DECISION

Fair Work Act 2009
s.604—Appeal of decision

Construction, Forestry, Maritime, Mining and Energy Union
v
Noorton Pty Ltd T/A Manly Fast Ferry
(C2018/4715)

Appeal against decisions [2018] FWC 4638 and [2018] FWCA 5740 of Deputy President Sams at Sydney on 7 and 23 August 2018 in matter number AG2017/3080; whether employees who were asked to vote to approve the agreement were “employed at the time”; whether the agreement passed the better off over all test; error established; permission to appeal granted; appeal upheld; decisions quashed; application to approve the agreement remitted to Member.

Introduction

[1] Noorton Pty Ltd (Noorton) made application to the Fair Work Commission (Commission) under s.185 of the Fair Work Act 2009 (Act) for the approval of an enterprise agreement purportedly made on 11 July 2017 titled Manly Fast Ferry – Sydney Harbour Services – On-Board Crew – GPHs and Hosts – Enterprise Agreement 2017 (Agreement). The Agreement is expressed to cover employees of Noorton Pty Ltd employed as either a General Purpose Hand (GPH) or Host/Hostess or as a Junior in one of these positions in relation to the work covered by the Agreement.

[2] The “work” is described in clause 5(e) of the Agreement relevantly as follows:

“. . . when such employees are working on the Company's vessels while those vessels are operating:

Either:

i. Public passenger ferry services, being regular scheduled passenger and/or commuter services on or about Sydney Harbour. To avoid doubt, Sydney Harbour includes Darling Harbour and the Parramatta River. At the time of the commencement of this Agreement the Company's public passenger ferry services are its:-

1. Manly to Circular Quay public passenger service; and

2. Manly to Darling Harbour via North Sydney and Pyrmont public passenger service.

Or:

ii. As a commercial vessel (as defined in Clause 6.) on or about or from Sydney Harbour, which includes marine tourism and whale watching.”

[3] “Commercial vessel” is defined in clause 6(a) of the Agreement as follows:

“"Commercial Vessel" means a vessel engaged in the marine tourism and charter vessel industry operating in, on or around bays, harbours and rivers and up to 15 nautical miles offshore as either a tourist, leisure or a sightseeing service or a cruise service or a charter service vessel and/or as a place of or for entertainment, functions, restaurant/food and beverage supply in relation to water orientated tourism, leisure and/or recreational activities. It should be noted that marine tourism, leisure, sightseeing etc. services may or may not operate in accordance with a predetermined schedule or timetable. The vessel may be engaged on a day or part day charter or for an overnight charter.”

[4] “Marine tourism and charter vessel industry” is defined in clause 6(d) of the Agreement as follows:

“"Marine tourism and charter vessel industry" means the operation of vessels as a tourist, sightseeing, sailing or cruise vessel and/or as a place of or for entertainment, functions, restaurant/food and beverage purposes engaged in the provision of water orientated tourism, leisure and/or recreational activities but does not include the operation of ferries engaged in regular scheduled passenger and/or commuter transport.”

[5] According to the statutory declaration 1 filed in support of the application for approval of the Agreement, employees employed at the time who are covered by the Agreement were asked to approve the Agreement by voting for it on 11 July 2017.2 Forty four employees cast a valid vote and 23 employees voted to approve the Agreement.3 One vote the other way would have had the result that the Agreement would not have been made.

[6] The Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) was relevantly a bargaining representative for the Agreement. It opposed approval of the Agreement but gave notice pursuant to s.183(1) of the Act that it wanted to be covered by the Agreement. 4 We note that the decision approving the Agreement does not contain a note that the Agreement covers the CFMMEU as required by s.201(2) of the Act. The CFMMEU opposed the approval of the Agreement on several grounds set out in the statutory declaration of an employee organisation in relation to the approval of an enterprise agreement.5 The Agreement was approved with undertakings by Deputy President Sams in a decision issued on 23 August 2018 (Approval Decision).6 His reasons for doing so are contained in an earlier decision given on 7 August 2018 (Reasons for Decision).7

[7] The notice of appeal lodged on 24 August 2018 identifies that the appeal is against a decision issued on 7 August 2018 identified by its medium neutral citation of [2018] FWCA 4521. The medium neutral citation of that decision was subsequently amended by the Deputy President’s Chambers to [2018] FWC 4638. That decision does not in terms approve the Agreement, although it indicates that subject to undertakings being received that outcome is likely. 8 It deals only with the matters raised by the CFMMEU in opposition to the approval of the Agreement. The decision approving the Agreement was made on 23 August 2018 and has a medium neutral citation of [2018] FWCA 5740.

[8] The parties to this appeal were alerted to the fact that the notice of appeal seeks to appeal only the Reasons for Decision which contain the Deputy President’s reasons for rejecting the objections raised by the CFMMEU and does not appeal the Approval Decision. 9 The CFMMEU subsequently sought leave to amend its notice of appeal to include the Approval Decision.10 Noorton did not oppose this course.11

[9] In the circumstances, we have decided to grant leave to amend the notice of appeal by including in it an appeal against the Approval Decision. To the extent that it is necessary to do so, pursuant to Rule 6 of the Fair Work Commission Rules 2013, we dispense with the requirement under Rule 56(2) to lodge an appeal against the Approval Decision within 21 days after the day on which the Approval Decision was made.

[10] The CFMMEU lodged an appeal pursuant to the amended notice of appeal against the decisions pursuant to s.604 of the Act for which permission must be obtained.

Consideration

The decision the subject of appeal

[11] The Deputy President sets out some background to the application for approval at [1]–[11] of the Reasons for Decision. At [13]–[82], the Deputy President sets out a summary of the evidence given in the proceeding. At [83]–[109] and [136]–[154], the Deputy President sets out a summary of the submissions of Noorton and those responsive to the case put in opposition by the CFMMEU. At [110]–[135], the Deputy President sets out a summary of the submissions of the CFMMEU.

[12] The Deputy President begins his consideration at [155] of the Reasons for Decision. There, he distilled the objections raised by the CFMMEU into six issues 12 as follows:

1. Whether Noorton Pty Ltd is an employer capable of making an enterprise agreement and making an application for approval of the Agreement;

2. Whether the applicant, Noorton Pty Ltd complied with all of the statutory pre-approval steps for the making of an enterprise agreement;

3. Whether the correct cohort of voters were employed at the time of the vote for the approval of the Agreement and/or are to be covered by the Agreement;

4. Whether there were other reasonable grounds for believing the Agreement had not been ‘genuinely agreed’ by the employees;

5. Whether the Ports Award is the only Award which would otherwise cover the work performed by employees of Noorton Pty Ltd; and

6. Whether the Agreement satisfies the Better Off Overall Test (BOOT).

[13] In determining these issues the Deputy President concluded:

•  that a compliant NERR had been issued by Noorton on 6 June 2017; 13

that Noorton had initiated bargaining directly with its employees; 14

the voting cohort of casual employees were engaged by Noorton on an ongoing basis with regular and systematic employment 15 and were employed at the time within the meaning of s.182(1) of the Act;16

there were no other reasonable grounds for believing the agreement had not been genuinely agreed to by the employees; 17

two modern awards, the Marine Tourism and Charter Vessels Award 2010 (Marine Tourism Award) and the Ports, Harbours and Enclosed Water Vessels Award 2010 (Ports Award) were the relevant reference instruments against which the BOOT is to be assessed; 18 and

•  the Agreement passed the BOOT; 19 once he accepted undertakings.20

Grounds of appeal

[14] The CFMMEU advances three grounds of appeal. Without reciting each of the grounds at length, the first concerns whether the Deputy President could be satisfied that relevant employees genuinely agreed to the Agreement because he could not be satisfied that Noorton had complied with s.181(2) of the Act. Compliance turns on, relevantly, whether there was a notification time so as to establish whether there had been compliance with s.173(3) and therefore s.173(1).

[15] By the second appeal ground, the CFMMEU contends that the Deputy President erred in concluding that the employees who were requested to approve the Agreement by voting for it were employed at the time within the meaning of that term in s.181(1) of the Act.

[16] The third ground concerns the BOOT, and by it the CFMMEU contends, inter alia, that the Deputy President erred in his conclusion that the Agreement passed the BOOT because he was in error in failing to conclude that the Ports Award applied to the exclusion of the Marine Tourism Award vis-a-vis the relevant employees.

Employees employed at the time

[17] It is convenient that we begin with the second ground of appeal. Section 186(1) requires the Commission to approve an enterprise agreement if the requirements in that section and in s.187 are met. The requirement in s.186(2)(a) is that the Commission must be satisfied that the Agreement has been genuinely agreed to by the employees covered by the Agreement. Section 188(1)(b) of the Act provides that an enterprise agreement has been genuinely agreed to by the employees covered by the agreement if the Commission is satisfied the agreement was made in accordance with, relevantly, s.182(1) of the Act. That section provides that if employees have been asked to vote to approve the agreement under s.181(1), the agreement is made when a majority of those employees cast a valid vote to approve it.

[18] Section 181(1) of the Act provides that an employer that will be covered by a proposed enterprise agreement may request the employees employed at the time who will be covered by the agreement to approve the agreement by voting for it.

[19] The phrase “employees employed at the time” in s.181(1) of the Act received consideration by a Full Court of the Federal Court in National Tertiary Education Union v Swinburne University of Technology. 21 The effect of the Full Court’s reading22 of s.181(1) is that an employer should only make a request under s.181(1) to employees who are employed “at the time”, as opposed to those who are not employed at the time but who might otherwise be regarded as “usually employed”.23

[20] It is uncontroversial that all of the employees who were asked by Noorton to vote to approve the Agreement were casual employees. A casual employee has no firm advance commitment from the employer to continuing and indefinite work according to an agreed pattern of work. Nor does a casual employee provide a reciprocal commitment to the employer. 24 Irregular work patterns, uncertainty, discontinuity, intermittency of work and unpredictability are the usual manifestations of an absence of a firm advance commitment.25

[21] Ordinarily, the general contractual characteristics of casual employment is that a person who works over an extended period of time as a casual employee will be engaged under a series of separate contracts of employment on each occasion a person undertakes work, however, they will not be engaged under a single continuous contract of employment. 26 There are some, albeit rare, cases where a casual employee has been found to have been engaged under a single continuing contract of employment,27 but the accepted orthodoxy of casual employment is the notion that each engagement is under a separate contract rather than a continuing contract of employment.

[22] Thus, a person who is a casual employee but who is not working on a particular day or during a particular period, is unlikely to be employed on that day or during that period.

[23] The cohort of employees entitled to be asked to vote under s.182(1) are those who were: “employed at the time” (of the request to vote or perhaps also during the access period 28) and who “will be covered by the agreement” (the employees that fall within the coverage, however described, of the Agreement).

[24] It must be said that the evidence as to the employment terms of the casual employees who were asked to vote to approve the Agreement was limited. There was no evidence before the Deputy President that the casual employees who were asked to vote to approve the Agreement had terms assuring their tenure or other forms of assurances of ongoing engagement or that any employee was entitled to or received any paid leave.

[25] There are no contracts of employment, letters, emails or any other document which might show, discuss or disclose the terms of engagement of the casual employees or the positions into which the employees were, at the time they were asked to vote, engaged.

[26] A number of time sheets for the casual employees who were requested to vote to approve the Agreement are contained in the evidence. 29 The CFMMEU summarised that material before the Deputy President30 and it appears to show that of the group of casual employees who are asked to vote to approve the Agreement:

a) 5 of the employees were not at work on the day of the vote (Employees 2, 6, 11, 16 and 38);

b) 4 of those employees (Employees 2, 6, 11, and 16) were not at work for periods between one and over four months covering the period during which the vote occurred;

c) there was no evidence for one of those employees (Employee 38) of the performance of any shift subsequent to the date of the vote;

d) for one employee (Employee 12) there is no record of the employee working on duties as a deckhand or general purpose hand or host, and that employee was marked as “Raratonga Cook Islands Whale Research” from one week following the vote without any scheduled date of return;

e) for one employee on a traineeship (Employee 20) there is no record of the employee performing any shifts subsequent to 12 July 2017, the day after the ballot;

f) one employee (Employee 33) had only worked three days as a deckhand; and

g) for one employee (Employee 37) such records as were produced showed only that the employee had worked shifts as sales staff, a role that would not be covered by the Agreement.

[27] As to this material, the Deputy President concluded relevantly that the employees in a) were absent “on a period of leave at the time of the vote” and that all five were expected to resume work and did resume work after the period of leave. 31 The employees in d), e) and f) worked on the day of the vote as deckhands and were entitled to vote.32 The employee in g) is a ticket seller who also performs shifts as a deckhand and was entitled to vote.33

[28] The Deputy President had earlier dealt with the CFMMEU’s objection underpinning this ground of appeal as follows:

“[180] As will be evident from Ms Doust’s submissions, the Union maintains that there is doubt about these two preconditions, given the entire workforce are Casual employees; there is a substantial turnover of labour; and more Casual employees were employed before the vote. Reliance was had on the generally well established view that each casual engagement is a separate contract of employment; see: Shortland v Smiths Snackfoods [2010] FWAFB 5709 at [10]. This is not the case here. It is clear the Casual employees were engaged by the applicant on an ongoing basis with regular and systematic employment. The evidence is that 77.5% employees who voted, had worked for the business for at least six months. All 49 employees who voted, had been working for Noorton in the previous financial year; (see: Group Certificates).

[181] It is obvious the employer considers the employees are regular and systematic Casual employees. The employees are all engaged according to rosters, and employees make known to the employer (and may seek approval before) when making a request to have time off without pay. There is evidence the employees, after any period of extended time off, are re-engaged upon their return.

[182] In my view, Swinburne does not assist the Union’s arguments. The evidence establishes that employees are not just ‘usually employed’ - they are employees who comfortably fit within the expression ‘employed at the time’.” 34

[29] The Deputy President also referred to that which he considered to be the “important paragraphs relevant to this case” from the decision in Swinburne. 35 To the extent that he appears to have relied upon those passages to support his conclusion that the evidence established that the employees were not just “usually employed”, the Deputy President was in error. The passages upon which the Deputy President relied are from the judgment of Pagone J in Swinburne.36 They are at odds with the conclusion of Jessup J (with whom White J agreed) as to the proper construction of “employees employed at the time” in s.181(1) of the Act.

[30] As we have earlier noted, there was an absence of evidence before the Deputy President about the nature of the engagement which underpinned the casual employment of the persons who were asked to vote to approve the Agreement. It is plain on the evidence that at least some of the employees who were asked to vote to approve the Agreement did not work on the day of the vote or during the access period. It is difficult to see how one can conclude that these employees were “employed at the time” without evidence about the terms under which they were engaged. It is equally difficult to see how one can conclude that particular casual employees were “on leave” at the relevant time without evidence about the terms under which these casual employees were engaged.

[31] That the employer “considers” the employees are regular and systematic casual employees 37 takes the matter no further. First, because the subjective opinion of the employer is not relevant to ascertaining objectively the nature of the employment. Secondly, that a person is engaged on a regular and systematic basis is not inconsistent with the person being a casual employee whose employment is ended at the conclusion of each engagement and relevantly was not “employed” at the time he or she was asked to vote or during the access period. There is no evidence, for example, of a firm advance commitment from Noorton to continuing and indefinite work according to an agreed pattern of work which was given to any particular casual employee. This is because there is a complete absence of any material which goes to the nature of the engagement of the casual employees at issue.

[32] During the appeal, Noorton referred to the decision in McDermott Pty Ltd v the Australian Workers’ Union and Anor 38 in aid of the Deputy President’s conclusion that the cohort of casual employees who were asked to vote were employed at the time. Whilst we may have some misgivings about the correctness of McDermott, it is unnecessary for us to express a concluded view. The decision is plainly distinguishable on the facts. The critical conclusion in McDermott was that the casual employees “accepted on-going employment” with McDermott as evidenced by the employer’s payroll records and the evidence of Mr McMahon, and as such they were employed by McDermott at the time the Agreement was made. Their employment comprehended work within McDermott’s scope of work for the Project. Unlike the facts in Swinburne, the casual employees were employed at the time, they were not in a cohort of “likely to be engaged” or “usually employed.”39 The reasoning adopted by the Full Bench in McDermott might be said to be more akin to a conclusion that the relevant employees were not “casual employees” at all but rather were “ongoing employees” who had accepted “ongoing employment”.

[33] There was no evidence before the Deputy President that the casual employees who were asked to vote to approve the Agreement accepted ongoing employment with Noorton. As we have already observed, there was no evidence about the nature of the casual employment of the employees or the terms under which these employees were engaged. The decision in McDermott therefore provides no assistance.

[34] The paucity of the evidence, in relation to particular employees, is perhaps encapsulated by the following exchange between the solicitor appearing for Noorton and the Bench during the appeal:

“In relation to Employee 38 - - -

DEPUTY PRESIDENT GOSTENCNIK:  Was there evidence that that employee was working as a general purpose hand at the time of the vote?

MR MCCARTHY:  No, there's not.

DEPUTY PRESIDENT BINET:  Is there any evidence that he worked any time as a general hand?

MR MCCARTHY:  Not specifically, no, other than the witness evidence given by Mr Ford that the employee has worked for Mr Ford via the company, as you can see, for many, many years and it was Mr Ford's uncontested evidence under cross-examination that the employment history and arrangement of this employee is that he works generally in ticket sales, but, from time to time, will step in, and is qualified to do so, to work as a general purpose hand on vessels.

DEPUTY PRESIDENT BINET:  Where is that evidence?  In the transcript?

MR MCCARTHY:  In the transcript, yes.

DEPUTY PRESIDENT BINET:  Where?

MR MCCARTHY:  I'm afraid I don't have that.

DEPUTY PRESIDENT BINET:  Because, at the moment, I don't think we have been taken to any evidence.  There was evidence of the process by which the employees were identified and that explained that they appeared in the payroll system under that category, but evidence that he actually performed those shifts - - -

MR MCCARTHY:  Yes.

DEPUTY PRESIDENT GOSTENCNIK:  And there was no evidence, just further on that, as to how they were categorised in that payroll system.

MR MCCARTHY:  No, the evidence, your Honour, that is before the Commission in relation to the time of the vote was that the employee was on a roster, an employment roster, was working.  On the particular day, he was rostered off, but he was rostered on to work in ticket sales.

DEPUTY PRESIDENT BINET:  Yes.

MR MCCARTHY:  And his engagement as a general purpose hand under the agreement is periodic.

DEPUTY PRESIDENT BINET:  But is there any evidence that he actually worked as a general purpose hand?

MR MCCARTHY:  At all?

DEPUTY PRESIDENT BINET:  Yes.

MR MCCARTHY:  No, there's not, your Honour.” 40

[35] For these reasons, we consider that the Deputy President erred in his conclusion that the relevant employees who are casual employees and who were asked to vote to approve the Agreement were all “employees employed at the time”. It is to be remembered that the vote to approve the Agreement succeeded in effect by one vote. This required some not insignificant attention to that which the evidence did or did not disclose vis-a-vis individual members of the cohort of employees who were asked to approve the Agreement. It follows that on the basis of the paucity of evidence before the Deputy President about the nature of, and the terms under which employees were engaged as casual employees by Noorton, he could not be satisfied that the Agreement was made in accordance with s.182(1) of the Act and so could not be satisfied as to s.186(2)(a).

The better off overall test

[36] We have earlier set out the relevant coverage provisions of the Agreement. In summary, clause 5(e) of the Agreement contains its coverage vis-a-vis general purpose hands and hosts/hostesses working on Noorton’s vessels whilst those vessels are operating, either public passenger ferry services or as commercial vessels on or about Sydney Harbour, including marine tourism and whale watching. Before the Deputy President, the CFMMEU argued that the Ports Award covered the employees in respect of the work that was covered by the Agreement, and so it was the appropriate reference instrument for the purpose of the BOOT.

[37] The Deputy President decided that both the Ports and the Marine Tourism Awards were relevant to the BOOT. His reasoning was as follows:

“[189] There is no doubt that an employer’s enterprise can be covered by one or more Modern Awards. For example, a factory in which the employer has manufacturing, transport and clerical functions and where employees do not move outside their respective award coverage, is covered by the respective Modern Awards. Less common, but not rare, are enterprises which, for seasonal or operational reasons, employees may move between the coverage of two or more Modern Awards; for example a farm on which produce is grown and harvested and then stored and distributed. Employees are involved in the horticultural industry and the storage/warehousing industries. In the maritime industry, there have been disputes concerning whether employees are engaged under the Seagoing Industry Award or the Ports, Harbour and Enclosed Water Award. Closer to home, it is common ground that the majority of work to be covered by this Agreement (although the exact percentage is disagreed) would fall within ‘ferry’ work and be otherwise covered by the Ports Award. The Union insists that this means the Ports Award is the only relevant instrument for the purposes of the BOOT. Where there are disputes about which Modern Award reference instrument applies for the purposes of the BOOT, it is invariably the case that the rates and conditions under a proposed agreement may not meet one reference instrument, but will meet another. But that is not the situation in this case. As I understand the evidence, the employees will be ‘better off’ whether the test is against the Marine Tourism Award or the Ports Award, (save for whale watching, which no party claims is not tourism work).

[190] In other words, the Union’s claim as to the Ports Award being the only Award to be applied for the purposes of the BOOT, is an arid argument. It makes no difference as to whether the Agreement passes the BOOT. In any event, there is no statutory prohibition on the Commission finding that two Modern Awards are the relevant reference instruments for the purposes of the BOOT. I am satisfied that this is the position in respect to operations of Noorton's on-board vessel operations. I shall return to the Union’s BOOT submissions shortly.” 41

[38] The CFMMEU contended before the Deputy President that Noorton’s 1000 weekly timetabled ferry services between the Sydney Harbour wharves at Manly, Circular Quay, Darling Harbour, Pyrmont, North Sydney, Rose Bay and Watsons Bay were ferry services caught by the Ports Award, and that relevant employees were excluded from coverage by the Marine Tourism Award. The CFMMEU says that to the extent that Noorton and its employees engaged in whale and other leisure and tourism cruises, Noorton did not lead evidence as to the extent of that activity, whether in terms of revenue, working hours or numbers of services. Consequently, the Deputy President could not determine in respect of any particular employee or employees, whether they engaged in sufficient non-ferry work for the purposes of assessing whether they were wholly or substantially covered by the Marine Tourism Award.

[39] The Ports Award is expressed to cover employers throughout Australia in ports, harbours and enclosed water vessels industries and their employees in classifications listed elsewhere in the award but does not cover employers and employees “wholly or substantially” covered by, relevantly, the Marine Tourism Award. 42 “Ports, harbours and enclosed water vessels industry” means the operation of vessels of any type wholly or substantially within a port, harbour or other body of water within the Australian coastline or at sea on activities not covered by one or more of the excluded awards to which reference is made in clause 4.1.43

[40] Clause 4.9 of the Ports Award provides that where an employer is covered by more than one award, an employee of that employer is covered by the award classification which is most appropriate to the work performed by the employee and to the environment in which the employee normally performs the work.

[41] The Marine Tourism Award covers employers throughout Australia in the marine tourism and charter vessels industry and their employees in the classifications listed elsewhere in the award. It operates to the exclusion of any other modern award. 44 “Marine tourism and charter vessel industry” means “the operation of vessels engaged on a day charter or for an overnight charter wholly or principally as a tourist, sightseeing, sailing or cruise vessel and/or as a place of or for entertainment, functions, restaurant/food and beverage purposes engaged in the provision of water orientated tourism, leisure and/or recreational activities but does not include the operation of ferries engaged in regular scheduled passenger and/or commuter transport.”45

[42] Clause 4.7 of the Marine Tourism Award is in the same terms as clause 4.9 of the Ports Award.

[43] Clause 13 of the Ports Award contains classifications and minimum wages for Master, Mate, Engineer, Shipkeeper, Crane Driver (under 20 tonnes) and (over 20 tonnes), and General-Purpose Hand, Deck Hand, Greaser, Passenger Attendant, Turnstile Attendant, Boating Attendant, Host, Fireman, Trimmer, Linesman, Cook, Sailor, Able Seaman and Leading Hand.

[44] Clause 13 of the Marine Tourism Award contains classifications and minimum wages for overnight charter employees and non-overnight charter employees as well as for junior crew hands. The various classifications contained therein are Crew Level 1, 2 and 3, Dive Master/Dive Instructor, Coxswain, Engineering Med I, II and III, and Master IV and V.

[45] In order that an employer and a particular employee is covered by the Marine Tourism Award the employer must be in the Marine tourism and charter vessel industry and their employees, inter alia, must be employed by that employer in that capacity and be in a classification listed in the award.

[46] It is plainly the case, as the Deputy President concluded, that an employer may be covered by more than one modern award. That this is the case in respect of the Ports Award and the Marine Tourism Award is evident by clauses 4.9 and 4.7 respectively of those awards. The Deputy President observed that it was common ground that the majority of work to be covered by this Agreement (although the exact percentage is disagreed) would fall within ‘ferry’ work and be otherwise covered by the Ports Award. 46 It is not clear to us how it is that, on the state of the evidence, the CFMMEU’s proposition as to the exclusivity of coverage of the Ports Award, could be said to be wrong. It may be wrong, but to be so satisfied, this would have required some evidence about the extent to which Noorton and its employees are engaged in whale and other leisure and tourism cruises. There was no evidence about the extent of these activities, whether in terms of revenue, working hours or numbers of services, or the time that employees spent or might spend engaged on vessels undertaking these activities so that one could assess for example in respect of any particular employee or a group of employees, whether and to what extent they engaged in non-ferry work. This is relevant for the purpose of assessing whether one or more employees (or prospective award covered employees) are or would likely be wholly or substantially covered by the Marine Tourism Award.

[47] But even if some employees or prospective employees are or would be covered by the Marine Tourism Award, since the Agreement in terms does not preclude employees being engaged exclusively in work that would otherwise fall within the Ports Award, the application of the BOOT required a consideration of whether any existing or prospective Ports Award covered employee would be better off overall if the Agreement applied than if the Ports Award applied to that employee at test time.

[48] The following shows that on a wage comparison between the wages payable under the Agreement as compared to the Ports Award in the situations identified below, the Port Award employees and prospective Ports Award employees cannot be said to be better off overall under the Agreement compared to the Ports Award. There is no suggestion that there are other benefits in the Agreement which would offset the detriment identified below.

a) Pay rate comparison: The pay rate comparison below shows that the rate of pay for a casual Host/Hostess under the Agreement is 5.69% below the corresponding rate of the pay in the Ports Award which was not remedied by an undertaking.

b) Model 1 (Full time employees – Host/Hostess classification): The model considers full time employees working a 38 hour week between Monday to Friday and assumes 8 hours of work each day commencing at 5:00am, without overtime penalties for work performed between 5:00am and 6:00am. This model has been constructed in light of the undertaking dealing with the span of ordinary hours for daywork. The undertaking is that for full time employees, ordinary hours of work while on daywork shall be worked between 5:00am and to 6:00pm. The model below indicates that if full time employees in the Host/Hostess classification work 8 hours commencing at 5:00am each day on Monday to Friday without receiving overtime penalties for work between 5:00am and 6:00am, these employees would not be better off in comparison to the Ports Award based on a 38 hour week model.

c) Model 2 (Part time employees – Host/Hostess classification): The model considers part time employees working 5:00am to 9:00am Monday to Wednesday (3 days), without overtime penalties for work performed between 5:00am and 6:00am. This model has been constructed in light of the undertaking dealing with span of ordinary hours for daywork. The undertaking is that for part time employees ordinary hours of work while on daywork shall be between 5:00am and to 6:00pm, for not less than 4 consecutive ordinary hours. The modelling indicates that if part time employees in the Host/Hostess classification work a minimum engagement of 4 hours per shift between 5:00am to 9:00am Monday to Wednesday without overtime payable for work performed between 5:00am and 6:00am, these employees would not be better off in comparison to the Ports Award based on a 12 hour per week model.

d) Model 3 (Casual employees – GPH classification): The model considers casual employees working 5:00am to 9:00am Monday to Wednesday (3 days), without overtime penalties for work performed between 5:00am and 6:00am. This model has been constructed in light of the undertaking dealing with span of ordinary hours for daywork. The undertaking is that for casual employees, ordinary hours of work while on daywork shall be worked between 5:00am and to 6:00pm, for not less than 4 consecutive ordinary hours. The modelling indicates that if casual employees in the GPH classification work a minimum engagement of 4 hours per shift between 5:00am to 9:00am Monday to Wednesday without overtime payable for work performed between 5:00am and 6:00am, these employees would not be better off in comparison to the Ports Award based on a 12 hour week model. The outcome is in essence the same as under the Ports Award ($0.06 difference). Note: clause 10.3 (b) of the Ports Award appears to indicate that the casual loading is payable on ordinary hours of work and therefore it does not appear to be all-purpose. Modelling below has reflected this on this assumption.

e) Model 4 (Full time shiftworkers – considering work performed one hour outside Circular Quay timetable (i.e finish at 10:25pm) Host/Hostess classification): The model considers shiftworker employees working all hours on an afternoon shift with no Modern Award shift penalties being payable. The Agreement does not provide afternoon shift penalties. The Ports Award provides afternoon shift penalties of 15% are payable for any shift finishing after 6:00pm and at or before midnight. Indicative modelling suggests that if employees in the Host/Hostess classification work all hours on an afternoon shift for the purposes of the Ports Award, these employees do not appear better off overall under the Agreement.

[49] For these reasons, we consider the Deputy President erred in his assessment that the Agreement passed the BOOT even when the undertakings are taken into account.

The notification time point

[50] We return to the first ground of appeal. We accept that the Deputy President’s Reasons for Decision is open to criticism in the sense that reliance on the conduct of an employer that is not making the Agreement is not relevant to the question of whether Noorton agreed to or initiated bargaining for the purpose of ascertaining a notification time. We also accept that the text message to an employee who is not amongst the cohort to be covered by the Agreement is not evidence of Noorton initiating bargaining. Nonetheless we consider that there was a notification time and on the evidence notices of employee representational rights were given within the timeframe prescribed in s.173(3) of the Act.

[51] We consider this to be the case for the following reasons. First, the employer’s statutory declaration filed in support of the approval of the Agreement sets out that the day on which the employer agreed to bargain was 6 June 2017. 47 Secondly, the notice of employee representational rights was given on that day. Thirdly, whilst the issuing of a notice of employee representational rights does not in and of itself initiate bargaining, it is nonetheless evidence of conduct which is consistent with the employer having initiated bargaining. Fourthly, the memorandum to relevant employees dated 29 June 2017 provides, inter alia, that Noorton “is seeking to establish a new enterprise agreement with its general-purpose hands and host/hostess employees”.48 This is consistent with Noorton having initiated bargaining as set out in its statutory declaration. The notice of employee representational rights itself informs the reader that Noorton “is bargaining in relation to an enterprise agreement”.49 We are therefore satisfied that there was a notification time as specified in the statutory declaration and that the relevant notice of employee representational rights was given within the period required by the Act. This ground of appeal therefore fails.

Conclusion

[52] For the reasons given, we are satisfied that the appeal raises important questions about the operation of s.182(1) of the Act and about the application of the BOOT. As should be evident from our discussion above, we consider the decision is attended by appealable error as to these matters. Permission to appeal is therefore granted. For the reasons given, we would uphold the appeal in respect of grounds 2 and 3 but dismiss the appeal in respect of ground 1. The decisions against which the appeal is made should be quashed. The Application to approve the Agreement should be remitted for determination.

[53] We therefore order as follows:

a. Permission to appeal is granted;

b. The appeal is upheld on grounds 2 and 3 of the notice of appeal but is otherwise dismissed;

c. The decisions in [2018] FWCA 5740 and [2018] FWC 4638 are quashed; and

d. The application for the approval of the Agreement is remitted to Deputy President Sams to determine having regard to our decision.

DEPUTY PRESIDENT

Appearances:

L Doust of Counsel for the Appellant.

S McCarthy for the Respondent.

Hearing details:

2018.

Sydney:

October 17.

Printed by authority of the Commonwealth Government Printer

<PR702639>

 1   Appeal Book pp.172 –233

 2   Appeal Book p.178

 3   Ibid

 4   Appeal Book pp.234 – 236

 5   See in particular Appeal Book pp.234 –235

 6   [2018] FWCA 5740

 7   [2018] FWC 4638

 8   Ibid at [207]

 9   Email to parties dated 23 November 2018

 10   Email from CFMMEU dated 23 November 2018

 11   Email from Holman Webb on behalf of Noorton dated 27 November 2018

 12   [2018] FWC 4638 at [155]

 13   Ibid at [166]

 14   Ibid at [169]-[171]

 15   Ibid at [180]-[181]

 16   Ibid at [182]

 17   Ibid at [187]-[188]

 18   Ibid at [189]-[190]

 19   Ibid at [205]

 20   [2018] FWCA 5740

 21   (2015) 232 FCR 246

 22   Per Jessup J with White J agreeing

 23   (2015) 232 FCR 246 at [24], [27] and [38]

 24   WorkPac Pty Ltd v Skene [2018] FCAFC 131 at [172]

 25   Ibid at [173]

 26   Predl v DMC Plastering Pty Ltd [2014] FCCA 1066

 27   See AJ Mills & Sons Pty Ltd v Transport Workers’ Union of New South Wales [2009] NWSIRComm 135; (2009) 187 IR 56, which involved a casual engagement requiring a racing steward to attend throughout the year

 28   (2015) 232 FCR 246 at [25]

 29   Appeal Book pp.1492-1607

 30   Ibid at p.461, Table 1

 31   [2018] FWC 4638 at [184]

 32   Ibid

 33   Ibid

 34   Ibid at [180]–[182]

 35   Ibid at [175]

 36   (2015) 232 FCR 246 at [30]-[32]

 37   See [2018] FWC 4638 at [181]

 38   [2016] FWCFB 2222

 39   Ibid at [35]-[38]

 40   Transcript at PN318-PN336

 41   [2018] FWC 4638 at [189]-[190]

 42   Clause 4.1 of the Ports Award

 43   Ibid

 44   Clause 4.1 of the Marine Tourism Award

 45   Ibid at clause 3.1

 46   [2018] FWC 4638 at [189]

 47   Appeal Book p.178

 48   Ibid at p.200

 49   Ibid at p.194