DECISION

Fair Work Act 2009
s.225—Enterprise agreement

Esso Australia Pty Ltd T/A Esso
v
The Australian Workers’ Union; the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia; the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union
(AG2016/4853)

Application for termination of the Esso Offshore Enterprise Agreement 2011 - whether termination of the Agreement is not contrary to the public interest - whether termination of the Agreement is appropriate – application dismissed.

[1] To say that bargaining and the litigation relating to it and to this application, which has been extensive, has been less than successful in delivering the commonly desired goal of all combatants – an enterprise agreement - is a litotes – an understatement. By an application under s.225 of the Fair Work Act 2009 (Cth) (the Act) lodged on 3 August 2016, Esso Australia Pty Ltd (Esso) seeks to terminate the Esso Offshore Enterprise Agreement 2011 1 (Agreement). The terms and conditions of employment of Esso’s employees working on the Gippsland Basin Joint Venture (GBJV) offshore platforms in the Bass Strait are governed by the Agreement. The Agreement was approved by Fair Work Australia, now the Fair Work Commission (Commission), on 10 January 2012 and commenced operation on 17 January 2012. The last wage increase under the Agreement of 5 per cent accrued to employees on 1 October 2013. The nominal expiry date of the Agreement is 1 October 2014 and it has long ago passed.

[2] Before turning to some background material, it is convenient to say something about the way in which the parties conducted the proceeding before me. As will be apparent shortly, before this application was heard, there had been an extensive case presented to a Full Bench of the Commission of which I was a Member, about the making of a workplace determination (WD Proceeding) following an order under s.424 purportedly terminating protected industrial action. The case was concluded, a decision reserved but for reasons later discussed, never delivered. All parties relied on some of the material adduced during the WD Proceeding and helpfully provided a 6 volume, 5,420 page Commission Book containing all relevant material on which the parties relied, including material by way of update or supplementation. Esso raised objections to some of the material. Attached to this decision is Schedule 1 which sets out Esso’s objections to particular evidence, a summary of the ground on which each objection is raised and my ruling on each.

[3] As to this application, I have decided that it is not appropriate at this stage to terminate the Agreement. Consequently, the application is dismissed. These are my reasons for that decision.

1. Background and context

History of various proceedings

[4] Since late 2014 and until 7 December 2016, The Australian Workers’ Union (AWU), the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) and the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) (collectively “the Unions”), as bargaining representatives had been bargaining with Esso for a proposed enterprise agreement or agreements that would replace, inter alia, the Agreement.

[5] During this period, the bargaining included bargaining for a proposed enterprise agreement or agreements to replace the Esso Gippsland (Longford and Long Island Point) Enterprise Agreement 2011 (Longford & LIP Agreement).

[6] In an endeavour to advance its bargaining claims, the AWU organised, and many of its members engaged in, various forms of industrial action directed against Esso commencing early in 2015. The AWU maintained that all such industrial action was protected industrial action under s.408(a) of the Act. Esso maintained that aspects of the AWU’s industrial action were not protected action. The other unions also organised protected industrial action to prosecute bargaining claims but the status of action organised and taken as protected industrial action was not disputed.

[7] The disputed industrial action which was taken by some employees covered by the Longford & LIP Agreement included bans on the performance of equipment testing, air freeing and leak testing. The AWU’s bans on these activities were imposed from 2 March 2015. Although the AWU had earlier issued a notice under s.414 of the Act advising Esso of action in the form of a ban on the “de-isolation of equipment”, which had the effect of engaging the protected industrial action provisions in relation to the “de-isolation of equipment”, Esso maintained that bans on or a refusal to undertake equipment testing, air freeing and leak testing did not fall within the description “de-isolation of equipment” and therefore was not protected action.

[8] Esso obtained a number of orders from the Commission directed, inter alia, to the AWU stopping unprotected industrial action in 2015. 2 Clause 4.1 of an order Esso obtained on 6 March 2015 under s.418(1)3 (the Order) required the AWU (and its delegates, officers, employees and agents) to stop organising certain industrial action including any action constituting a ban, limitation or restriction on the performance of equipment testing, air freeing and leak testing. The Order also required AWU members covered by the Longford & LIP Agreement to stop the identified industrial action. The Order came into effect at 6.00pm on 6 March 2015 and ceased to operate at 6.00pm on 20 March 2015.

[9] In contravention of the Order, the AWU continued to organise the action, including a ban on air freeing and leak testing between 6.00pm on 6 March 2015 and 9.30am on 7 March 2015, and a ban on the manipulation of bleeder valves to facilitate air freeing and leak testing between 9.30am on 7 March 2015 and 17 March 2015. Consequently, Esso commenced proceedings in the Federal Court of Australia, pursuant to s.562 of the Act. In the proceedings Esso sought, inter alia, declarations that the AWU had contravened an order which applies to it in relation to the proposed agreement to which the proposed protected industrial action related, with the consequence that industrial action thereafter organised by the AWU in relation to the proposed agreement was not protected industrial action. An issue that required determination in the proceeding was the proper construction of s.413(5).

[10] In an earlier judgment in Australian Mines and Metals Association Inc. v The Maritime Union of Australia 4 (AMMA v MUA), Barker J held that s.413(5) of the Act did not apply without qualification to any contravention no matter when the contravention occurred.5 Rather, the focus is on contravention of orders that apply to the bargaining representative or employee at the time the industrial action is proposed.6 In Esso Australia Pty Ltd v The Australian Workers’ Union7 (Esso v AWU) Jessup J held that, despite his own view of the effect of s.413(5), His Honour could not say that AMMA v MUA was plainly wrong, and therefore he was bound to follow it.8 On that basis, the Court rejected Esso’s claim. I will say a little more about this later in the decision.

[11] Esso appealed to the Full Court of the Federal Court. The same Court also heard an appeal against the judgment in AMMA v MUA. Reasons for judgment in the two appeals were delivered on 25 May 2016. The Full Court dismissed both appeals. 9 On 21 June 2016, Esso filed in the High Court of Australia, an application for special leave to appeal particular orders of the aforementioned judgment of the Full Court. Esso contended, inter alia, that the Full Court had erred in its construction of s.413(5) of the Act.

[12] On 30 November 2016, the Unions served on Esso notices of intention to take protected industrial action pursuant to s.414 of the Act. Each union served two notices. The notices given by the Unions concerned industrial action that was to be taken by employees covered by the Longford & LIP Agreement and by employees covered by the Agreement.

[13] Subsequently, the Minister for Industrial Relations for the State of Victoria (Victorian Minister) applied for orders pursuant to s.424 of the Act to suspend or terminate protected industrial action. On 7 December 2016, Vice President Watson made an order 10 (s.424 Order) pursuant to s.424 of the Act purporting to terminate protected industrial action, of which notice had been given by the Unions and which was due to commence on 9 December 2016.

[14] Esso’s special leave application had not, at this stage, been heard. The High Court of Australia granted special leave on 16 December 2016. 11

[15] Following the making of the s.424 Order, the bargaining representatives for the Longford & LIP Agreement reached agreement prior to the end of the post-industrial action negotiating period and the Esso Gippsland (Longford and Long Island Point) Enterprise Agreement 2017 was approved by the Commission on 4 April 2017, commencing operation on 11 April 2017. 12 Esso and the Unions engaged in further negotiations during the post-industrial action negotiating period but were unable to agree on the terms of a new enterprise agreement to replace the Agreement. No application was made to extend the period. The post-industrial action negotiating period ended on 28 December 2016. A Full Bench was convened to deal with making an ensuing workplace determination as contemplated by s.266 of the Act. In this connection, the Full Bench heard and received lengthy evidence and submissions throughout 2017 in respect of a workplace determination that should be made. A decision was reserved.

[16] Prior to the Vice President making the s.424 Order, Esso lodged an application on 3 August 2016 under s.225 of the Act to terminate the Agreement.

[17] On 9 September 2016, Esso filed material in support of its s.225 application, consisting of an outline of submissions and eight witness statements. In October 2016, the Unions applied for orders for the production of documents by Esso. After a hearing before the Vice President, an order for the production of documents was made. 13 Once the s.424 Order was made Esso applied to adjourn the s.225 application, and on 8 December 2016, the Vice President adjourned the proceedings sine die with liberty to apply.14 On 6 December 2017, the High Court of Australia delivered judgment in Esso Australia Pty Ltd v The Australian Workers’ Union15 in which a majority of the Court allowed an appeal by Esso, holding that the industrial action organised by the AWU in relation to a replacement enterprise agreement or agreements for, relevantly, the Longford & LIP Agreement and the Agreement was not protected industrial action subsequent to the AWU’s contravention on 6 March 2015 of the Order. This was because it did not meet the common requirements provided in s.413(5) of Act.16 As to the effect of s.413(5), the majority said:

“[35]… Although the title of s 413(5) still makes reference to “Compliance with orders”, the change from “has complied with the order or direction so far as it applies to the organisation” (emphasis added), in the body of s 443(1) of the Workplace Relations Act, to “have [not] contravened any orders that apply to them” (emphasis added), in the body of s 413(5) of the Fair Work Act, bespeaks an explicit change in emphasis from a state of compliance with orders to a state of absence of past contravention of orders. And, so far as can be seen, the only reason for the change is to make clear, or possibly clearer, that the provision applies to past contraventions of orders.

…

[51]… For the reasons already given, the change in tense from the present tense in s 413(2) and (3), to the present perfect tense in s 413(4) and (5), followed by the change back to the present tense in s 413(6) and (7), read in context, leaves no room for doubt that the Parliament intended s 413(5) to apply to past contraventions of orders…” 17

[18] Esso next applied to the Commission under s.603 of the Act for an order revoking the s.424 Order. The Victorian Minister and the Unions opposed revocation. Esso’s application succeeded and the revocation order was made on 13 July 2018. 18 The Victorian Minister applied to the Federal Court of Australia for judicial review of the decision to revoke the s.424 Order on 10 August 2018.19 Judgment of the Full Court dismissing the application was delivered on 19 February 2019.20

[19] On 27 July 2018, Esso wrote to the Commission, seeking to progress its s.225 application. On 14 August 2018, the Unions wrote to the Commission indicating that they wanted a stay of the s.225 proceeding, in light of the then extant judicial review proceeding. On 3 September 2018, the Unions lodged a formal application seeking an order that the s.225 application be stayed until further order. I dismissed the application for a stay or adjournment of the s.225 application on 10 October 2018. 21 The application proceeded to hearing with further final submissions having been made by both Esso and the Unions in June 2019, after I allowed the Unions to re-open their case.22

[20] In summary, bargaining and bargaining related activities and litigation has included:

•  42 bargaining meetings prior to the filing of this application;

•  two Employee All Sites Committee meetings;

•  seven conciliations facilitated by the Commission;

•  protected and unprotected industrial action;

•  a picket at Longford from 30 July to 6 August 2015;

•  several s.418 applications, including three that resulted in s.418 orders;

•  an application by Qenos, a customer of Esso, to suspend the industrial action made on significant economic harm grounds;

•  Federal Court litigation by Esso and by the Unions;

•  a deed to suspend industrial action between August 2015 and January 2016;

•  an “Intensive Bargaining Summit” in April 2016, chaired by former Commissioner Wayne Blair, which was a three day negotiation for all agreements;

•  appeal proceedings in the Full Federal Court;

•  proceedings under s.424 commenced by the Victorian Minister and consequent proceedings for a workplace determination;

•  the High Court appeal;

•  revocation proceedings in relation to the s.424 order;

•  the bargaining representatives declining the invitation from the Full Bench of the Commission to view the content of the Workplace Determination that the Full Bench would have made;

•  the judicial review proceedings commenced by the Victorian Minister challenging the revocation decision;

•  ongoing action in the Federal Court for the hearing of final orders to the imposition of penalties on the AWU for the declared contraventions and for the recovery of compensation to remedy the effects of the contraventions; and

•  since the decision to revoke the s.424 Order, there have been:

•  five bargaining meetings;

•  an application made by the Unions on 25 October 2018 for the Commission to deal with a bargaining dispute in relation to the proposed enterprise agreement; and

•  more than six facilitated bargaining meetings before the Commission.

[21] As is evident from the brief history discussed above, in August 2016, after more than two years of bargaining, industrial action and legal proceedings, Esso lodged this application. The application lay dormant for another two years whilst other proceedings which might have resolved the bargaining issues were argued but were not concluded. It is now almost five years since the Agreement passed its nominal expiry date. There is still no agreement on making a replacement agreement.

Commercial and operational context

[22] A key issue and sticking point in bargaining has been that under clauses 19 and 20 of the Agreement, a roster of 7 days on and 7 days off is by default the only method of working shifts offshore for Esso’s employees covered by the Agreement. The roster may only be altered by agreement with the union delegates. This is an arrangement with which Esso had agreed, otherwise it would not be part of the fabric of the Agreement. Despite efforts, agreement of the delegates to alter the rostering arrangement has never been forthcoming. As part of its bargaining claims, Esso has sought to bargain for the removal of the provision and the employees have resisted. There are of course other important issues separating the bargaining parties.

[23] Esso say that unless the Agreement is terminated, the employees and the Unions will rely on the Agreement and the rostering restriction therein, for as long as the Agreement continues to operate.

[24] Esso says the circumstances have changed significantly and it needs to improve efficiency at many levels to meet significant challenges in its business. Esso says it faces major challenges to the sustainability of the GBJV operations. It needs further major capital investment from the joint venture partners, ExxonMobil and BHP. To compete for limited capital, Esso must improve its cost base, reliability and efficiency.

[25] Esso says that it has been seeking to negotiate a replacement agreement that will remove some provisions that it considers increase risks to the health and safety of its offshore workforce and pose barriers to productivity. It says these changes remain relevant to Esso’s business today, more than two years after it has made application to terminate the Agreement.

[26] The Unions are covered by the Agreement and are entitled to, and do, industrially represent many of Esso’s employees covered by the Agreement. The Unions and the vast majority of employees covered by the Agreement oppose Esso’s application for termination.

[27] Esso contends that termination of the Agreement is not contrary to the public interest and is an appropriate outcome in the circumstances. It says termination is more likely than the status quo to promote and balance the objectives of productivity and fairness, and to reinvigorate good faith bargaining. The Unions contend the opposite.

[28] Esso’s offshore operations in the Bass Strait comprise 11 staffed offshore oil and gas facilities, 7 unstaffed installations and 600km of underwater pipelines. 23 Its offshore operations extract gas and oil from reservoirs within Bass Strait. Some of its platforms have historically been its major gas producing platforms. Each produces gas from the crest of a large, high quality sandstone reservoir that is supported by a strong aquifer. More recently, production from these facilities has declined as the gas from these reservoirs is reduced.24

[29] Esso’s newer developments are major sources of gas production for the future to offset declining production from older fields. Several years ago, a significant investment was required to ensure some fields could be explored and developed. 25 Additionally, due to the high levels of CO2 in the produced gas, significant investment has been made in constructing the Longford Gas Conditioning Plant to remove excess CO2 prior to flowing into the main Longford gas plants.26

[30] In 2018, Esso approved investment in the West Barracouta field, the last discovered but undeveloped sweet gas (low CO2) field in Bass Strait. 27

[31] Esso’s platforms named Fortescue, Kingfish B, West Kingfish, Bream A&B, Snapper, Marlin, Tuna, West Tuna and Flounder produce crude oil. Crude oil is first separated from vapour and formation water, and then pumped into the offshore pipeline network for transfer to Longford. Once crude oil reaches Longford, it is processed at the Crude Stabilisation Plant (CSP). After processing through the CSP, the crude oil is piped to Long Island Point for sale. Gas produced from the oil at the CSP is recovered and piped back into the gas system. 28

[32] Production in the Bass Strait has been undergoing significant change. Esso’s production of oil in the Bass Strait operations has declined dramatically since peaking in the mid-1980s. In 1985, a significant part of Esso’s total revenue from the Bass Strait operations came from the oil producing facilities. 29 In 2017, oil production accounted for a much lower percentage of total revenue.30

[33] Oil reserves in the Bass Strait are also in decline. Many of Esso’s platforms are currently not producing oil, due to poor asset profitability performance, and/or operational limitations which could only be addressed by significant new investment. Several platforms are affected. 31 A number of other of Esso’s oil platforms are forecasted to reach end of field life in the next three years.32

[34] Gas sources in the Bass Strait are also changing. Since 2016, there has been a decline in production from a platform 33 which has historically been Esso’s largest and most reliable gas producer. This has resulted in an increased reliance on multiple gas sources to meet gas demand requirements.34 While gas is becoming more important for the GBJV operations, the decreases in oil production has an impact on Esso’s bottom line. Without further investment to find and develop new gas fields, Esso’s gas production is forecasted to reduce quite dramatically in a few years’ time.35 A current development36 will only provide a short reprieve from that decline. Hence, based on current gas prices and even assuming increased gas prices in the future, Gippsland revenues are forecasted to decline from 2022/2023 onwards.37

Esso’s offshore workforce

[35] It is uncontroversial that Esso’s offshore employees enjoy high wages and beneficial working conditions. An offshore operator’s annual average earnings is $285,000 (including superannuation) and an offshore maintenance technician’s annual average earnings is $240,000. These employees work offshore about 20 weeks per year. These working conditions have a long history.

[36] Esso say some of the working conditions date back to the 1970s. Then, Bass Strait oil was plentiful and there was little competition. It says that until the mid-1990s, the oil industry participants conducted their industrial arrangements as a ‘special industry’ working group, against a paid rates award backdrop.

[37] The production and maintenance work on Esso’s offshore platforms and installations is carried out by a combination of Esso’s offshore employees and contractors. Some platforms are continuously staffed, while others are irregularly or temporarily staffed. All offshore workers are transported to platforms by helicopters from Longford, operated by Esso.

[38] There are about 265 Esso employees working on Esso’s offshore platforms. About 210 of these employees are covered by the Agreement. These employees perform the roles of operator, maintenance technician and Platform Service Operators (PSOs). About 55 of the employees are employed in the supervisor and Offshore Installation Manager (OIM) roles, which are not covered by the Agreement. 38 The supervisors and OIMs work a 14 days on and 14 days off roster cycle (14:14 roster cycle). It is therefore a 28 day work cycle. Approximately 20% of Esso’s offshore employees work a 14:14 roster cycle. As already noted, Operations Technicians, PSOs and Maintenance employees covered by the Agreement and who comprise approximately 80% of the employees work a 14 day work cycle involving a 7 days on and 7 days off roster cycle (7:7 roster cycle).

[39] Most of the offshore workforce is engaged through contractors. In 2016, the Esso wages employees constituted 35% of the offshore workforce on any given day. 39 In 2018, the attrition of employees during that year was “more than offset” by the engagement of contractors.40 Employees of key maintenance and well-work contractors work a 28 day work cycle, with a 14:14 roster cycle. Many other employees of specialist contractors do not work to any roster cycle, instead travelling to offshore platforms as and when work is required.41

[40] Contractors engaged by Esso have been progressively implementing a 14:14 roster cycle for their offshore employees. For these employees and for Esso’s OIMs, a 14:14 roster cycle appears to have worked well for many years with no evidence of any detrimental impact on safety or health for those employees. 42 Approximately 40% of Esso's contractor employees are working offshore on a 14:14 roster cycle, and Esso had earlier estimated that at some stage during 2017 the percentage will increase to over 95% because of transitions to new contracts and contractor agreements which provide for 14:14 roster cycle arrangements.43 In any event, it seems uncontroversial that a significant proportion, if not the preponderance of Esso’s offshore workforce, works on a 14:14 roster cycle.

2. The competing claims in bargaining

Roster cycle

[41] Esso has sought changes to the Agreement which it says target increasing workforce efficiency, reducing risks to health and safety and reducing operating costs. The saving that would be made by introducing a 14:14 roster cycle for the Agreement covered workforce has been the subject of evidence. 44 It is uncontroversial that compared to the overall operating costs of Esso’s offshore operations, the projected saving is small. But it is apparent that cost savings, though not unimportant, is not the driving force behind Esso’s desire to bring about change.

[42] Pursuant to clause 20 of the Agreement, relevant employees work a 7:7 roster cycle, which may only be altered with the agreement of the union delegates. Esso’s claim in bargaining has been that it wants to move to a 14:14 roster cycle. It says that it wants to do so for reasons that include:

•  the change will result in a reduction in the number of crew change handovers. Crew change handovers involve an element of risk to the health and safety of offshore workers. 45 A reduction in the number of crew change handovers will necessarily result in a reduction in the frequency with which the risk arises;

•  the change will approximately halve the number of helicopter flights for employees, which will reduce a key identified risk for offshore workers; 46 and

•  the change will lead to improvements in workforce productivity, including cost savings associated with reduced helicopter flights and less changeovers. 47

[43] The 7:7 roster cycle has been worked by Esso’s offshore employees since the 1970s. The Unions and employees have opposed any change to this roster pattern.

[44] Esso maintains that it has tried on many occasions over the years to persuade the Unions to agree to a change. Esso points to the fact that it has attempted industrial confrontation in the past (1996), as did its engineering subcontractors (2004). It says that it has tried collaboration and consultation at various times over the past decade to resolve this issue. It says that neither approach has worked. 48

[45] Esso says that the 7:7 roster cycle is an anomaly in the industry. There is some support for this view. It appears that the major offshore oil and gas producers in Australia, most of which are based in Western Australia and the Northern Territory, operate a minimum 14:14 roster cycle and there appears to be a trend towards longer shift swings. Most contractors in the Bass Strait work a 14:14 roster cycle. There are contractors who like Esso work a 7:7 roster cycle consistently with the provisions of the applicable enterprise agreements that apply. 49

[46] Esso’s desire to move towards the 14:14 roster cycle in Bass Strait reflects the practice in the offshore oil and gas operations in the North West Shelf and in the Northern Territory where the producers operate a minimum 14:14 roster cycle for operations and maintenance workers. 50 It also reflects the minimum swing length for offshore based sectors in Australia, for example in construction, drilling and vessel operators.51

[47] The Unions dispute the three reasons given by Esso for the roster change and state that the reasons are weak and unpersuasive.

[48] In relation to productivity, the Unions advance that the estimated cost benefit and reduction in working time is a minimal productivity gain from such a substantial change to a long-established workplace arrangement. They say that the roster proposed and the associated savings are wholly at the expense of the employees, resulting in reductions in the take home pay of employees of up to 4.1%. 52

[49] The Unions contend that the savings Esso has estimated in relation to reducing helicopter travel is overstated as Esso has double-counted the savings in employees’ wages. As such, the Unions contend that there will only be the savings associated with the cost of fuel for 312 hours’ of flying per year, equating to a very small percentage of the GBJV’s annual expenditure. 53

[50] The Unions say that Esso can only provide two examples where an inadequate handover has contributed to a safety incident and there have been no helicopter accidents at Esso over the last 35 years. Rather, the Unions say that a change to a 14:14 roster cycle may give rise to a higher risk of error in handover and employees would face a high risk during the hours spent working on platforms when compared to the level of risk when in the air. 54

[51] As to Esso’s submission that the 7:7 roster cycle is an anomaly in the offshore oil and gas industry, the Unions submit that the situation of those producers is distinguishable and a more legitimate comparator is the BassGas operation in Bass Strait where the 7:7 roster cycle is worked. The Unions say that any consideration of the roster arrangements of Esso’s contractors should be assessed by reference to the fact that Esso does not advert to its role in influencing those contractors in relation to rosters nor does it advert to the modus operandi of its contractors in making their respective enterprise agreements. 55

[52] The merits of the particular positions and claims of the bargaining parties about rostering arrangements are not matters which are relevant to an assessment of whether the Agreement must be terminated save to the extent that the contested consequence of the changes to rosters might be linked to the termination of the Agreement and therefore relevant to the assessment of the likely effect of termination of the Agreement on the parties. I set out the competing positions for context. The reasons for Esso’s pursuit of its claim appear to me to be rationally based. They are not confined to financial savings. Self-evidently, fewer helicopter flights means fewer risks. Consistent roster patterns across all of the offshore workforce will likely garner productivity and efficiency benefits as well as some modest financial saving. The desire to remove strictures on rostering so that change through consultation rather than agreement may occur is also readily understandable.

[53] As for the resistance, this too is understandable. Employees and particularly longer serving employees who have worked a particular roster cycle and have framed their personal commitments and responsibilities around the current arrangements will likely view a change as disruptive, undesirable and as having, or potentially having, a deleterious effect on the working conditions and their personal and family circumstances.

Removal of the overtime matrix

[54] Part B of the Agreement provides that Esso’s offshore employees are paid an annualised salary incorporating non-standard overtime of up to 75 hours per annum or 15 hours per trip. Under attachment 1 of the Agreement, Esso’s capacity to use the 75 hours bank is “limited to events described in the Offshore Overtime Work Selection Document.” There is an overtime selection matrix in the document, which requires particular steps to be taken before an employee may be required to work such overtime. It appears that under the matrix, employees are only required to work such overtime as a last resort.

[55] It is said that the practical effect of the provisions of the Agreement is that employees hardly work any of the 75 hours of overtime for which they are paid. It appears that on average employees work only between 2 to 10 hours overtime per annum. In the result, Esso says that critical operations and maintenance activities are deferred.

[56] Esso complains that its employees have the benefit of being paid for overtime they do not work, while Esso suffers the detriment of paying for overtime which is not actually being worked.

[57] Esso’s claim in bargaining is for the removal of the matrix so it can use the 75 hour bank more effectively. Instead of the matrix, Esso proposes to manage overtime work having regard to critical work requirements and existing fatigue management procedures. Esso considers this an important measure to improve continuous productivity and plant reliability.

[58] The Unions and employees dispute Esso’s claim for the removal of the matrix. The Unions say it is flawed for the following reasons:

•  Esso is wrong to characterise the overtime matrix as a “bank” of pre-purchased overtime and is rather a “matrix” specifying the circumstances in which overtime can be directed at an annual cap of 75 hours; 56

•  it is incorrect to say that the matrix only permits overtime as a “last resort” as it sets out different types of events which may give rise to the need for working overtime, some with guidelines to minimise unnecessary overtime work; 57

•  Esso’s supervisor or superintendent in each case is to decide whether overtime is to be worked so if the complaint is that not enough overtime is being worked then that is a result of the supervisors’ discretion and Esso should raise that with the supervisors; 58

•  the annualised arrangement reached in 2011 had the stated desire to reduce overtime working and allow decisions about overtime to be taken at the shop floor, so to seek to abolish the matrix suggests that Esso is complaining about successfully achieving its original goal; 59

•  there is no requirement for employees to record overtime worked and as such figures of average overtime worked cannot be accepted as a true measure; 60 and

•  the introduction of the matrix was a compromise reached by PSOs abandoning an industrial claim which was intended to be permanent and now should not be undone because Esso dislikes it. 61

[59] The Unions claim that the overtime matrix does not result in critical maintenance being affected as it only applies to Operations Technicians and PSOs. 62 The Unions say that if the overtime matrix is abolished then it will likely result in operators and PSOs working additional non-standard overtime for no additional pay.63 Further, the Unions say that Esso has not provided any probative evidence (such as specific cost figures) to demonstrate that the removal of the overtime matrix is a core productivity claim.64

[60] Again, the merits of the competing positions and claims are not particularly material to the assessment I need to make, save in the context previously noted. However, the summary of the competing positions highlights the difficulty associated with reaching an agreement in circumstances where the object and effect of the existing overtime matrix is in dispute. It is difficult to bargain a solution for a problem that is in dispute.

[61] The other disputed claims are discussed briefly further below.

The other disputed claims

[62] There can be little doubt that bargaining for the proposed agreement has been protracted. Esso says that little progress has been made during that time, and such progress as has recently occurred is only the consequence of Esso’s prosecution of this application and the prospects of the termination of the Agreement. Esso says that it is only recently, with the prospect of a hearing to deal with the application to terminate the Agreement looming, that the Unions have been prepared to engage in any meaningful discussions about a proposed replacement agreement with provision for a 14:14 roster cycle. It says that even then, the Unions have sought to attach several claims to any such roster, which Esso regards as unacceptable.

[63] There are several other key points that remain in dispute, including retrospectivity of wage increases, the overtime matrix and access to arbitration. Esso and the Unions have agreed to a process in which Esso will provide a copy of its proposed enterprise agreement to the Unions for review. 65

[64] Esso’s view on the state of bargaining is that even if a replacement agreement with provision for a 14:14 roster cycle might be able to be eventually negotiated with the Unions, the chances of that being voted up by the employees is remote unless the Agreement is terminated. 66

[65] The seven unresolved claims of the bargaining parties are or were as follows:

(a) Esso’s claims:

•  mandatory 14:14 roster;

•  removal of the overtime selection matrix;

•  amendment to the catering and amenities clause;

•  insertion of the step-up OIM clause; and

(b) the Unions’ claims:

•  wage rates, term and operative date;

•  inclusion of an arbitral step in the dispute settlement procedure; and

•  a mechanism for adjusting the RAPHP for additional gazetted public holidays. 67

[66] Apart from the claims earlier discussed, the other unresolved issues may be summarised as follows.

(i) Catering and amenities clause

[67] Esso says that the current clause relating to catering and amenities is overly prescriptive and imposes an unreasonable burden on it. Currently, it requires a minimum of 2 catering personnel to attend and requires that Esso provide freshly prepared hot and savoury meals and morning tea on an a la carte basis or a choice of three meals even if a crew is travelling to a platform for a day to perform maintenance. Esso says it proposes a more flexible clause ensuring market competitive catering and camp services. 68

[68] The Unions say that the requirement to send 2 catering personnel only applies to staffed platforms and the proposed clause is vague and uncertain which will cause disputes. The Unions contend that Esso has made no sufficient case for the change. 69

(ii) Step-up OIM clause

[69] Esso seeks to insert a ‘Step-Up Supervision’ clause to allow it to ask employees and give the employees an opportunity to step up and perform the duties of OIM when there is an absence or staff shortage. It says that this will offer training and development opportunities for its employees. 70 The Unions support the opportunity for employees to step up but say that the proposed allowance of $100 per day is inadequate considering the additional duties which would need to be performed.71

(iii) Wage rates and retrospectivity

[70] Esso proposes a 3% annual wage increase, contingent upon the 14:14 roster cycle and other changes being introduced, whilst the Unions seek a 5% annual wage increase with back-pay and no roster change. 72 The Unions say that their position should be preferred taking into account the maintenance of existing wages, current wages of comparable workers, wage rises of comparable workers, wage increases under comparable instruments, work value considerations, “productivity” gains from implementing a 14:14 roster cycle, Esso’s windfall profits, executive pay and retrospectivity.

[71] The Unions justify a 5% annual wage increase by stating that due to consumer price inflation, a 2-2.5% annual wage increase is needed just to maintain purchasing power of employees’ wages. 73 Further, the Unions say the most comparable workers are those who work on the Yolla platform and earn around $290,000-$300,000 per annum, essentially earning up to 16-27% more than Esso employees in Bass Strait for doing the same type of work in a similar location.74 In addition, due to wage price index measures, the Unions say that increases of 3-3.5% are necessary so that Esso employees can maintain their position relative to other workers.75

[72] As to wage increases under comparable instruments, the Unions compare to Esso’s main competitor BassGas which has an enterprise agreement providing a 4.5% annual pay increase. They argue that in the private and public sector, the average annual wage increase under enterprise agreements is 3.2%. 76

[73] The introduction of a 14:14 roster cycle the Unions say justifies a significant increase in wages to compensate for the deterioration of work conditions, the psychosocial context, the possibility of working overtime and the isolation for a longer period. 77 To further this they say that all the productivity gains will flow to Esso and so in the interests of fairness some of the savings should flow to the workforce. Similarly, they say the windfall profits that Esso will experience from the increase in gas price means that a 5% annual increase can comfortably be awarded.78 Moreover, the increase in executive salaries of 25% is inconsistent with the claimed need to reduce costs and therefore a 5% increase for employees cannot be said to be too much. The Unions say that whatever the wage increase is it should be back paid since the nominal expiry date of the Agreement.79

[74] Esso rejects the Unions’ claim because:

•  the wage claim is excessive having regard to the already high rates received by offshore employees;

•  the wage claim is made without any productivity offset;

•  the increase would well exceed the agreed wage increases in the Longford & LIP Agreement and the Esso Gippsland (Barry Beach Marine Terminal) Enterprise Agreement 2016, rewarding the offshore employees and their bargaining representatives for not having negotiated an enterprise agreement with Esso; and

•  the wage claim is excessive compared to the general range of prevailing wage increases in the oil and gas industry and the broader community. 80

[75] Esso contends that a 3% increase over three years would ensure that offshore employees achieve a reasonable wage increase in return for Esso being able to pursue changes resulting in improvements to productivity and efficiency. Further, it says there is no merit for wage increases to operate retrospectively at least before February 2017 which was the end of the post-industrial action negotiating period. 81

(iv) Arbitration of disputes

[76] The Unions seek a new dispute resolution clause in the proposed agreement enabling workplace disputes to be referred to arbitration by the Commission and its merit would be to provide a circuit-breaker for intractable industrial disputes. 82 Esso’s concern is that the insertion of a compulsory arbitral step may give rise to an increase in the number of notified disputes and its concession to include such a clause in the Longford & LIP Agreement was because it was part of an overall negotiated package.83

(v) Regular Annual Public Holiday Payment (RAPHP) allowance

[77] Currently, the Regular Annual Public Holiday Payment (RAPHP) clause provides an annual allowance to employees in lieu of public holiday premiums and allowances otherwise payable and provides for an amount equal to 3.192 hours per week.

[78] The Unions claim an increase in the RAPHP allowance is justified as recently two new public holidays (Easter Sunday and Grand Final Eve) have been gazetted and therefore the formula needs to be updated to reflect this. They say that if the allowance is not granted, then under s.114 of the Act Esso may not be permitted to direct employees to work on the two new public holidays. 84

[79] Prior to the RAPHP allowance, employees were paid for work on public holidays on an incident basis, meaning that they would only receive public holiday penalties when the public holiday coincided with their rostered shift. Esso says that the current RAPHP costs Esso $2.2 million per annum but if the Unions claim was accepted it would increase that cost to $2.6 million. It says that it would be more cost effective for the company to eliminate the RAPHP and restore the previous regime. 85

3. Undertaking

[80] Esso has given an undertaking (the Undertaking) which, though directed to the Commission, is for all practical purposes an undertaking to employees covered by the Agreement that if the Agreement is terminated it will apply the terms and conditions of the Undertaking to each such employee for a period of six months unless a new enterprise agreement commences to operate in that time. The Undertaking maintains many of the terms and conditions for which the Agreement provides, reverts some (e.g. Dispute resolution and consultation) to those in the Hydrocarbons Industry (Upstream) Award 2010 (Hydrocarbons Award), and does not continue to apply some of the Agreement terms. The full text of the Undertaking is set out in Schedule 2 to this decision.

[81] The Undertaking does not prevent Esso from applying relevant provisions of the Hydrocarbons Award to change rostering and work cycle arrangements provided for in the Undertaking.

[82] However, any such changes must be consistent with the Hydrocarbons Award and the National Employment Standards (NES) and will not result in a reduction in the wage rates or allowances for which provision is made in the Undertaking whilst the Undertaking operates.

[83] A number of provisions of the Undertaking will only apply while Esso maintains the 7:7 roster cycle. These provisions deal with:

(i) Ordinary hours (clause 13(e) - second sentence);

(ii) Fixed cycle payments/rosters (clauses 14(a) and 14(c));

(iii) Fixed cycle payment (clause 14.2);

(iv) Roster crew change arrangements (clause 15);

(v) Annual leave – amount of leave (clause 18.1);

(vi) Personal leave (clause 19(d));

(vii) Long service leave (clause 21(d));

(viii) Offshore cycle hours (Schedule 2 to Part A);

(ix) Additional hours and additional compensation (clause 35); and

(x) Amended offshore cycle hours – dayshift and nightshift (Attachment A to Part C).

[84] The Unions criticise the Undertaking saying that the conditions provided in the Undertaking are less favourable than the Agreement as it does not contain the following entitlements:

•  a right to access arbitration for certain disputes;

•  a right to convert from full-time work to part-time work;

•  rights to an appropriate retrenchment package and not just the NES minimum;

•  rights to a fair grievance procedure, including the requirements for three warnings to be given before dismissal for underperformance;

•  protections against overwork under the overtime matrix, including a cap on non-stand overtime, and default rules regulating the circumstances in which overtime may be required;

•  the DPIC or “Designated Person in Charge” allowance, which is paid to maintenance technicians in charge of a shift;

•  rights to a favourable standard of amenities; and

•  rights to assistance from unions, including rights to participate in paid or unpaid communication meetings, and rights to be transported to/from stop work meetings which occur onshore. 86

[85] The Unions say if the 14:14 roster cycle is introduced during the transitional period, it will result in the loss of the following protections and conditions as a range of the Undertaking provisions will be “switched off”:

•  rules about when offshore shifts begin and end, for the purposes of payment;

•  the “multiplier” for calculating earnings in a work cycle, which multiplier in turn reflects decisions about which hours are to attract penalty rates and in what amount;

•  rights to pay (at penalty rates) as well as meals and accommodation if flights to/from the platforms are delayed; and

•  entitlements to annual leave (and entitlements to cash in lieu of an extra week’s annual leave for operators), sick leave, and long service leave. 87

[86] Further, they say that once the Undertaking expires, the following benefits which are found in both the Agreement and the Undertaking will be lost as they are not found in the Hydrocarbons Award:

•  the benefit of the Oil Industry (Long Service Leave) Award 2000, including the right to be paid out accrued long service leave if employment ends after five (rather than the standard seven) years;

•  the right to be paid for a minimum of 4 hours’ work if called out to perform non-continuous overtime;

•  the right to a paid 30 minute meal break when working non-standard overtime;

•  the right to paid jury leave;

•  the right to a RAPHP allowance, representing 250% penalty payments for 5.5 public holidays per annum, irrespective of whether the employee works that many holidays in a particular year;

•  the right to accident make-up pay to full earnings, not just Award earnings; and

•  the right to 60 minutes’ paid breaks per shift, rather than 40 minutes under the Award. 88

[87] Esso responds that its Undertaking will operate for 6 months post termination unless a new agreement is reached. It says that the Unions have exaggerated the differences between the Undertaking and the Agreement. The basis for this contention is set out in a table in Schedule 3 to this decision. 89

[88] Esso’s Undertaking is as already noted in all practical respects given to the affected employees, rather than to the Commission. I accept that the Undertaking will not operate to provide for every beneficial term which is contained in the Agreement. Nonetheless, I am satisfied that it will provide for key terms, well above the minimum terms and conditions for which provision is made in the Hydrocarbons Award. It will however have the effect of minimising the financial impact on employees of the Agreement’s termination and will facilitate the introduction of a 14:14 roster cycle through consultation, if agreement to introduce the cycle is not reached through bargaining for a new agreement. That Esso has, or proposes to give the Undertaking, and the terms of the Undertaking, are matters that are relevant in the assessment whether it is appropriate to terminate the Agreement. 90 I propose to take the Undertaking into account for that purpose. The Undertaking will only operate if the Agreement is terminated, and presumably the period of operation of the Undertaking has been selected because Esso assesses that within that period it is reasonable to assume that with a changed bargaining dynamic, a new agreement containing more flexible provisions would be made.

4. Relevant legislative provisions

[89] The relevant legislative mechanism by which an enterprise agreement may be terminated is found in Division 7 of Part 2–4 of the Act. Subdivision D of Division 7 contains provisions which enable the termination of an enterprise agreement after the agreement has passed its nominal expiry date. These provisions are as follows:

“Subdivision D—Termination of enterprise agreements after nominal expiry date

225 Application for termination of an enterprise agreement after its nominal expiry date

If an enterprise agreement has passed its nominal expiry date, any of the following may apply to the FWC for the termination of the agreement:

(a) one or more of the employers covered by the agreement;

(b) an employee covered by the agreement;

(c) an employee organisation covered by the agreement.

226 When the FWC must terminate an enterprise agreement

If an application for the termination of an enterprise agreement is made under section 225, the FWC must terminate the agreement if:

(a) the FWC is satisfied that it is not contrary to the public interest to do so; and

(b) the FWC considers that it is appropriate to terminate the agreement taking into account all the circumstances including:

(i) the views of the employees, each employer, and each employee organisation (if any), covered by the agreement; and

(ii) the circumstances of those employees, employers and organisations including the likely effect that the termination will have on each of them.

227 When termination comes into operation

If an enterprise agreement is terminated under section 226, the termination operates from the day specified in the decision to terminate the agreement.”

[90] These provisions, and relevantly s.226, are to be construed in a manner that is consistent with the language and purpose of the provisions by reference to the language of the Act as a whole, and so the context, general purpose and policy of the provision are an important means by which the meaning and effect of a provision is to be ascertained. The operation of these provisions was considered in detail in Aurizon Operations Limited; Aurizon Network Pty Ltd; Australia Eastern Railroad Pty Ltd 91 and by a Full Court of the Federal Court in Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Aurizon Operations Ltd92 and need not be repeated here.

[91] The nature of the exercise of power under s.226 was explained by the Full Bench in AWX Pty Ltd  93 as follows:

“We begin an examination of this aspect by noting that the application of s.226 of the Act is an exercise in discretion by the decision maker. The provision requires that an instrument must be terminated if the Commission is satisfied that it is not contrary to the public interest and after taking account of all the circumstances including the views of the employees, each employer, and each employee organisation (if any), covered by the agreement; and the circumstances of those employees, employers and organisations including the likely effect that the termination will have on each of them.” 94

[92] The Full Bench in AWX Pty Ltd referred to the following passage in Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission 95 in identifying that s.226 required the exercise of a discretion:

“"Discretion" is a notion that "signifies a number of different legal concepts". In general terms, it refers to a decision-making process in which "no one [consideration] and no combination of [considerations] is necessarily determinative of the result." Rather, the decision-maker is allowed some latitude as to the choice of the decision to be made. The latitude may be considerable as, for example, where the relevant considerations are confined only by the subject matter and object of the legislation which confers the discretion. On the other hand, it may be quite narrow where, for example, the decision-maker is required to make a particular decision if he or she forms a particular opinion or value judgment.” 96[Footnotes omitted]

[93] Section 226 involves the exercise of a “narrow” discretion of the type described in the last sentence of the passage above. However, it remains the case that the evaluative assessments required by s.226(a) and (b) allow a degree of latitude on the part of the decision-maker as to the conclusions to be reached. 97

[94] Section 226 requires the Commission to take particular matters into account in making its evaluative assessment. A statutory requirement that a matter be taken into account means that the matter is a ‘relevant consideration’ in the sense discussed in Minister for Aboriginal Affairs and Another v Peko-Wallsend Limited and Others (Peko-Wallsend), 98 that is, it is a matter which the decision maker is bound to take into account. The obligation to take into account “all of the circumstances including the matters in s.226(b)(i) and (ii) means that each of the matters must be treated as a matter of significance in the decision-making process.99 As Wilcox J said in Nestle Australia Ltd v Deputy Federal Commissioner of Taxation:100

“To take a matter into account means to evaluate it and give it due weight, having regard to all other relevant factors. A matter is not taken into account by being noticed and erroneously discarded as irrelevant.” 101 

[95] The weight given to a particular matter is ultimately a matter for the Commission subject to some qualification. As Mason J explained in Peko-Wallsend: 102 

“It follows that, in the absence of any statutory indication of the weight to be given to various considerations, it is generally for the decision-maker and not the court to determine the appropriate weight to be given to the matters which are required to be taken into account in exercising the statutory power. ... I say "generally" because both principle and authority indicate that in some circumstances a court may set aside an administrative decision which has failed to give adequate weight to a relevant factor of great importance, or has given excessive weight to a relevant factor of no great importance. The preferred ground on which this is done, however, is not the failure to take into account relevant considerations or the taking into account of irrelevant considerations, but that the decision is "manifestly unreasonable".” 103 

5. Section 226(a): Whether termination of the Agreement is not contrary to the public interest

[96] A requirement to consider the public interest, and in this context whether something would or would not be contrary to the public interest “refers to matters that might affect the public as a whole such as the achievement or otherwise of the various objects of the Act, employment levels, inflation, and the maintenance of proper industrial standards.” 104 Though the content of the notion of public interest cannot be precisely defined, it is something that is distinct in nature from the interests of the parties.105 The public interest and the interests of the parties may be similarly affected however that fact does not diminish the distinction.106 A consideration of whether termination of the Agreement is not contrary to the public interest may, and often will, involve balancing countervailing public interests.107 In that assessment, all of the circumstances should be taken into account to determine where the public interest lies,108 and how countervailing considerations as to public interest should be balanced.

[97] In the context of s.226, a consideration of the public interest is plainly directed to the consequences of terminating the Agreement. 109 The question is whether the termination of the Agreement is not contrary to the public interest. In making that assessment, it is obviously not necessary to conclude that the termination is in the public interest. The public interest in a given case may be neutral and the subsection is satisfied. The relevant consequences of the termination of an agreement are those which are likely foreseeable.110

[98] Esso contends that the termination of the Agreement is not contrary to the public interest for the following reasons:

•  there is no incompatibility with the scope and purpose of the Act as the legislative scheme does not presume that bargaining is only facilitated by terms and conditions in an expired agreement continuing in perpetuity; 111

•  termination of the Agreement will better suit good faith bargaining as the continued operation of the Agreement is hindering rather than encouraging good faith bargaining due to employees being reluctant to forgo any legacy working conditions. Esso says that the bargaining process under existing dynamics has run its course, the parties would remain bound by the good faith bargaining requirements of the Act post termination and would be able to exert industrial pressure to bargain for a new agreement; 112

•  termination of the Agreement will increase the likelihood of making an enterprise agreement as it will facilitate negotiation of a replacement agreement; 113 and

•  termination of the Agreement will not undermine proper industrial standards as employees would continue to be covered by proper industrial standards being the Hydrocarbons Award and the NES. In addition, employees would continue to receive the existing wages and conditions for six months after termination under Esso’s Undertaking. 114

[99] Further, Esso contends there is a public interest in ensuring that its operations in Bass Strait continue to be a sustainable business for as long as possible to be achieved by allowing Esso to implement reasonable workplace changes to improve productivity and efficiency. 115

[100] The Unions contend that the termination of the Agreement is contrary to the public interest because of the impact of termination on:

•  employees’ safety;

•  the Gippsland economy;

•  family life and social inclusion; and

•  stagnant wages growth. 116

[101] These are discussed in more detail later in the decision and the concerns around safety and family life/social inclusion are also relied upon by the Unions in the assessment of the effect of the termination of the Agreement on employees.

[102] Esso says the Unions have failed to comment on s.171 of the Act and have not dealt with the analysis of the Full Bench in Aurizon 117 and Construction, Forestry, Mining and Energy Union v AGL Loy Yang Pty Ltd118.119 Esso submits that the Unions have failed to draw distinctions between:

(a) the public interest and the interests of the parties; and

(b) the likely foreseeable consequences of terminating the Agreement and the consequences of the introduction of a 14:14 roster cycle and the removal of an overtime matrix. 120

[103] Esso submits that the Unions’ contentions about employees’ safety and family life/social inclusion invites the Commission to repeat that which the Full Bench found to be an error in Kellogg Brown & Root Pty Ltd and others v Esso Australia Pty Ltd 121 (KBR) and as such no public interest issue arises from these concerns.122 The Unions argue that previous decisions do not deal with specifically whether disruption to the lives of family members is a public interest matter and they only stand for the propositions that public interest is to be identified with the interests of the public “as a whole” and considered separately to the interests of the parties.123 Further, the Unions say that “as a whole” does not mean that each and every person who forms part of the public has to be affected, but could be just part of the community.124 The Unions say that the potential impact on the families of employees engages the public interest because of weight of numbers that will be affected125 and the impact on the employees’ relationships with their partners and children.126

[104] As to the economy and wage growth issues, Esso says these go to the impact of termination on the income and employment of employees which are relevant to s.226(b) rather than to the issue of public interest as confirmed in KBR. 127

[105] As Esso has noted, the direct legal consequence of termination of the Agreement is that its terms and conditions contained would no longer apply. Instead, the provisions of the Hydrocarbons Award and the NES would apply as the minimum terms and conditions of employment. Plainly, Esso would no longer be prevented from seeking to make a change to rosters in the absence of the agreement of the union delegates and Esso could allocate reasonable overtime without being required to follow the steps in the overtime selection matrix.

[106] Thus, termination of the Agreement may allow Esso to implement particular changes to its existing 7:7 roster cycle and other working arrangements such as overtime, which it regards as inefficient and out of step, for example, with the roster cycle employed by many of its contractors. The merit of these and other proposed changes sought by Esso is not however within public interest inquiry, though the foreseeable effect or impact of the changes may be.

[107] There are other likely consequences of the termination of the Agreement.

[108] There can be little doubt that termination of the Agreement will disturb the current bargaining positions. The Unions and employees are presently bargaining from a position that the terms and conditions contained in the Agreement cannot be altered except through bargaining for a new agreement. Whilst ever there is no new agreement, the existing terms and conditions including those about which Esso complains remain in force. This will cease to be the case in the event the Agreement is terminated. Though the Undertaking proffered by Esso will preserve for a six-month period many of the terms and conditions in the Agreement, it will nevertheless allow Esso to prepare for and to proceed with implementation of its preferred 14:14 roster cycle unencumbered by the need to bargain for that change, albeit it remains willing to do so. In and of itself this consequence is not inconsistent with the object in s.171 of a fair framework enabling collective bargaining and facilitating good faith bargaining.

[109] Generally, collective bargaining will remain available to the bargaining parties. Esso and the Unions in their bargaining will continue to be required to meet the good faith bargaining requirements. Were it otherwise then it seems to me that it would always likely be contrary to the public interest to terminate an agreement where the pre-termination bargaining positions are disturbed by an agreement’s termination. But this is not the scheme of the Act.

[110] Esso maintains that it wants to reach an agreement that will give wage increases and change certain conditions contained in the Agreement and that it wants to resolve all the bargaining issues. I accept that this is so. Esso proffers an Undertaking which would operate from the date of the termination of the Agreement for a period of six months as the Undertaking would come into force from the date of termination. In proffering the Undertaking, Esso says that it has taken into account that the Hydrocarbons Award contains significantly less beneficial terms and conditions than the Agreement and thus if the Agreement is terminated, Esso proposes to preserve key terms and conditions by means of the Undertaking. I also accept that Esso is genuine in proposing the Undertaking and that it intends by the Undertaking to preserve for six months that which it describes as key terms and conditions. There are of course differences as earlier noted.

[111] However, the proffering of an undertaking is not to be treated as raising an automatic entitlement to the termination of an agreement or as satisfying some of the prescribed preconditions for termination. The proffering of an undertaking, its content and duration are matters to be weighed in assessing whether the Commission is satisfied of the matters in s.226(a) and (b) of the Act.

[112] Nevertheless, the Undertaking makes the immediate likely consequences of the termination of the Agreement much more certain. There will be no immediate dramatic shift in the wages and conditions under which the relevant employees are employed. There will be further bargaining and rostering changes implemented through, at least consultation, if not agreement. Esso proposes that within the period during which the Undertaking will operate, it will seek to negotiate a replacement agreement with the bargaining representatives that is approved by employees. The form of any such agreement will depend on the bargaining.

[113] As already noted, Esso wants any replacement agreement to make provision for a 14:14 roster cycle. Plainly, if a replacement agreement included such a term, the timing and process for its introduction and the benefits and detriments that are attached to it would depend on the result of the bargaining process.

[114] Esso seeks this change for several reasons, including to increase labour productivity by reducing the downtime and duplication that comes with crew changes; reduce operating costs by essentially halving helicopter travel costs; and improve safety risk management, particularly by halving the risks associated with helicopter transport and crew change handovers.

[115] The capacity of Esso to change the rostering system in the event the Agreement is terminated is to be assessed by reference to the manner in which Esso will seek to introduce the change in the event it is permitted to do so. This is important in assessing the likely consequence of the termination of the Agreement. As already noted, first and foremost Esso wants to negotiate an agreement so that its capacity to introduce a 14:14 roster cycle is not impeded in the manner currently set out in the Agreement. Whether through a new agreement or otherwise, Esso proposes to deal with the implementation of the 14:14 roster cycle in accordance with the consultation processes in the Hydrocarbons Award, 128 including consideration about the maximum weekly hours, rostering and ordinary hours of work clauses.129

[116] According to Esso, consultation will involve a notice period of 6 months before the introduction of the 14:14 roster cycle, a consideration of views, feedback and issues raised by employees; consideration of issues raised by employees’ representatives and if required, following standard risk assessments, consultation with relevant experts or consultants regarding appropriate risk control measures. 130 Esso maintained that the manner of introduction of the 14:14 roster cycle will take account of information drawn from the consultation process, together with health and safety considerations, and mitigating measures recommended by experts.131

[117] The manner in which Esso proposes to implement this change to rosters will likely have a mitigating effect on many of the potential consequences of the implementation of the roster alteration identified by the Unions.

[118] I also accept that termination of the Agreement will likely provide fresh cause or impetus for the employees and the Unions as their bargaining representatives to consider compromise, rather than pursuing the status quo vis-à-vis the roster and overtime alterations. As for Esso, there is also likely to be some incentive, if not imperative, to reach agreement over the changes because the alternative is to push through its change without support of the workforce. This would likely be disruptive, time-consuming and unproductive to maintaining, or perhaps in this case, attaining a harmonious industrial relations environment. However, if bargaining does not bring about then a change to rosters would be subject to the consultation processes in the Hydrocarbons Award and the employees will have access to the dispute resolution mechanism under that award.

[119] That said, I am not persuaded that bargaining has reached the point of impasse despite the protracted bargaining and the litigation that bargaining conduct has spawned. The summary of the positions of the parties discloses difficulty but not impossibility of an agreement being made. I do not accept as Esso contends, that even if agreement is reached with the Unions on a 14:14 roster cycle, that employees would not support such a change. There is no evidence to support the contention and it is speculative. Moreover, there are other bargaining tools available to the parties to narrow or eliminate differences. The parties have been utilising the Commission to facilitate bargaining. They could ask the Commission to make a recommendation or express an opinion about particular claims and how these might be resolved. The parties could agree in the context of the s.240 proceedings to an arbitration of one or more of the outstanding claims. Section 240 is part of the bargaining framework and intended to facilitate the resolution of bargaining disputes by mediation, conciliation and consent arbitration. The parties could also take up the course suggested by the Full Bench in Esso Australia Pty Ltd v AMWU and others 132 at [76], either as a whole or in respect of one or more particular issues.

[120] Esso also contends that the continued operation of the Agreement is hindering, rather than encouraging, good faith bargaining. It contends that there is a reluctance on the part of the Unions and employees to forgo that which Esso describes as legacy working conditions.

[121] It must be accepted bargaining thus far has not produced an agreement. There is also no suggestion in the evidence that an agreement is imminent. No doubt also there is a desire on the part of the employees to maintain existing working conditions particularly those concerning rosters and overtime. Similarly, Esso strongly desires that these existing restrictions be removed. There is nothing unusual in such a state of affairs. The existence of the Agreement might well have contributed to the state of affairs, but it does not follow that its existence is hindering good faith bargaining. The good faith bargaining requirements do not require concession to be made. Mechanisms are available under the Act to deal with a failure by a bargaining representative to comply with one or more of the good faith bargaining requirements. It is telling, in assessing the veracity of this contention that in the array of matters brought before the Commission related to bargaining and industrial action, only one has concerned an application for a bargaining order. That application was made early in the piece in 2014. No such application has since been made. Therefore, the submission that the Agreement’s existence is hindering good faith bargaining must be rejected since it implies that in order that good faith bargaining requirements be met a party is required, after a lengthy and perhaps protracted period of unfruitful bargaining, to make concessions, even reasonable concessions. That is not the case under the scheme of the Act. Hard bargaining is not inconsistent with good faith bargaining and that is what appears to have been occurring here, on both sides.

[122] I also reject Esso’s contention that the conditions that the Unions and employees seek to be retained in an agreement are legacy working conditions. It is doubtless the case that the current 7:7 roster cycle is out of kilter with the rostering cycle utilised by many of Esso’s contractors and Esso in respect of some of its offshore employees. But this was (although perhaps to a lesser degree) also the case when Esso freely entered into the Agreement. The constraint on change are those imposed by the agreement of those making the Agreement. 133 It is the package to which the bargaining parties last agreed.

[123] It is clear from the evidence given by employees that they do not regard the rostering arrangements under which they currently work as legacy conditions but rather an important feature of their employment around which many have made family and other personal arrangements. Just as Esso’s desire to have an altered rostering arrangement in operation should not be discounted merely because the cost savings it would generate are small, so to the employee’s desire to maintain existing arrangements around a known roster should also not be discounted by referring to such conditions as legacy conditions. The current rostering system was not one inherited by Esso but rather it was a system, including its inherent restrictions, which forms the package of employment arrangements for which it bargained and ultimately agreed. Moreover, unlike the “no forced redundancy” provisions in Aurizon which had the effect of continuing the employment of 69 employees who were not otherwise engaged in productive work, 134 employees of Esso are not inhibited in engaging in productive work by reason of the 7:7 roster cycle, even though it might be said that a 14:14 roster cycle would be more efficient and so more productive.

[124] I accept that Esso’s case of termination of the Agreement is not pre-emptory. The bargaining process under the existing dynamic has been extensive and has not produced an agreement. I also accept that termination of the Agreement is more likely than the status quo to facilitate a replacement agreement. This is because not only will the dynamic have changed but the industrial armoury available to the Unions or at least one of them and many of the employees is significantly diminished, a matter to which I will return when I consider the effect of termination of the Agreement on the employees.

[125] I also accept that if the Agreement is terminated the employees would continue to be covered by proper minimum industrial standards, namely the Hydrocarbons Award and the NES, and they retain the capacity to bargain collectively for better terms and conditions.

[126] Later I will deal with the effect on employees of the termination of the Agreement, particularly the roster changes proposed. I do not consider these matters affect my consideration whether the termination is not contrary to the public interest in the circumstances of this case. The deleterious effect or impact on various employees (particularly those relating to family life and social inclusion) of the proposed roster change, presupposes a causal connection between the termination of the Agreement and the implementation of a 14:14 roster cycle. For the purposes of considering whether a particular matter is relevant to assessing whether the termination of the Agreement is not contrary to public interest, it is necessary to understand that termination of the Agreement will not necessarily have the result that rosters will be altered. This is because firstly, Esso’s primary and preferred position is that it wants to continue to bargain for the change, albeit under a bargaining dynamic that has removed the Agreement as the mechanism regulating changes to rosters. Secondly, even absent an agreement, Esso is committed to and indeed must consult over the introduction of any proposed rostering alteration. It seems to me in the circumstances that it is just as likely that the implementation of a 14:14 roster cycle would occur as a consequence of making a new agreement rather than the termination of the existing one because of the changing dynamic that will be brought about by the termination of the Agreement.

[127] Moreover, the affected employees and their bargaining representatives will have the usual bargaining tools available to them, including protected industrial action, unless as is the case with the AWU, they have been disqualified from organising or taking protected industrial action by contravening the Act and orders of the Commission. Collective bargaining remains available to the parties. The parties will remain bound by the good faith bargaining requirements in the Act. They will be able to exert such legitimate industrial pressure as is available to them under the Act to bargain and reach agreement. The scheme of bargaining under the Act which gives effect to the objects in s.171, contemplates bargaining in good faith, agreement making, termination of an agreement that has passed its nominal expiry date, recourse to protected industrial action and limitations thereon in the event of conduct that contravenes certain kinds of orders of the Commission. The scheme allows access to the Commission for mediation, conciliation, making recommendations, expressing an opinion and consent arbitration. The scheme is replete with swings and roundabouts. That is part of the “balanced framework” contemplated by the object in s.3 and paragraph (f) thereof.

[128] I therefore do not consider that a change in the bargaining dynamic brought about by the termination of the Agreement, without more, to be a factor telling against a conclusion that termination of the Agreement is not contrary to the public interest. The change in bargaining dynamic is, in effect, contemplated by the scheme of the Act. Termination of an agreement during bargaining will likely have this result. But that is not to say that a change in bargaining dynamic is irrelevant. As will later be seen, the change in bargaining dynamic brought about by the termination of an agreement may be relevant in assessing the impact of termination on the various parties covered by an agreement.

[129] I also do not consider the contested risks to safety and the identified impact on affected employees’ family life and social inclusion as telling against such a conclusion. As to the former, I rely on the reasons I later give on the subject. As to the latter, I rely on reasons already set out.

[130] The two other matters identified by the Unions as telling against a conclusion that termination of the Agreement is not contrary to the public interest are addressed below.

[131] The Unions say that termination of the Agreement and the resultant alteration to the affected employees’ terms and conditions, particularly a reduction in pay, will have a negative impact on the Gippsland economy. According to the Unions, this will likely occur in two ways. Firstly, the introduction of the 14:14 roster cycle would negatively affect the Gippsland economy as many of Esso’s offshore employees live in the Gippsland region with their families and many have said that they will resign if the 14:14 roster cycle is introduced. 135 This would deprive the economy of the incomes of those employees who would otherwise have spent the income or a portion of it locally. Secondly, for those that remain, incomes would be reduced. Collectively, Esso’s offshore employees earn a significant amount before and after tax.136 Thus, if wages are reduced by 60% then it could lead to adverse economic impact on the Gippsland region.137

[132] The Unions submit that the potential effect on the economic welfare of the Gippsland region is clearly a matter of public interest. 138

[133] On this matter, Esso says that there is no evidence to support any finding about the effect of termination of the Agreement on the economy and it is a weak argument engaging in a speculative approach. 139

[134] The Unions’ contention about impact of the termination of the Agreement on the Gippsland economy draws principally upon the effect of the termination of the Agreement on the incomes of the employees who are covered by the Agreement. There is thus an overlap between considering this matter as a public interest consideration and giving consideration to this factor under s.226(b) of the Act. Apart from the absence of any expert economic forecasting to support the contention, it cannot be said that there will be an immediate impact on the Gippsland economy by reason of the termination because although notionally the underpinning industrial instrument will be the Hydrocarbons Award, practically, affected employees will continue to receive the same or substantially the same income as they currently enjoy. This is because incomes will be maintained for a period through the Undertaking and beyond that much will depend on whether a new agreement is made in terms of that agreement. Beyond the period of the Undertaking, though it is theoretically possible, Esso does not say that it will reduce the wages of the affected employees back to the minimum rates prescribed under the Hydrocarbons Award (although it doubtless reserves to itself the “right” to do so). Doubtless Esso will have to weigh such financial benefit that might accrue to it from doing so against the likely negative impact on employee morale, productivity, cooperation, employee relations and retention.

[135] Similarly, although a number of employees have given evidence that the introduction of a 14:14 roster cycle might result in their resignation, as already noted, Esso does not intend to immediately implement a new roster but will do so, first by trying to reach an agreement about the terms of a new enterprise agreement with the Unions and its employees. Secondly, absent an agreement, implementation will be through consultation in the manner earlier described. In that consultation, the personal circumstances of individual employees would likely be taken into account. Consequently, that which in the evidence is an expression on the part of some employees of an intention to resign might never eventuate.

[136] In short, reaching a conclusion that the termination of the Agreement will have a deleterious effect on the Gippsland economy on the state of the evidence is in the realm of speculation rather than a well-founded assessment as to a likely consequence.

[137] I am therefore not persuaded that the Unions’ case in this regard tells against a conclusion that termination of the Agreement is not contrary to the public interest.

[138] The Unions also contend that termination of the Agreement will result in pay decreases of around 60% to Esso’s workforce and this factor should be taken into account. They contend that the Commission should not further contribute to the slow growth of wages that Australia has experienced in recent years. 140 Upon the expiry of the Undertaking, Esso will only be obliged to pay employees the remuneration and provide the employment conditions prescribed in the Hydrocarbons Award, which the Unions say will place significant financial pressure on the employees and their families due to the reduction in wages.141

[139] It is contended that wages growth is a macroeconomic issue of national importance broader than the interests of the parties that should be recognised as a matter going to the public interest, just as employment levels and inflation have been previously. 142

[140] Again, Esso says this is a weak argument based on extrapolation and speculation. 143

[141] It is undoubtedly the case that wages growth over the last several years in this country and indeed globally has been at levels far below historical levels of annual wage growth. The many reasons for that which might be described as wages growth stagnation are neither completely agreed nor clear. A detailed discussion about some of the contributing factors is beyond the scope of this decision and indeed the evidence that has been led. However, briefly it is uncontroversial that the low rate of wages growth in Australia reflects a number of structural and other factors. Some of these include the spare capacity in our labour market despite apparently strong employment growth over recent years. There is also the inevitable adjustment that has resulted consequent on the ending of that which has been described as the mining investment boom. This is particularly apparent in those mining exposed states in Western Australia and Queensland. There is also the question of the extent to which there is productivity growth which plainly has an effect on the level of wages growth. Also, the effect of technological changes and globalisation on the capacity to secure high wages growth has not been fully assessed but is a likely contributor to the rate of wages growth. The Reserve Bank of Australia has said recently in respect of these and other factors that it is difficult to know how persistent or important these are to an increased rate of wages growth. 144

[142] There is also little doubt that the rate at which wages are increasing is a macro economic issue of not only national interest but importance. It is a factor that impacts on monetary policy. It is thus capable of being a factor to be taken into account in assessing whether termination of the Agreement is not contrary to the public interest. The more difficult question is how and to what extent will the termination of the Agreement contribute to or impact wages growth. It is in my view overly simplistic to simply point to the fact that the termination of the Agreement will have the result that the underlying minimum terms and conditions of employment for a relatively small group of employees (compared to the workforce as a whole) will be those contained in Hydrocarbons Award; and then to conclude that as the award contains much lower rates of pay, wages go backwards rather than forwards thus contributing to wages growth stagnation. As I have already noted, the immediate impact will be that by and large the wages of the affected employees will not be altered (at least not significantly) because of the Undertaking. What happens during the operation of the Undertaking is unknown. It might be that a new agreement is made. Esso maintains that it wants to make a new agreement which increases the wages of the affected employees. If that eventuality transpires then wages will increase and not decrease so that the asserted group of employees’ contribution to stagnation will not eventuate. Moreover, as I have already noted, though it is theoretically possible, Esso has not said that it will reduce the wages of the affected employees back to the minimum rates prescribed under the Hydrocarbons Award. But even if this occurred, there is no data available to me to assess what, if any, actual impact there might be on the rate of annual wages growth in the economy.

[143] As with the earlier matter, on the evidence, an assessment of the impact, if any, of the termination of the Agreement upon stagnant wages growth would be speculative. Such impact as there might be could just as readily go either way. In any event, in order to make good the connection sought to be made by the Unions, greater attention to expert economic analysis and forecasting would be required.

[144] I am not persuaded that any of the matters to which the Unions have averted establish that the termination of the Agreement is contrary to the public interest. There are no other matters which have been raised which suggest termination is contrary to the public interest or which might weigh against a conclusion that termination is not contrary to the public interest. Therefore, for the reasons appearing above, I am satisfied that termination of the Agreement is not contrary to the public interest.

6. Section 226(b)(i): Views of Esso, the Unions and the employees covered by the Agreement

[145] Esso, as the applicant, supports the termination of the Agreement. The Unions and most of their members oppose this course. Employee opposition is evident in the witness statements, and in the survey showing that 94% of employees surveyed opposed termination of the Agreement. 145 This much is unsurprising. It is doubtless the case that the opposition of employees, reflected in the survey and the witness statements, is in part influenced by the prospect of the employees reverting to Hydrocarbons Award wages and working a 14:14 roster cycle, and the impact of these changes on incomes and personal and family responsibilities. So much is clear from the questions posed in the survey. The answers to the questions are consistent with the evidence given by employee witnesses about, for example, the impact that a 14:14 roster cycle will have on family and personal commitments, and on community activities.

[146] As I have already noted, these consequences may not eventuate or may not be as significant as the concerns of employees disclose. Moreover, the concerns of the employees as to the effects of a changed roster on fatigue, are to be assessed against the conclusions I later reach as to the safety issue. There is also the evidence of Dr Katharine Parkes 146 which sets out her various observations and conclusions (based not only on her own research but on a review of available literature) about the impact of a 14:14 roster cycle on issues such as fatigue and the effect on employees and their families, albeit not in the context of offshore work in the Bass Strait, but certainly including offshore work elsewhere. Thus, whilst the views of the affected employees are important, the weight that attaches is to be measured against these factors with the consequence that the weight attaching diminishes.

[147] Taken together and balanced as against the opposing views, the views of Esso, the Unions and the affected employees do not weigh against a conclusion that it is appropriate to terminate the Agreement.

7. Section 226(b)(ii): Circumstances of and likely effect that termination would have on the employees

[148] The Unions led a substantial amount of evidence relevant to the circumstances of and the likely effect of the termination of the Agreement on the employees covered by it. These matters and their import are considered below.

Employees’ safety

[149] First, there is the issue of impact of the termination of the Agreement, and more particularly the impact of a 14:14 roster cycle on employee safety. The Unions contend that Esso has not demonstrated that the proposed 14:14 roster cycle would be safe particularly having regard to the noisy cabins which impair sleep and contribute to fatigue. 147

[150] It was submitted in the WD Proceeding that studies have shown that on average the 14:14 workers in the North Sea sleep less than the 7-8 hours required to avoid fatigue and there is no reason to expect a better result in Bass Strait. 148 Further, older workers are known to sleep worse than younger workers149 and the offshore workforce in Bass Strait is a relatively old cohort.150 The Unions say that there is already evidence of employees sleeping poorly in Bass Strait under the 7:7 roster cycle and therefore moving to a 14:14 roster cycle will be expected to have an adverse effect on some employees’ health and safety as there will be no improvement to sleep duration and quality.151

[151] In October 2016, 376 union members employed by Esso 152 were invited to participate in a survey, 253 of which completed the survey.153 The relevant findings of the survey of employees experience working offshore were as follows:

•  75% of members in this survey share with at least one other person during their time offshore;

•  65% of members describe their living conditions offshore as ‘poor’;

•  only 8% expect that they would easily cope in physical terms with working 14 consecutive 12 hour shifts, while 42% report that they would either not cope at all (6%) or that they would really struggle and that they fear they would not cope (36%);

•  87% of members disagree with the statement ‘sleeping with other workers in a room does not cause me any problems’. Further, 79% disagree with the idea that ‘lack of privacy is not an issue for me’;

•  73% disagree with the suggestion that they ‘get enough sleep’; and

•  77% disagree with the idea that ‘even after 7 days offshore, I feel alert and energetic’. 154

[152] Esso’s evidence was that day-shift employees are only required to share a room 8.1% of their time offshore and mostly this is when a shutdown is occurring, night shift employees are never required to share a room and it brings in extra quarters during periods of high activity to accommodate workers. 155 Those working night shift are designated rooms located in the quietest area of the platform with special noise attenuation improvements.156 Evidence was given that Esso’s accommodation on its platforms is comparable to that in the North West shelf platforms.157

[153] One of the primary concerns about introducing a 14:14 roster cycle is the effect of fatigue on employees. According to Esso’s ‘Fatigue Management Resource Manual’ (Fatigue Manual), fatigue is defined as “a state of impairment with mental and/or physical components, which is associated with reduced alertness, performance and safety.” 158 It also says that fatigue builds up in response to not getting adequate recovery sleep and can be made worse by other factors including high workload, poor medical fitness and demands of the physical environment, with the effect that the person may not continue to perform tasks safely or efficiently.159

[154] The Fatigue Manual indicates that a 48 hour work week is considered to be a moderate risk and a 56 hour work week is considered high risk. 160 On the issue of consecutive shifts, Safe Work Australia’s ‘Guide for managing the risk of fatigue at work’ suggests that it should be limited to 5-7 days in a row,161 whilst the Fatigue Manual does not address the issue.

[155] A further matter which the Unions contend will make the employees’ workplace more hazardous and the risks more significant is that Esso’s intention is to increase the levels of overtime work if the overtime matrix is removed by the termination of the Agreement. 162 The Unions say that the question is not whether the roster is “safe” or “unsafe” in absolute terms but whether the Commission is satisfied that the roster would be safe on average for the whole cohort of employees, an issue about which they say the Commission cannot be satisfied. This is because the stresses of long working hours will risk the safety of at least some of the workers.163 Esso submits there is no evidence to support that the removal of the overtime matrix will result in more overtime being worked and in turn employees working unreasonable or unsafe working hours.164 The overtime selection matrix only applies to non-standard overtime and therefore Esso says there is no reason to believe this would present an issue between the approved safety plan and fatigue management system.165

[156] The Unions also rely on the Commission’s decision in the Working Hours Case, 166 where the Commission accepted that “working extended or long hours of work is likely to give rise to a risk of fatigue” but that “a number of factors will impact on whether the number of hours worked cause fatigue.”167

[157] The Unions also rely on the OH&S obligations in the Offshore Petroleum and Greenhouse Storage Act 2006 (Cth) 168 (Offshore Act) and the Offshore Petroleum and Greenhouse Gas Storage (Safety) Regulations 2009 (Cth)169 (Offshore Regulations), submitting that approving a termination which could result in a work environment that fails to meet legislative requirements would be contrary to the public interest.170

[158] Clause 11 of Schedule 3 to the Offshore Act provides as follows:

“11   Duties of employers

General duties in relation to employees

(1) An employer must take all reasonably practicable steps to protect the health and safety of employees at a facility.

…

Specific duties in relation to employees

(2) An employer is taken to be subject, under subclause (1), to each of the following requirements:

(a) to take all reasonably practicable steps to provide and maintain a working environment that is safe for employees and without risk to their health;

…

(c) to take all reasonably practicable steps to implement and maintain systems of work that are safe and without risk to health…”

[159] Regulation 3.1(2) of the Offshore Regulations relevantly provides:

“3.1 Avoiding fatigue

…

(2) The [employer] must not allow, or require, a member of the workforce who is under the person’s control, to work for:

(a) a continuous period; or

(b) successive continuous periods;

of a duration that could reasonably be expected to have an adverse effect on the health or safety of the member of the workforce or other persons at or near the facility.

Penalty: 10 penalty units.”

[160] Esso says that as the independent expert regulator and Commonwealth statutory agency established under the Offshore Act, the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) has approved Esso’s “safety case” in respect of each offshore facility operated in Bass Strait and the Offshore Regulations set out the requirements for the content of safety cases. In addition, its safety management system is governed by the Operations Integrity Management System which puts in place policies relating to safety, security, health, environmental and product safety. It considers that it has a comprehensive fatigue risk management system in place which includes but is not limited to the following:

•  a detailed Fatigue Manual;

•  active and routine use of an Offshore Worker Fatigue Risk Assessment and the Safe Work Practice 50.126 for fatigue management throughout the offshore facilities, including a number of checks for fatigue in base personnel safety management processes, including the job safety analysis tool;

•  a strong cultural message within the Esso workplaces that employees should not work if they consider that they are not feeling 100%;

•  very modest overtime rates (on average 24 hours per annum for maintenance employees, 10.7 hours per annum for Operations Technicians and 3.3 hours per annum for Platform Services Technicians); and

•  a demonstrated willingness to engage expert consultants in relation to fatigue management systems and management offshore, and to address the issues raised by that consultant. 171

[161] Esso engaged Dr Adam Fletcher in 2010 to provide recommendations in relation to the development of a risk based fatigue management system, which Esso says it has adopted and implemented those recommendations since then by:

•  implementing its Fatigue Manual in 2014 with input from union delegates, workplace health and safety representatives and the Manager Occupational Health;

•  notifying employees and contractors in 2014 of the Fatigue Manual and the requirement to undertake online Fatigue Management Awareness training;

•  conducting face to face training with all offshore field supervisors, field superintendents and operations superintendents on fatigue management including how to assess and manage fatigue in an employee;

•  establishing a fatigue management cross-site working group to draft, release and implement the Safe Work Practice 50.126 Fatigue Management and Work Hours guidelines and checklist;

•  utilising the TapRoot incident investigation process which includes considering fatigue as a causal factor to establish root cause and explores the causes of fatigue. The JSA Task Hazard Assessment (THA) includes that fatigue be considered when planning work activities; and

•  following consultation with employees, making significant improvements to amenities and facilities including soundproofing accommodation, replacing metal cabinets with laminate cabinets, replacing curtains with thicker material, galley flooring, echo panel wall treatment, ceiling tiles, window treatments, seals, low noise grilles on internal doors and low noise glides on dining chairs. 172

[162] Esso called expert evidence from Dr Parkes. Dr Parkes opined that the 14:14 roster cycle is safe, particularly if worked as a fixed shift pattern. 173 Esso also relies on the Unions’ expert witness Dr Fletcher accepting that the roster can be worked safely “in a context and system that provides measurable ongoing assurance that safety and fatigue-related risks are adequately managed.”174

[163] The Unions contend that Dr Parkes’ opinion that the 14:14 roster cycle is safe is unwarranted as in evidence she confirmed the opinion is based on an assumption that the circumstances in North Sea can be applied to the workers in Bass Strait and no study of the cohort in Gippsland has been completed. 175 As to the assertion that the 14:14 roster cycle is worked elsewhere, the Unions contend that it does not follow that it complies with the NES in relation to employees working unreasonable additional hours and moreover, it cannot be assumed that other workplaces are identical to Bass Strait.176 The Unions contend that reasonableness of the hours worked may only be considered in the context of the work at the workplace in the Bass Strait177 (and presumably also by reference to the circumstances of each individual employee). Dr Parkes explained that no study has been completed comparing the 14:14 roster cycle with the 7:7 roster cycle because the use of 7:7 roster cycle is rare for offshore oil and gas operations.178

[164] Esso argues that there are safety benefits of a 14:14 roster cycle including reducing the number of handovers and crew transfers, changeover helicopter flights and better adaptation to night shift work than the 7:7 roster cycle. 179 It says that it has been successfully implementing a 14:14 roster cyle with contractors for many years with no detrimental impact on safety or heath and further that the minimum swing length for offshore based sectors (such as construction, drilling and vessel operators) in Australia is 14 days.180 Esso also makes the point that in order to succeed in its application it does not need to demonstrate whether a 14:14 roster cycle on its Bass Strait platforms is safe.181

[165] When a crew changeover occurs a handover is performed which involves discussions with the outgoing crew. There are risks associated with crew changeover including failing to communicate appropriate information, providing inaccurate information and loss of information, which Esso says can be reduced with the introduction of the 14:14 roster cycle. 182

[166] Another safety risk which Esso says would be reduced with the introduction of the 14:14 roster cycle is helicopter flight risk. Under the 7:7 roster cycle, Esso’s helicopter fleet flies approximately 3,000 hours per year, completing approximately 16,000 take-offs and landings. As crew changes would occur every 14 days rather than every 7 days, it says there will be a 50% reduction in the frequency of Esso crew change helicopter flights. 183

[167] In summary, Esso maintains that the combination of its fatigue management system and the regulatory framework in place to manage safety are appropriate safeguards that would prevent unreasonable fatigue risks on its platforms. 184

[168] As earlier noted, the termination of the Agreement will not immediately and certainly not necessarily result in the implementation of a 14:14 roster cycle. The circumstances under which such an alteration to the rosters might be implemented is relevant in assessing the circumstances of the employees and the likely effect that the termination will have on employees covered by the Agreement. It is doubtless the case that the termination of the Agreement will facilitate a change to the current roster cycle as impediments to change contained in the Agreement will have been removed. But it is relevant, as I have earlier observed, that Esso desires to implement the change through agreement obtained through ongoing bargaining post termination. If an agreement cannot be garnered, Esso will implement the change through a consultation and change management process. Thus, it must be accepted that the nature, extent and timing of any change in the roster cycle cannot be predicted with any degree of certainty and as any impact on employees is dependent, in part, on the nature, extent and timing of any alteration and the outcome of consultation, the precise effect on employees similarly cannot be predicted with any degree of certainty.

[169] I accept that there is a risk that the longer 14:14 roster cycle will contribute to the level of fatigue that might be experienced by some employees. The risk of fatigue from working extended hours should not be underestimated. That there are such risks however does not mean that a 14:14 roster cycle is unsafe. That which is required is the taking of all reasonably practical steps to eliminate or to minimise such risks to protect the health and safety of employees. I have earlier set out the evidence given by Esso as to its approved safety case, its safety management system and its fatigue risk management system. These systems are in place to address the very risks that the Unions properly have identified. Esso is also able to garner its experience in managing such risks in connection with its contractor workforce which largely already works the longer 14:14 roster cycle. In my view, the combination of international experience, Esso’s existing health and safety framework including its fatigue management system and the regulatory framework governing Esso’s offshore operations in the Bass Strait, provide a sound platform for it to manage safety and implement appropriate safeguards to eliminate or reduce the risk of fatigue health and safety risks associated with its employees working on a 14:14 roster cycle. In these circumstances, I do not consider that this matter weighs against a conclusion termination of the Agreement is appropriate.

Family life and social inclusion

[170] The Unions say that the introduction of the 14:14 roster cycle will hinder workers’ ability to be involved in family life which goes against one of the objects of the Act to assist employees to balance their work and family responsibilities by providing for flexible working arrangements. 185 It is contended that family life and social inclusion would be strained by the highly inflexible 14:14 roster cyle if workers are not able to comfort their family and friends in person in the event of a difficult day, illness, accident or death.186

[171] The Unions rely on evidence from employees that a move to the 14:14 roster cyle will affect their social inclusion by making it difficult to keep connections with friends and remain involved in the community including participation in sporting teams, bands and other clubs. 187

[172] The key findings of the survey of employees in 2016 in relation to family life and social inclusion were as follows:

•  71% of members were married with dependent children and 74% had either 2 or 3 children;

•  out of those who had a spouse, 15% indicated that their spouse worked full-time;

•  a further 12% indicated that they had someone else who was financially dependent on them (e.g. elderly parents);

•  one in five (20%) members stated that during the week they are at home, they are responsible for the care and supervision of their children;

•  15% of members have a child with special needs;

•  over one third (39%) of members have another person reliant on either themselves or their partner for care and support;

•  88% agree that by the end of the 7 days offshore they are very anxious to get home;

•  78% of members in this survey say that a move to a 14:14 roster cycle would have a negative effect on their and/or their family’s regular social, sporting, community, educational or recreational activities;

•  most members believe that a move to a 14:14 roster cycle would make their lifestyle worse in a range of ways, such as ‘missing their family’ (95% say that this would be worse), ‘fatigue’ (91%), stress levels (87%), their mood (85%) and ‘personal conflicts’ (81%); and

•  key disadvantages of a shift to a 14:14 roster cycle were seen to be:

•  the amount of time I will spend with the children (84%)

•  how I will physically cope with work (80%)

•  my involvement in community and sporting activities (79%)

•  my involvement in family life (77%)

•  my general mood (76%) 188

[173] In her report dated 21 March 2017, Dr Parkes says that although “roster patterns have significant implications not only for personnel working offshore but also for their partners and children”, the “14:14 roster has the advantage that it allows the offshore partner longer leave breaks to spend with family members but, conversely, it has the disadvantage of requiring the home partner to manage the household on their own for longer, and repeated parental absence may be difficult for young children.” 189 The Unions say that even though Dr Parkes has suggested that there are advantages to a 14:14 roster cycle, she has not interviewed the Bass Strait families and as such could not say whether the benefits would outweigh the detriments in Bass Strait.190

[174] The evidence from affected employees on which the Unions rely includes the following:

•  there is a concern that moving to a 14:14 roster cycle will have an impact on the employees’ children and partners and their relationship with them; 191

•  there is a concern that moving to a 14:14 roster cycle will shift the responsibility of parenting onto partners; 192

•  moving to a 14:14 roster cycle will make it more difficult to keep connections with friends and remain involved in the community through sporting teams, bands and other clubs; 193

•  moving to a 14:14 roster cycle will make it difficult for employees to continue to care for family members with special needs; 194

•  moving to a 14:14 roster cycle will force their partner to give up their job; 195

•  moving to a 14:14 roster cycle would mean that employees will consider resigning from their positions; 196 and

•  custody arrangements for children would have to be re-negotiated if forced to move to a 14:14 roster cycle. 197

[175] Esso considers this concern to be emotive speculation rather than fact stating that the 14:14 roster cycle is not a direct consequence of termination. 198 Esso argues that before a 14:14 roster cycle is implemented, further consultation and bargaining would take place, that the Unions have ignored that many workers on the Bass Strait already work a 14:14 roster cycle and that offshore employees would have more time off work under a 14:14 roster cycle compared to a 7:7 roster cycle.199 In addition, it says that frequency of reunions and partings will decrease by 50%, travel time will decrease because there will be fewer crew changes and the longer stretches of time at home will allow for more options for family holidays.200

[176] This evidence given by employees summarised earlier above was not seriously challenged by Esso save by way of rhetorical flourish in its submissions. Nonetheless, the evidence must be assessed in context. Firstly, these are matters of concern, and whilst doubtless they are legitimately held concerns, the concerns might not bear out. Secondly, many of the matters of concern identified seem to me to arise in connection with the 7:7 roster cycle. They arise because the concern related to blocks of time at work that cause employees to be away from family and friends, from community and social events, and which place greater parental or carer responsibilities on the employees’ partners. Some of the concerns, such as custody arrangements and the like are more problematic. They are not however insurmountable.

[177] Nevertheless, it must be accepted that an alteration to the roster of the kind envisaged in circumstances where employees have worked a different kind of roster cycle will have a degree of disruption to particular employees who have organised their personal and family arrangements around the existing roster cycle. Some of this dislocation and disruption might be addressed through consultation, the period of notice given for the implementation of the change and other mitigating measures which could be identified during consultation. There are also plainly upsides in the proposed roster cycle including most significantly that employees working under a 14:14 roster cycle will, compared to working under a 7:7 roster cycle, have longer breaks from work and fewer swings at work. In the end, it is unlikely that each employee’s personal circumstances will be able to be accommodated and so, in the context discussed further below, some weight is to be attached to the fact that some employees will experience some deleterious consequences from a change in the roster.

[178] I accept that repeated longer absences from home of a parent will likely be a difficult adjustment for children particularly younger children of the absent parent. That there will be an impact and a need for adjustment is not I think in dispute. That in some cases this will cause some difficulty must also be accepted and appropriate weight should be given to the fact that this is so. I also accept that there are some potential benefits to employees, their families and their capacity to participate in the community with friends and connections. Self-evidently, longer blocks of time spent at work under the 14:14 roster cycle means longer blocks of time spent away from work, at home or in the community. Additionally, the frequency with which there are reunions and departures will decrease because the number of swings will effectively be reduced by half. The statistical prospect of an employee missing a significant event by reason of work will be unchanged. The number of days that an employee will be offshore and at work will be the same, only the patterns of periods of work offshore will change and the number of swings will reduce. Time spent onshore will remain unchanged. Travel time will also be halved.

Loss of pay and conditions

[179] It is submitted that if the Agreement is terminated, workers will suffer a significant loss of pay and conditions. 201

[180] It is submitted by the Unions that the conditions provided in the Undertaking are less favourable than the Agreement. The differences identified by the Unions are earlier set out.

[181] Another consideration the Unions say is relevant is that with the introduction of a 14:14 roster cycle, employees would likely work additional non-standard overtime for no additional pay when working a second 84 hour week continuous after the first week. 202

[182] Esso says that the Undertaking will operate for six months post termination unless a new agreement is reached and that the Unions have exaggerated the differences between the Undertaking and the Agreement. 203 The reasons for this have been earlier set out. Upon termination, Esso says that there will be further bargaining under new dynamics where the parties can no longer refuse to compromise.204 By parties I assume Esso means the employees and the Unions. There is nothing in the change in dynamics that termination will bring about that will mean that Esso can no longer refuse to compromise. Indeed, the opposite is more likely to be true.

[183] There are several relevant factors in considering the effect of the termination of the Agreement upon the employees’ wages and conditions of employment. The first of these is that the safety net of minimum terms and conditions of employment is set out in the Act as constituting the relevant modern award and the NES. Agreements made under the Act have a finite nominal life and continue to operate until a new agreement is made or the agreement is terminated in accordance with one or more of the provisions under the Act. Secondly, there is the fact that the Undertaking given by Esso to its employees will operate for a period of six months. In that time, a new agreement might be made which might provide for at least wages to be more beneficial than those which currently pertain. Thirdly, such changes as might occur to the contentious rostering system might also be brought about by agreement and absent an agreement will certainly be brought about through consultation in the manner earlier discussed. These last two matters mitigate the potential adverse effect on employees that the Unions say will be brought about in the event of the Agreement’s termination. This must also be balanced by the fact that bargaining for an agreement has by any measure been prolonged and hard fought.

[184] That is not to say that the effect or potential effect of termination on the employees’ terms and conditions is not to be taken into account. Appropriate weight must of course be given to the fact that Esso would be handed the capacity to reduce the terms and conditions back to the minimum contained in the Hydrocarbons Award. Although in my assessment it is more likely that in the event that the Agreement is terminated a new agreement will be made before Esso could reduce terms and conditions back to those in the Hydrocarbons Award, the possibility that this might be a consequence cannot be altogether disregarded and that contingency and its potential effect on employees must be given some not insignificant weight. Not every termination of an agreement under s.226 of the Act has an adverse impact on employees. Indeed, many cases with which the Commission deals have the opposite effect because the agreements that are terminated are outdated and the restoration of the relevant modern award has a positive impact on the affected employees’ wages and conditions of employment. Thus, just as this would be a factor weighing with appropriateness of a termination, so too it must be accepted that a shift or potential shift in the opposite direction, weighs against appropriateness. How much so will depend upon the circumstances of a given case. In this case, a significant immediate shift will not occur because of the Undertaking, whether an actual significant shift occurs depends on how bargaining under a changed dynamic progresses.

Change in bargaining dynamic

[185] I return then to the change in the bargaining dynamic that would be brought about by the termination of the Agreement and in particular the likely effect on employees. Esso says that a change in the bargaining dynamic would more likely result in an agreement than maintenance of the current dynamic. It is difficult to argue against this proposition because the changed dynamic includes the prospect of returning the employees to the terms of the Hydrocarbons Award. This has the propensity to focus attention and to see the changes currently opposed in a different, and relatively more favourable light. It is uncontroversial that the award terms are substantially inferior to those in the Agreement. Faced with a choice of making a new agreement which increases existing wages but a 14:14 roster cycle and reverting to the Hydrocarbons Award, coupled with the disarming of the AWU and its members of the capacity to take protected industrial action, it is more than likely the choice will be a new agreement.

[186] Esso contends that the affected employees and their bargaining representatives will have the usual bargaining tools available to them, including protected industrial action (unless they have disqualified themselves from taking protected industrial action by contravening the Act and orders of the Commission). Esso says that collective bargaining remains available to the parties and the parties will remain bound by the good faith bargaining requirements in the Act and will be able to exert legitimate industrial pressure to bargain and reach agreement.

[187] This is true for two of the three unions and their members but not in the case of the AWU and its members.

[188] In order to properly assess the change in the bargaining dynamic that will likely be brought about by the termination of the Agreement in the context of its impact on employees, it is necessary first to consider the bargaining regime under the Act.

[189] Section 3 of the Act contains its object which is “to provide a balanced framework for cooperative and productive workplace relations that promotes national economic prosperity and social inclusion for all Australians by” inter alia:

“(f) achieving productivity and fairness through an emphasis on enterprise-level collective bargaining underpinned by simple good faith bargaining obligations and clear rules governing industrial action.”

[190] The bargaining and agreement making framework envisioned by this object is as earlier noted found in Part 2–4 of the Act. Section 171 contains the objects of the Part which relevantly include the provision of “a fair framework the enables collective bargaining in good faith” for enterprise agreements that deliver productivity benefits.

[191] Division 2 of Part 2–4 sets out the character and types of enterprise agreements that may be made under the Act. Division 3 deals with the process of “collective bargaining” which may lead to making an enterprise agreement. Relevant to bargaining for and making an enterprise agreement are the provisions of Part 3–3. Division 4 deals with the approval of enterprise agreements, first by the employees covered by an agreement making it and next, by the Commission. Division 5 sets out mandatory terms of enterprise agreements, and Division 6 deals with the base rates of pay under an enterprise agreement. Division 7 deals with variation and termination of an enterprise agreement, the relevant provisions of which have been earlier set out. Division 8 deals with the Commission’s general role in facilitating bargaining and relevantly includes:

•  good faith bargaining requirements that a bargaining representative for a proposed enterprise agreement must meet; 205

•  making bargaining orders in certain circumstances where one or more of the bargaining representatives is not meeting the good faith bargaining requirements or where the bargaining process is not proceeding efficiently or fairly because there are multiple bargaining representatives for the proposed agreement; 206

•  a serious breach declaration in cases of serious and sustained contraventions of bargaining orders where contraventions significantly undermined bargaining for a proposed agreement, 207  with the prospect of a bargaining related workplace determination being made;208

•  scope orders, which may be made in certain circumstances to resolve disputes about the scope of a proposed enterprise agreement; 209

•  enabling the Commission, on application by a bargaining representative for the proposed agreement, to deal with a dispute about the agreement, and may do so by arbitration if all the bargaining representatives have agreed; 210 and

•  the Commission may also conduct a conference and make recommendations or express an opinion in the course of dealing with a bargaining dispute. 211 

[192] Part 3 –3 of the Act deals with the subject of “industrial action”. Division 2 is important in the scheme of collective bargaining established by the Act and regulates “protected industrial action”. Broadly, and subject to complying with a number of specific requirements, employees, unions and others who are bargaining representatives (and, in some circumstances, employers) may organise and engage in industrial action when bargaining for a new enterprise agreement. Industrial action of this kind is “protected” from certain legal consequences that would, or might, otherwise apply to industrial action. 212 Sections 413(6) and 417 of the Act, proscribe the organising and taking of industrial action before the nominal expiry date of an applicable enterprise agreement. Division 8 deals with one of the preconditions to organising and taking of protected industrial action – obtaining a protected action ballot order and obtaining majority support from relevant employees in a ballot for particular forms of industrial action.

[193] Relevant also is s.413(5) of the Act. It sets out one of the common requirements that apply for industrial action to be protected industrial action and provides that neither the bargaining representative nor an employee who will be covered by the agreement, relevantly organising or engaging in the industrial action, must not have contravened any orders that apply to them and that relate to, or relate to industrial action relating to, the agreement or a matter that arose during bargaining for the agreement.

[194] The legislative scheme therefore enables and facilitates good faith bargaining for an enterprise agreement. It establishes good faith bargaining requirements under which bargaining is to be progressed. The bargaining parties may seek the Commission’s assistance to facilitate bargaining through the making of bargaining orders where appropriate or by dealing with bargaining disputes. The scheme facilitates the making and approval of enterprise agreements but does not mandate that result. Once an enterprise agreement is made it has a finite nominal life. During its nominal life, industrial action must not be engaged in or organised. At the end of the nominal life of an agreement, bargaining parties may bargain for a new agreement utilising all of the tools available under the Act including by the organising and taking of protected industrial action unless barred from doing so by the absence of one or more of the common requirements that pertain to protected industrial action. A person to whom an agreement applies may also take steps to bring the agreement to an end in accordance with the provisions of the Act.

[195] In the normal course of events, the termination of an enterprise agreement after its nominal expiry date will leave the bargaining parties with all of the available remedial and coercive weaponry that the scheme allows. In this matter, this will be the case in respect of Esso, the CEPU and the AMWU. However, the availability of protected industrial action to be organised by the AWU and to be engaged in by its members who will be covered by the proposed agreement is not available because of an earlier contravention of an order made by the Commission under s.418 of the Act. That consequence is envisioned by the scheme in s.413(5). Again, in the normal course of events there is nothing unusual or unfair in such an outcome. But this is not strictly speaking a normal case, and not just because of the extended history of bargaining and litigation.

[196] In assessing the likely effect of the termination of the Agreement on employees (the preponderance of whom are AWU members), it is necessary to consider how it is that the AWU and its affected members came to be prevented from taking protected industrial action because of the operation of s.413(5) of the Act.

[197] As earlier noted, since about June 2014, Esso and the Unions as bargaining representatives of various of Esso’s employees, have been engaged in bargaining to make a new enterprise agreement, or agreements, to take the place of the Longford & LIP Agreement, which covers employees at two of Esso’s onshore processing operations at Longford and Long Island Point, the  Esso  Offshore Enterprise Agreement 2011, which covers employees at Esso’s offshore oil and gas platforms and the  Esso  Gippsland (Barry Beach Marine Terminal) Enterprise Agreement 2011, which covers employees at Esso’s Barry Beach Marine Terminal.

[198] Once the nominal expiry date of the abovementioned agreements passed, the AWU and its members were, subject to compliance with the procedures or preconditions mandated by the Act and earlier discussed, able to organise and take protected industrial action in support of claims in bargaining with Esso.

[199] Relevantly, one of the procedures or preconditions was to give Esso written notice of the industrial action proposed, which notice was required to “specify the nature of the action and the day on which it will start.” 213 Industrial action organised or taken which was not specified in such a notice would not be protected industrial action within the meaning of the Act. In furtherance of its bargaining claims, the AWU organised, and many of its members engaged in, various forms of industrial action directed against Esso commencing early in 2015. The first of a series of notices of protected industrial action was given by the AWU on 16 January 2015.

[200] On 3 February 2015, the AWU gave in its fourth notice of intention to take protected industrial action, notice that employees covered by the earlier mentioned agreement would, inter alia, from 12 February 2015, take industrial action in the form of an indefinite ban on the de-isolation of equipment. The nature and scope of this ban ultimately assumed central significance to the operation of subsequently made orders under s.418 of the Act and the effect of s.413(5) on subsequent purported protected industrial action.

[201] As earlier noted, the AWU maintained that all industrial action organised and taken pursuant to the notices was protected industrial action under s.408(a) of the Act. Esso maintained that aspects of the industrial action were not protected action. The disputed industrial action included bans on the performance of equipment testing, air freeing and leak testing, which Esso maintained did not fall within the description “de-isolation of equipment” and therefore was not protected action.

[202] During February and March 2015, Esso made several applications for orders under s.418 of the Act. Relevantly on 5 March 2015, Esso applied for an order under s.418. That application relied on several grounds including the following:

“4.4 Following the issuance of the Notice, the Employees engaged in a ban on the performance of de-isolation of equipment at the Longford Plant.

4.5 Esso responded by arranging for its managerial and supervisory employees to carry out that task.

4.6 Since 2 March 2015, the Employees have expanded their ban to testing procedures associated with the recommissioning of plant and equipment. In particular, the Employees have refused to perform equipment testing, air freeing, and leak testing (the Action).

4.7 In recent days, Esso managers have pointed out to the AWU that the Action is not protected industrial action because it is not covered by the Notice. The AWU, through the local delegate Rob Steed and the Victorian Branch Secretary Ben Davis, confirmed that: (i) the Action was in place; and (ii) the Action would continue because the AWU regarded the Action as part of the notified ban on de-isolation of equipment.”

[203] Thus, Esso was contending that equipment testing, air freeing and leak testing did not fall within the meaning of “the de-isolation of equipment” in AWU’s notice of 3 February 2015, and that the bans on such operations were not, therefore, protected industrial action. It is to be observed that, although the notice of protected industrial action raised a ban on the performance of de-isolation of equipment “and by employees covered by” the three earlier mentioned agreements, the ban was actually imposed by employees at the Longford Plant. The AWU opposed the making of an order under s.418 at a hearing before Deputy President Hamilton on 6 March 2015. The Deputy President determined that on 2 March 2015 operators at the Longford Plant began to advise their supervisors that they would not perform air freeing or leak testing required to be performed for de-isolation and that this refusal or ban was not protected industrial action. 214

[204] Consequently, the Deputy President made the Order which required that industrial action as defined in the order must stop and must not be organised. The industrial action was described in the Order to include:

(a) the performance of work in a manner different from that in which it is customarily performed, or the adoption of a practice in relation to work the result of which is a restriction or limitation on, or a delay in, the performance of equipment testing, air freeing, and leak testing;

(b) a ban, limitation or restriction on the performance of work on the performance of equipment testing, air freeing, and leak testing. 215

[205] The Order was binding on Esso, the AWU and relevantly, employees of Esso who are members of the AWU and who are covered by the Longford & LIP Agreement. 216 It did not bind employees who were AWU members and who are affected by this application. The Order came into effect at 6.00pm on 6 March 2015.217

[206] That which followed on the day after is set out in the judgment of Jessup J in Esso Australia Pty Ltd v The Australian Workers’ Union 218 as follows:

“53. At the hearing when the Commission made this order, the respondent was represented by its organiser with responsibility for the Longford plant, James Ward. Two of the respondent’s delegates at Longford, Mr Steed and Mark Vos, were also present. The order was made at about 3.30 pm on 6 March 2015, and Mr Ward sent a copy of it to Mr Steed by email at about 4.40 pm. Mr Steed received it on his way back to Longford. He then held a telephone conference with the delegates at Longford to inform them of the outcome in the Commission, and of the order that had been made. He directed those delegates to hold meetings of their shifts to advise the respondent’s members of the orders, and what was prohibited under them. Although not mentioned by Mr Steed, one of those delegates, Anthony Malady, gave evidence that he first became aware of the Commission’s order on the afternoon of 6 March 2015 (before Mr Steed’s telephone conference) when he received what was a group message from Mr Steed, stating that orders had been made which required the operators to perform leak testing and air freeing, but, the “[b]an on de-isolations remains”. Mr Steed sent a copy of the Commission’s orders to the other delegates at about 9.10 am on 7 March 2015.

54. On that day, 7 March 2015, there were three items of work scheduled for leak testing and air freeing at Longford which Mark Lloyd, Operations Supervisor – Longford Plants, described as follows:

(a) air freeing on the ‘frac system’, which is work associated with what is known as the ‘Kipper Mercury Removal’ project (KMR Project); and

(b) leak testing on the ‘crude header’, which relates to work on the Crude Oil Stabilisation Plant to rectify some corrosion; and

(c) pressure testing the ‘propane header’, which also relates to work on the Crude Oil Stabilisation Plant to replace a worn valve.

Three employees were to be allocated this air freeing and leak testing work.

55. One of those employees was Gary Jones, an operator and a member of the respondent. On the morning of 7 March 2015, the members of his shift held a meeting. They were addressed by their delegate, Karl Tschugguel. He informed them of the Commission’s order, and what it required. He said that they were not to ban air freeing and leak testing work. There followed a discussion about what could be done without breaching the order. The operators decided that, if points were listed on the ICC, they were de-isolation work and were covered by the ban. They decided that, under the ban, it was open to them to refuse to manipulate the points or valves.

56. At approximately 9:00 am, Mr Lloyd met with Mr Jones. They discussed the leak testing to be performed on the propane header, the pressure rating on the vessels, and the scope of the work generally. Mr Lloyd came away from those discussions with the understanding that Mr Jones was going to perform the leak testing.

57. Mr Jones then spoke to Mr Tschugguel, and informed him that Mr Lloyd had requested that he perform leak testing work on the propane header. He sought clarification as to what he could and could not do as part of the protected industrial action. He told Mr Tschugguel that a bleeder valve on the propane header would have to be manipulated before he could conduct pressure testing. Mr Tschugguel then asked Mr Jones to access a computer to check the electronic ICC. Having done so, Mr Jones said that the ICC was “in place”, and that it also listed the bleeder valve as a tagged valve. The valve was also tagged “in the field”. On the basis of this information, Mr Tschugguel advised Mr Jones that, if a supervisor manipulated the bleeder valve and recorded “de-isolation in progress” on the ICC, both on the computer and in the field, he should comply with the Commission’s order and perform the pressure test.

58. At about 9:30 am, Mr Jones returned to Mr Lloyd’s office and informed him that he would not shut the bleeder valves to facilitate the leak testing. Mr Jones said that he was refusing to do this because the open/shut status of bleeders was recorded on the ICC, and, accordingly, work involving the manipulation of bleeder valves formed part of the de-isolation process. It was, therefore, as Mr Jones informed Mr Lloyd, covered by the ban imposed upon de-isolations of equipment notified on 12 February 2015. Mr Jones said that he was willing to perform the leak testing if a supervisor manipulated the bleeder valves. Mr Lloyd’s response, as stated in his evidence-in-chief, was as follows:

I questioned that. To me it wasn’t part of a ban. I was under the impression we were okay to purge and pressure test, and there was no protected action around that. I felt I understood the ban on de-isolation of equipment. I certainly wasn’t asking him to de-isolate any equipment. I was asking him to perform a leak test. So I suggested he think about that, because I was just asking him to manipulate some bleeders so we could start the pressure test.

59. According to the evidence of Mr Lloyd, Mr Jones also said that he had made this decision after consulting his delegate, Mr Tschugguel. In his evidence-in-chief, Mr Jones denied that, adding that Mr Tschugguel was present at the time, as was another of the respondent’s delegates, Brian Rawnson. Neither Mr Lloyd nor Mr Jones was cross-examined about this point of disagreement. However, what I have said in para 60 of these reasons is taken from the unchallenged evidence of Mr Tschugguel, from which it appears that Mr Jones had indeed had the consultation referred to in Mr Lloyd’s evidence.

60. Mr Lloyd then asked Mr Tschugguel to come to his office, which he did. He (Tschugguel) confirmed that he had instructed Mr Jones not to shut any bleeder valves to progress the leak testing. He said that he had told Mr Jones to undertake pressure testing only after a supervisor had put the “de-isolation in progress” on the computer and manipulated the bleeder valve listed on the ICC. According to Mr Tschugguel’s evidence, the respondent’s members were not refusing to perform air freeing or leak testing as such.

61. This meeting was followed by another at about 10:45 am, also in Mr Lloyd’s office. In addition to Mr Lloyd himself and Mr Tschugguel, Mr Jones and Rob Mahon, Operations Supervisor at Longford, were present. Mr Lloyd stated the applicant’s position that the manipulation of bleeder valves was work that formed part of air freeing and leak testing. Mr Tschugguel then asked Mr Rawnson, to join the meeting. Having done so, Mr Rawnson confirmed, on behalf of Mr Tschugguel and Mr Jones, that it was the respondent’s position that bleeder valve manipulation formed part of the ban on the de-isolation of equipment. He confirmed that the respondent’s members would perform air freeing and leak testing once all bleeder valve manipulations had been completed by supervisory staff.

62. At about 3:30 pm, there was yet another meeting in Mr Lloyd’s office, convened by Mr Kristeff. In addition to Messrs Lloyd and Kristeff, Messrs Rawnson and Tschugguel were present, as was Rob Mackie, Operations Superintendent at Longford. At the meeting, Mr Kristeff asked Messrs Rawnson and Tschugguel whether they had been provided with the Commission’s order made the previous day. They said that they had. Mr Kristeff said that the Commission had made a ruling about what a de-isolation was, which confirmed the applicant’s view that leak testing and air freeing were not part of the ban. He said that de-isolations were defined in the WMS, and did not include leak testing and air freeing. He directed Messrs Rawnson and Tschugguel to perform leak testing and air freeing when that work became available later in the day.

63. Messrs Rawnson and Tschugguel did not agree with Mr Kristeff. They held to the respondent’s position as explained to Mr Lloyd earlier that day. They said that they would not perform the manipulation of bleeder valves because that was identified on the ICC. Mr Kristeff asked them, and they agreed, to confirm their position after speaking to Mr Steed. The meeting concluded on that note.

64. At about 4:15 pm on 7 March 2015, Messrs Rawnson and Tschugguel met with Messrs Kristeff and Mackie in Mr Kristeff’s office. They telephoned Mr Steed, who joined the conversation on speaker phone. He told Mr Kristeff that the respondent’s position was that its members would not shut bleeder valves as part of air freeing or leak testing, because bleeder valves were identified on the ICC. He said that supervisors would need to shut bleeders, and to direct operators what to do subsequently, if air freeing or leak testing were to proceed.

65. After some correspondence between the applicant’s solicitors and the respondent, the present proceeding was commenced on 16 March 2015. On 17 March 2015, the court made an interim injunction lasting until 4:00 pm on 25 March 2015, restraining the respondent from organising industrial action relating to bargaining for a replacement enterprise for the agreements referred to in para 5 above. On 25 March 2015, the court made an interlocutory injunction restraining the respondent, pending the hearing and determination of this proceeding, from organising industrial action at Longford of various descriptions, including “bans on de-isolations, equipment testing, air freeing and leak testing.” 219

[207] A central issue in the aforementioned proceeding was whether the AWU’s notified industrial action of a ban on the “de-isolation of equipment” covered its members’ refusal to carry out air freeing and leak testing and, from 7 March 2015, their refusal to manipulate bleeder valves. This issue did not concern any conduct of the employees covered by the Agreement.

[208] Jessup J rejected the AWU’s contention that the expression “de-isolation of equipment” in the 3 February 2015 notice would reasonably have been understood by Esso as referring to every aspect of operators’ work that would be performed during the period that the Isolation Control Certificate was headed “[De-isolation] in Progress”. 220 His Honour concluded that the expression would have been understood as referring to the specific function of de-isolation and would not have been understood as encompassing equipment testing, air freeing or leak testing.221 His Honour also concluded that the expression also did not refer to the manipulation of valves associated with those activities, notwithstanding that such manipulations were mentioned on the Isolation Control Certificate.222

[209] Consequently, ban on work of the kind just described was not protected industrial action within the meaning of the Act. 223

[210] In the proceeding, Esso also contended that, upon the proper construction of s.413(5), once the AWU had contravened the Deputy President’s order of 6 March 2015, the AWU was incapable of satisfying the common requirement specified in s.413(5) of not having contravened an order that applies to it and relates to industrial action relating to the agreement or a matter that arose during bargaining for the agreement. Consequently, Esso contended, no further industrial action organised by the AWU in relation to the proposed agreement could be protected industrial action. 224

[211] As noted earlier in Esso v AWU, Jessup J expressed a provisional preference for the construction of s.413(5) for which Esso contended absent the decision of Barker J in AMMA v MUA 225 in which Barker J had held that the words "any orders that apply to them and that relate to ... the agreement or a matter that arose during bargaining for the agreement" include only such orders as continue to apply to the bargaining representative at the time of the commencement of the proposed protected industrial action. Ultimately, Jessup J followed the decision in AMMA v MUA. The outcome of the subsequent proceedings before the Full Court of the Federal Court and in the High Court is earlier set out and need not be repeated.

[212] The Longford employees who are members of the AWU and the AWU to whom the Order was directed, have since made an enterprise agreement which I have earlier noted.

[213] The AWU was held to have been in breach of the Order by reason, inter alia, of the conduct noted earlier above. 226 The industrial action organised and taken in breach of the Order was centred on a disputed interpretation of scope of the notified industrial action, which was resolved in Esso’s favour. The AWU member employees of Esso who are affected by this application were not bound by the Order and did not engage in the contravening conduct. Nevertheless, as the contravening conduct was engaged in by their bargaining representative, the AWU, and as the contravention of the Order applying to the AWU related to industrial action relating to, the agreement that would apply to the AWU member employees of Esso who are affected by this application, these employees cannot now, nor if the Agreement is terminated, afterwards organise or engage in protected industrial action. This is the effect of s.413(5) of the Act.

[214] This will continue to be the case unless AWU member employees of Esso appoint another person or other people as their bargaining representative for the proposed agreement or revoke the AWU’s status as bargaining representative pursuant to s.176(1)(b) of the Act.

[215] In the result, the termination of the Agreement will in my view change the bargaining dynamic to such a degree and to bring about unfairness to many of the affected employees. In my view, the resulting unfairness is not immediately answered by the capacity of these employees to substitute a resourced, organised and experienced bargaining representative in the AWU for one or more persons who are not likely to be organised, resourced nor experienced.

[216] The fair scheme of bargaining established by the Act envisioned the capacity to engage in protected industrial action and as we have seen also removes that capacity in the face of a contravention of a relevant order of the Commission. This is rightly a consequence of contravening conduct. But all of the relevant circumstances need to be considered. The only “sin” committed by AWU members affected by this application, is to have the AWU as their bargaining representative. The effect of terminating the Agreement on these employees, who are the majority of affected employees will be significant. They will lose the leverage obtained in the Agreement to bargain against change or at least to bargain for greater benefits in exchange for the change, and will not have available the capacity to apply legitimate bargaining pressure through protected industrial action. Such a dramatic change to the bargaining dynamic in the circumstances of this case is a weighty matter tending against a conclusion that it is appropriate to terminate the Agreement. It gives Esso all the leverage and most of the affected employees none. In assessing all of this, it is necessary to consider and to weigh the fact that industrial action was engaged in or at least threatened by the offshore AWU member employees after the earlier mentioned contravening conduct by the AWU and some onshore employees. That action was likely unprotected. That action occurred or was threatened against the backdrop of litigation which in effect was considering the status of action organised and taken after the contravening conduct. The issue was in dispute. I therefore do not ascribe any significant weight to this circumstance in assessing the position of the employees for the purposes of s.226(b)(ii).

[217] Although it is the case that the AWU member employees cannot presently organise or take protected industrial action, neither can Esso introduce (even after consultation) the changes it seeks, unilaterally. If the Agreement is terminated, the AWU member employees remain industrially impotent while the shackles to change are removed. The industrial fight in which the parties are engaging becomes too unfair. Taken together, the circumstances of and the likely effect on employees weighs against a conclusion that it is appropriate to terminate the Agreement, the last mentioned matter significantly so.

8. Section 226(b)(ii): Circumstances of and likely effect that termination would have on Esso

[218] Turning then to the circumstances of Esso and the likely effect that the termination of the Agreement will have on Esso. Esso’s central contention is that termination of the Agreement would have a positive impact for Esso because it will remove some barriers to measures that it wishes to implement in order to improve productivity, efficiency, safety and reliability of operations, particularly in relation to the matters of rosters and the overtime matrix. 227 Esso considers these measures are important so as to improve the safety and productivity of its offshore workforce by increasing workforce efficiency, reducing risks to health and safety and reducing operating costs.228

[219] Esso’s interest in the matter is concerned with ensuring that the Bass Strait operations have a sustainable future and to be able to achieve this it needs to implement workplace changes. 229 It is argued that the termination of the Agreement and the introduction of a 14:14 roster cycle will assist Esso to reach the following objectives:

•  commercial productivity and being in the best position to compete for capital investment;

•  extend the life of oil platforms that are at or near end of life stage; and

•  reduce controllable costs. 230

[220] In relation to the commercial environment earlier discussed and in which Esso operates, it says that it faces two significant challenges:

(a) maximising the economic life of declining oil producing assets in prevailing low global oil prices by small incremental reductions in operating costs; and

(b) attracting significant new investment to partially offset the decline in its developed gas reserves to take advantage of the forecasted higher prices in the East Coast of Australia domestic gas market beyond 2020 by combining improvements in efficiency and productivity of labour offshore with other operational improvements. 231

[221] To reach the challenges it faces, Esso is aiming to improve efficiency and productivity of labour offshore. 232 Esso says that by moving to a 14:14 roster cycle and removing the overtime matrix it would promote labour productivity by reducing crew changeover days and the unproductive hours associated with changeovers, disruptions and delays.233

[222] The overtime matrix currently in place provides for a payment of an annualised salary to employees that incorporates an allowance for working non-standard overtime of up to 75 hours per annum. Given the limited number of hours of non-standard overtime that employees on average work per annum, the payment of the overtime allowance is unreasonable and unsupportable from Esso’s perspective. 234

[223] Over a period of three years, Esso anticipates that the 14:14 roster cycle will deliver a quantifiable improvement in productivity and efficiency and a quantifiable saving in helicopter movements. 235

[224] The indirect productivity benefits said to be achieved from the 14:14 roster cyle are as follows:

•  greater continuity of work, job satisfaction and ownership, particularly for maintenance employees;

•  greater alignment of employee roster patterns with OIMS and the majority of contractor labour;

•  less disruption of jobs due to crew changeovers; and

•  more scope to schedule visits to unstaffed operating platforms, shutdowns and well work. 236

[225] Since the early 1980s, GBJV gas production has increased whilst oil production has been steadily declining, with oil production forecasted to continue to decline at a not insignificant rate per annum. 237 Esso says this decline reflects the ultimate decline of oil resources in Bass Strait and its oil-producing assets are reaching their end life.238 As there is a decline in oil production, the unit cost of GBJV oil production per barrel increases, with a 5 year forecast anticipating that the unit operating cost of the oil producing facilities will continue to increase.239

[226] In 2015, several oil block platforms were shut down as the revenue generated from the platforms did not cover the marginal costs of production. 240 Therefore, to extend the life of its assets Esso needs to reduce operating costs and improve operating efficiencies.241 According to Mr Stuart Jeffries, even small improvements could achieve this.242

[227] In addition, Esso’s gas reserves are depleting and there has been some decline in production in recent years. 243 It has been forecasted that the production from the GBJV’s developed reserves will fall significantly from 2022-2023.244 Esso therefore says that its capacity long term to compete as a gas supplier will be determined by the extent of new investment and the exploitation of undeveloped gas reserves in Bass Strait.245 It puts forward that the GBJV new investment opportunities are more challenging as it has already exploited the largest and least complex fields in the Bass Strait.246 The more complex fields require a more complex and expensive processing procedure which in turn means an increase in operational costs.247

[228] Esso has also provided price forecasts for the price of gas, showing an increase from 2017 to 2021 and is substantially lower than the price that Energy Quest reported that Sole had secured for its gas volumes. 248 The fact that Esso is fully contracted until 2020 also means that market conditions will not affect the price that Esso is obtaining for its gas until then.249 It says that although the price of gas will increase in the next few years, revenue will decrease as a result of declining volumes.250

[229] Esso stipulates that although it is taking a range of steps to reduce its costs structure and improve long term viability of operations, it is competing for limited capital as ExxonMobil will only fund developments in the top range of global opportunities. 251 Its ability to attract new investment is also dependent on profitability performance, which its return on capital investment has been lower in recent years compared to the commercial threshold used.252

[230] The Unions argue that Esso has not established that it “needs” the 14:14 roster cycle and the abolition of overtime matrix but it would be desirable in the interests of attracting further investment, stating that desirability is something less than necessity. 253

[231] Further, the Unions say that the correct way to cost the savings to be made by Esso is in relation to reducing their wage bill by a significant amount per annum rather than the direct and indirect productivity benefits that Esso refers to. 254 It is contended that assigning a value to “unproductive time” associated with changeovers is speculative and flawed and things like meetings cannot be considered as unproductive time.255 The Unions consider that there is no urgent crisis or threat to Esso’s business256 and the savings of Esso would be insignificant when being contrasted with the total operating cost for the GBJV.257 Overall, the Unions say between the reduction in the hours worked and helicopter use, the introduction of the 14:14 roster cycle would equate to an insubstantial productivity saving.258

[232] The Unions contend that attracting further investment is unrelated to the Agreement and it cannot be said that its existence is the cause or contributing factor to it being unable to attract further investment due to operating costs. 259

[233] As to the indirect productivity benefits that Esso alleges, the Unions contend that those outcomes have not been proven likely or that they would have a productivity enhancing effect. In order for there to be productivity benefits, Esso would need to show that job satisfaction leads to employees working harder which would allow Esso to employ fewer employees. 260

[234] Esso says that although the savings to be achieved by a 14:14 roster cycle seem proportionately small from an overall financial performance perspective, that does not render the savings as being insignificant or irrelevant for the purposes of s.226(b)(ii). 261

[235] I accept that it is desirable that Esso be in a position to maximise the efficient production of oil and gas reserves in the Bass Strait in the context of the commercial challenges that it faces. I also accept that it is desirable that it seek to achieve efficiencies through, amongst other things, the way in which it utilises its labour force. In my assessment, the changes it seeks to labour utilisation through the implementation of a 14:14 roster cycle and to the overtime matrix are not exploitative nor unreasonable in the context of the terms and conditions overall of the affected employees. I agree that although the savings to be garnered through the implementation of these measures are small, they are not insignificant, and that they are small is no real answer against the implementation of such changes.

[236] I accept the savings and efficiencies that would be brought about by such changes would not, in the context of the overall investment in the Bass Strait and the fluctuating price of the oil and gas resources produced in the Bass Strait, likely be the cause of or a contributing factor to a decision to make further investment. But the flexibilities that are sought to be obtained would nonetheless enable Esso to be more responsive to changed circumstances. Inflexibility in the way in which it utilises a labour resource means that, under the current Agreement, there is little or no capacity to adjust its labour utilisation at least so far as its directly employed workforce is concerned to meet changing operational requirements. That the current arrangement is inflexible (requiring union delegate agreement) is no better demonstrated by the fact that Esso has been unable to secure a change despite bargaining for the change for nearly 5 years. Inflexibility in labour arrangements, like costs and profitability, is likely a factor to be weighed in the balance by those making investment (or further investment) decisions.

[237] Termination of the Agreement will remove the existing barriers either through further agreement in the context of a changing bargaining dynamic or through consultation to implement an altered roster as its economic and operational circumstances dictate without the need for agreement of union delegates. I also accept that if Esso is able to implement the change that it will contribute to improved safety, at least through a reduction in the risk associated with helicopter flights and changeover operations.

[238] The changes that would likely follow following the termination of the Agreement will in my view contribute to the efficiency of Esso’s operations and thus likely improve productivity. Whilst not being a deal breaker in relation to decisions about future investment, it cannot be doubted that issues of efficiency and productivity will factor in the overall mix of matters that will influence investment decisions. Furthermore, I accept that part of Esso’s motivation in seeking the changes as part of its commercial objectives, is the objective of extending the life of some of its oil platforms that are at or nearing end-of-life stage. Esso’s commercial objectives include controlling those matters that are within its control. The changes that it seeks to implement will, if the Agreement is terminated, be within its control. Other factors such as the fluctuating price of oil are not within its control. Controllable costs through the introduction of some of these changes, even though modest, I accept will contribute to Esso’s objective of extending the life of some of its oil platforms and will be a factor, though probably not a determining factor, in capital investment decision-making in order to secure the sustainability of the GBJV operations.

[239] All these circumstances weigh favourably towards a conclusion that it is appropriate to terminate the Agreement.

9. Section 226(b)(ii): Circumstances of and likely effect that termination would have on the Unions

[240] Clause 40 of the Agreement is titled ‘Union provisions’ and confers rights upon the Unions which enable them to organise and recruit members. The Unions say that these rights will be lost and will have a negative impact on the Unions if the Agreement is terminated. 262

[241] The Unions also believe that termination of the Agreement will lead to the weakening of their position and role in the workplace which would consequently affect the employees. 263

[242] From the Unions’ perspective there is a concern that termination of the Agreement will undermine bargaining which will result in the below situations:

•  Esso would have no incentive to make a new agreement as it cannot be forced to agree to a new enterprise agreement;

•  if Esso does seek a new agreement, it will result in a one-sided agreement and undermine “fair” collective bargaining; 264 or

•  bargaining will be further one-sided as AWU members will not be able to have the AWU as their bargaining representative and will not retain their ability to take protected industrial action. 265

[243] Further, the Unions believe that if the 14:14 roster cycle is introduced and the overtime matrix is abolished, there will be little incentive for Esso to participate in bargaining next time as they would have achieved their desired result and the roster would most likely not be reversed in subsequent negotiations. 266

[244] Esso relies on Aurizon in saying that “the change in bargaining dynamic that would result following a termination must be viewed in context.” 267 It says that over the last four years of bargaining, the Unions and employees have had little incentive to compromise and under the status quo the employees would be unlikely to approve any agreement that would introduce a 14:14 roster cycle.268 Therefore, it says that a change in dynamics is appropriate and the termination is more likely than the status quo to facilitate bargaining and make a new agreement.269

[245] Clause 40 of the Agreement doubtless confers particular rights on the Unions through their delegates. These are important rights which enable the Unions to organise the workplace and to represent members working in the workplace. They are also important rights because they facilitate recruitment and representation in circumstances where the exercise of entry rights under the Act by a permit holder will by reason of locality of the workplace, the circumstances in which work is undertaken and the frequency with which workplace visits may be undertaken is restricted in comparison to workplaces that are less remote and more accessible. The clause allows for regular communications meetings and access to facilities by delegates including equipment, resources and information which will enable delegates to efficiently and effectively communicate with and represent union members.

[246] The termination of the Agreement will likely have the effect of impeding the capacity of the Unions to represent existing members and to recruit new members. Unless alternative arrangements can be made, the Unions will be left with only the entry rights provided for in the Act.

[247] The diminution of rights or benefits the Unions have under the Agreement is thus a factor that weighs against a conclusion that is appropriate to terminate the Agreement.

[248] As to the undermining of bargaining by reason, inter alia, of the position in which the AWU as a bargaining representative finds itself - unable to organise and take protected industrial action - this is a circumstance which has been brought about only by the AWU’s conduct. The AWU chose to bargain for an agreement or agreements for both offshore and onshore employees. It engaged in conduct in breach of the Order which the scheme of the Act contemplates will have adverse consequences. In these circumstances, although the AWU and its capacity to exert pressure in the bargaining is adversely affected by reason of its breach of the Order, I am not persuaded that this is a factor that weighs against a conclusion that it is appropriate to terminate the Agreement. The other unions are unaffected by the AWU’s breach of the Order, though plainly as these unions represent a minority of the workforce, the effectiveness of any protected industrial action campaign is likely to be diminished.

10. Is it appropriate to terminate the Agreement?

[249] As should be evident from the foregoing discussion, the answer to the question posed by the heading immediately preceding this paragraph is neither obvious nor easy. The answer, as the statute envisages, is arrived at by taking into account all of the relevant circumstances, including those specifically identified in s.226(b) of the Act. Some of the relevant circumstances that arise for consideration under s.226(a) are also relevant here. I rely on what is said about these matters earlier in considering the public interest question and these are not repeated here. However, such weight as they have for or against the question whether termination of the Agreement is not contrary to the public interest, also applies to the issue of appropriateness raised by s.226(b). Where, as in this case, the many circumstances identified, point in different directions, they must be given weight and balanced, one against the other and as a whole. Reasonable minds may differ on the conclusion following that exercise in a case of this kind. This is not an easy case. However, a judgment needs to be made. On balance, taken together the circumstances which weigh against a conclusion that it is appropriate to terminate the Agreement outweigh those which point the other way. In the circumstances of this case I do not consider, at this time, that it is appropriate to terminate the Agreement.

[250] As should be evident from my reasons, the unfairness to AWU member employees resulting from the weakening of their bargaining position and the corresponding strengthening of Esso’s, that would be brought about by terminating the Agreement, weighs significantly in my conclusion. The weight that is to be attributed to this consideration also depends on the circumstances. The weight that might be attributed to this matter, in circumstances where there is some evidence that the relevant employees know that they can appoint a bargaining representative other than the AWU and thus organise and engage in protected industrial action but nonetheless choose not to appoint another person or at least remove the authority of the AWU to act as a bargaining representative, would likely be less, perhaps significantly less, than the weight that I have attributed to the consideration in this case. There is no evidence that employees have given consideration to this issue or that the possibility of changing horses is known to them.

11. Conclusion

[251] I have concluded that termination of the Agreement is not contrary to the public interest but that it is not appropriate, at this juncture, to terminate the Agreement taking into account the circumstances discussed in this decision. The application to terminate the Agreement is therefore refused and is dismissed.

DEPUTY PRESIDENT

Appearances:

F Parry QC and R Dalton QC for the Applicant.
H Borenstein QC and J Fetter of Counsel for the Unions.

Hearing details:

2019.
Melbourne:
February 4, 7.

Further submissions:

Applicant, 3 June 2019.
Respondents, 11 June 2019.

Printed by authority of the Commonwealth Government Printer

<PR711983>

SCHEDULE 1 - OBJECTIONS TO EVIDENCE

SCHEDULE 2

 1   AE890812

 2   PR561142, PR561655 and PR561701

 3   PR561701

 4   (2015) 251 IR 75

 5   Ibid at [175]

 6   Ibid at [171]

 7   [2015] FCA 758; (2015) 253 IR 304

 8   Ibid at 351-352 at [135]-[139]; 354-355 at [144]-[148]

 9   See Esso Australia Pty Ltd v The Australian Workers' Union [2016] FCAFC 72; (2016) 245 FCR 39 and Australian Mines and Metals Association Inc. v The Maritime Union of Australia [2016] FCAFC 71; (2016) 242 FCR 210

 10   PR588352

 11   See Esso Australia Pty Ltd v The Australian Workers’ Union; The Australian Workers’ Union v Esso Australia Pty Ltd [2016] HCATrans 311

 12   [2017] FWCA 1860

 13   Order dated 14 October 2016

 14   Directions dated 8 December 2016

 15   [2017] HCA 54

 16   Ibid at [64]

 17   Ibid at [35] and [51]

 18   See Esso Australia Pty Ltd v “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU); The Australian Workers’ Union and Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia [2018] FWCFB 4120; PR588352

 19   VID981/2018; Minister for Industrial Relations for the State of Victoria v Esso Australia Pty Ltd & Ors

 20   Minister for Industrial Relations for the State of Victoria v Esso Australia Pty Ltd [2019] FCAFC 26

 21   [2018] FWC 6244

 22   [2019] FWC 3696

 23   Exhibit 1, Commission Book, pp.4484-4773

 24   Ibid at p.4478

 25   The names of the fields are in evidence but are the subject of a confidentiality order and therefore not reproduced in the decision

 26   Ibid at p.4485 at [10]; The actual dollar values are in evidence but are the subject of a confidentiality order and therefore not reproduced in the decision

 27   Ibid at p.5332 at [30] and p.5333 at [33]

 28   Ibid at p.105 at [13]-[14]

 29   Ibid at p.4486 at [17]; The actual percentage is in evidence but is the subject of a confidentiality order and therefore not reproduced in the decision

 30   Ibid at p.4347; The actual percentage is in evidence but is the subject of a confidentiality order and therefore not reproduced in the decision

 31   The names of the platforms are in evidence but are the subject of a confidentiality order and therefore not reproduced in the decision

 32   Ibid at p.3954 at [21]; Figure 4 is the subject of a confidentiality order and therefore not reproduced in the decision

 33   The name of the platform is in evidence but is the subject of a confidentiality order and therefore not reproduced in the decision

 34   Ibid at p.4487 at [18]

 35   Ibid at p.3974A, Updated GBJV Long Term Gas Outlook graph; This graph is the subject of a confidentiality order and therefore not reproduced in the decision

 36   The name of the development is in evidence but is the subject of a confidentiality order and therefore not reproduced in the decision

 37   Ibid at pp.5336A-5336AB, Extract from the GBJV Pricing Model dated 30 January 2019; This document is the subject of a confidentiality order and therefore not reproduced in the decision

 38   Ibid at p.4487 at [20]

 39   Ibid at [21]

 40   Ibid at p.5338 at [8]

 41   Ibid at p.4489 at [24]

 42   Ibid at p.4779 at [16]

 43   Ibid at p.4489 at [24(c)]

 44   Ibid at p.3957 at [35]; p.5073 at [19(b)] and [24]; The actual dollar value is in evidence but is the subject of a confidentiality order and therefore not reproduced in the decision

 45   Ibid at pp.601-602 at [149]-[153]

 46   Ibid at pp.602-603 at [154]-[158]

 47   Ibid at pp.603-604 at [159]-[160]

 48   Ibid at p.683, tab 13 at [9] and [24]

 49   Ibid at p.35 at [24]; pp.125-152 at Annexures SD-1 and SD-2

 50   Ibid at p.1044 at [17] and p.3673 at [34]

 51   Ibid at p.1045 at [26]

 52   Ibid at pp.1574-1575 at [75]-[81]

 53   Ibid at p.1575 at [82]-[84]; The actual percentage is in evidence but is the subject of a confidentiality order and therefore not reproduced in the decision

 54   Ibid at p.1576 at [85]-[91]

 55   Ibid at pp.1576-1577 at [92]-[93]

 56   Ibid at p.1586 at [152]-[153]; p.1684 at [288]

 57   Ibid at p.1586 at [154]

 58   Ibid at p.1586 at [154]-[155]; p.1685 at [292]; p.1687 at [299]

 59   Ibid at p.1684 at [289]-[290]; p.1746 at [53]

 60   Ibid at p.1684 at [291]

 61   Ibid at p.1685 at [294]-[295]

 62   Ibid at p.397 at [55]

 63   Ibid at p.1629 at [110(d)]

 64   Ibid at pp.163-164 at [29]-[30]

 65   Ibid at pp.5355-5385 at Annexure RZR-1; In a bargaining meeting on 19 December 2018 before Commissioner Cribb, it was agreed that Esso would send the proposed agreement to the Unions for review in January 2019. At a bargaining meeting before Deputy President Clancy on 24 January 2019, it was again agreed that Esso will provide the Unions with a copy of the proposed agreement for the Unions to review and provide a response. A copy of the proposed agreement was provided on 1 February 2019

 66   Ibid at p.5352 at [26]

 67   Ibid at pp.528-529 at [12]; p.1563 at [12]

 68   Ibid at pp.537-538 at [50]

 69   Ibid at p.1589 at [168]-[172]

 70   Ibid at p.538 at [51]

 71   Ibid at p.1589 at [174]-[175]

 72   Ibid at p.1590 at [177]

 73   Ibid at [178]-[179]

 74   Ibid at [180]-[182]

 75   Ibid at p.1590-1591 at [183]-[184]

 76   Ibid at p.1591 at [185]-[188]

 77   Ibid at p.1592 at [190]-[191]

 78   Ibid at pp.1592-1593 at [192]-[195]

 79   Ibid at p.1593 at [196]-[199]

 80   Ibid at p.538 at [53]

 81   Ibid at pp.538-539 at [54]-[55]

 82   Ibid at p.1594 at [201]-[206]

 83   Ibid at p.539 at [57]-[59]

 84   Ibid at pp.1594-1595 at [207]-[212]

 85   Ibid at pp.540-541at [60]-[66]

 86   Ibid at pp.5076-5077 at [41]

 87   Ibid at p.5077 at [42]

 88   Ibid at pp.5077-5078 at [43]

 89   Ibid at p.5312 at [25] and comparison table at pp.5315-5325

 90   Aurizon Operations Limited; Aurizon Network Pty Ltd; Australia Eastern Railroad Pty Ltd [2015] FWCFB 540 at [111]

 91   [2015] FWCFB 540 at [118]-[152]

 92   [2015] FCAFC 126 at [1]-[26]

 93   [2013] FWCFB 8726

 94   Ibid at [18]

 95   [2000] HCA 47; (2000) 203 CLR 194 per Gleeson CJ and Gaudron and Hayne JJ

 96   Ibid at [19]

 97   Construction, Forestry, Mining and Energy Union v Peabody Energy Australia PCI Mine Management Pty Ltd [2016] FWCFB 3591 at [18]

 98   [1986] HCA 40; (1986) 162 CLR 24; see also Griffiths v The Queen (1989) 167 CLR 372 at 379; Ho v Professional Services Review Committee No 295 [2007] FCA 388 at [23]-[26] and Hasim v Attorney-General of the Commonwealth [2013] FCA 1433; (2013) 218 FCR 25 at [65]

 99   See Friends of Hinchinbrook Society Inc v Minister for Environment (No 3) (1997) 77 FCR 153; Australian Competition and Consumer Commission v Leelee Pty Ltd [1999] FCA 1121; Edwards v Giudice [1999] FCA 1836 and National Retail Association v Fair Work Commission [2014] FCAFC 118

 100   (1987) 16 FCR 167 cited with approval by Hely J in Elias v Federal Commissioner of Taxation (2002) 123 FCR 499 at [62] and by Katzmann J in CFMEU v FWA (2011) 195 FCR 74 at [103]

 101   (1987) 16 FCR 167 at 184

 102   [1986] HCA 40; (1986) 162 CLR 24

 103   Ibid at [15], pp.39-41

 104   Kellogg Brown and Root, Bass Strait (Esso) Onshore/Offshore Facilities Certified Agreement 2000 (2005) 139 IR 34 at 40

 105   Ibid

 106   Ibid

 107   Ibid at 41

 108   See for example Re Australian Insurance Employees Union; Ex parte Academy Insurance Pty Ltd (1988) 78 ALR 466 at [467]

 109   Kellogg Brown and Root, Bass Strait (Esso) Onshore/Offshore Facilities Certified Agreement 2000 (2005) 139 IR 34 at 41

 110   Ibid

 111   Exhibit 1, Commission Book, p.5312 at [26]; Esso’s final submissions dated 7 February 2019 at [F.1]

 112   Esso’s final submissions dated 7 February 2019 at [F.2]

 113   Ibid at [F.3]

 114   Ibid at [F.4]

 115   Exhibit 1, Commission Book, p.576 at [56]

 116   Ibid at p.5081 at [56]-[57]; Outline of submissions for the AWU, CEPU and AMWU dated 7 February 2019 at [117]-[118]

 117   Aurizon Operations Limited; Aurizon Network Pty Ltd; Australia Eastern Railroad Pty Ltd [2015] FWCFB 540

 118   [2017] FWCFB 1019

 119   Exhibit 1, Commission Book, p.5308 at [5]

 120   Ibid at p.5308 at [7]

 121   (2005) 139 IR 34 at [47]-[49]

 122   Exhibit 1, Commission Book, pp.5308-5309 at [8]-[9]; p.576 at [57]

 123   Ibid at p.1615 at [64]-[65]; Kellogg Brown & Root Pty Ltd and others v Esso Australia Pty Ltd (2005) 139 IR 34 at [23]

 124   Exhibit 1, Commission Book, p.1616 at [67]-[68]

 125   Ibid at p.1619 at [75]

 126   Ibid at pp.1616-1617 at [69]-[73]

 127   Ibid at p.5309 at [10]; Kellogg Brown & Root Pty Ltd and others v Esso Australia Pty Ltd (2005) 139 IR 34 at [46]

 128   Clause 8 of Esso's Undertaking dated 1 August 2016 annexed to the s.226 application; see also Schedule 2 to this decision

 129   Exhibit 1, Commission Book, p.3673 at [37]-[38]; p.4505 at [86]

 130   Ibid at p.596 at [137]; p.3651 at [32]

 131   Ibid at p.596 at [138]; p.3651 at [32]

 132   [2018] FWCFB 4120

 133   Contrast the position of the restrictions on redundancies in Aurizon which Aurizon inherited as part of the prioritisation process

 134   Aurizon Operations Limited; Aurizon Network Pty Ltd; Australia Eastern Railroad Pty Ltd [2015] FWCFB 540 at [26]; [44]-[47]

 135   Exhibit 1, Commission Book, p.5079 at [51]; Outline of submissions for the AWU, CEPU and AMWU dated 7 February 2019 at [108]-[109]

 136   Exhibit 1, Commission Book, pp.4603 and 5079; The actual dollar values are in evidence but are the subject of a confidentiality order and therefore not reproduced in the decision

 137   Ibid at p.5079 at [50]; Outline of submissions for the AWU, CEPU and AMWU dated 7 February 2019 at [108]-[109]

 138   Exhibit 1, Commission Book, p.5081 at [59]

 139   Ibid at p.5313 at [31]

 140   Ibid at p.5080 at [30]-[31]; Outline of submissions for the AWU, CEPU and AMWU dated 7 February 2019 at [110]-[111]

 141   Exhibit 1, Commission Book, p.5071 at [13(d)]; p.5076 at [39]

 142   Ibid at p.5082 at [61]; See Kellogg Brown & Root Pty Ltd and others v Esso Australia Pty Ltd (2005) 139 IR 34 at [23]

 143   Exhibit 1, Commission Book, p.5313 at [32]

 144   See for example Reserve Bank of Australia statement on Monetary Policy at p.56

 145   Exhibit 1, Commission Book, pp.259–368

 146   Ibid at pp.943–988

 147   Ibid at p.5075 at [33]; pp.1634-1673 at [128]-[245]; Outline of submissions for the AWU, CEPU and AMWU dated 7 February 2019 at [73]

 148   Exhibit 1, Commission Book, p.1634 at [128]

 149   Ibid at p.976 at [8.3]

 150   Ibid at p.4781 at [24]

 151   Ibid at p.1634 at [128]; p.1641 at [144]; p.1672 at [244]; p.5169 at [23]; p.5173 at [43]; p.5204 at [18]; p.5208 at [40]; p.5192 at [18]; p.2782 at [20]; p.5233 at [27]; p.5244 at [24]; p.5285 at [114]; p.5294 at [19]-[20]; p.5181at [32]-[35]; p.1642 at [145]

 152   Ibid at p.248 at [7]-[8]

 153   Ibid at p.262

 154   Ibid at p.265

 155   Ibid at p.611 at [195]; p.4496 at [44]-[47]; p.4784 at [28(d)]

 156   Ibid at p.615 at [216]; p.972 at [7.4.4]; p.2779 at [10]; p.2765 at [12]

 157   Ibid at p.612 at [198]-[199]; p.3798 at [27]; p.3799 at [28(d)]

 158   Ibid at p.4533 at [2.1]

 159   Ibid

 160   Ibid at p.4569

 161   Ibid at p.1809

 162   Ibid at p.5075 at [35]-[36]

 163   Ibid at p.1628 at [110(a)]; p.1633 at [126]

 164   Ibid at p.605 at [168]; p.610 at [189]

 165   Ibid at p.610 at [189]-[192]

 166   Working Hours Case (2002) 114 IR 390

 167   Ibid at [129]

 168   See Schedule 3, clauses 11(1) and 11(2)(a) and 11(2)(c)

 169   See regulation 3.1(2); Exhibit 1, Commission Book, pp.1630-1631 at [113]-[115]

 170   Exhibit 1, Commission Book, p.5081 at [58]; p.1633 at [123]

 171   Ibid at pp.597-599 at [139]-[146]; pp.4528-4596; pp.4617-4622; pp.4717-4723; pp.4505-4507 at [90]

 172   Ibid at pp.4507-4510 at [91]-[92]; p.599-601 at [147]-[148]; p.612 at [200]

 173   Ibid at p.605 at [165]-[166]

 174   Ibid at p.2401 at lines 803-805

 175   Outline of submissions for the AWU, CEPU and AMWU dated 7 February 2019 at [74]; Exhibit 1, Commission Book, pp.3149-3152 at PN2270-PN2299

 176   Exhibit 1, Commission Book, p.1626 at [104]-[105]

 177   Ibid at p.1626 at [105]

 178   Ibid at p.606 at [171]-[172]; p.955 at [3.2]

 179   Ibid at p.5309 at [13]

 180   Ibid at pp.595-596 at [134]-[135]; p.4779 at [16]; p.3673 at [36]; p.1044 at [17]

 181   Ibid at p.5311 at [22]

 182   Ibid at p.602 at [151]-[153]

 183   Ibid at p.603 at [155]-[158]

 184   Ibid at p.606 at [170]

 185   See s.3(d) of the Act; Outline of submissions for the AWU, CEPU and AMWU dated 7 February 2019 at [67]; Exhibit 1, Commission Book, p.5075 at [31]

 186   Outline of submissions for the AWU, CEPU and AMWU dated 7 February 2019 at [68]; Exhibit 1, Commission Book, p.5075 at [32]

 187   Exhibit 1, Commission Book, pp.1618-1619 at [74(d)]

 188   Ibid at pp.264-265

 189   Ibid at p.967 at [6.1.1]

 190   Ibid at pp.1617-1618 at [73(a)] and p.3252 at PN3307-PN3308

 191   Ibid at p.5238 at [56]; p.5172 at [37]; p.5185 at [48] and [49]; p.5186 at [50]-[52]; p.5198 at [47]; p.5207 at [36]; p.5208 at [38]; p.5245 at [30]; p.5246 at [31]; pp.5252-5253 at [31]-[33]; pp.5260-5261 at [32]; p.2795 at [18]; p.2817 at [52]; pp.2785-2786 at [37] and [41]; p.5269 at [39]; p.5299 at [35]

 192   Ibid at p.5237 at [51]-[52]; p.5172 at [36]; p.5185 at [48]; p.2750 at [34]; p.5198 at [47]; p.4245 at [29]-[30]; p.5252 at [31]; p.2816 at [48]; p.5224 at [66]

 193   Ibid at p.5238 at [53]-[54]; p.2787 at [41]; p.5253 at [36]; p.5140 at [52]; p.2767 at [25]-[26]; pp.5187-5188 at [54]

 194   Ibid at p.2784 at [33] and p.2786 at [41]; p.5234 at [36]; p.5237 at [52]; p.2750 at [34]; pp.5150-5151 at [45]-[50]; p.5223 at [63]; p.5224 at [66]

 195   Ibid at p.2795 at [16]; p.5207 at [34]-[36]

 196   Ibid at p.2785 at [38]; p.5140 at [57]; p.2822 at [23]

 197   Ibid at p.5246 at [32] and [34]

 198   Ibid at p.5311 at [20]

 199   Ibid at p.5311 at [20]-[21]; p.616 at [224]

 200   Ibid at p.617 at [225]; p.967 at [6.1.3]; p.968 at [6.1.7]-[6.1.8]

 201   Ibid at p.5075 at [37]

 202   Ibid at p.1629 at [110(d)]

 203   Ibid at p.5312 at [25] and comparison table at pp.5315-5325

 204   Ibid at p.5312 at [25]

 205   Fair Work Act 2009 (Cth), s.228

 206   Ibid at ss.229-233

 207   Ibid at ss.234-235

 208   Ibid at s.269 (which appears in Part 2–5 of the Act)

 209   Ibid at ss.238–239

 210   Ibid at s.240

 211   Ibid at s.592(1) and (4)

 212   Ibid at s.415

 213   Ibid at s.414(6)

 214   Transcript of proceedings dated 6 March 2015 at PN709-PN724

 215   PR561701, clause 3.1

 216   Ibid at clause 2

 217   Ibid at clause 6

 218   [2015] FCA 758, (2015) 253 IR 304

 219   Ibid at [53]-[65]

 220   Ibid at [90]

 221   Ibid

 222   Ibid

 223   Ibid

 224   Ibid at [126]-[129]

 225   [2015] FCA 677; (2015) 251 IR 75; [2015] FCA 758, (2015) 253 IR 304 at [151]

 226   [2015] FCA 758, (2015) 253 IR 304 at [150]

 227   Exhibit 1, Commission Book, p.3654 at [47]

 228   Ibid

 229   Ibid at p.575 at [52]

 230   Ibid at p.5310 at [15]

 231   Ibid at p.579 at [70]-[72]

 232   Ibid at p.579 at [72]

 233   Ibid at pp.576-577 at [60]

 234   Ibid at p.618 at [229]-[236]

 235   Ibid at p.579 at [73]; p.4614; p.603 at [159]; The actual dollar value is in evidence but is the subject of a confidentiality order and therefore not reproduced in the decision

 236   Ibid at pp.603-604 at [160]; p.4503 at [78]-[81]

 237   Ibid at pp.579-580 at [74]-[75]; p.3965 at Figure 1; p.3314 at PN262; p.3471 at PN1731; The actual percentage is in evidence but is the subject of a confidentiality order and therefore not reproduced in the decision

 238   Ibid at p.580 at [75]; p.3322 at PN338

 239   Ibid at p.3956 at [29]-[30]; pp.580-581 at [77]-[78]

 240   Ibid at p.581 at [80]

 241   Ibid at p.582 at [82]

 242   Ibid at p.3322 at PN340; p.3488 at PN1887

 243   Ibid at p.582 at [4.3]; p.4487 at [18]; pp.3032-3035 at PN1080-PN1123; The amount of decline is in evidence but is the subject of a confidentiality order and therefore not reproduced in the decision

 244   Ibid at p.583 at [83]; pp.3973-3974 at [46]; The actual percentage is in evidence but is the subject of a confidentiality order and therefore not reproduced in the decision

 245   Ibid at p.3974 at [47]; p.583 at [84]

 246   Ibid at p.584 at [86]; pp.3974-3975 at [48]-[49]; p.3034 at PN1101

 247   Ibid at p.584 at [87]; p.3975 at [49]

 248   Ibid at p.587 at [97]-[98]; p.1080; The actual percentage and dollar values are in evidence but are the subject of a confidentiality order and therefore not reproduced in the decision

 249   Ibid at p.587 at [96]; p.589 at [105]

 250   Ibid at p.588 at [99]-[100]

 251   Ibid at p.585 at [89]-[91]

 252   Ibid at p.586 at [92]-[93]; p.3492 at PN1923; pp.1123-1130; This document is the subject of a confidentiality order

 253   Ibid at p.1628 at [110(c)]

 254   Ibid at p.1621 at [84]-[85]; pp.4602-4603; The actual dollar value is in evidence but is the subject of a confidentiality order and therefore not reproduced in the decision

 255   Ibid at p.1621 at [86]; p.3068 at PN1462-PN1464

 256   Ibid at p.5073 at [21] and [22]

 257   Ibid at p.1622 at [87]; p.1121-1122; The actual dollar value is in evidence but is the subject of a confidentiality order and therefore not reproduced in the decision

 258   Ibid at p.1622 at [87]-[89]; The actual percentage is in evidence but is the subject of a confidentiality order and therefore not reproduced in the decision

 259   Ibid at p.5073 at [24] and p.5074 at [25]

 260   Ibid at p.1623 at [90]

 261   Ibid at p.5130 at [17]; p.579 at [73]

 262   Ibid at p.5078 at [44]

 263   Ibid at p.5078 at [45]

 264   See Fair Work Act 2009 (Cth), ss.3(f) and 171(a)

 265   Exhibit 1, Commission Book, p.5079 at [46]-[49]

 266   Ibid at p.1624 at [96]

 267   Aurizon Operations Limited; Aurizon Network Pty Ltd; Australia Eastern Railroad Pty Ltd [2015] FWCFB 540 at [173]; Exhibit 1, Commission Book, p.5312 at [27]

 268   Exhibit 1, Commission Book, p.5312 at [28]

 269   Ibid at [29]-[30]