Group) propose to amend the current “Ordinary hours of work and rostering” sub-clause 17.1 so that the ordinary hours of work are increased from an average of 35 per week to 38. References to 35 ordinary hours per week would also need to be amended in the current “Shiftwork” sub-clause 18.10 and the current “Rostering arrangements” sub-clause 18.14.

[50] The Stevedoring Employers note that this variation would also require consequential changes to other provisions of the Award which are currently premised on full time employees working 35 ordinary hours per week. This includes clauses which relate to normal shift work and maximum working hours and are dealt with below, in particular clauses 18.1, 18.2, 18.12, 19.2 and 19.3.

[51] The Stevedoring Employers contend that this provision, in conjunction with “Overtime rates” sub-clause 19.1, has the effect that any hours worked by a stevedore in excess of an average of 35 hours per week are paid at overtime rates. The Stevedoring Employers submit that a week consisting of a maximum of 35 ordinary hours is out of step with most other moderns awards, and that this includes other industries that operate 24 hours a day and seven days a week.

[52] There are 122 modern awards. 111 provide for 38 ordinary hours per week. Five provide for 35 hours in all cases and one provides for 35 hours for a sub-set of employees. The others provide for a number between 35 and 38.

[53] The 35 hour week was introduced into the Waterside Workers Award in 1972 by consent between the Waterside Workers Federation of Australia and the employer association representing stevedore employers. The variations were opposed by the Commonwealth Government but approved by the Commonwealth Conciliation and Arbitration Commission.

[54] The Stevedoring Employers submit that the change was highly contingent on the circumstances at the time and those circumstances have largely ceased to exist. They submit that the nature of work is similar in a general sense to work in the manufacturing, construction, mining, transport and storage industries, and that stevedoring work is not necessarily of greater intensity than work in those industries.

[55] Evidence was led from a shift work expert, Mr James Huemmer on comparable industries in relation to hours of work, rostering, patterns of work, overtime and work on weekends and public holidays. The rostering and work allocation practices of stevedoring employers were explained by Mr Greg Nugent (Qube) and Mr Greg Muscat (DP World). It is apparent from this evidence that the rostering arrangements in the stevedoring industry provide a unique level of flexibility for employers by allowing them, on the day before the shift, to confirm whether work is required and nominate the shift starting time. A corresponding consequence of this flexibility is a significant inconvenience for employees who, for the most part, cannot plan the precise work, recreational activities and other responsibilities more than a day in advance.

[56] The MUA, the AWU and the TWU strongly oppose this proposed variation. The MUA contends that the adoption of a 35 hour week was a consent position that became standard in the 1960s and 1970s as a consequence of industrial negotiations that took place between the Association of Employers of Waterside Labour and the Waterside Workers’ Federation and that those negotiations had regard to the unique circumstances of continuing rapid technological change in this period. The MUA submits that distinct operations of the stevedoring industry continue to exist today and therefore the concept of a 35 hour week remains relevant. The Patrick Group does not oppose this proposed variation to the Award but otherwise made no substantive submissions in support of this variation. The Ai Group supports the variation.

[57] When making modern awards, the Australian Industrial Relations Commission had primary regard to the existing instruments that were to be replaced and the impact on employers and employees of the proposed terms of modern awards. The Commission was required to endeavour to achieve an outcome that neither disadvantaged employees or added costs to employers. Hours of work were not standardised across awards. The limited industries that previously had awards containing a 35 hour week were covered by modern awards which maintained those provisions. In the case of the stevedoring industry there was a long history of a beneficial award entitlement based on discrete industry circumstances. A change to an award provision in these circumstances requires a strong case based on merit and the modern awards objective.

[58] The circumstances of the industry including the other award provisions are relevant to this proposal. Australia remains highly dependent on sea based transportation of cargo. New technology such as containerisation and automated wharf operations is designed to bring about significant productivity and efficiency improvements. Stevedoring labour must be sufficiently flexible to meet variable shipping movements.

[59] While employees may be rostered to work on particular days in a roster cycle, the rosters are different to most other rosters that operate in other industries. The rosters do not guarantee work on the rostered days. Rather employees are expected to make themselves available on those days (subject to a limited number of refusals) and will not be rostered work on all of the days when they are effectively required, by virtue of their roster, to make themselves available. Allocation of labour at container terminals is typically performed on a day to day basis and is dependent on shipping schedules, actual shipping movements and the progress of unloading and loading activities.

[60] When rostered for work on a particular day, there is often no advanced notice of the time a shift is to be worked on that day until the day before. Employees are required to telephone an automated allocation system each day. They are then told whether they are rostered for work on the following day, and the time at which their shift will commence. Shift start times vary. For example, a day shift employee may be advised that the next day shift will start at 5, 6, 7 or 8 am. Evening shift starts may be 12, 1, 2, 3 or 4 pm. Night shifts may start at 9, 10 or 11 pm. They are usually not told the particular role they will be required to perform on that shift until the commencement of that shift. Fixed Salary Employees (FSEs) are usually rostered to perform their primary skill. Shifts can be extended at short notice.

[61] Rosters may nominate “I” which means that the actual shift required to be worked may be day, evening or night or the employee may not be required to work that day at all. According to Mr Warren Smith, the only stevedoring workers who have rosters where more than 50% of the shifts are predictable are the permanent workers at the larger container terminals in Sydney, Melbourne and Adelaide.

[62] These procedures vary dependent on the type of employee concerned. FSEs work an average of 35 ordinary hours per week. They are usually rostered to a particular panel in the roster. They are told the usual shift length, which is often 8 hours, but this can be extended by up to 4 hours. Variable salary employees (VSEs) are effectively part-time employees. They have a minimum salary guarantee and are required to work a certain number of hours and a mix of shifts to make up that guarantee. They must also be reasonably available to meet the needs of the business by being available to work shifts on an irregular basis. Supplementary employees are similar to casual employees. They are not rostered to a particular panel. They work shifts when required and are used to supplement other categories of labour when needed.

[63] Stevedoring work is required to be performed on weekends and public holidays. Normally FSEs are rostered a standard number of Saturdays and Sundays. For example, at DP World Brisbane this is 29 Saturdays and/or Sundays a year. Other categories work a variable number of weekend days. The type of shifts is usually organised in a particular way. At DP World Brisbane approximately 1/3 of shifts are day shifts, 1/3 are evening shifts (similar to what are termed afternoon shifts in other industries) and 1/3 are night shifts. The starting time of the shift may vary from day to day.

[64] Stevedoring work is performed in accordance with enterprise agreements that provide for better terms and conditions than the Award. In particular the rate of pay under agreements is considerably higher than the Award rate. There is no evidence of any enterprise agreement adjusting the 35 hour week or trading off longer ordinary hours for the higher rate of pay. The 35 hour week means that employees receive the weekly rate of pay for working 35 hours - rather than 38, and overtime payments are payable after 35 hours are worked. This amounts to approximately an additional 8.5% increase on the hourly rate of the 35 hourly week worker compared to a 38 hourly week worker. The significance of a change in the number of ordinary hours arises at the time of renegotiation of enterprise agreements and the application of the better off overall test. If working under the Award, an employee would need to work an additional three hours work without additional payment and overtime would not be payable until more than 38 hours is worked. The Stevedoring Employers submitted that an appropriate adjustment to the weekly wage rates in the Award might also be contemplated if its application is granted.

[65] I am not satisfied that the Stevedoring Employers have established a sufficient case for the variation or that the variation is necessary to meet the modern awards objective. A 35 hour week is present in some awards for the similar historical reasons as the stevedoring industry. There is nothing inherently contrary to the modern awards objective in the continuation of this prescription. Further the highly unusual nature of shift allocation systems for waterfront labour warrant a swings and roundabout approach to award entitlements. Greater demands on employees that contribute to a more intrusive availability requirement than in most other areas of employment warrant a more generous ordinary hours prescription. This provides compensation for the inconvenience of the rostering arrangements in the stevedoring industry. The allocation practices arising from the need for flexible labour requirements obviously contributed to the unique structure of the award hours provisions and remain relevant today. I would not grant the variation sought.

Normal shift length

[66] If the proposed variation regarding ordinary hours of work is made by the Bench, the Stevedoring Employers propose altering the current “Shiftwork” clause 18 so that the normal length of a shift would be increased from 7 to 8 hours, and subsequent references to normal shift length made in the “Minimum payment for overtime” clause 19.2.

[67] As the members of this Bench reject the change to ordinary hours of work I do not propose to consider this matter further.

Maximum working hours

[68] If the proposed variation regarding ordinary hours of work is made by the Bench, the Stevedoring Employers propose that the current “Maximum duration of overtime” sub-clause 19.3 be amended to increase the maximum working hours from eight to nine (where the overtime attaches to any evening shift) and nine to ten (where the overtime attaches to a night shift).

[69] This variation is not relevant given the decision of the Bench to reject the change to ordinary hours of work.

Penalty rates

[70] As the Bench is not agreed on the outcome of the applications for changes in penalty rates it is appropriate that I deal with the approach to the matter and the necessary analysis in some detail. As will be seen from the analysis below, the shift and weekend penalties in this Award are significantly higher than those in other modern awards. For the first time in very many decades stevedoring employers have challenged the existing level of these payments. A reconsideration of the fairness of the award penalty rates is clearly available under the 2014 four year review process in a way that was not available in the process of making the modern award or the 2012 two year review process. I have concluded that there is no merit justification for the existing high level of penalty rates and that they are out of step with all other modern awards.

[71] Having put the current penalty rate regime in issue it is incumbent on this Commission to consider the merit of the award penalty payments based on contemporary circumstances. The legislative task does not allow historical inertia to be a determinative factor, or to base decisions on the identity of applicants and supporters. Rather, the Commission must ensure that the award penalty rates represent a fair and relevant minimum safety net having regard to the various elements of the modern awards objective.

[72] The context of making the original modern Stevedoring Award is relevant. When making the award in 2009, the scope to challenge the merit of existing award provisions was severely limited. I have observed in other proceedings that award modernisation was a process conducted by the Australian Industrial Relations Commission (AIRC) under the terms of Part 10A of the Workplace Relations Act 1996 (the WR Act). Pursuant to that part of the WR Act, the AIRC was required to perform its functions having regard to the factors in s.576B and in accordance with an award modernisation request made by the Minister under s.576C (the Ministerial Request). The s.576B factors included the desirability of reducing the number of awards operating in the workplace relations system. The original Ministerial Request was issued on 28 March 2008 and was varied on eight occasions during the process. The Ministerial Request contained additional objects of the process, including that the creation of modern awards was not intended to disadvantage employees or increase costs for employers. The award modernisation request required the award modernisation process to be completed by 31 December 2009.

[73] As a result of the award modernisation process, approximately 1,560 federal and state awards were reviewed over a period of about 18 months and replaced by 122 modern awards by the award modernisation Full Bench of which I was a member. A further 199 applications to vary modern awards were made during this period. It is clear from any review of the process that the objects of rationalising the number of awards and attempting to balance the seemingly inconsistent objects of not disadvantaging employees and not leading to increased costs for employers attracted the vast majority of attention from the parties and the AIRC. It was clearly not practical during the award modernisation process to conduct a comprehensive review of the industrial merit of the terms of the awards. Matters that were not put in issue by the parties were not subject to a merit determination in the conventional sense. Rather, terms were adopted from predecessor awards that minimised adverse changes to employees and employers. As the Full Bench explained on a number of occasions, the general approach was as follows: 7

“[3] In general terms we have considered the applications in line with our general approach in establishing the terms of modern awards. We have had particular regard to the terms of existing instruments. Where there is significant disparity in those terms and conditions we have attached weight to the critical mass of provisions and terms which are clearly supported by arbitrated decisions and industrial merit. We have considered the impact of the provisions based on the information provided by the parties as to current practices.”

[74] Hence it is important to note the limited nature of the task undertaken by the award modernisation Full Bench. It is also important to note the scope of the review now being undertaken. The scope for review will indicate the nature of a case that will need to be run to justify a change to an award provision.

[75] There are broadly three avenues for considering award variations under the Fair Work legislation:

● the variation of awards outside of award reviews under ss. 157 or 160 of the Act;

● the variation of awards as part of the 2 year review under Item 6 of Schedule 5 of the Transitional Act, requiring the Commission to consider whether the awards achieve the modern awards objective, and are operating effectively; and

● the variation of awards as part of the 4 yearly review under s.156 of the Act, required to be conducted as soon as practicable after each fourth anniversary of the commencement of the modern awards on 1 January 2010.

[76] As various Full Bench decisions make clear, the 4 yearly review is broader than the 2 year review and broader than other mechanisms under ss. 157 and 160 to seek changes to awards. The 2 year review process nevertheless permitted changes to award provisions that did not provide a fair and relevant minimum safety net. For example in relation to a review of standard award flexibility clauses as part of the 2 year review a Full Bench said: 8

“[211] The variations proposed are necessary to remedy the issues identified in the Transitional Review and to ensure that the model award flexibility term and modern awards are operating effectively, without anomalies or technical problems arising from the award modernisation process. We are also satisfied that the variations proposed are ‘necessary’ (within the meaning of s.138) to achieve the modern awards objective and will ensure that modern awards provide a fair and relevant minimum safety net of terms and conditions having regard to the matters set out at paragraphs 134(1)(a)-(h). In particular, the variations proposed will provide flexible modern work practices and reduce regulatory burden while taking into account the needs of the low paid and making the model flexibility term simpler and easier to understand.”

[77] The Full Bench reviewing provisions regarding apprentice provisions of modern awards also considered whether the current provisions of awards represented a fair and relevant minimum safety net of terms and conditions of employment by reference to the factors in the modern awards objective. In various instances it was found that the provisions should be varied based on merit considerations including fairness, equity and other grounds. It is clear from the decision that the task involved a broad judgement of the type described, without applying a barrier that favours the retention of the status quo.

[78] The nature of the 4 year review has been explained by a Full Bench as follows: 9

“[60] On the basis of the foregoing we would make the following general observations about the Review:

1. Section 156 sets out the requirement to conduct 4 yearly reviews of modern awards and what may be done in such reviews. The discretion in s.156(2) to make determinations varying modern awards and to make or revoke modern awards in a Review, is expressed in general terms. The scope of the discretion in s.156(2) is limited by other provisions of the FW Act.

In exercising its powers in a Review the Commission is exercising ‘modern award powers’ (s.134(2)(a)) and this has important implications for the matters which the Commission must take into account and for any determination arising from a Review. In particular, the modern awards objective in s.134 applies to the Review.

2. The Commission must be constituted by a Full Bench to conduct a Review and to make determinations and modern awards in a Review. Section 582 provides that the President may give directions about the conduct of a Review. The general provisions relating to the performance of the Commission’s functions apply to the Review. Sections 577 and 578 are particularly relevant in this regard. In conducting the Review the Commission is able to exercise its usual procedural powers, contained in Division 3 of Part 5-1 of the FW Act. Importantly, the Commission may inform itself in relation to the Review in such manner as it considers appropriate (s.590).

3. The Review is broader in scope than the Transitional Review of modern awards completed in 2013. The Commission is obliged to ensure that modern awards, together with the NES, provide a fair and relevant minimum safety net taking into account, among other things, the need to ensure a ‘stable’ modern award system (s.134(1)(g)). The need for a ‘stable’ modern award system suggests that a party seeking to vary a modern award in the context of the Review must advance a merit argument in support of the proposed variation. The extent of such an argument will depend on the circumstances. Some proposed changes may be self evident and can be determined with little formality. However, where a significant change is proposed it must be supported by a submission which addresses the relevant legislative provisions and be accompanied by probative evidence properly directed to demonstrating the facts supporting the proposed variation. In conducting the Review the Commission will also have regard to the historical context applicable to each modern award and will take into account previous decisions relevant to any contested issue. The particular context in which those decisions were made will also need to be considered. Previous Full Bench decisions should generally be followed, in the absence of cogent reasons for not doing so. The Commission will proceed on the basis that prima facie the modern award being reviewed achieved the modern awards objective at the time that it was made.

4. The modern awards objective applies to the Review. The objective is very broadly expressed and is directed at ensuring that modern awards, together with the NES, provide a ‘fair and relevant minimum safety net of terms and conditions’.

5. In the Review the proponent of a variation to a modern award must demonstrate that if the modern award is varied in the manner proposed then it would only include terms to the extent necessary to achieve the modern awards objective (see s.138). What is ‘necessary’ in a particular case is a value judgment based on an assessment of the considerations in s.134(1)(a) to (h), having regard to the submissions and evidence directed to those considerations.

...”

[79] The application of the Stevedoring Employers needs to be considered in the light of the above. The application seeks to amend the current “Payment for shiftworkers” sub-clause 18.5 so that a reduced number of penalty rates apply, no penalty rates are payable during day shift and reduced penalties apply for evening and night shifts. The clause currently reads:

“18.5 Payment for shiftworkers

All time worked will be paid as follows:

(a) day shift on Monday to Friday—no additional payment;

(b) day shift on Saturday—double the ordinary rate;

(c) day shift on Sunday—two and a half times the ordinary rate;

(d) evening shift on Monday to Friday—one and a half times the ordinary rate;

(e) evening shift on Saturday—double the ordinary rate;

(f) evening shift on Sunday—two and a half times the ordinary rate;

(g) night shift on Sunday to Friday—double the ordinary rate; and

(h) night shift on Saturday—two and a half times the ordinary rate.”

[80] The new clause sought by the Stevedoring Employers reads as follows:

“18.5 Payment for shiftworkers

All time worked will be paid as follows:

(a) day shift—no additional payment;

(b) evening shift on Monday to Friday—115% of the ordinary hourly rate;

(c) evening shift on Saturday and Sunday—150% of the ordinary hourly rate;

(d) night shift on Sunday to Friday—130% of the ordinary hourly rate; and

(e) night shift on Saturday—150% of the ordinary hourly rate.”

[81] The Stevedoring Employers submit that the shift penalties provided for in the Award are well in excess of equivalent provisions in almost every other modern award, and that this includes other industries which have a continuous operating environment and in which the working of non-standard hours as part of shift rosters is common practice. They further submit that the provisions of the clause are unduly complex in providing for eight different shift penalty arrangements. They contend that the proposed variation to shift penalties would bring the stevedoring industry into line with these other industries. The employers submit that lower penalties would decrease employment costs and provide greater scope and flexibility to operate efficiently and make necessary adjustments to their operations. They submit that the current provision makes costs for operating on weekends higher than is otherwise necessary and that stevedoring operators have little opportunity to avoid these costs. The costs of stevedoring are passed on to customers and ultimately exporters and consumers of imported goods.

[82] The Stevedoring Employers submitted details of the weekend and shift penalties in every modern award. They provided a comparison between the relevant provisions in the Stevedoring Industry Award and ten other modern awards that they submitted provided an appropriate benchmark. That comparison was as follows:

TABLE 4 - SHIFT PENALTIES IN SELECTED AWARDS

* The higher rate applies to shifts worked on permanent night shift.

† This award also provides for an early morning shift loading of 12.5%.

� Rate is for ordinary hours, which can be worked on Saturdays and Sundays by agreement. Without such agreement, overtime would be payable.

[83] The Stevedoring Employers led evidence on shift patterns in other industries. Mr Huemmer, a consultant in developing shift work rosters in many industries gave detailed evidence about shift work in the stevedoring industry compared to other industries. He said that while there are some differences, the similarities far outweigh the differences. He said many industries develop rosters based on both their repetitive, predictable workload and their less repetitive, less predictable workload. He said:

“In my experience, the stevedoring industry certainly has a dynamic workload that (with the help of the tides) rolls peak workloads all around the clock and all through the week. This workload contributes to the need for flexibility (irregular shift assignments) in labour allocation.

However, from my assessments of planned and actual patterns of work, I do not find patterns of work in the stevedoring industry to be any more irregular or any more unpredictable than patterns of work required in other comparable industries. For example, there are towage services and ship pilot operations in the maritime industry and all of the pools of casual, contractor and labour hire resources used in manufacturing, mining, services and other industries that share the same irregularity, unpredictability and patterns of work.”

[84] In relation to penalty rates he said:

“Some industries work more Saturdays, Sundays and public holidays than the stevedoring industry and some work less. The stevedoring industry is similar to most 24/7 industries and requires similar staffing to what is required for their operations during the week, Monday to Friday.

It is weekend and public holiday work that has the greatest impact on maintaining family and social activities for all workers regardless of industry. Although most workers admit that additional compensation (through penalty rates for these hours of work) helps, it does not fix the social impact.

Stevedoring requirements on weekends and public holidays are similar to requirements in other industries, so in this case, I am not aware of any cogent reason to support why different penalty rates are used for stevedoring industry workers compared to workers from other industries.”

[85] The MUA, the AWU and the TWU oppose this proposed variation. The unions contend that the pattern of work in the stevedoring industry is casual and unpredictable with flexibility in start times being a longstanding feature. The MUA submits that the existing penalty rates in the Award continue to play a role in compensating stevedores for that flexibility and the need for them to work unsociable hours. The Patrick Group does not oppose this proposed variation to the Award but otherwise made no substantive submissions in support of these variations. Ai Group supported the proposed changes and said that the evidence establishes that the costly and inflexible minimum terms have ceased to be fair and relevant for the industry and are out of step with other interfacing industries. Ai Group submitted that the change is necessary to meet the modern awards objective and is supported by probative evidence of facts justifying the variation.

[86] The evidence of Mr Smith, referred to above, provided detail of the extent of flexibility for employers and the lack of certainty employees have in the rostering arrangements that apply to many employees in the stevedoring industry. Most stevedoring employees do not have a roster and those who do have an element of unpredictability in their roster. As concluded above, these elements are not encountered in the vast majority of shift working arrangements for regular full time employees. They are common however for casual and labour hire employees.

[87] The comparative material between different modern awards establishes that the penalty provisions for stevedoring employers are well in excess of other awards:

● The common afternoon shift loading in awards is 15%. The Stevedoring Award is 50%.

● The common night shift allowance in awards is 15% or 30% for non rotating night shift workers. The Stevedoring Award is 100%.

● The common Saturday penalty payment is 50% (time and a half). The Stevedoring Award provides for 100% (double time).

● The common Sunday penalty rate in awards in 100% (double time). The Stevedoring Award provides for 150% (double time and a half).

[88] Even allowing for the unique needs of the industry and the unusual demands on employees, the differences appear to me to be out of all proportion. The combined effect of a 35 hour week and the highly inflated penalty rate regime is that the payments to employees over the period of a week are approximately 50% more under the Stevedoring Award compared to the Manufacturing Award for the same classification of employee working a 7 day 24 hour roster on the same award rate of pay. There is no merit justification for such a discrepancy in a minimum safety net award.

[89] The penalty provisions have a long history but the consensual nature of the provisions and the changes that have occurred since that time require a reconsideration of what are quite anomalous safety net provisions. New stevedores are entering the market. Automation is occurring. Ship volumes are increasing at the larger ports. These trends suggest that for many employees there will be increased predictability of working hours and their disabilities are more in line with those experienced in other industries. In my view, it is no longer sustainable to have an inflated penalty rates regime, inherited from another era, so out of proportion with the safety net provisions of other modern awards.

[90] In making the modern award in 2009, the AIRC did not consider the merit of the level of these provisions. Further, the common rule nature of the Award from 2010 means that all employers covered by the Award, regardless of the history of award coverage are bound by the abnormally high cost structures. This includes new business entrants and restructured corporate entities since the original consent position was established.

[91] The disproportionate penalty regime impacts on overall costs and limits the flexibility that stevedoring businesses might be able to extract from their businesses. Lower costs and greater operational flexibility should translate to lower transportation costs in an increasingly competitive industry and flow on benefits to the general community, including exporters and consumers of imported goods. Where there is no unfairness to employees in bringing safety net penalty entitlements more into line with community standards, the benefits of the changes carry considerable weight.

[92] Altering the award provisions should not have any immediate effect given the ongoing application of enterprise agreements. The parties will of course be free to agree on whatever mix of penalties and payments they can agree upon in future enterprise agreements. As a result of the above decision in relation to ordinary hours of work, the 35 hour week will continue to be reflected in the Award and provide an additional benefit that compensates for the level of unpredictability in stevedoring rosters.

[93] All of these matters are evident from the evidence and submissions before the Commission. This is not a case, such as with restaurants, where many employees are paid at the award level, and the award penalty rates are found to contribute to reduced opening hours and less employment at weekends. Employees under this award are paid well in excess of the award in accordance with enterprise agreements which reflect award penalty rates and higher base wages. It is not possible to adduce evidence of a current negative impact on employment opportunities or an immediate future positive impact on employment opportunities if penalty rates are reduced.

[94] Indeed the Stevedoring Employers did not put their arguments on such a basis. Their merit case is that the penalty payments in this Award are disproportionate to all other modern awards and the differences between the stevedoring industry and other industries are insufficient to justify such significant differences. They are not seeking a reduction to levels below the current standard penalty rates in other comparable awards.

[95] The evidence establishes that the first proposition is correct without any doubt. The second proposition is more contentious but is really a question of degree. As indicated above there are aspects of stevedoring rostering that provide less predictability for employees than occurs in other industries. Nevertheless the evidence establishes that many of the disabilities of working in a 7 day—24 hour operation apply equally to many other categories of employees working under many other awards that provide a much lower safety net penalty rate regime.

[96] A fair and relevant minimum safety net is one that pays due regard to the requirements and disabilities of employees and the costs of employers and adopts penalty payments that deliver fair compensation for the inconvenience and disabilities concerned. The elements of the modern awards objective bear this out as the following analysis demonstrates.

[97] Relative living standards and the needs of the low paid are not relevant for stevedoring employees who receive a high level of wages compared to many other workers engaged in physical labour.

[98] Collective bargaining is well entrenched in the stevedoring industry. Given the different rostering arrangements and different levels of inconvenience across the industry there is something to be said for dealing with those differences in enterprise agreements rather than a uniform penalty regime as is currently in the Award. At the very least this factor supports a moderate approach to award penalties rather than an inflated approach.

[99] Increased workforce participation is probably not affected either way by award penalties, although a more standard approach to weekend penalties may encourage the engagement of more part time or casual employees on weekends and hence more spreading of employment opportunities.

[100] Promoting flexible modern work practices and the efficient and productive performance of work is likely to be better achieved by adopting a more standard approach to award penalties.

[101] The need to provide additional remuneration for employees working shifts, weekends, irregular hours and unsociable hours is at the heart of this matter. However this case concerns the quantum of such additional remuneration in the circumstances of this industry. The employers are seeking an approach consistent with the standard approach in other awards. An approach which provides a fair level of compensation relative to other employees covered by other awards having regard to the similarities and differences in disabilities concerned is consistent with this objective.

[102] The principle of equal remuneration for work of equal or comparable value, as defined in s.302 of the Act, is probably not particularly relevant to award penalty rates in the stevedoring industry.

[103] It is clear from the evidence in this matter that other awards operating in the vicinity of stevedoring or which involve broadly comparable work and working conditions have a much lower award penalty rate regime. Business generally is enhanced by a more uniform and logical safety net that does not involve inexplicable spikes and anomalies. Stevedoring employers would be better off by having a safety net in line with other industries that operate in the general vicinity of their operations rather than one that is radically out of step. Fairness and efficiency are enhanced by a consistent approach to compensation for like disabilities.

[104] Clearly the objective of a simply, understandable, stable and sustainable award system is enhanced by comparable penalties for comparable disabilities across industries, especially as there is the potential for overlap of awards and close interaction between employees of different employers. A penalty rate regime in one award which is out of all proportion to the penalties in interfacing industries is anathema to this object.

[105] A more rational, fairer and consistent penalty rate regime is likely to impact favourably on prospects for employment growth, competitiveness and economic performance.

[106] Having regard to all of these factors, I am of the view that the evidence establishes a clear case that reductions in the disproportionate award penalty rates is necessary to achieve the modern awards objective and a fair and relevant minimum safety net of terms and conditions. The changes I believe should be made are as follows.

[107] Afternoon (or evening) shift allowances are usually around 15% in rotating shift rosters in comparable awards. This Award provides for 50%. In my view, 15% is an appropriate level for award evening shift allowances. I would propose to reduce the current allowances in two stages - 30% from 1 July 2015 and 15% from 1 July 2016.

[108] Night shift allowances are usually 15% or 30% depending on industry circumstances. This Award provides for an allowance of 100%. I consider that the 30% level is appropriate. I would provide for the decrease in two stages - 50% from 1 July 2015 and 30% from 1 July 2016.

[109] Saturday work usually attracts a penalty payment that subsumes other applicable shift allowances. The usual provision is time and a half (50%). This Award is 100% for day and evening shifts and 150% for night shifts. I would propose to adopt the standard 50% Saturday loading. Again this should be achieved in two stages - 75%/100% from 1 July 2015 and 50% from 1 July 2016.

[110] Sunday work usually attracts a penalty of 100% in 24 hour/7 day industries. The Stevedoring Award penalties are 150% and 100% for night shift. I consider that the 100% level is appropriate. The reduction should be achieved in two stages - 125% from 1 July 2015 and 100% from 1 July 2016.

[111] The evidence before the Commission justifies these variations as necessary to achieve the modern awards objective of a fair and relevant minimum safety net.

Additional day of leave for working on certain public holidays

[112] The Stevedoring Employers seek a variation to the “Public holidays” sub-clause 25.3. This provides employees with an entitlement to an additional day’s leave, in addition to penalty rates, for working Christmas Day, Good Friday, Anzac Day or Labour Day. The penalty payments for working a public holiday are double time and a half for day and evening shift and triple time for night shift. The Stevedoring Employers seek the removal of the additional leave provision from the Award. They do not seek to reduce the public holiday penalty rates.

[113] Historically, stevedore employees could be required to work on most public holidays. However, on certain public holidays they could not be required to work involuntarily. Those employees that did voluntarily work on these days were given an additional day of leave in addition to the public holiday penalty payments. The Stevedoring Employers submit that these four public holidays are no longer treated any differently to other public holidays under the Award and that employees who perform work on a public holiday are already sufficiently compensated for working by other provisions of the Award.

[114] The MUA, AWU and the TWU oppose this proposed variation. The unions contend that these closed port days are different to other public holidays with respect to the right to decline work, the required availability of workers, advance notification provided to workers for work allocation and payment for work performed on those days. The MUA also contends that removing this traditional award entitlement would undermine the bargaining for wage outcomes in relation to existing enterprise agreements. The Patrick Group does not oppose this proposed variation but otherwise made no substantive submissions. The Ai Group supports the variation.

[115] The modern awards objective requires, among other things, that the Commission ensure that modern awards, together with the National Employment Standards, provide a fair and relevant minimum safety net of terms and conditions taking into account various matters including the need to provide additional remuneration for working on public holidays. In my view, there is a standard in awards that penalties are paid for work on public holidays. Double time and a half is a common provision. The employers have not sought to make out a case to change this entitlement. Against that background, the entitlement to an additional day of leave on top of the entitlement to penalty payments for working on a public holiday appears in my view to be unnecessary to satisfy the modern awards objective and is not consistent with a fair and relevant minimum safety net.

[116] Also relevant is the fact that the National Employment Standards (see s.114 of the Act) provide that all employees covered by the national workplace relations system have a statutory right to refuse a request to work on a public holiday if the request is not reasonable or the refusal is reasonable. That statutory right, which first came into operation in March 2006 as a result of the Workplace Relations Amendment (Work Choices) Act 2005, had the practical effect of removing any historical distinction between the four public holidays and other public holidays in terms of when stevedores could be required to work.

[117] Having taken into account these considerations, and having particular regard to the modern awards objective, this provision should be deleted.

Conclusions

[118] A number of other substantive issues were set out in the directions issued by the President but were not raised in the submissions of the parties to this matter. The issues concern the following:

● annual leave and paid meal breaks entitlements for employees employed in the industry on 25 November 1991;

● calculation of overtime rates;

● public holiday penalty rates;

● rates of pay for “double headers”;

● entitlement to payment of accrued personal/carers’ leave on retirement;

● basis for calculation of cashing out of unused sick leave;

● payment in lieu of excess accrued sick leave; and

● public holiday payments made to shift workers rostered off on a public holiday.

[119] As no case has been made out for these variations the applications for these changes should be dismissed.

[120] The Bench has agreed that the removal of the entitlement to an additional day of leave for work on public holidays is necessary to achieve the modern awards objective of a fair and relevant safety net.

[121] I have reached the same conclusion in relation to the level of shift and weekend penalties in the Award and would make further changes as outlined above. In their separate decision the other members of the Bench do not approve any changes to the penalty rates provisions. By majority those variations are not approved.

[122] The variation approved by the Full Bench is reflected in a determination issued in conjunction with this decision.

Decision of Deputy President Kovacic and Commissioner Roe

[123] As noted at paragraph [5] of Vice President Watson’s decision, this Full Bench is agreed on the course to be adopted in relation to all of the matters before us except the issue of penalty rates. In acknowledging that agreement, we would point out that while we agree on the course to be adopted we do not necessarily agree with all of the views expressed and/or observations made by Vice President Watson in his decision. For instance, we do not agree with the Vice President that the 35 hour week “provides compensation for the inconvenience of the rostering arrangements in the stevedoring industry.” As set out in paragraph [159] below, the material before us suggests that the level of penalty rates in the Award was to compensate for the irregularity of shifts. We also observe that the oil refining industry is one where the award provides for a 35 hour week as in the stevedoring industry but where there is not the notion of irregular shifts for normal full-time employees.

Penalty Rates

[124] Qube Ports Pty Ltd, Qube Bulk Pty Ltd and the DP World Group of companies (together the Applicants) sought to vary clause 18.5 of the Award to reduce the level of penalty rates. Specifically, the Applicants proposed that the clause be varied to provide as follows:

“All time worked will be paid as follows:

(a) day shift—no additional payment;

(b) evening shift on Monday to Friday— 115% of the ordinary hourly rate;

(c) evening shift on Saturday and Sunday—150% of the ordinary hourly rate;

(d) night shift on Sunday to Friday—130% of the ordinary hourly rate; and

(e) night shift on Saturday—150% of the ordinary hourly rate.”

[125] Clause 18.5 of the Award currently provides as follows:

“18.5 Payment for shiftworkers

All time worked will be paid as follows:

(a) day shift on Monday to Friday—no additional payment;

(b) day shift on Saturday—double the ordinary rate;

(c) day shift on Sunday—two and a half times the ordinary rate;

(d) evening shift on Monday to Friday—one and a half times the ordinary rate;

(e) evening shift on Saturday—double the ordinary rate;

(f) evening shift on Sunday—two and a half times the ordinary rate;

(g) night shift on Sunday to Friday—double the ordinary rate; and

(h) night shift on Saturday—two and a half times the ordinary rate.”

[126] The practical effect of the variations sought would be to:

● reduce evening shift penalties from 150 per cent to 115 per cent for Monday to Friday and from 200 per cent on Saturday and 250 per cent on Sunday to 150 per cent;

● reduce night shift penalties from 200 per cent to 130 per cent for Sunday to Friday night and from 250 per cent on Saturday night to 150 per cent; and

● remove all penalties for working a day shift on a Saturday or Sunday from the current 200 per cent for a Saturday day shift and from 250 per cent for a Sunday day shift.

The Applicants’ Submissions and Evidence

[127] The grounds on which the Applicants advocated for a reduction in the level of penalty rates were twofold.

[128] First, the existing levels in the Award were in excess of those provided for in other awards covering industries which operated on a 24/7 basis in circumstances where the Applicants argue that there is no difference between the working hours arrangements in the Award/stevedoring industry and the other awards/industries. On this ground, Mr Shariff, who appeared on behalf of the Applicants, stated that what “we are really attacking is the rationale, the logic, to why in 2015 one can justify the quantification of these penalty rates as they stand.” 10

[129] Second, there was no basis for the different penalties applying to Saturday and Sunday work under the Award. On this issue, Mr Shariff submitted that “... the only relevant distinction between Saturday and Sunday rates is because it’s Sunday having particular significance last century, or for part of last century, but that can no longer be maintained.” 11

[130] In their written submissions, the Applicants compared the penalty rates in the Award with those applying in a number of other modern awards. That comparison is set out in the Table incorporated in Vice President Watson’s decision (Table 4).

[131] The Applicants also addressed each of the considerations set out in the modern awards objective, submitting that the variations sought would help the Award better achieve the modern awards objective. With particular regard to the modern awards objective, the Applicants submitted, among other things, that:

● few stevedores are low paid;

● relatively few employees covered by the Award are award reliant, meaning that the proposed variations would have limited impact on the relative living standards of employees;

● the proposed variations would not compromise employees’ bargaining position, while providing employers more opportunity to strike bargains by which they obtain terms which are genuinely beneficial and improve productivity;

● the proposed variations may allow for more employees to be employed and rostered;

● the proposed variations would give employers in the industry greater scope to operate efficiently and make necessary adjustments to their operations;

● the proposed variations would over time reduce costs for employers in the industry; and

● reductions in employment costs are likely to flow on to the affordability of imported goods in Australia and the international competitiveness of Australian exports. 12

[132] The Applicants relied on evidence from Mr Huemmer, a consultant who specialises in providing advice on the issues of rostering and hours of work. Key aspects of Mr Huemmer’s evidence were that:

● rostering arrangements in the stevedoring industry are similar to those operating in other industries working on a 24/7 basis;

● the intensity of work performed by employees in the stevedoring industry is similar to (and at times less intense) than the comparator industries;

● patterns of work in the stevedoring industry, like other industries, are customised to suit workload variations and other needs at each terminal port operation and also reflect employee interests in time off;

● the seven week on and one week off roster arrangement commonly used in the stevedoring industry is not used in the other comparator industries;

● this roster arrangement provides many social opportunities during the one week off, but limits social opportunities during the seven week period of work required to create the one week break;

● employees working in the stevedoring industry have slightly less but similar sleep patterns and practice a similar number of health habits as employees working in other industries;

● the patterns of work in the stevedoring industry are no more or no less unsocial than the patterns used in comparable industries;

● patterns of work in the stevedoring industry are no more irregular or any more unpredictable than patterns of work in other comparable industries;

● work falling on weekends and public holidays in the stevedoring industry is very similar to work on weekends or public holidays for the comparator industries used; and

● working overtime in the stevedoring industry is the same or similar to working overtime in the comparator industries.

[133] Under cross examination, Mr Huemmer:

● agreed that it was common in many awards for there to be a provision requiring an employer to provide employees with a minimum period of notice of shift changes; 13

● acknowledged that in the stevedoring industry the availability of work was contingent on a ship being in port for loading/unloading; 14 and

● was unable to point to any other industry which required permanent employees to telephone their employer the afternoon before to make sure that they were required for work the following day. 15

[134] Evidence was also given by Mr Nugent, the State Manager - Queensland for Qube Ports Pty Ltd, on behalf of the Applicants on the issue of penalty rates. In his witness statement Mr Nugent detailed the hours of work at Qube Ports’ Australian operations. In addition, he also detailed the proportion of day, evening, night, Saturday, Sunday, and public holiday shifts at the various categories of employees at the Port of Brisbane performed during the 2013/14 financial year. Under cross examination, Mr Nugent confirmed that employees were required to call in the afternoon to see whether they were required for work the following day. He also clarified aspects of the operation of the seven week on/one week off roster that applied at its facilities.

The MUA’s Submissions and Evidence

[135] The MUA opposed the Applicants’ application. The MUA submitted, inter alia, that penalty rates do not represent a new entitlement in the stevedoring industry having been introduced when work in the industry was very casual and unpredictable. The MUA further submitted that this reflects the current pattern of work in the industry and that although a degree of predictability was achieved in the some sections of the industry between the 1970’s and 1990’s, workers are now required to be much more flexible than they were during that period. The MUA also submitted that flexibility in start times has been a feature of the industry for a very long time, with the existing penalty rates compensating workers for that flexibility and the need for them to work at unsociable hours. 16

[136] Mr Warren Smith, the MUA’s Assistant National Secretary, provided evidence on the issue of penalty rates behalf of the MUA. Key aspects of Mr Smith’s evidence 17 were that:

● Qube and DP World (i.e. the Applicants) represent a minority of stevedoring employers;

● 24 hour shift work is almost always required in the industry;

● less than 20 per cent of the workforce in the industry have rosters in which more than 50 per cent of shifts are predictable;

● most workers in the industry have no roster at all;

● only a minority of workers in the industry work according to a roster and those rosters incorporate extreme flexibility;

● in bulk and general stevedoring, most workers are now required to work 1820 hours per year (including annual leave) and under this arrangement there is no limit on the weekly hours of work, with those hours only being limited by the provisions for rest between shifts;

● unusual features of work allocation in the industry include daily work allocation systems with as little as 12 hours notice for work, flexible shift start and finish times, shift extensions can be notified during a shift, and shift start times can change with as little as three hours notice;

● the examples provided by Mr Huemmer do not apply to the majority of workers in the industry;

● for example, at Qube only 48 workers in Brisbane and 22 workers in Melbourne are on rosters out of a total stevedoring workforce of 1650 workers;

● the Qube Brisbane roster has a very high degree of unpredictability - over an eight week cycle there are nine days where the worker is rostered off; and

● the only stevedoring workers who have rosters where more than 50 per cent of the shifts are predictable are permanent workers at the larger container terminals in Sydney, Melbourne and Adelaide (see table 4 of Mr Smith’s statement).

[137] Under cross examination Mr Smith affirmed that the rostering arrangements applying in the case of major stevedoring employers have been implemented pursuant to enterprise agreements negotiated with the MUA. Mr Smith also confirmed that the Award does not prescribe any particular rostering arrangement or any minimum/maximum amount of notice to be given to employees for a change of shift. Importantly, much of Mr Smith’s witness statement was not contested or challenged under cross examination.

Other submissions

[138] The Australian Industry Group (Ai Group) was the only party to support the Applicants’ application. The Ai Group submitted that the costly and inflexible minimum terms and conditions contained in the Award have ceased to be fair and relevant for the industry and are out of step with terms and conditions of other interfacing industries such as the road transport and distribution industry, and storage services industry. It further submitted that the variations proposed by the Applicants are necessary under s.138 of the Act to meet the modern awards objective and have been supported by probative evidence of the facts justifying the variation. 18 The Ai Group led no evidence in support of its submission. Patrick in its outline of submissions stated that it did not oppose the variations to the Award proposed by Applicants and that it did not presently wish to make further submissions in relations to those variations.19 No submissions were received from other stevedores on the issue.

[139] The AWU 20 opposed the application, submitting that “if the industry has operated on a 24 hours-per-day basis for the last 35-40 years, it is difficult to identify what changes between 2009 and 2015 could justify a reduction to well-established shift loading rates.”21 The AWU also pointed to annual reports of the Applicant companies which they say demonstrate that the companies are successful and profitable.22 The TWU23 characterised the Applicants’ application as “doomed to fail”.

[140] Beyond the above submissions, no other party in the proceedings commented on or expressed a view on the Applicants’ proposed variations to penalty rates.

Key Considerations Regarding Applications to Vary an Award as part of the 4 yearly Review

[141] The Commission’s general approach to considering applications to vary modern awards as part of the 4 yearly review was set out in the preliminary issues decision issued by a Full Bench of the Commission 24 in March 2014. Among other things, the Full Bench stated:

“[23] The Commission is obliged to ensure that modern awards, together with the NES, provide a fair and relevant minimum safety net taking into account, among other things, the need to ensure a ‘stable’ modern award system (s.134(1)(g)). The need for a ‘stable’ modern award system suggests that a party seeking to vary a modern award in the context of the Review must advance a merit argument in support of the proposed variation. The extent of such an argument will depend on the circumstances. We agree with ABI’s submission that some proposed changes may be self evident and can be determined with little formality. However, where a significant change is proposed it must be supported by a submission which addresses the relevant legislative provisions and be accompanied by probative evidence properly directed to demonstrating the facts supporting the proposed variation.

[24] In conducting the Review the Commission will also have regard to the historical context applicable to each modern award. Awards made as a result of the award modernisation process conducted by the former Australian Industrial Relations Commission (the AIRC) under Part 10A of the Workplace Relations Act 1996 (Cth) were deemed to be modern awards for the purposes of the FW Act (see Item 4 of Schedule 5 of the Transitional Act). Implicit in this is a legislative acceptance that at the time they were made the modern awards now being reviewed were consistent with the modern awards objective. The considerations specified in the legislative test applied by the AIRC in the Part 10A process is, in a number of important respects, identical or similar to the modern awards objective in s.134 of the FW Act.  In the Review the Commission will proceed on the basis that prima facie the modern award being reviewed achieved the modern awards objective at the time that it was made.” (Underlining added)

[142] In its decision in respect of 4 yearly review of the Security Services Industry Award 2010 25 (the Security Award decision) when discussing the approach to considering applications to vary modern awards this Full Bench stated:

“[8] While this may be the first opportunity to seek significant changes to the terms of modern awards, a substantive case for change is nevertheless required. The more significant the change, in terms of impact or a lengthy history of particular award provisions, the more detailed the case must be. Variations to awards have rarely been made merely on the basis of bare requests or strongly contested submissions. In order to found a case for an award variation it is usually necessary to advance detailed evidence of the operation of the award, the impact of the current provisions on employers and employees covered by it and the likely impact of the proposed changes. Such evidence should be combined with sound and balanced reasoning supporting a change. Ultimately the Commission must assess the evidence and submissions against the statutory tests set out above, principally whether the award provides a fair and relevant minimum safety net of terms and conditions and whether the proposed variations are necessary to achieve the modern awards objective. These tests encompass many traditional merit considerations regarding proposed award variations.” (Underlining added)

[143] We adopt the approach outlined in the Security Award decision to the determination of the issues in relation to this Award.

[144] To summarise, the key points which emerge from the above extracts are that:

(i) the Award achieved the modern awards objective at the time that it was made; and

(ii) an application seeking a significant change to an Award will need to be supported by submissions addressing the relevant legislative provisions and by probative evidence which will usually include evidence of the operation of the award, the impact of the current provisions on employers and employees covered by it and the likely impact of the proposed changes.

Consideration of the Issues

[145] It was not disputed before the Full Bench that the level of penalty rates in the Award are above those applying in other modern awards. 26

[146] Mr Huemmer’s evidence was effectively that the nature of the shift work arrangements applying in this industry are not significantly different to those operating in other industries working on a 24/7 basis. This raises questions as to whether the differential in penalty rates that currently exists between the Award and other modern awards remains appropriate. However, Mr Huemmer’s oral evidence also suggests that there are factors, such as aspects of this industry’s rostering arrangements, which are unique.

[147] The existence of unique factors in this industry when compared to other industries operating on a 24/7 basis was reinforced by Mr Smith’s evidence on behalf of the MUA. Again, a key point of differentiation between this industry and other industries highlighted in Mr Smith’s evidence were the rostering arrangements which operate in this industry. As previously noted, much of Mr Smith’s witness statement was not contested or challenged under cross examination.

[148] This evidence is consistent with the observation made at paragraph [59] of Vice President Watson’s decision that while employees may be rostered to work on particular days in a roster cycle, the rosters are different to most other rosters that operate in other industries. For instance, the rosters do not guarantee work on the rostered days. Further, it is important in our view to focus on the high level of flexibility and unpredictability in respect to working hours available under the Award rather than on the actual arrangements under existing enterprise agreements. In the absence of more detailed evidence and analysis it cannot, in our view, be assumed that reductions in the safety net will have no impact on future work rosters and bargaining in the industry.

[149] Taken together, the evidence supports a finding that there are factors unique to this industry which are relevant when considering the level of penalty rates in this Award necessary to meet the modern awards objective.

[150] The question that ensues from such a finding is whether these unique factors continue to justify the existing level of penalty rates in the Award or some lower level taking into account the modern awards objective and the history of the existing provision. It is here where the evidence becomes critical in considering the changes proposed by the Applicants. To that end, consistent with the approach adopted in the Security Award decision, the onus falls on the Applicants “to advance detailed evidence of the operation of the award, the impact of the current provisions on employers and employees covered by it and the likely impact of the proposed changes”.

[151] The examination of the proposed variations against the modern awards objective in submissions and the proceedings before us was limited. For instance, the Applicants’ written submissions provided no indication of what the employment effects of the proposed variations might be other than a generalised statement that the changes may allow for more employees to be employed and rostered. 27 We do not accept that it is not possible to model the potential effects of the changes, including on employment, in circumstances where the Applicants can draw on data relating to the mix of shifts worked at their operations and other relevant considerations concerning their operations such as labour requirements. As we noted at paragraph [134], Mr Nugent’s evidence detailed the proportion of day, evening, night, Saturday, Sunday, and public holiday shifts at the various categories of employees at the Port of Brisbane performed during the 2013/14 financial year.

[152] The Applicants’ submissions were similarly superficial and somewhat cursory regarding a number of the other elements of the modern awards objective.

[153] The evidence led by the Applicants focussed heavily on drawing comparisons between the nature of working arrangements and the level of penalty rates applying in this industry relative to a number of other industries which work on a 24/7 basis. However, the Applicants led little, if any, evidence regarding key considerations such as the impact of the current provisions on employers and employees covered by the Award and the likely impact of the proposed changes. In the absence of probative evidence and analysis we are extremely loathe to speculate about the impact of the variations proposed by the Applicants on collective bargaining, consumer prices, productivity, investment, future working hours arrangements and the living standards of stevedoring workers.

[154] The lack of evidence led in support of the proposed removal of penalty rates for day shifts on Saturday and Sunday is indicative of the significant gaps in the Applicants’ evidentiary material. The Applicants evidence at Table 4 of Vice President Watson’s decision demonstrates that in nearly all comparator industries day work on a Saturday attracts a penalty of 50 per cent and on a Sunday a penalty of 100 per cent, yet the Applicants neither provided any rationale for nor led any evidence to support their proposed removal of the penalties for weekend day shifts provided in the Award.

[155] Further, and consistent with the observation at paragraph [64] of Vice President Watson’s decision when discussing ordinary hours of work, no evidence was led by the Applicants of any enterprise agreement adjusting the level of penalty rates for the higher rate of pay.

[156] Together these factors support a finding that the evidence led by the Applicants is inadequate to justify the significant variations to penalty rates sought, particularly in circumstances where the evidence supports a finding that there are factors unique to this industry which are relevant when considering the level of penalty rates in this Award necessary to meet the modern awards objective.

[157] Also noteworthy in our view is that the position of other employers covered by the Award on the proposed variations to penalty rates is not known. Apart from the Applicants, no other stevedore expressed support for the proposed variations. While Patrick indicated in its submissions that it did not oppose the variations proposed, it made no further submission on the issue. Further, it is not clear to what, if any, extent the Ai Group (the only other party to support the Applicants’ proposed variations regarding penalty rates) represented the views of other stevedoring industry employers. In those circumstances, it would in our view be inappropriate to construe the absence of submissions from other stevedores on the penalty rates issue as indicating their consent to the variations proposed by the Applicants.

[158] Finally, the Applicants provided the Full Bench with material tracing the antecedents of the penalty rate regime in the Award back to 1928, though it was acknowledged that the existing provisions were the product of a consent award in 1967. The following extract from Justice Beeby’s 1928 decision in Waterside Workers’ Federation v Commonwealth Steamship Owners Association and Others 28 illustrates the arbitrated basis for higher penalty rates in this Award was directly related to the unique working hours arrangements of the industry.

“In most industries in which regular rotating shifts are worked workmen are paid extra rates ranging from 5 per cent to quarter time for rostered referring night shifts, but in this industry there is no regularity about the shifts, a man may work ordinary hours one day and be called on without notice to work a night shift on the next night. When starting night work he has no guarantee of a full shift. He cannot arrange his domestic affairs to fit in with any ordered routine work. His payment for his night work must be considered on an entirely different principle from those applied to regular shift workers.” 29

[159] Interestingly, in that decision Beeby J determined that “shift workers should receive time and a quarter until midnight and time and a half thereafter.” 30 A comparison of those shift penalties with those set out at Table 4 in Vice President Watson’s decision indicates that they are above those currently applying in comparable industries for afternoon and night shifts worked Monday to Friday. In short, the material points to a longstanding premium in terms of the penalty rates applying in this industry relative to other industries premised on there being “no regularity about the shifts”.

[160] The submissions of the parties demonstrate that the evolution and finalisation of the existing penalty rates regime in the Award took into account factors including employment and productivity issues, particularly in the context of containerisation and the unique working time arrangements of the Award and industry. Although the modern awards objective is in different terms to the considerations in earlier legislation, there is a degree of commonality in the considerations utilised by the parties and the tribunal in earlier times. This is the case whether or not the arrangements evolved through consent awards or through contested arbitration.

[161] While it is not disputed that the level of penalty rates in this industry are above those in comparable industries, we are not satisfied that the Applicants have established the case for their proposed variation to penalty rates or that the variation is necessary to meet the modern awards objective. In our view, the evidence before us indicates that there are factors unique to this industry when compared to other industries that work on a 24/7 basis. However, the Applicants and other parties who appeared before us failed to go the next step and provide probative evidence which would have enabled us to determine whether the existing or some other level of penalty rates was appropriate. On such a significant issue, it is just too simplistic to argue that the level of penalty rates should be reduced in the absence of such probative evidence and on the basis that the existing level of penalty rates in the Award are above those applying in other modern awards. We acknowledge that there is an important issue to be tested here. However, simply showing that the existing level of penalty rates are above those applying in comparable awards and industries is in our view insufficient, in the absence of probative evidence, to satisfy us that the Award needs to be varied to meet the modern awards objective. As discussed earlier, the Award achieved the modern awards objective at the time that it was made and the Applicants have not established that the Award no longer meets that objective.

[162] We observe, however, that it remains open for the Applicants and/or other parties to seek to address the evidentiary shortcomings we have identified in this case and make application under s.158 of the Act to vary the penalty rate provisions of the Award outside the next 4 yearly review or as part of that next 4 yearly review.

VICE PRESIDENT

Appearances:

Mr B. McNally for the MUA.

Mr Y. Shariff for the Stevedoring Employers.

Mr S. Jauncey and Ms P. Flynn for the Patrick Group.

Mr B. Ferguson for the Ai Group.

Mr C. Gardner for the Toll Group.

Mr O. Fagir for the TWU.

Mr S. Crawford for the AWU.

Mr P. Ryan for the ARTIO.

Hearing details:

2015.

Sydney.

4, 5, and 6 February.

 1   [2015] FWCFB 620.

 2   [2009] AIRCFB 450.

 3   [2009] AIRCFB 826.

 4   [2015] FWCA 248.

 5   [2015] FWCFB 2472, upholding the decision of Cargill C in [2015] FWCA 248.

 6   [2013] FWC 6709.

 7   Re General Retail Industry Award [2010] FWAFB 305.

 8   [2013] FWCFB 2170.

 9   [2014] FWCFB 1788.

 10   Transcript at PN142.

 11   Ibid at PN1645.

 12   Exhibit S9.

 13   Ibid at PN221-223.

 14   Ibid PN244.

 15   Ibid at PN253.

 16   Outline of Submissions of the Maritime Union of Australia in Reply to the 24 December 2014 Submissions of the Stevedoring Employers.

 17   Exhibit M2.

 18   Australian Industry Group Reply Submissions at paragraphs 144 and 145.

 19   Outline of Submissions on Behalf of Patrick Companies in Response to Variations Proposed by Other Interested Persons and Organisations.

 20   Outline of Submissions for the Australian Workers’ Union Regarding Variations Proposed by Stevedoring Employers and the Maritime Union of Australia at paragraph 6.

 21   Outline of Submissions from the Australian Workers’ Union Regarding Variations Proposed by Stevedoring Employers and the Maritime Union of Australia at paragraph 17.

 22   Exhibits C2 and C3.

 23   Transcript at PN2022-2024.

 24   [2014] FWCFB 1788.

 25   [2015] FWCFB 620.

 26   Ibid at PN1831.

 27   Exhibit S9 at paragraph 75.

 28   26 C.A.R at page 866.

 29   Ibid at page 892.

 30   Ibid.

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