C2004/2311, Transcript of Proceedings [2004] AIRCTrans 1504 (19 April 2004)

AUSCRIPT PTY LTD
ABN 76 082 664 220

Level 4, 179 Queen St MELBOURNE Vic 3000
(GPO Box 1114 MELBOURNE Vic 3001)
Tel:[phone] Fax:[phone]

TRANSCRIPT OF PROCEEDINGS


O/N 6724
AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

DEPUTY PRESIDENT IVES

C2004/2311
AG2004/2357

P & O MARITIME SERVICES PTY LTD

and

AUSTRALIAN INSTITUTE OF MARINE AND POWER
ENGINEERS, THE VICTORIA/TASMANIA BRANCH

Application under section 170LW of the Act
for settlement of dispute re the applicability
of offshore oil and gas awards and agreements

CONCILIATION IN RESPECT OF AGREEMENTS

Application under section 170NA(1) of the Act
by P & O Maritime Services Pty Ltd re the
applicability of offshore oil and gas awards
and agreements

MELBOURNE

2.03 PM, WEDNESDAY, 7 APRIL 2004

PN1

THE DEPUTY PRESIDENT: Yes, I will take the appearances, please.

PN2

MR B. BARTON: If the Commission pleases, I appear on behalf of P&O Maritime Services Pty Ltd and appearing with me is MR R. BURGESS from P&O.

PN3

THE DEPUTY PRESIDENT: Good, thank you.

PN4

MS J. THOMPSON: If the Commission pleases, I appear for the Australian Institute of Marine and Power Engineers.

PN5

THE DEPUTY PRESIDENT: Yes, thank you. Look, there are two applications here, one is a section 170LW application. Now I understand from some discussion I think that took place between - perhaps it was you, Mr Barton, and my associate that - for this matter to progress there may be a need for directions and witness evidence. I thought if we could deal with that first, at least from the point of view of providing some background to the Commission at this stage, and if there is a necessity for directions to issue, then we can deal with that and perhaps then deal - move on to the other matter. Is that a suitable course of action to both parties?

PN6

MR BARTON: That would certainly suit us, Deputy President.

PN7

THE DEPUTY PRESIDENT: Yes. Ms Thompson?

PN8

MS THOMPSON: Our position is that the Commission can't actually hear - hear these matters because the agreement expired in June last year and we are in a bargaining period.

PN9

THE DEPUTY PRESIDENT: Yes, well, I will hear you on that, Ms Thompson. Go ahead Mr Barton.

PN10

MR BARTON: Thank you, Deputy President. The - this matter, that is, AG2004/2357, concerns an application pursuant to section 170LW of the Act to have a matter resolved under the dispute resolution procedure - - -

PN11

THE DEPUTY PRESIDENT: Sorry, I think we are dealing with 2331, are we not? C2004/2331 [sic] which is the 170LW application?

PN12

MR BARTON: Yes.

PN13

THE DEPUTY PRESIDENT: Yes, I think you just gave me - - -

PN14

MR BARTON: Have I got the number - - -

PN15

THE DEPUTY PRESIDENT: I think you just gave me the number of the - of the 170NA application.

PN16

MR BARTON: Oh, okay, my apologies.

PN17

THE DEPUTY PRESIDENT: Yes.

PN18

MR BARTON: Thank you for correcting me on that one.

PN19

THE DEPUTY PRESIDENT: Yes.

PN20

MR BARTON: The certified agreement in question is the P&O Maritime Services and AIMPE Research Vessels Agreement 2001 and that is an agreement between P&O Maritime Services and the Australian Institute of Marine and Power Engineers. The agreement was made pursuant to section 170LJ of the Workplace Relations Act and has a term of 29 May 2002 to 30 June 2003. Clause 55 of the agreement contains a settlement of disputes clause and I have a copy of the agreement if the Commission requires one.

PN21

THE DEPUTY PRESIDENT: Yes, that would be helpful, thank you, Mr Barton.

PN22

MR BARTON: Now if we look at clause 40 - 55, sorry, of that agreement we will find that that is the settlement of disputes clause and subclause (e) of that particular clause enables unresolved disputes to be referred to the Commission for determination.

PN23

Now the matter that is in dispute in this particular hearing is the application of the agreement to a voyage that was undertaken by a vessel that is operated by P&O Maritime Services during February and March this year. That work was performed on behalf of GO Science Australia which is the government geological agency.

PN24

THE DEPUTY PRESIDENT: Yes.

PN25

MR BARTON: Now P&O operates three vessels that are usually engaged in things like maritime research, fishery surveillance, border protection and polar exploration. Now the vessel in question is the Southern Surveyor which is actually owned by the CSIRO but is operated and managed by P&O Maritime Services. That vessel in more recent times has pretty well been working full time for CSIRO and through it, you know, GO Science Australia.

PN26

Now the union has claimed that in subclause 4.2 of the agreement that the provisions of that subclause should apply. Now 4.2, if we turn to that, basically says that:

PN27

Should either vessel engage in seismic survey for hydrocarbons the provisions of the Maritime Industry Offshore Oil and Gas Operations Award and enterprise agreements related thereto will be applied during such operations in Australian waters.

PN28

So essentially they are saying that the work that was undertaken in February and March this year was searching - was seismic survey for hydrocarbons.

PN29

Now the company rejects that claim firstly because the voyage was not one that falls into the requirements of 4.2. It wasn't a seismic survey for hydrocarbons, the survey was undertaken to collect information about the shape of the seabed, the sea floor features and various habitats thereon. The seismic data that was collected is basically used as part of building up a bigger picture about the petroleum potential of the area that was being surveyed. Now that is quite distinct from actually looking for hydrocarbons.

PN30

THE DEPUTY PRESIDENT: What would have been the effect, Mr Barton, had the Maritime Industry Offshore Oil and Gas Operations Award applied?

PN31

MR BARTON: For a Chief Engineer, I believe the difference is roughly $20,000 a year - in rough terms.

PN32

THE DEPUTY PRESIDENT: Thank you.

PN33

MR BARTON: So, it's not an inconsiderable amount of money. Plus there is the issue that the vessel will be doing this sort of work in the future as it has in the past and it's not just the cost that arises from paying the higher rates for the voyage this year, it's also the precedent potential as well.

PN34

Now, as I say, that seismic data is used - basically it is part of a pre-competitive assessment process. The information that is gathered is actually freely available and forms the basis of an assessment as to whether the area is worthy of further investigation including far more detailed seismic surveys. Now, in addition to that, the Southern Surveyor was not and is not equipped to determine if hydrocarbons are actually present or not. It can only add information to a general assessment of the area for the petroleum potential and whether - and that assessment goes to determining whether a further survey is required or not.

PN35

The difference between the equipment that was used on the Southern Surveyor and that used for what is called a commercial seismic survey, is vast. Basically it is far more complex equipment, it is far more expensive, a lot more involved and gives you far better results.

PN36

THE DEPUTY PRESIDENT: Yes.

PN37

MR BARTON: The 4.2 of the agreement we also say was intended to cover what is called commercial seismic surveys. Now in the P&O context, commercial refers to the work being done for a non-governmental agency. In this case, the vessel is owned by CSIRO and the survey was being undertaken by GO Services Australia - both are government agencies. And in a GO Services, sorry GO Sciences Australia context, they refer to a commercial seismic survey as one that involves the use of that far more complex and far more expensive equipment that is capable of producing results where people can actually determine with a reasonable of probability that hydrocarbons are present and basically, the equipment on the Southern Surveyor, as I say, does not fall into that category in any way, shape or form.

PN38

Now on both of those accounts or in all of those accounts, the voyage of the Southern Surveyor in February and March this year basically doesn't qualify for the offshore oil and gas rates as spelt out in the agreement. In addition - - -

PN39

THE DEPUTY PRESIDENT: Do you say, Mr Barton, that the provisions of clause 55.2, the dispute settlement clause, have been complied with at this stage?

PN40

MR BARTON: In the sense that the claim has been pursued through the union, there have been discussions over the claim. My friend here has had - well raised the issue with the company earlier in the year and the response from the company was that it didn't believe that 4.2 was applicable. We had discussed the issue on a couple of occasions since and basically, we don't seem to be getting anywhere in terms of a resolution.

PN41

THE DEPUTY PRESIDENT: Yes, so in essence you say that the steps leading to the referral to the Commission as outlined in the procedure have been complied with?

PN42

MR BARTON: Substantively, yes. It's been a discussion of - the last discussion we had was on 22 March and I think there is a final step in there that includes discussions with the federal secretary of the union. Yes. And also the General Manager of P&O Maritime Services and no resolution was possible at that stage, so, basically, the discussions between the company and the union seem to have been exhausted. There is no really - there is really nowhere else to go - - -

PN43

THE DEPUTY PRESIDENT: Yes.

PN44

MR BARTON: - - - with the company's processes.

PN45

THE DEPUTY PRESIDENT: All right. Thank you.

PN46

MR BARTON: So, as I was saying, another ground for objection is basically that there are two other certified agreements that apply to the Southern Surveyor. Those agreements have as respondents the Maritime Union of Australia and the Australian Maritime Officers Union. The agreements, the correct titles for the MUA, it is the P&O Science MUA Ratings Agreement 2002 and for the AMOU, it is the AMOU/P&O Maritime Services Pty Ltd Deck Officers Agreement 2003.

PN47

Now both of these agreements, in their own way, basically acknowledge that offshore oil and gas rates should only be applied to commercial seismic surveys or for work within the oil and gas industry. So those agreements do not generate entitlement to offshore oil and gas rates. So we have a situation where out of the three agreements that apply to this particular vessel and to the work in question, two agreements are quite clear, the third one some doubts have been raised by the union as to the application of offshore oil and gas rates.

PN48

From a company perspective, it just doesn't make sense to make any other interpretation that given the commonality of interest, the desire for the company to have, you know, reasonably stable employment conditions across its vessel, that it would agree to something different for the engineers that would entitle them to far higher rates of pay than it did for the MUA and also the deck officers. It just doesn't make sense to read all three agreements like that.

PN49

THE DEPUTY PRESIDENT: Yes.

PN50

MR BARTON: So - and our last ground for rejecting the claim is basically that the history of the operation of the vessel is that work similar to this has been conducted previously by company operated vessels and offshore oil and gas rates have not been paid and some of that work was as recent as last year. And it doesn't make sense then to come back and say, well, something is now different when it is isn't and pay higher rates for that work particularly if it's only for part of the crew.

PN51

So that the company is seeking to have the Commission conciliate and, if necessary, determine this dispute. In doing that we realise that there is a number of issues that arise. The first of those comes to the jurisdiction of the Commission and I think it's - whilst the union hasn't quite said it, I think they implied it, and I deal with the issue as they expressed it as well. The first of those jurisdictional issues is this: this is a matter that concerns the application of the agreement and we say that it is and if it is, what can the Commission do in terms of conciliating and determining the issue.

PN52

Now, in relation to that, the union has raised the question of well, obviously the term of the agreement has passed, there is a bargaining period in place, can the Commission arbitrate still? And I think the short answer to that is quite clearly, yes. So we have - - -

PN53

THE DEPUTY PRESIDENT: Well, the agreement still has effect, does it not?

PN54

MR BARTON: That's correct. 170LX, I believe, is the relevant section of the Act.

PN55

THE DEPUTY PRESIDENT: Yes.

PN56

MR BARTON: Yes, so - and the counter to the union's claim is basically 170LX means that the agreement still has legal effect, the dispute resolution process that is there is still accessible by either party and the powers that it imparts on the Commission are still able to be exercised by the Commission. As far as the existence of bargaining period is concerned, we say that the prohibition on arbitration during the life of a bargaining period via section 170N is irrelevant to this particular matter and basically the reason for saying that is that 170N(1) states that:

PN57

During a bargaining period, the Commission must not exercise its arbitration powers under Part VI in relation to a matter that is at issue between the negotiating parties.

PN58

Now, as I say, that prohibition doesn't apply. 170LW, the head of power that we are using in terms of trying to resolve this dispute through the Commission exists in part VIB of the Act not part VI which is where the prohibition in section 170N has its effect. So it is outside of the prohibition, it leaves the Commission free to continue to exercise its powers under the dispute resolution clause. In addition to that, there is authority - and I'm prepared to provide those - - -

PN59

THE DEPUTY PRESIDENT: Not now, Mr Barton.

PN60

MR BARTON: Okay. In addition to that there is authority to the effect that the powers exercised by the Commission under a dispute resolution process are different in nature from the arbitral powers provided in part VI. The Commission is exercising the power of private arbitration.

PN61

THE DEPUTY PRESIDENT: Yes.

PN62

MR BARTON: So basically we believe the Commission has the ability to determine the issue and in relation to the wording of the agreement, it is quite clear, it says matters may be referred to the Commission for determination and again there is precedent that says determination in the context of a dispute resolution process equals arbitration.

PN63

So what we would be seeking in relation to this matter, Deputy President, is, as I say, we are prepared to engage in discussions in an effort to conciliate and in the likely event that they do not result in agreed settlement, because we do have our doubts, then we would be asking that the Commission basically hear and determine the matter at some future date and yes, at that stage, we would be seeking to make more detailed submissions about the merits of the claim and also call on a couple of relevant witnesses as well.

PN64

THE DEPUTY PRESIDENT: Yes.

PN65

MR BARTON: If the Commission pleases.

PN66

THE DEPUTY PRESIDENT: Good thanks, Mr Barton. Ms Thompson.

PN67

MS THOMPSON: Thank you Deputy President. We say that section 170N of the Workplace Relations Act does not permit exercise of arbitral powers during a bargaining period. The agreement expired in - June 30 last - last year. The matter of the - in question has now become an issue in our - in our new EBA. As of 4 March, our secretary wrote to the company stating:

PN68

To conclude the EBA without -

PN69

it goes on to say:

PN70

he would seek an increase - a pay increase from 3 per cent to 4 per cent and consider what words should be in the EBA in respect to seismic survey by government instrumentality for hydrocarbons if we are prepared to alter them.

PN71

Now - - -

PN72

THE DEPUTY PRESIDENT: So, just before you go on, Ms Thompson, do you say that the determination of this matter by the Commission as provided by the disputes procedure would be an exercise of the arbitration under part VI of the Act? Is that what you are saying to me?

PN73

MS THOMPSON: We are saying that 170N - - -

PN74

THE DEPUTY PRESIDENT: Yes, well 170N talks about - - -

PN75

MS THOMPSON: 170N says you can't arbitrate.

PN76

THE DEPUTY PRESIDENT: - - - must not exercise arbitration powers under part VI.

PN77

MS THOMPSON: Yes.

PN78

THE DEPUTY PRESIDENT: So you are saying that the exercise of the Commission's function in respect of this disputes procedure, that is the determination of the matter, you are saying that that is an exercise of arbitration powers under part VI of the Act; is that your submission?

PN79

MS THOMPSON: Yes.

PN80

THE DEPUTY PRESIDENT: Yes, thank you.

PN81

MS THOMPSON: The other problem we've got in the matter is I can't actually - I can't actually - the matter has been referred to the Federal Secretary and he is away on leave. So there is - I don't want to waste the Commission's time any more but there is not much I can say - - -

PN82

THE DEPUTY PRESIDENT: Yes.

PN83

MS THOMPSON: - - - until he comes back, anyway, but the fact of the matter is that it's - it is up to the negotiation in the EBA - of the new EBA.

PN84

THE DEPUTY PRESIDENT: Yes, all right, well, perhaps to the extent that we can explore the matter further, we will do that in conference, subject to there being no objection to that particular course of action, Ms Thompson. I prefaced that by saying: to the extent that we can do that.

PN85

MS THOMPSON: I don't want to waste your time, that's my problem.

PN86

THE DEPUTY PRESIDENT: No, but it may well be, Ms Thompson, that your submissions about the Commission's jurisdiction in this matter are made out. That is, that I may well call for directions or sorry, issue directions in this matter and call for submissions from the party and hear you more fully on the issue of the Commission's jurisdiction and it may be that the result of that is those objections to jurisdiction are not made out and the matter will go forward to determination. So it seems to me that in that circumstance it might be wise to, at least as far as we are able, to canvass any future progress of the matter within conference.

PN87

MS THOMPSON: Okay.

PN88

THE DEPUTY PRESIDENT: Whatever that future progress may be.

PN89

MS THOMPSON: All right, thanks.

PN90

THE DEPUTY PRESIDENT: Yes. Yes, now, Mr Barton, the other application was for the Commission to provide assistance in conciliation under 170NA; is that correct?

PN91

MR BARTON: That's correct, Deputy President, I'm happy to speak to that.

PN92

THE DEPUTY PRESIDENT: Within - did you wish to speak to that on the record? Being that is a conciliation circumstance, I'm not sure that there is much to be gained by remaining on the record in respect of that particular matter.

PN93

MR BARTON: I will be guided by yourself on that. I'm happy to go straight into conference on that or you know, provide an explanation on the record.

PN94

THE DEPUTY PRESIDENT: Yes.

PN95

MR BARTON: It's up to yourself.

PN96

THE DEPUTY PRESIDENT: Well I think given that it is a provision for conciliation, it might be better that we refrain from putting anything on the record in respect of that, subject to anything Ms Thompson has to say about the matter.

PN97

MS THOMPSON: No, I agree with you.

PN98

THE DEPUTY PRESIDENT: Yes. That being the case, we will go off the record, thank you.

NO FURTHER PROCEEDINGS RECORDED [2.25pm]