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Fair Work Commission Transcripts |
TRANSCRIPT OF PROCEEDINGS
Fair Work Act 2009 1052360
COMMISSIONER SIMPSON
AG2015/2789
s.185 - Application for approval of a single-enterprise agreement
Application by Sea Swift Pty Ltd
(AG2015/2789)
Cairns Court Complex
11.04 AM, THURSDAY, 27 AUGUST 2015
Continued from 26/08/2015
PN1114
THE COMMISSIONER: Right. Now, I understand, Mr Herbert, you're going first in closing?
PN1115
MR HERBERT: Yes. Yes, thank you, Commissioner. Commissioner, we filed a fairly detailed outline of submissions in accordance with the Commission's directions.
PN1116
THE COMMISSIONER: Yes, I think my associate has that material.
PN1117
MR HERBERT: Could I - - -
PN1118
THE COMMISSIONER: I might just get her to hand it up.
PN1119
MR HERBERT: Yes. I'm not sure what your practice in that regard might be but might I tender those submissions? That you treat them as an exhibit, otherwise - - -
PN1120
THE COMMISSIONER: Yes. Just bear with me for one second. That's all right. I've got it. I think we're up to Exhibit 11. Is that right gentlemen?
PN1121
MR KEATS: I think we're up to Exhibit 12. Exhibit 11 was the Ceiling Queensland Agreement.
THE COMMISSIONER: That's right. All right. Well, I'll admit the outline of submissions for the applicant in the matter as Exhibit 12.
EXHIBIT #12 OUTLINE OF SUBMISSIONS FOR THE APPLICANT
PN1123
MR HERBERT: Can I enquire whether the Commission received with those submissions a copy of the Seas and Submerged Lands Act?
PN1124
THE COMMISSIONER: No, I did not.
PN1125
MR HERBERT: I might seek to remedy that because I obviously need to refer to that in my submissions. I think there was - I think what happened was that - sent through a link rather than the Act. I might arrange to have a copy of the whole Act handed up, Commissioner. Sorry, I wasn't aware that you didn't have it. What I might do, though, Commissioner is I'll hand up my copy and I'll work off the copy of the - which I can get from Commlaw. I thank my friend for that. Mr Keats has volunteered his.
PN1126
Commissioner, as I indicated at the opening there are a couple of issues that emerge in relation to this matter which have some prominence. The other issues appear that have much lesser prominence and in some cases appear to have disappeared altogether. Can I deal with things, generally, in the order in which they appear in the written submissions, just for housekeeping purposes?
PN1127
THE COMMISSIONER: Yes.
PN1128
MR HERBERT: The material that we put in, in relation to - in the submissions - in relation to the structure and the operating characteristics of Sea Swift itself, commences at about paragraph 5 and goes forward. Now, much of that material was the subject of the evidence of the marine and operations staff - that's Mr O'Halloran and Mr Bruno and it sets out the structure of the various operations which are intended to be covered by the agreement.
PN1129
The one characteristic of the agreement is that it is intended to cover and it does cover all employees of the company and that that means what it says - all employees of the company - I'll come back to that. That, in itself, in my submission disposes of any suggestion that the employees were not unfairly - or the group of employees to be covered by the agreement were not unfairly chosen.
PN1130
And can I deal with that issue immediately? The question of unfairly chosen is raised by section 186 of the Act. One of the - it's one of the general requirements which the Commission must take into account when seeking and determining whether to approve an agreement. It is contained in section 186(3). That requirement is expressed in terms that the Commission must be satisfied that the group of employees covered by the agreement was fairly chosen.
PN1131
But if one goes to 3(a) if the agreement does - 3(a) provides that if the agreement does not cover all of the employees of the employer or employers covered by the agreement the Commission must, in deciding whether the group of employees covered was fairly chosen take into account whether the group is geographically, operationally organisationally distinct.
PN1132
That consideration is only triggered in the event that the agreement doesn't cover all the employees. If it does cover all the employees there's nothing to consider in that regard. So it cannot be in the legislative scheme of things that employees - the group - is unfairly chosen if it constitutes all employees. There is no other way - there's no - in effect - no fairer proposition in respect of the selection of the group of employees that let you choose everybody. It's as simple as that. And that's what's happened in relation to the matter.
PN1133
We've also made submissions to the effect that - because we note that it's been put against us - that in some way the senior executives are not covered by the agreement, when the agreement says they are. And the submission seems to be because a small handful of the senior executives are remunerated on a salary basis on the footing that they do not, as Mr White said, they do not claim overtime or any other penalties of that kind, then it is said that they're not covered by the agreement which is an interesting proposition in itself that apparently you can make yourself not covered by an agreement by entering into some external salary arrangements that aren't expressly provided for in the agreement.
PN1134
In the written submissions we have dealt with this topic and we have said that and we repeat the submission for the present purposes that the agreement is - it provides minimum standards - there is absolutely no reason why an employer, in those circumstances, by reason of a salary arrangement buy out overtime and hours provisions of that kind in circumstances where so long as once the maths are done that the minimum standards in that agreement are reached.
PN1135
It doesn't matter how much over and above that the employee works and is remunerated accordingly and there's no suggestion that what will happen or has happened or did happen at any point or will happen under this agreement is that the remuneration standards will be breached by virtue of the fact that senior salaried staff are engaged in such a way that their overtime and hours provisions are brought out by a generous salary.
PN1136
But that only goes to the question of salary because all other conditions of employment relating to leave, sick leave, entitlement to holidays and other things of that kind are all set out in the agreement. They all apply to those same salaried employees as a legal enforceable obligation. Just as the agreement says it does. And so, in those circumstances, there can't be any suggestion that somehow or other these people are because they are management they can't be covered by the agreement. If the agreement says they are, then they are and that's the end of the question. There is no further correspondence can be entered into in respect of the matter.
PN1137
And to say that they don't have a practical effect because they don't actually work for $34.86 an hour, every hour, and clock off at 4.30 and go home with the maintenance workers means that the agreement doesn't apply to them, means with all due respect, a legal nonsense. The agreement applies in accordance with its terms, not in accordance with what the parties do.
PN1138
And so can I dispose then of those two points, that is, the question as to whether the employees were fairly chosen and whether all of the employees who voted for the agreement are covered by the agreement. It is a literally a 100 percent coverage agreement as it itself expresses it to be.
PN1139
We have dealt with the Form F17 and the union responses to Form F17 and we have summarised them going forward and in relation to the earlier industrial coverage which is dealt with in paragraph 34 that the Sea Swift Collective Agreement, 2009, which is referred to in paragraph 35 is the existing industrial instrument. It was entered into under the Workplace Relations Act. Its nominal expiry date was 18 September 2014. It is now expired and out of time but of course remains in force under the Act. It replaced the 2005 agreement.
PN1140
But the Sea Swift Agreement, 2009, as was the evidence yesterday had a provision within it and of course this bears on some later questions that have been raised. It has a provision within it which allowed for flexibility in relation to rostering. It does not, in accordance of the evidence of Mr White and the records - if the Commission wishes to see a copy of that agreement it can be provided but - - -
PN1141
THE COMMISSIONER: I've got one actually.
PN1142
MR HERBERT: Thank you. The 2009 agreement are only and I took Mr White to it yesterday. It allows for flexibility in relation to rostering. It allows for the introduction of an even time roster under the authority of that agreement by the mechanisms provided for the making of flexible rosters as required by the employer's business from time to time. But, of course, equally it allows for the unmaking of the even time roster and going back to any other form of roster which the employer requires to attain its business objectives.
PN1143
The even time roster is not enshrined in that agreement and there is simply no way that anybody could say the fact that it's been introduced once means that it must - there is some legal entitlement to keep it indefinitely. However, under the proposed agreement in these proceedings an even time roster is embedded in the process.
PN1144
Now, that goes to some of the later matters that I need to deal with and that's the question as to whether anything that was said in the course of the negotiations relating to the security of maintaining the even time roster was an improper, inappropriate coercive or other comment to make because it referred to the fact that the even time roster that was introduced by the employee unilaterally on one occasion would no longer be maintained by the employer in light of the fact that it looks as if the old industrial arrangements might have to be maintained in the event that a ballot for the new agreement is successful.
PN1145
That that is a perfectly proper lawful and appropriate statement to make to employees and most centrally it is true. The employer forms the intention that it does no longer require a four by four roster because the economic arrangements with which it is going to have leave it under the 2009 agreement going forward won't sustain that indefinitely or for the future it is perfectly entitled to exercise its right under the 2009 agreement to introduce another form of roster and to no longer assist with the four by four roster. That's not a threat, that's a fact in relation to these arrangements. So that that much needs to be understood from those earlier arrangements.
PN1146
But going back further, as I mentioned yesterday, and I haven't had the opportunity to download all the material from the website but under the award organisation research data that's available on the Commission website and we get an opportunity to put a written submission in reply which I will suggest at the end of my submissions we would seek to attach the material or provide to the Commission with the material off the website, which indicates that an original Sea Swift enterprise arrangement was included within the data and within the awards - and that was a State award, as I understand it - it was included in the material that was considered by the AIRC whilst making the Ports Harbours and Enclosed Waters Vessels Award. It's listed as part of the base material that was brought into account, as I understand it.
PN1147
MR KEATS: Unusually, Commissioner I might rise to object to that evidence being given in that form from the Bar table. It's actually not correct as to what happened.
PN1148
THE COMMISSIONER: Well, look - - -
PN1149
MR KEATS: It says an Award order that is on the Commission's website. That shows quite clearly which awards were included and it wasn't the Sea Swift Award.
PN1150
THE COMMISSIONER: Yes. Well, look we're just dealing with submissions at this stage but yes, I guess, it'll be a matter of fact one way or the other.
PN1151
MR KEATS: Correct. And he's giving it from the Bar table.
PN1152
THE COMMISSIONER: But - I do recall the process well, because I was personally involved.
PN1153
MR KEATS: I was also involved in the matter before.
PN1154
THE COMMISSIONER: You'd categorise various instruments from different jurisdictions and nominally put them under different industry groupings but what's to be made of that, I guess, I'd have to sort through it.
PN1155
MR KEATS: And that ended up 2012, Commissioner, they did prepare an awards order that showed what they actually took into account when making the award at the end of the day. And the Sea Swift Award's not there.
PN1156
MR HERBERT: Well, I - - -
PN1157
MR KEATS: And that's on that basis I object to the evidence being given from the Bar table.
PN1158
MR HERBERT: If that's correct, then I stand corrected. My understanding of when I looked at the matter originally to do the research in relation to this matter is the Sea Swift Award is - - -
PN1159
THE COMMISSIONER: Yes.
PN1160
MR KEATS: - - - within the awards it was conceded. But if I am incorrect about that because the matter was only - was raised yesterday morning and I haven't had time to go back to that research material in order to establish it.
PN1161
THE COMMISSIONER: Well, it certainly sounds like a subject that it might be appropriate for us to get to the bottom of through written submissions perhaps.
PN1162
MR KEATS: Yes.
PN1163
THE COMMISSIONER: We'll deal with that as we go.
PN1164
MR KEATS: I'm prepared to hand up when I do my submissions the list of awards that were included. I have downloaded off the audit page.
PN1165
THE COMMISSIONER: All right.
PN1166
MR HERBERT: Well, then we'll all be enlightened.
PN1167
THE COMMISSIONER: Sure.
PN1168
MR HERBERT: Leaving all that - however, well leaving that topic to one side Sea Swift has been operating under the instruments which are set out in paragraph 35 for obviously some significant period of time. This is the first time in which it has been required to have its operations tested as against the Modern Awards as a result of that history. And, therefore it's necessary in the circumstances for the whole of its operations to be assessed for their applicability against the relevant Modern Awards as to where it fits in it would entirely new structure which has been put together by the Commission of its own motion and in the response to the Award modernisation request.
PN1169
Now, can I then move to the question of the applicable boot test in relation to Maritime Awards? In relation to the Maritime Awards the contention by the Maritime Unions is that the applicable award is the Seagoing Industry Award. The Seagoing Industry Award coverage is as what I've set out in paragraph 38 of the submissions.
PN1170
Now, employers who are engaged - it's an industry coverage award - it covers employers which are engaged in the seagoing industry and their employees. It, however, does not cover employers who are covered by the Ports, Harbours and Enclosed Waters Vessels Award in accordance with clause 4.4.
PN1171
Now, the seagoing industry in which the employer must be engaged before the Award could be triggered is that the operation of vessels trading as cargo vessels, et cetera, as set out in paragraph 40. Now, we put in some detailed submissions about that and I won't go read - go through them again in detail other than to mention a few things about the significance of the operation of the two awards as constructed by the Commission.
PN1172
There does appear to be some tension between that award and the Ports Harbours Award in terms of the coverage on their face because the Ports Harbours and Enclosed Waters Vessels Industry and that award is also, I mention, an industry award in that it covers employers engaged in that particular industry. The industry is described as the operation of vessels of any type wholly or substantial within a port harbour or other body of water within the Australian coastline, or at sea on activities not covered by the above awards.
PN1173
Now, it also in the circumstances excludes employers who are covered by the Seagoing Industry Award. So each award excludes employers covered by the other. So one has to look at the question of what is the - or how does the coverage clause apply vis- -vis the operations of the employer and does the employer comfortably fit within the coverage clause of one or other of the award? And if it does, any other consequential bits and pieces of the employer's operation which may not of themselves sit within that industry are not covered by another award. They're covered by the primary award within which coverage comfortably sits.
PN1174
Now, it's the submission that we make is in two parts. Firstly, the Seagoing Industry Award in and of itself when one looks at the substantial operations of the employer the Seagoing Award does not apply by its own terms. The Seagoing Award by its own terms refers to, in the description of the industry, vessels - et cetera - the operation of vessels, et cetera, which in the course of such trade or operation proceed to sea.
PN1175
Now, proceeding to sea is said to be on voyages outside the limits of bays, harbours or rivers. Now, the submission we make about that is that the voyage - it is the voyage - which must be outside the limits of bays, harbours, rivers et cetera. If the voyage in whole or substantial part is inside the limits of bays, harbours or rivers, then it is not a voyage as described in that award and the vessel, consequently, is not taken to have proceeded to sea.
PN1176
And it is not enough, in fact it is a very long way short of the mark, one would have thought and ordinary common sense that so soon as a vessel leaves at any time, at any point, in its operations the limits of a bay, harbour or a river, it is ergo - it has by that measure proceeded to sea. Because if it leaves one bay, harbour or river or the limits thereof, travels a mile or two and goes back into another bay, harbour or river and then goes for another 50 miles, then the mere fact it left one bay and entered another bay doesn't mean the voyage is outside the limits of bays, harbour and rivers.
PN1177
It means in the course of the voyage it actually went out of there but the voyage itself, properly characterised is inside the limits of bays, harbours and rivers. And as such, does not qualify for coverage by the Seagoing Industry Award. And what we said about that is, in essence, then because every ship - every cargo or passenger vessel at some point, at either end of its journey, or its voyage will be required to be in a port or a bay or a harbour or river because it will need to load or unload its passengers or its cargo, which traditionally would be done in a port of some kind.
PN1178
The focus of the coverage of the Award is on the voyage. Now, to be sensible about it, as the Commission is required to be - interpretation of awards - the mere fact that it starts its voyage in a bay and proceeds out of that bay and stays out of that bay and stays out of bays, harbours and rivers for essentially the whole of the voyage, until such time as it arrives at the other end of the voyage, then that would be what is described as proceeding to sea.
PN1179
Not only does it accord with the words that are actually used in the award but it accords with ordinary common sense, because when one stands - if one stands back and takes a helicopter view of these two awards they're intended to draw a distinction between vessels which go to sea and vessels which ply on waterways and around the coast - as I'll come to the words of the Ports Harbours Award - but don't go out in the blue ocean.
PN1180
It's intended to draw a clear distinction between those who go out to sea and those that don't but stay in close contact with the coast. Not quite the words that are used but I'll come to the words that are used. Now, if that is the distinction that's being drawn one says, "Well, what sort of vessels are we talking about?" "What sort of operations are we talking about?" Well, there are two very clear classes that can be drawn.
PN1181
There are the monster oil tankers and mega-ore ships and the Sea Princess passenger liners and things which search for blue water. They go for deep water. They get way away from the coast and reefs and anywhere else they might get into trouble, unless they're Italian in the Mediterranean Sea, where occasionally they come in too close for comfort.
PN1182
But, ordinarily, vessels of that kind head out to sea and stay there. And they stay away from bays, harbours and rivers, because bays, harbours and rivers, spell for the most part potential trouble for those sorts of vessels and, in any event, they're going Brisbane, Osaka, San Francisco, wherever - the mega ships that ply the world's oceans we put it. That's seagoing with all due respect. That's where you go - the voyage itself - except for the beginning and end of necessity must be in a port is engaged wholly and solely outside bays, harbours and rivers. And that comes from the use of the definition within the brackets - on voyages - outside those places. Not the mere fact of leaving or (indistinct) constitutes the award as having been triggered.
PN1183
The other class of vessels are, rather than the big passenger tankers, et cetera, et cetera that leave Australia or leave an Australian port and then come back in again for days or weeks. The other class of ships which obviously is intended to be covered by the Ports, Harbours and Enclosed Waters Vessels Award are those that do not go out, head out in the mother ocean, but stay within the sorts of waters that are close - very close to the coast that are constituted by bays, harbours, rivers and other bodies of water as it says. And those are the types of vessels that do precisely the kind of work that is done by my client. One could almost see my client's operations in front of the Full Bench at a point when they were drawing up the coverage clause of this Award.
PN1184
And that's because when one goes to the Ports, Harbours and Enclosed Waters Vessels industry description - wholly or substantially, though not completely you can be outside the limits of all of these areas that are nominated here. So it can be substantially and "substantially" means what it says - more than half perhaps - a significant part of. Wholly or substantially within a port, harbour.
PN1185
Now, ports or harbours one immediately understands that - Sydney Harbour Ferries - those sorts of things - river cats - those sort of vessels that trundle around and never put their nose outside the mouth of the river or the mouth of the harbour or the bay or whatever. But, of course, the Full Bench didn't stop there. This is not intended to be a ports and harbours award, as it's been sought to be characterised. As soon as you go outside a port or a harbour, then you've gone to sea, because you're outside the limits of bays, harbours and rivers and therefore you've gone to sea.
PN1186
Because the Full Bench didn't stop at ports and harbours. They added another body of water within the Australian coastline or other body of water within the Australian coastline. Now, that's another body of water, i.e. a body of water which is not a port or a harbour. And they only need to be wholly or substantially within any one of those areas - and substantial will do - in order to qualify within this industry.
PN1187
Now, again, if one comes back to the example of the Sea Princess which sticks its nose into the Brisbane River, unloads, and unloads tourists, they go shopping and then off they go again and then four days to Vanuatu, and three days to Pago Pago et cetera - all those sorts of trips like that. Their visiting of a port or a harbour is only really at the end of a voyage. It is not where the voyage is conducted. A body of water within the coastline is not where the voyage is conducted. They try to stay for the most of those vessels as far away from coastlines and bodies of water within the coastline as they can get.
PN1188
These vessels, on the other hand, the vessels being talked about here are vessels that stick by the coastline, essentially, as closely as they can for a range of reasons and that is because on a very regular and frequent basis they are darting in and out of ports and harbours undertaking the sort of milk-run operations which are described in the evidential material that you have. And you have the map that chose where all these vessels go.
PN1189
And virtually no occasion whatsoever do they even leave territorial waters which is 12 miles off-shore. They actually hug the coast very closely because they are their next port of call is on the same coast that they are following. And then one after that and one after that as a result of which there is no point and they do not actually leave the coastline in any measurable way - these operations.
PN1190
So that it is very plain that what the Full Bench was trying to do, in my submission, and as you correctly identified yesterday the exercise you have to undertake in this regard is to determine what it is that the Full Bench meant. They meant to include vessels which are wholly or substantially operating within a body of water, leaving aside the question of ports and harbours, because a port and harbour is also a body of water within the Australian coastline.
PN1191
But within a body of water which is not a port and harbour but is within the Australian coastline that is, one would have to say, interpolating within close contact with the Australian coastline or in relevant senses, attached to the Australian coastline in some meaningful way - that is the body of water is attached in some meaningful way - and I don't mean just by mere proximity but by a number of other means.
PN1192
So that there's a very clear conceptual distinction between the two groups of vessels we're talking about and the landing barges and the small vessels that are by and large the meat and bread of everything that Sea Swift are, for the most part couldn't go to Vanuatu. Couldn't ply across the sea in a big flat bottomed barge in stormy conditions in the middle of the Pacific Ocean. One dreads to think what might happen.
PN1193
Small tugs that push barges around - dumb barges around - or tow barges around, heading off in that sort of way on an ocean voyage, why would you, for a start - and if you did and the consequences of having a 50-metre barge out in the middle of the Pacific Ocean, towed by a tug in a storm - in a specific storm one would again - it's too horrible to contemplate what might happen.
PN1194
These are not vessels that can or would or should go out to sea in any sensible maritime sense. And the purpose and very plainly for the drawing of the distinction between the two is to allow for some local operations which operate very close to the coast, which are domestic Australian operations that are in and out of the coastline, travelling in and out of bays, doing little "milk-runs" of this kind that we're talking that Sea Swift does, in relation to the coast, as distinct from the dynamics and the economics and the structure et cetera of mega-tankers and other large cargo ships and passenger vessels, heading off overseas, and going to America or Japan or Korea or wherever they go.
PN1195
Now, once one sees the two spheres of influence intended to be described by the industry rules in this regard, then the matter really becomes quite easy and quite clear. None of these operations by Sea Swift have any aspect in which they leave a port, go out but leave all vestiges of ports, harbours and rivers and never return again to a port, harbour and river until the voyage is finished. None of them do that.
PN1196
They all spend - and we've got attachment "D" to the statement of Mr O'Halloran which was not cross-examined on at all draws - contains an enormous amount of information which is determinative, in my submission, of the question as to how long - for example - and we've used the standard of the territorial baseline - how long those vessels actually live behind the territorial baseline in relation to operations.
PN1197
And they're by operations, as we have noted on that schedule, and again none of this was challenged in cross-examination that "operations" is the term which was used in the award. Operations is a term which incorporates the loading and unloading of the vessel, and the travelling of the vessel, and it bears that same meaning of the Navigation Act, so far as it matters. But the operation of the vessel includes its loading and its unloading. Now, we've added all of those figures together and the amount of time that they spend in each of the out-ports, loading and unloading, and all of which are in bays, harbours, and bodies of water enclosed. And the amount of time that they spend travelling between the various out-ports to which they go and the amount of time that that travel spends within enclosed waters and we'll come to the question of those waters shortly.
PN1198
But having regard to all of that every single one of the Sea Swift vessels, except for some of the mother-shipping operations spends the majority or the whole of its time, that is, more than half or up to and including the whole of its time behind the territorial baseline, during the course of its operations. And at no point do any of those vessels head out in a direction which is, as it were, at right-angles to the coast heading out to blue water and spending the whole or, effectively, the whole of its voyage outside the limits of what we say are bays, harbours and rivers.
PN1199
Now, for those reasons, that means that - just on the basis that we've put in the way of the calculated matters in attachment "D" - this extraordinarily unique operation which doesn't exist anywhere else in Australia in this form, is in its breadth and its scope and the type of operations and the essential services it provides, must be taken to be an operation the substantial part of which occurs within a body of water which is within the Australian coastline. A significant proportion of the work is done in ports and harbours, that is the loading and unloading operations.
PN1200
The balance of the operations of the vessels in a range of localities. The benchmark we've set, for example, is the territorial baseline and the reason why we've done that is because we think that is for the purposes of this argument is an extremely useful benchmark to be used - not mentioned in the award - but it's an extremely useful benchmark to use in the context of a matter of this kind because of what it is.
PN1201
What it is Commissioner, the line is drawn in accordance with section 7 of the - - -
PN1202
THE COMMISSIONER: I've got your marked-up copy now.
PN1203
MR HERBERT: Has it got some markings on it?
PN1204
THE COMMISSIONER: That's all right.
PN1205
MR HERBERT: There's no words I hope.
PN1206
THE COMMISSIONER: No, no, no. There's just - section 7 has got a highlighting on it. Is there any issue taken from the respondent parties about that?
PN1207
MR KEATS: No, Commissioner.
PN1208
THE COMMISSIONER: All right. Thanks. That makes life a bit easier. Well, it saves us adjourning and going and photocopying another copy. So I appreciate that.
PN1209
MR HERBERT: Commissioner, section 7(2) or section 7(1), "The Governor-General may from time to time" et cetera "declare not inconsistently with section 2 part 2 of the convention the limits or the whole or any part of the territorial sea." Now, the territorial sea is the 12-mile zone contiguous with the coast of Australia.
PN1210
Now, under section 7(1), the Governor-General may declare again, not inconsistently with the convention the limits of the whole or any part of the territorial sea and for the purposes of such proclamation - "The Governor-General may determine either or both of the following, the breadth of the territorial sea", and under 2(b) "The baseline from which the breadth of the territorial sea or any part of the territorial sea is to be measured."
PN1211
Now, that's how the baseline - that's the power under which the baseline is to be drawn. Now the Articles under which that is said to occur and with which such a drawing cannot be inconsistent are those that the convention should be attached - the relevant parts of the convention are attached. And that's part 2 schedule. And it talks about the breadth of the territorial sea in Article three. "Every State has a right to establish up to a limit not exceeding 12 nautical miles measured from baseline to determine in accordance with the convention." The outer limit is every point which is the distance from the nearest point of the baseline equal to the breadth of the territorial sea.
PN1212
Now, five, six and seven and eight are the relevant parts. Now, these are are the parts in respect to which there can be no departure by the Governor-General when determining a baseline. Now the normal baseline for measuring, and under Article 5 - is the normal baseline - is the lower water mark along the coast. So that's the lowest, in effect, astronomical tide and so, ordinarily, in places where you don't have a baseline which is drawn on water the low tide mark is it.
PN1213
Now, in the case of islands situated on atolls or islands having fringing reefs and in one instance is Torres Strait in this circumstance, the baseline for measuring the breadth of the territorial sea is the seaward lowline of the reef. So you plan a chart, find out the reef and the seaward low-water mark of the reef, which means everything inside the reef as distinct from the low-water mark on the island. So if there is a lagoon behind a reef then the base - the coast of Australia, for the purposes of this process - the baseline is the outer edge of the reef or the outer edge of the island itself. And if there's a lagoon between the two that's considered part of the island, not part of the sea.
PN1214
But Article 7 and we set this out in the submissions but this is where the provisions come from.
PN1215
"In localities where the coastline is deeply indented and cut into or if there is a fringe of islands along the coast in its immediate vicinity, the method of straight baselines joining appropriate points may be employed in drawing the baseline from which the breadth of the territorial sea is measured."
PN1216
And then it talks about questions of deltas - the drawing of straight base - and item 3. "The drawing of straight baselines must not depart to any appreciable extent to the general direction of the coast." Again, this is the guiding rules that must guide the Governor-General in making these baselines. "The sea areas lying within the lines must be sufficiently closely linked to the land domain to be subject to the regime of internal waters. Straight baseline shall not be drawn to and from low tide elevations, unless lighthouses et cetera have been built." And item 5 - "Where the method of drawing straight baselines is applicable under paragraph one account may be taken of economic interests." et cetera. And under 6 - "The system of straight baselines can't be applied in a way which isn't relevant here."
PN1217
Now, it's important to note and as it is under the Act, because these conventions have relevantly now been enacted into the Law of Australia by the Seas and Submerged Lands Act, but except as provided and of Part 4, "Waters on the landward side of the baseline of the territorial seas form part of the internal waters of the State."
PN1218
Now, "internal waters", in that sense, essentially are the Brisbane River, Sydney Harbour, Port Phillip. They're internal waters. They're almost completely surrounded by land and well in land of the approximate line of the coast it says. But those internal waters have never been in contention as being - and the Murray River and all those sorts of places - they have never been in the contention as to whether internal waters or not, because they are internal to the land area of the country.
PN1219
But this convention extends the definition of internal waters out to territorial baselines so that the internal waters have quite a different standing to territorial waters. They are actually part of Australia. Not part of the water over which Australia has certain dominion, but they are, in fact, part of Australia.
PN1220
Now what that means in every legal sense is that that baseline and this, again, is not just some - weird political activity in the United Nations that has no bearing - this is now internal waters domain is now part of the internal domestic waters of Australia because of the Act, but those internal waters are within Australia - rights, (indistinct) and passage and other things that apply in relation to territorial waters. And the other zones that are provided for under this legislation do not apply to the same way in internal waters as they do to all other kinds of waters. So, Australia, in effect that's considered part of Australia for the purposes of Australian law, all sorts of Australian laws and for the purposes of international law.
PN1221
Now, if they're internal waters, and if one notionally treats the territorial baseline as being, therefore, essentially the real legalist coastline of Australia - not the shoreline, but the coastline of Australia - then those internal waters, one would have to say strike a bit of a resonance with the terms of the Ports Harbours Award, that is waters within the Australian coastline. These are waters behind the Australian coastline, therefore within it.
PN1222
And the other reason why that can be taken to be so, that is, waters behind baselines can be treated for the purposes of these proceedings as waters within the Australian coastline, is that the methodology for creating those internal waters by the drawing of straight baselines across the water is exactly the same methodology that is used to establish the limits of bays, harbours and rivers, as appears in Article 9, 10, 11 et cetera.
PN1223
And under Article 9, "If a river flows directly into the sea the baseline shall be a straight line across the mouth of the river between the points of the low water line of its banks." So if you've got a river that isn't - doesn't flow into a bay - which has a different treatment, then the Australian coastline doesn't speak-up the banks of the river and go into like the Murray River. It doesn't go halfway up through South Australia and off to Victoria - the Australian coastline - it stops at that line which is drawn across the mouth of the river.
PN1224
Similarly, with bays - which is bays and the coasts which belong to a single State, which is all the bays of the Australian mainland, "A bay is a well-marked indentation whose penetration is in such proportion with the width of its mouth as to contain land-locked waters and constitute more than a mere curvature of the coast. An indentation shall not, however, be regarded as a bay unless its area is as large as" - et cetera.
PN1225
Now - "for the purpose of measurement, the area of an indentation is that lying between the low-water mark around the shore of the indentation line and a line joining the low-water mark of its natural entrance points." et cetera - now, under Article 4 is the important one.
PN1226
"If the distance between the low-water marks of the natural entrance points of a bay does not exceed 24 nautical miles, a closing line may be drawn between these two low-water marks and the waters enclosed thereby shall be considered as internal waters."
PN1227
So that if it's less than 24 miles from the top of Moreton Island across to the main land then you draw a line from the top of Moreton Island to the mainland and that is the closure of Moreton Bay - to use the local example - that's how this is done. And, in fact, if you have regard to the maps we handed up yesterday which actually incorporate Moreton Bay, the baseline which has been drawn is from the north - is from Cape Moreton to Caloundra.
PN1228
THE COMMISSIONER: Taking in Bribie?
PN1229
MR HERBERT: Beg your pardon?
PN1230
THE COMMISSIONER: Taking in Bribie.
PN1231
MR HERBERT: Taking in Bribie. And the shoreline of Bribie is not the coastline of Australia for those purposes because the waters off Bribie - all of the waters off Bribie. It's not the larger map. We handed up the two - they're double-sided maps - and one of them has the coast of Queensland going all the way down - if you still have them with you.
PN1232
THE COMMISSIONER: Yes.
PN1233
MR HERBERT: And I can hand up another one if they're not in court, Commissioner.
PN1234
THE COMMISSIONER: No, I've got it.
PN1235
MR HERBERT: That actually incorporates down - well, into New South Wales - do you have that one? On one side it's from - - -
PN1236
THE COMMISSIONER: Yes, I'm looking at it now. I've got it.
PN1237
MR HERBERT: Yes. And you see Moreton Bay is pretty well in the middle of that area there.
PN1238
THE COMMISSIONER: Yes.
PN1239
MR HERBERT: The line goes on the outside of South Stradbroke, stops at North Stradbroke - presumably the LAT is the low-tide marked there as the line. It then commences at Point Lookout and it goes from Point Lookout to Cape Moreton, and then it goes from Cape Moreton across to Caloundra. Now, that's the mechanism by which Moreton Bay is closed so that everything behind that line is closed waters.
PN1240
Now, there is a significant proportion of what might otherwise be described as "open water" there because it's out east of Moreton Island. But whilst it might be open water in the sense there's nothing between that and California, other than the ocean - South America - other than ocean, it might be said to be open water it is, in fact, part of Moreton Bay for legal purposes. It is the closing line for Moreton Bay.
PN1241
And so on when you go up the coast. Hervey Bay is closed by the same mechanism, from Sandy Cape across to South Head or to Bundaberg. All of the areas to the south of Gladstone up to and outside Curtis Island and then chasing up towards the various islands in Shoalwater Bay and those sort of places and there is a significant amount of those sorts of areas which are also included because that bay - Hervey Bay is closed by that mechanism, Shoalwater Bay and the Keppel Bay and a number of those other bays are all closed by this same mechanism of the drawing of straight lines across what might otherwise be considered to be open water so that it becomes certain from where the 12-mile limit starts.
PN1242
Now the territorial baselines that exist in Cape York and the ones that we rely on significantly in relation to these matters are drawn by precisely the same mechanism as the bay closing lines are drawn. Now, the importance of that line, in my submission, is that this award - that is, the Ports Harbours Award, and the Seagoing Industry Award, both depend on ascertainment of where the limit or limits of the bays, harbours and rivers and other bodies of water exist.
PN1243
Because it is in the nature of bays, harbours, ports, rivers and other bodies of water that might be in question in these proceedings, that they open to the sea.
PN1244
Now the question is because they do open to the sea, at what point can one say that one has left that bay, harbour or river? And the way that it's described in the Seagoing Industry Award is when you leave the limits of the port or the harbour. The Full Bench didn't say what's meant by the limits - in making this award - and, similarly, if you are to conduct yourself wholly or substantially within ports, harbours and other bodies of water that means that you need to know when you are outside those same places in order to determine the question of whether you're wholly or substantially in or wholly or substantially out.
PN1245
So there needs to be a determination made as to where the line can or should be drawn in order to determine the question of whether you are - your operations are inside or outside the relevant bodies of water. And what we say here, in this part of the world, in relation to this company's operations - and we don't seek that the Commission make any universal declaration about these things - because the only matter in contention is whether Sea Swift's operations can be characterised in the way Ports, Harbours Award suggests.
PN1246
And the way in which that occurs in this case, is that you look for what are the limits that we can have regard to, to say whether you're inside or outside other bodies of water within the Australian coastline and are they - can they be seen to be within the coastlines - or are they considered to be blue water ocean operations, or what are they?
PN1247
And what we say about that is the territorial baseline is an extremely convenient mechanism to determine that question, because what they are and the reason when one looks at the Convention, the only reason for which they can be made is, in effect, to cover off coastlines, whether islands, bays, indentations, rocky and ragged areas, from which it would illogical and difficult to use the low-tide mark following the coast as the baseline, so another line is drawn, which in every sense closes off all of those bays, inlets and islands and other things.
PN1248
See, as you go up the coast and Cape York, you've got islands and bays and indentations and all sorts of funny things - if you went along and closed every single one of them, with one little tiny line, and then you've got the islands - what do you do with the islands? Well, you've got to go out and around the islands the way they've done in Moreton Bay, and it would be a very elaborate process to be able to do that. And you'd end up with a line which is just as ragged as the one you started with, which would mean that the territorial limits - well, it's important to know where they are - would also present us a ragged line.
PN1249
So to close off these bays they haven't gone up to each individual bay and drawn a line across from point to point at the opening of the bay. They've gone a little further out to sea and said, "We'll draw one line and close all these bays with the one line." So for legal purposes and, again, I can't stress too much - this is an enactment for Commonwealth Parliament. It's part of Australian Domestic Law. It's not just an international convention - well, it is that but it's not just that - for legal purposes that line that is drawn declares where the true coastline is or where the limits of all of those bays and harbours going up the coast are. When do you leave it?
PN1250
Now, around Cairns you leave the harbour once you get past the line which is drawn across the mouth of the inlet and on the large scale chart that we handed up you can see there's a tiny little blue area which goes from the northern beaches down to the immediate headland that appears - which is starboard side heading out of the Trinity Inlet. That just covers that little area there and they've simply just drawn a line across that.
PN1251
But, of course, the 12-mile limit goes further because there's significant amounts of reefs outside from which the actual - which also constitute baselines. If they come out of the water as part of the normal tide function, then they're considered to be part of Australian territory and the LAT can be drawn from that, or the territorial can be drawn from that.
PN1252
But for the purpose of closing off the harbour in Cairns, they've drawn a line across those two points. For the purposes of closing up all of the little bays and islands and reefs and as one goes north of South Cape Bedford, you've got the bays from South Cape Bedford to Cape Flattery. You've then got a range of very small islands, including Lizard Island, Howick Island. You then go forward up to Cape Melville and you've got a bay somewhere between Cape Melville and a bunch of islands. Then you've got Princess Charlotte bay and on and on.
PN1253
Now there are a range of bays, inlets, indentations and all those other things there, all of which are entitled to be and have been closed by the proclamation by the Governor General as reflected in this territorial base line. Instead of being closed across the points of the headlands like they are at Trinity Inlet, they're closed by a line which goes out to sea, it says we'll close all of them further out to sea.
PN1254
What could have happened in relation to Trinity, that line could be 24 miles long. It could go from Cape Grafton across to the mainland, much as it does from Moreton Island to Caloundra in Moreton Bay. They've chosen not to do that here, they've chosen to do it by the mechanism that they have. That line indicates the limits, one would have to say, of Trinity inlet, so that if there was any importance on the question of whether a vessel was travelling inside or outside, operating inside outside Trinity Inlet, that would usually be determined, one would think by where has the baseline been drawn for legal purposes. That would be a very useful guide. It's not determinative of it, but it's a very useful guide as to where it might be, because that then is the legal limit of the bay.
PN1255
If there's some other practical limit you could say in a particular circumstance of the case, there's a whole mess of fringing reefs out there that hold the ocean back etcetera, then you might say well you're still sort of inside the reefs. That would be a very useful guide.
PN1256
So it is, when one gets to Cape York because when one gets to South Cape Bedford, there is then a single line drawn all the way from there up to and north of Moroa Island, Badoo Island, down west of West Island, down west of Prince of Wales Island, down past Slade Point, Short Island and doesn't join the Australian coast again until Barilla Point. That line there is intended to incorporate, to deal with, all of the exigencies of having to decide the question of whether territorial waters exist around those Torres Strait Islands or not, in accordance with international law and under the Seas and Submerged Lands Act, drawing a line which establishes the limits of Australian coastline from which territorial waters etcetera can be measured.
PN1257
The same mechanism is used at Port Mulgrave at Cullen Point. The same mechanism is used at Albatross Bay from Duyfken Point to Pura Head and that closes off the bay in that way. There's a very significant indentation in Weipa, but there is a line which says that the Australian coast is not where Weipa is, the Australian coast is out where that line is, from Duyfken Point south.
PN1258
All the waters behind that are actually called internal waters and by relevant parity of reasoning are waters within the Australian coast line. There's no difference between the waters behind the line at Weipa and waters behind the line at Cape Grenville on the other side of the cape. They're all Australian internal waters and therefore waters within the Australian coastline and, not coincidentally, they have the characteristic of other waters that one would extract by way of bays, ports, harbours and other things within the Australian coastline, that is they are very close to the coast, they're in close association with bays and the actual indentation in the coast. In the particular case here, all of them are inside the Great Barrier Reef, which in and of itself is a massive protective barrier against the forces of mother ocean.
PN1259
In that sense, they are all waters that have the protection of the barrier reef, are in close association with the coast, have a connection with the coast, as I pointed out, that the convention requires and all of them therefore, all of those waters are waters that you could comfortably treat here, in this part of Australia, for these purposes, as being a very useful, if not determinative guide, as to the question of whether the waters behind that line can be treated as a body of water within the Australian coast line.
PN1260
As I say, no doubt you'll hear arguments that some or other are used in generous. It has to be a port, or like a port or a harbour, well, if the Full Bench had meant that, all they needed to say was a port or a harbour, or something the same, and they haven't said that. They've referred to a body of water within the Australian coastline which is not a port or harbour, because it's another body of water. If it's not a port or a harbour, it's something less protected. It's probably larger, it's probably less well defined, but it has an efficient connection with the coastline that it can be described as a body of water within that coastline.
PN1261
As I say, the obvious way to do that would be to say, well how are ports and harbours generally defined? What lines are used to cut a port or a harbour off from the ocean? If that line exists in other places, then anything behind that can be considered and used to be of a similar character. Particularly here when they're behind the barrier reef and all those other things. So, they're both behind the reef and behind the territorial baseline and close in to shore. Very close in to shore, as they must be because a territorial baseline can't be drawn any distance from the shore. As they are travelling up the coast they would think there's an oil field out there, where they are 200 miles out and come back in again, it has to be maintained as the convention says it does. It must maintain an identity with the coast.
PN1262
They are the areas in accordance with attachment D to Mr O'Halloran's statement in which the very substantial majority, or the whole of the operations of my client are conducted. There are some vessels such as the Temple Bay that only occasionally leaves the Lockhart River and goes a mile offshore and comes back again to unload the vessel coming past. There are some vessels which operate wholly within Port Kennedy which is the port between Horn Island and Thursday Island, out where the red dot is, indicating Thursday Island. There's a body of water between Horn Island and Thursday Island which is Port Kennedy and there are some vessels, a couple of vessels that only stay in there and don't travel anywhere else. Those vessels are essentially within a port or a harbour in every sense.
PN1263
That's the first part of the case because if all of those vessels spend either the whole or the substantial majority of their time operating behind the territorial baseline, behind the barrier reef and/or in ports and harbours loading and unloading, when you add up all the figures, they come up with a very large majority in that regard.
PN1264
The other part of the equation, there are two more parts to the equation, one is that when one goes out into the Torres Strait and there are some routes which are shown on the journey maps and the large scale map you have does not have the actual routes marked on it. It is just a large scale blow up of the map. If one has regard to the journey maps which are attached to Mr O'Halloran's statement - you can't read the legend, you can see where the journeys are conducted.
PN1265
THE COMMISSIONER: I think we had two slightly larger maps, at the back maps.
PN1266
MR HERBERT: You have, you do have, you should have. When you have regard to those journey maps you can see, in effect, what's being said and that is that those journeys or those operations I should say, not journeys. Line Haul vessels leave Cairns and go to Cooktown, they're in territorial waters, and a lot places in and about bays and literally a stone's throw from the coast until they reach South Cape Bedford. Then they go behind the territorial line and they travel through those various bays that are nominated there, including Princess Charlotte Bay etcetera.
PN1267
Those line vessels, except for a period where in order to travel through the barrier reef passage, the line vessels leave - that's at about Cape Grenville on the eastern side of Princess Charlotte Bay and north for a period of some miles, the vessels then, they are in territorial waters and close to the reef, but outside the baseline. They then come back in behind the baseline and remain behind the baseline for the balance of their voyage all the way to Thursday and Horn Islands. They remain behind the baseline whilst doing all their loading and unloading in the harbour at Port Kennedy and then on the return voyage they do the same thing again. They remain behind the baseline until they have a short journey outside and then return back in at Princess Charlotte Bay and then they stay behind the baseline until they go again at South Cape Bedford.
PN1268
We've done the figures in relation to those matters, they're in attachment D to Mr O'Halloran's statement. Nobody has challenged them in any way, shape or form in these proceedings and they turn up a majority period of time behind the baseline and/or in the harbour. In the harbour is in Trinity, in Port Kennedy and any other places where they stop to unload they are in harbours. You add the journeys into that. The majority of the periods of time that they are operating are either in harbours or behind baselines, all of them, except for mother vessels. They are less so because they have a little bit more entrepreneurial trip to do and they don't spend anywhere near so much time in those kinds of waters. The harbour calculation includes in Albatross Bay we say, also to be delineated by reference to that.
PN1269
One doesn't delineate the limits of the ports as was suggested in Mr Farrelly's material by the limits imposed by the Queensland Ports Corporation legislation. Firstly that legislation doesn't apply in the Northern Territory, so it's of no value whatsoever outside Queensland. Secondly, they're just big squares or rectangles for the most part drawn on maps which have no connection to the land structures the way that the baselines do. Thirdly, Sea Swift visits over 30 ports and there are three or four of them that were mentioned in Mr Farrelly's material. What does one do about the question of when are you inside and outside ports and harbours and other bodies of water in relation to the other 30 odd ports that they visit? It's of no assistance whatsoever to have regard to those limits. One can look at them, but they don't tell you very much and certainly not likely to be determinative in any way.
PN1270
The other aspect of it is the Torres Strait Islands matter. We've put this squarely on the basis that there has to be a sort of a consolidated assessment made. When one is travelling as one can see from the large scale maps in particular, with the routes on it. When one is travelling throughout the Torres Strait Islands, one is travelling betwixt and between a maze, literally a maze of islands and reefs and other potentially damaging structures, if a ship comes anywhere too close to them. They are in and out of an area which, on the map, is 100 percent designated as Australian territorial waters. While it's territorial waters, it is not behind the baseline and that's one of the reasons why we say that the baseline isn't the be all and end all of these processes.
PN1271
The mossy green area which covers all of the Torres Strait Islands is on the legend Australia's Territorial Sea, so it is all incorporated. That Territorial Sea then - none of Sea Swift's vessels leave Australia's Territorial Sea. They are relevantly cannot be, in the way the Territorial Sea is calculated, they cannot be any more than 12 miles away from landfall. Because if you are more than 12 miles out towards the ocean from the landfall, then you would depart Australia's Territorial Sea which confirms in conceptual terms what I said yesterday in my opening and that is, with the possible exception of going out to Murray and Darling which is a trip which is a little longer than the others, you'd effectively not leave sight of one island before you got to the next one.
PN1272
When one sees the proximity of Thursday, Prince of Wales, Moa, West, Badoo, Maubieg etcetera, etcetera and all of those islands up there and then there's Turnagain and Saibai. Then if you've got those sorts of islands in that close proximity, each to the other, you would again, as I say, you're not exactly going to San Francisco, when you take a voyage from Maubieg to Turnagain. You'd probably see it before you leave Maubieg and you would not lose sight of Maubieg before you got to the other end. In that situation you're going from landfall to landfall in very close proximity. In those circumstances, and I'm not asking the Commission to take those matters literally, but one can see from the map what's going on here. If you're travelling in and around a bunch of islands, all of which the Territorial Sea of Australia has been expanded to cover all of them, all of which have a 12 mile ring around them. All of which have, because of the nature of them, a range of reefs around them. In the course of a journey you are never out of the range of a reef that might reach up and bite you if you're travelling in that sort of country in a vessel.
PN1273
That is, in a general sense, we can't put it any higher than that, in a general sense, it is Torres Strait and it is unique in Australia, we would say. Travelling in the Torres Strait is travelling in a body of waters that is within the Australian coastline because in every direction you look, in a matter of a few miles, there is a patch of Australian coastline that you can see. You leave one to go to another and you leave the other to go to another. They're all Australian coastline, they're all around you and as and when you pull into the steer of influence of those particular islands, if you go into lagoons or if you go into their little sheltered landing spots or actually literally park on the beach as these vessels do, you are within, as it were, the internal waters of those islands.
PN1274
In that sense, when there's Australian coastline, constituted by Torres Strait Islands and reefs that dry out at low tide, and therefore are considered to be part of Australian territory, then if you are within an absolute web and maze of them, as that map suggests you are, and you are travelling around in the way that this route map shows, you are travelling in a body of water which is within the Australian coastline in a proper and logical sense.
PN1275
I refer again to the dichotomy that I have submitted is intended to be drawn between the operating of the Seagoing Industry Award and the Ports, Harbours and Enclosed Waters Award. The Ports, Harbours and Enclosed Waters Award is intended to cover vessels that potter around from here to there and go within sheltered type waters and which are doing milk run type operations and heading into shallow waters for the purposes of doing the business that they do and their voyages are conducted in shallow and sheltered type waters. The distinction between them and the megatankers is out of San Francisco or the Artic or wherever they might go to.
PN1276
On that basis, if you apply that distinction, is the Torres Strait waters the kind of waters that the Full Bench would have had in mind when they said other bodies of water within the Australian coastline? They may not be ports, and they may not be harbours, but they're definitely a body of water and there's Australian coastline everywhere you look. Does that put them within the Australian coastline and the answer plainly is yes, in a sensible characterisation. Otherwise the vessel that might be going around Port Kennedy and going up to the nearby islands and around and don't ever leave the shadow of one island would be under one award. If one of those vessels leaves and goes to an island that is 20 miles away, as opposed to two miles away, it converts over to the Seagoing Industry Award, even though it's dodging reefs all the way and coming into an identical island on the same run, doing the same trip, to the same people. That would be a nonsense.
PN1277
On the broad conceptual basis that giving effect to the dichotomy that the Full Bench seem to have intended be brought about by drawing the lines that it has drawn between these two awards, it's very plain that those areas like that are within the Australian coastline.
PN1278
The same principles apply in the Northern Territory. You have as attachment B to Mr O'Halloran's material, the runs which are done in the Northern Territory. A significant amount of those runs occurs behind the baseline from Darwin, around the Tiwi Islands, which is Melville Island and so on. They then head off in an easterly direction again, almost never leaving any kind of territorial waters. By the time they get to Milingimbi, the vessel disappears back in behind the territorial baseline and so on, and then the vessel proceeds across behind the territorial baseline through the channel at the base end of the Wessels in a very narrow channel. Comes out at the other side and goes to a place called Lake Evella, I think it's called. It then heads around inside the domestic baseline until about Cape Arnhem and then travels down past Cape Grey to Groot Eylandt and those areas, all behind the territorial baseline.
PN1279
From there, the voyage goes south between Groot Eylandt and the Edward Pelham Group. One would have to say that's a body of water within the Australian coastline. Firstly it's in the Gulf of Carpentaria, secondly it has Groot Eylandt to the north, Arnhem Land to the west and the Pelham islands to the south and the Gulf of Carpentaria to the east. One would have to describe that as a body of water within the Australian coastline. Then from there across to a stop and then to Mornington Island and the Wellesley Islands, all of which again has a territorial baseline drawn around it and the vessels disappear in behind that baseline until they make the short run across to Murrumba from there.
PN1280
Now they are routes very often of the fishing support vessels. The fishing support vessels in that regard are the ones which, whilst if one measures the matter by reference to the territorial baseline, they actually come in at less than the 50 percent figure because of their gypsy lifestyle in that regard, but also because they are travelling outside the bounds of the baselines more than the other vessels. Having said that, all of their operations in that regard are within the Gulf of Carpentaria, which as I submitted yesterday is a body of water well within the Australian coastline and they spend a significant amount of their time behind the territorial baseline and in bays and harbours and other sheltered places for the purposes of doing what they do. That is to act as a mother ship to trawlers to raft up to trawlers so that the trawlers can tranship their product, take on fuel and products and things of that kind and that can really only sensibly be done in shallow and sheltered waters as they evidence discloses.
PN1281
Could it be suggested that they're vessels that fall out from under the coverage of the Ports, Harbours and Enclosed Waters Award simply because from time to time they cross the more open waters within a gulf, within the Australian coastline? Or do they fall generally within the area that's been described as falling within the ports, harbours and enclosed water vessels industry? My submission is that it is the latter and that even if there is any doubt about that, Commissioner, it doesn't matter because it doesn't affect the fact that, in accordance with attachment D, the vessels that have regular operations, that's attachment D to Mr O'Halloran's statement, the vessels that have regular operations in relation to the percentage internal operational hours, that we've put as being the middle column on that list of columns, the hours of the vessels are, leaving aside decimal points, 57, 100, 65, 100, 68, 44, 70, 79, 83, 53, 55, 78, 100, 100, 100.
PN1282
The fact that there are two, I think, that fall below the line, there's one at 44.9 and in fact I think that's the only one in that list that it falls below and that's the gulf run. The fact that that falls below the line when all of the others are somewhere between high 50s and 100 percent means that the employer wholly or substantially is engaged in the sort of activities which qualify under the award. The fact that it has one vessel that doesn't quite necessarily meet that standard, but it is otherwise not engaged in a cargo run to Osaka, but is going across the Gulf of Carpentaria, albeit not quite in accordance with the same standard that we've just applied in this schedule, doesn't mean the employer ceases to be bound by the relevant award in relation to that operation as well, because the industry within which it is, is to be seen by the whole or substantial component of its operations and we've gone to the trouble of assessing what that might be certainly in line with and percentage of operational hours is really, we think, the only good measure by which that can really be assessed.
PN1283
We've also got the percentage of nautical miles in travelling time that is incurred, and also the percentage of nautical miles and percentage of territorial and travel time. Now if one adds together the territorial and the internal, one gets 100 percent but the internal travel miles are very significant. The percentages of travel of nautical miles as distinct from time is also very important, but the test under this award is the operations, not just the travel and if the operations include the loading and the unloading as they must do, the figures that we've put in attachment D would really show that those vessels, quite apart from the fact that they sneak around in quiet waters, behind the reef inside the gulf, behind islands, in channels, in and out of bays and in and out of all those sort of sheltered waters and they never, never, never stick their nose out to what a real sailor would call out to sea.
PN1284
In those circumstances in my submission, there can be no doubt, other than that Sea Swift's operations are covered by the Ports and Harbours Award because they are wholly substantially engaged in operations of vessels within ports, harbours and other bodies of water in the Australian Coast. Not within the Australian shoreline necessarily, but that's not what it says. It's within the Australian coastline for legal purposes where you have a bay or a harbour or an opening or an indentation or a gulf or something. The coastline is to be determined, can be sensibly determined by reference to the territorial baseline where there is no drawn territorial baseline, you look at the geography, you look at Torres Strait and you say well, we're still within the Australian coastline there for the reasons I have submitted. Everywhere you look, there's a bit of Australia.
PN1285
On that basis, and we say again, we don't ask the Commission to purport to make any ruling that might have universal application around Australia or to any other employer, we only ask you to look at what this employer is, and does this employer fall within what the Full Bench must have been talking about when they drew the distinction between.
PN1286
One of the other indicators that we pointed to finally in relation to this dichotomy, one of the other indicators we pointed to in the submissions was the types of activities which were excluded from the Seagoing Award. The types of activities that have been excluded from the Seagoing Award are things like towage, dredging, oil and gas, things of that kind. In those circumstances, it's interesting that they are all - including Ports, Harbours and Enclosed Waters Vessels Award, they are all operations which do not involve primarily the vessel heading off on a voyage, in effect, overseas or for a long distance out a significant distance away from any ports or harbours or coasts, so that the voyage can be said to be going to sea.
PN1287
What all of those other awards which are referred to as exclusions from the Seagoing Industry Award have in common, is that none of them actually head off and engage in a voyage which is, as it were, the core purpose of their operation is to stay away from ports and harbours and head off to deep water. The very purpose of the voyage, in relation to all of the Sea Swift vessels is to stay in a port or harbour or close water, not to stay away from them, and to enclose themselves in that way. So it is with the Dredging Award, Towage Industry Award and the other awards which the Seagoing Industry Award says are excluded. Well, if they apply, then the Maritime Industry Award, does not apply.
PN1288
That's a further indication that local and domestic and close inshore activities which are undertaken if that's the purpose of the operation of the employer, then they are not intended to be covered by the Seagoing Industry Award. I instance under the coverage clause "The award does not cover employers and employees wholly or substantially covered by the Maritime Offshore Oil and Gas Award, the Coal Export Terminals Award, the Dredging Industry Award, the Marine Towage Award, the Port Authorities Award, the Ports Harbours and Enclosed Water Vessels Award and the Stevedoring Industry Award." That list, that's clause 4.4(d). That list, as I say, is all close shore local, not going out to sea type activities where you actually go out on the water, but you don't go to sea on a voyage which involves long distances away from ports. You hang around ports and you hang around shallow water and you hang around doing things which are fairly closely connected with the coast.
PN1289
That, in my submission, if you adopt that standard as being, or that as being a clear indication of what the Full Bench intended the Seagoing Industry Award did not cover, then the answer to this question becomes quite clear. Because if you then look at the Ports Harbours Award, compare the whole of substantial nature of the operations of Sea Swift against it, the award absolutely plainly covers it. If you look at what is intended or appears to be intended by the coverage of the Seagoing Industry Award or the long voyage away from the coast onset, then the Seagoing Industry Award does not, by its own terms cover it.
PN1290
In any event, because the Ports Harbours and Enclosed Water Vessels Award plainly does cover the Sea Swift operations, then the Seagoing Industry Award does not get a look in. It doesn't get a look in relation to any of its vessels, even if it is said that one of the line haul vessels spends only slightly more than half of its time behind the territorial baseline and in ports, well that would mean that it's close to it and on the near enough is good enough test, we can apply the Seagoing Industry award. You can't do that because the employer is in the Port Harbours Award, then everything the employer does, is and under that Award. On the basis, in my submission, has it being an industry award and that's because the Seagoing Industry Award itself says so, that the Seagoing Industry Award doesn't apply. The Ports Harbours and Enclosed Water Vessels Award applies to the employer.
PN1291
On that basis we say that the question of the application of the boot test in relation to the maritime operations is clear. In doing so I commend the written submissions to you, Commissioner. I've tried not to trample over too much of what is in there in the course of my submissions, but some of that is inevitable.
PN1292
There was some other suggested maritime boot awards. There's a Marine Towage Award and we've said that from time to time it is possible, to the extent that the company does undertaken contract tug and barge operations that don't fall under the scope of the Ports Harbours Award, but it remains possible that the award may apply.
PN1293
MR KEATS: Can I ask this, Commissioner, and say that the Institute doesn't press reference to the Marine Towage Award reference to the Marine Tourism and Chartered Vessels Award, reference to the Dredging Industry Award or the Stevedoring Industry Award. We only rely on the Seagoing Award for the comparison of the boot. It might save my friend making submissions about that area.
PN1294
MR HERBERT: Thank you for that.
PN1295
MR QUINN: To avoid any potential misunderstanding, the MUA and AMOU also only press the interpretation of the Seagoing Industry Award.
PN1296
THE COMMISSIONER: Sure, alright thanks for that. I might hear the submission anyway for my own benefit in terms of this issue of the Marine Towing Award.
PN1297
MR HERBERT: I've referred to it at paragraph 80 in the submissions.
PN1298
THE COMMISSIONER: Because ultimately I'm the one who's got to make a decision about this.
PN1299
MR HERBERT: The paragraph 80 says the most of what I wanted to say. Can I just simply add this to that. There are two types of towage operations under that award. There's harbour towage, which is tugs pushing big ships around for docking and other purposes. Sea Swift does none of that but there's also contract towage operations. The useful thing to be derived from that is that contract towage operations are essentially where you take a big cargo dumb barge and you tow it from A to B to drop off some machinery or something of that kind.
PN1300
Under that award, one can, and the award actually covers towing from one port in Australia to another port in Australia. That is going to sea. You are engaged in a marine towage operation. Going to sea as it would appear in the Seagoing Industry Award. The Seagoing Industry award says that the Marine Towage applies. It doesn't apply. So it's one of the awards which puts to bed the furfy that if you go to sea there is only one award, it's the Seagoing Industry Award and that's all there is to it. The Marine Towage Award appears to provide differently to that.
PN1301
The Marine Tourism and Charter Vessels Award, we've addressed that in 81. That's necessary for the vessel to be on a day charter, for an overnight charter, wholly or principally as a tourist sightseeing, sailing or cruise vessel. Much as I might find the whole thing entertaining, I don't think there are too many other citizens who'd find travelling on a working cargo vessel that entertaining. Whilst there are some minor tourism operations, they're extremely minor and that's not the nature of the business and so that's why that doesn't apply.
PN1302
Dredging Industry Award, there were no submissions put forward in relation to that. There might be some one off dredging operations where a barge might be required, but it's by no means a core business. Of course the Stevedoring Industry Award doesn't apply for its own application. I can't apply because the company has to be involved in the industry of stevedoring, well this employer or whatever else you might say about it, is not a stevedoring company per se, therefore the Stevedoring Industry Award doesn't apply and I appreciate the intimation of Mr Keats that they don't press the submissions. What we have to say about those awards is there. You really only have to read the application clause to understand.
PN1303
The Marine Towage Award may well apply. In itself, I don't think has an exclusion for the Ports Harbours Award. It excludes employees wholly or substantially covered by the Ports Harbours and Enclosed Water Vessels Award and the Seagoing Industry Award, but it does cover movement of contract cargo by combined tug and barge up to 10,000 tonnes between different ports and locations in Australia, which as I say, would involve going to sea. Of course, you can do that and not be in the seagoing industry. The mere fact that you stick a barge out of a harbour doesn't mean that you become involved in the industry.
PN1304
THE COMMISSIONER: Is it your view in terms of this discussion about the principle character of the applicant is more in line with the description in the Ports and Harbours Award as opposed to the Marine Towage Award?
PN1305
MR HERBERT: Yes. The fact that it does - - -
PN1306
THE COMMISSIONER: Do you then say if that's the case you would say it doesn't apply?
PN1307
MR HERBERT: It doesn't apply.
PN1308
THE COMMISSIONER: On your argument?
PN1309
MR HERBERT: On our argument, as a matter of interpretation. It's terms might apply to some of its operations but because it is also an industry award, in the marine towage industry. The fact that Sea Swift does contract towage operations from time to time, doesn't constitute it as being in that industry, being the industry award, because it's not the whole or substantial part of what they do. In fact it's an episodic part of what they do and it depends on demand and the mining industry and whatever else is happening.
PN1310
You're right Commissioner, and we say that the characterisation of Sea Swift's operations has to be seen in terms of what industry does Sea Swift live in and if that characterisation fits within the Ports Harbours Award, then by its terms it excludes all other modern awards from application to it. So you can't have a Clerks Award applying and you can't have another maritime award applying, and probably not any other modern award applying. In the nature of the operations that it has, then the Marine Towage Award would not apply because it is not in the Marine Towage Industry because it does a bit of marine towage as part of an overall operation. The Ports Harbours Award itself - it's really, one has to say, with the utmost respect to everyone concerned not a well thought out web because the lines of distinction in that regard are not well drawn. When one examines it in a way that I've put in the submission, the answer is we say, quite clear.
PN1311
The Ports Harbours and Enclosed Water Vessels Award doesn't cover any employer employee wholly or substantially covered by the Marine Towage Award so that it would have to be employers wholly or substantially covered by that Marine Towage Award and that would be somebody that that was pretty well all they did. Of course Sea Swift has a vast range of vessels, only a couple of whom are involved in that sort of thing. Therefore the correct characterisation of the principle purpose and nature of the operations of Sea Swift falls within the Ports Harbours Award and therefore all other awards are excluded.
PN1312
One could never, for example say, that the Temple Bay and the other vessels in the north and the ones running around in Torres Strait are covered by the Seagoing Award given the nature of what they do. It is not open for the unions to suggest that the fact that the Newcastle Bay or the Trinity Bay might do a run up the coast from Cairns to Thursday Island and back or around to Weipa and back would therefore mean that that vessel is covered by the Seagoing Industry Award, because it's not what the vessel does, it's what the employer does and what industry the employer is to be placed in by reference to whole or substantial proportion of what they do. One line haul vessel in an otherwise very close coastal bay operation doesn't remove them from the coverage of the Ports Harbours and Enclosed Water Vessels Award. That would be an extremely anomalous outcome were that to be the case.
PN1313
Then I don't think I need to say anything more about the maritime awards, but I refer to those submissions there between paragraphs 80 to 84 in relation to those other awards.
PN1314
THE COMMISSIONER: Just an issue, I'm interested to hear all of the parties on this to the extent that it has arisen and you have a view about it, just in terms to the language at clause 4 of the Ports Harbours and Enclosed Water Vessels Award, and again I guess it goes to the issue of instruction of the words and how they came to be there. You've got the classes described as a port harbour and there's or other body of water within the Australian coastline then or at sea on activities not covered by the award. Is there any view about whether those should be read conjunctively or disjunctively?
PN1315
MR HERBERT: Commissioner, if you look at the submissions, attached to the submissions there's a bit of a historical trawl through some proceedings that were undertaken in relation to - well because we went to that to try and find out what other body of water etcetera meant. I can tell you there was a debate about the question of whether there wasn't a gap between the Ports Harbours Award and the Seagoing Award in circumstances that if you went to sea as described in the Seagoing Award, not for one of the purposes listed in the Seagoing Award, then you're not covered by Ports Harbours because you've gone to Sea. You're not covered by the Seagoing Award because it only covers nominated activities, research vessels, cargo vessels, passenger vessels. Not too sure what else you could do out there - and there was an argument to say there was the potential for a gap. It's in that history that we've appended to the submissions. They added the words "or at sea on activities not covered" etcetera.
PN1316
That's a standalone provision, it's to be read disjunctively from the earlier parts, we would submit. The importance of it is though also, and thank you for raising it Commissioner, because it's a point that I had passed over. It makes it crystal clear. The Ports Harbour Award is intended to cover ships that go to sea. It's not as if there is a bright line drawn, you're either at sea or you're not at sea and if you're at sea it's the Seagoing Industry Award, end of story. Because Tugs go to sea, the marine towage provisions and the Ports Harbours Award covers vessels that go to sea, but on activities not covered by the Seagoing Award. Again, I'm not too sure what else there might be, I'm sure there's some other activity they had in mind. That was the history of that.
PN1317
THE COMMISSIONER: Part of the reason why I'm interested in that point is that - and we haven't heard the respondent's submissions yet, but as I understand this, part of the argument will be that the Ports Harbours and Enclosed Water Vessels Industry Award is from the respondent's perspective, or at least the Maritime Union's perspective, is really subsidiary to the other awards for example Seagoing Vessels Award. I think that's the part of the argument that we're going to hear from the respondents.
PN1318
To that extent I was interested in that in terms of the expressions "other body of water within the Australian coastline or at sea" for the purposes of whether they were intended to be conjunctively read or not.
PN1319
MR HERBERT: Disjunctively. Not, we would say, but it's indicative of the fact that the Full Bench didn't turn its face against this award covering vessels that got to sea. It might be said well these vessels go from Cairns to Thursday Island. That's a very long way. That's not just puttering around the harbour. You can't go home at night when you're passing Cape Bedford.
PN1320
THE COMMISSIONER: Yes.
PN1321
MR HERBERT: But this award covers vessels that go to sea.
PN1322
THE COMMISSIONER: You would say, Mr Herbert, that the reason why those words ended up there was to fill the gap that might otherwise have been - - -
PN1323
MR HERBERT: That history is attached to our submissions. The other body of water within the Australian coastline is an extremely wide expression and it really connotes a body of water, obviously, where it doesn't mean literally within the Australian coastline, because that's probably Lake Eyre or Lake Eucumbene or somewhere, literally within the Australian coastline. It doesn't mean that. It is obviously intended to mean a body of water which is adjacent to and contained or has a relativity one way or the other to the coastline.
PN1324
The way one assess that is to say well is there a body of water there, yes? Is there an area of the coastline to which it is adjacent and to which it can be said to have a relativity, yes? Well what are the boundaries of that? Does it stop at the barrier reef? Does it stop at the little opening of the bay itself, or does it stop somewhere in between? What are the limits of that and a useful limit, we say, is the territorial baseline where it exists. Where it doesn't exist and there are obvious geographical features like the Gulf of Carpentaria or where there's a bunch of islands surrounding a body of water and there is no baseline, well again, that can be used.
PN1325
Again, the breadth of the expression a "body of water within the Australian coastline" would seem to have been deliberate to allow for a serious amount of flexibility in relation to vessels who stick to the coast and stay there as their core business to do things on the coast. Not ones who go 200 miles out to sea and then go to Melbourne and then come back in again, but ones that stick to the coast because they're staying in that body of water. That conception, as I say, once one applies that, the rest all becomes self-evident. That particular expression, as I say, is explained by the history that's attached to the back of the submissions because it's to cover the going to sea.
PN1326
I stand to be corrected, but I think the history might have been that there was an attempt made to try and put those other activities in the Seagoing Industry Award and they were not, or they did not, but I don't want to go too far with that because I'm not sure whether that is right. In any event, they were put into that award, rather than the Seagoing Award, whatever be the rationale of the Full Bench or the request it was.
PN1327
THE COMMISSIONER: Can I ask this question, to the extent that you can answer it. Look, it might be covered in the material, but in terms of the mass - don't read anything into this by the way, it's just for the sake of getting it out while everyone is here. If you count the operations inside the Territorial Sea baseline, but don't count those outside the baseline, but inside Australia's Territorial Sea, how do you come out then?
PN1328
MR HERBERT: Outside the baseline, inside the Territorial Sea, you should come out at 100 percent, I hope.
PN1329
THE COMMISSIONER: I'm sorry, I thought from the submissions earlier - inside the baseline, so if you're counting inside the baseline but there's those areas amongst the Torres Strait Islands that I understood from your submissions are outside the baseline but are inside Australia's Territorial Sea.
PN1330
MR HERBERT: All of Torres Strait is inside Australian Territorial Sea.
PN1331
THE COMMISSIONER: Or the operations, I should say of the applicant.
PN1332
MR HERBERT: The baseline in Torres Strait is the ordinary baseline which is the low water mark of the island or if it has a reef, a fringing reef for example, that whole situation, then it's the low tide mark of the fringe or reef, territorial baseline. So if you've come ashore on one of these barges to offload by running up the ramp on the beach as they commonly do, well you're above the low tide mark when you do that, you have to be to have water underneath you to be able to get there. You're actually on dry land effectively, according to the - you're not in territorial waters even if you're still floating. In a number of these situations, the vessels actually go dry once they get up on the ramp or up on the beach.
PN1333
Commissioner, you would have seen the Straddie ferries and Moreton Island ferries, it's precisely the same operation. The landing barges, they run up on the beach or up on the ramp and offload vessels out the front of the vessel as they do it at Stradbroke Island. Based on that, there is all of the time spent, in and about close quarters with the island, would be operating within baseline areas because when they're offloading or whatever, they're inside this low tide mark. If there's a reef around the island, then the whole time they spend up inside that reef for example, if they were to sleep overnight or wait for the tide to change, or whatever, that would all be within the baseline.
PN1334
It's very difficult to compute all of that, but what we've done is - all of those vessels, except the fishing support vessels, spend 100 percent of their time inside territorial waters, but do not travel more than 12 miles offshore ever. Their time is divided between territorial waters and waters inside the baseline, so we should have a situation where behind the baseline, bearing in mind, territorial waters don't start until you get to the ocean side of the baseline, then the territorial waters start. So you add those figures together, hopefully they should all be 100 percent. Because they're either behind a baseline or they're in territorial waters and they're never anywhere else. If they're in the port of the harbour they're behind the baseline as well. They have to be the way the baselines are drawn.
PN1335
Anything further in relation to the boot test of the maritime awards?
PN1336
THE COMMISSIONER: No thanks, Mr Herbert.
PN1337
MR HERBERT: The boot test in relation to land based awards is a much easier task. We have, as I indicated yesterday, conceded the point in relation to drivers. That award is both a vocational award and an industry award. The vocational part of the award was determined in the case that we've referred to in the submission by the Full Court of the Federal Court and that's at footnote number 5 on page 13, the TWU and Coles Supermarkets. They were the home delivery grocery drivers who were working for Coles Supermarkets and it was determined that they were covered by the Road Transport Distribution Centres Award because that award had a clause (a) which is transport by road of goods moves merchandise etcetera.
PN1338
"Where the work performed is ancillary to the principle business undertaken by the industry employer". If that's the vocational rule, persons who are driving on the road from the route we went this morning, transporting goods by road in that sense and it is in every possible sense entirely incidental to the business or industry, namely sea transport had occurred, that would mean that the drivers in that sense would be covered by that award. We say that's of no import because the boot test is passed in relation to those drivers.
PN1339
It's an entirely different thing altogether to suggest that this award has application to what the company calls its distribution facilities. In paragraph 90 we put in the definition of a distribution centre which isn't necessary for this award to have industry coverage and that's in subparagraph (e) of the definition which is at the top of page 13 in our submissions. "Receiving, handling or storing of goods, merchandise, material etcetera or anything whatsoever, whether in its raw state or natural state, wholly or partly manufactured state, of solid, liquid or gaseous nature, otherwise in a distribution facility."
PN1340
Now the distribution facility has a definition which is set out in paragraph 90. "A facility from which goods are distributed by road and at which such goods may be stored for the purpose of subsequent distribution, is operated by an employer as part of, or in connection with a road transport business of that employer." It's a fairly short argument as to what Sea Swift does as a road transport business. It's not Road Swift of Truck Swift, it's Sea Swift. It's a sea transport company. That's what it does. You heard all the evidence yesterday. It doesn't separately invoice for any road component of anything. It transports nothing to anybody that isn't from its shed to its ship or from its ship to its shed or on the odd occasion, depending on how remotely they are, from the ship to an intended customer.
PN1341
What they don't do is take it by road from one customer to another customer. Nowhere does that occur and that was not challenged. It wasn't alleged, it wasn't challenged when we said that. A road transport business would be one where you transport goods by road, one would have thought from one customer to another customer. Sea Swift only transports goods from itself or to itself. From its ship or to its ship and nowhere else.
PN1342
Now whether it takes it from its ship and drops it off at the customer's yard because they're live crayfish that need to be kept alive and need to be delivered urgently and not sit in the midday sun, with the water from Trinity Inlet coming into their tanks. Whether they drop them off straight away to the customer or whether they drop off some gas bottles from a remote northern rural council, as one thing that they do rather than take into their shed and let the customer come and pick them up, is all very interesting. But what they don't do, as I say, is conduct road transport from one customer to another customer without the intervention of a many thousand mile and in many cases, sea voyage in between.
PN1343
The purposes of you giving goods to Sea Swift is not to have them transported by road, but to have them transported by sea. If they need to get from where they are in some places to the ship, from the shed to the ship and they do that by road, that doesn't make a road transport business. It's not a distribution centre within the meaning of that award. That award only applies in relation to, if it applies at all, to any employees, the content and the nature of their work being such that the road transport industry, they would be designated as being within driving classifications of the Road Transport Industry Award and if in that restricted instance that award does apply, an assessment will be done with a boot test and it's not been suggested to the contrary, as I understand it, is that the boot test is passed in relation to those drivers.
PN1344
There are no shift workers. There is some point made with shift workers. The evidence is there are no shift workers. What's happened, for the immediate purposes of a turnaround operation that's going on for some weeks while the Newcastle Bay is out of service, is that for one day a week, they work around the clock to get a ship loaded and then the employees go back to their weekly operations. It's been put in the submissions that the definition in the award of a shift worker is not met in relation to any employees and therefore it's not necessary for the agreement to include provision for them. It's not a company that engages in shift work.
PN1345
So that is my submission. The conclusion relates to shore based boot awards is at paragraphs 94 to 96 of the submissions, that is that the distribution centre fails the (indistinct), there may well be some who meet that test, but it's academic for the purposes of the outcome. I understand that the NES issues that we've addressed at paragraphs 97 and 98 are not being pursued.
PN1346
MR KEATS: They are on the part of the ones raised by the Institute. I note that there was some raised by someone else as well.
PN1347
MS CERRATO: The NES issues are (indistinct), yes.
PN1348
MR HERBERT: What we've said about that, there are only issues raised in the TWU submissions. Each of them is capable of resolution by the provision of an undertaking by employer. But in any event, we say it's not necessary because the NES is incorporated in the agreement by the terms of the agreement itself and that's an adequate means of dealing with those issues. But if the Commissioner has another view, supplementary undertakings in order to reinforce that position can be given, which doesn't change the agreement because we say that the NES is incorporated in any event. It can't be gone behind because its incorporation. If it prevails, and by law, if it prevails, then it prevails. There's no capacity for the terms of the agreement as such to have been altered by the union.
PN1349
The next two issues, and the two final issues really that need to be addressed for the purpose of these proceedings.
PN1350
THE COMMISSIONER: Just before you move off boot. There were just a couple of issues that I wish to raise, just for the record so that you're alive to them. I think you raised in your F17 a couple of classifications where you thought there might be an issue with the pay rates and you've proposed an undertaking to address those.
PN1351
MR HERBERT: Yes. That all stands when ‑ ‑ ‑
PN1352
THE COMMISSIONER: Yes. No, I think there's look, you might also need to look at the administrative assistant pay rate for a year 1 and 2 because I think the modern award rate might be a few cents higher than the rate under the agreement.
PN1353
MR HERBERT: Thank you for that.
PN1354
THE COMMISSIONER: You might just want to take that on notice.
PN1355
MR HERBERT: Yes, certainly.
PN1356
THE COMMISSIONER: I don't want anyone to read anything into that.
PN1357
MR HERBERT: No.
PN1358
THE COMMISSIONER: But I just raise that's an issue that I've identified.
PN1359
MR HERBERT: That certainly would fall into the same category as the others and would be the subject of an undertaking if that is right. We'll honour that.
PN1360
THE COMMISSIONER: The other question that I just wish to get clarity on is that the schedules talk about the 42‑hour week for maritime employees - I think the wages and it talks about the cooks - I think are 38. I'm just not sure whether the assessment of the BOOT comparison for the cook has been done on 38 or 42. I'm not sure in terms of the maths of that. I'm just raising that as an issue to have a look ‑ ‑ ‑
PN1361
MR HERBERT: Yes. But can I take that on notice ‑ ‑ ‑
PN1362
THE COMMISSIONER: Take those on notice.
PN1363
MR HERBERT: ‑ ‑ ‑ because that's not a calculation that I've been involved in.
PN1364
THE COMMISSIONER: No, sure.
PN1365
MR HERBERT: I've got my head in a couple of other issues and ‑ ‑ ‑
PN1366
THE COMMISSIONER: Sure. I think just housekeeping ‑ ‑ ‑
PN1367
MR HERBERT: Yes.
PN1368
THE COMMISSIONER: So everything is on the table.
PN1369
MR HERBERT: I have the ‑ ‑ ‑
PN1370
THE COMMISSIONER: I'm happy for you to go on.
PN1371
MR HERBERT: I have Mr Cooper with me, who will be able to deal with that. You'll see the buck passing here. In relation to the question of genuine agreement, a couple of immediate issues: nobody has purported to give any evidence, either direct or indirect, that anybody was actually influenced in relation to the making of the agreement by events that are said to have given rise to concerns by the Commission. It can't be just simply put out in the ether and said, "There's these things that might have hypothetically given rise to those issues." Nobody has even reported that anybody was absolutely for example, nobody even attempted when I say "nobody", no union official attempted to say that, "My members are just falling down in a dead faint about this and they've come to me and complained and there's all sorts of terrible problems about this, that they all felt dreadfully horrified and coerced into all this thing and they've changed their vote as a result of any of these things.
PN1372
There's not a shred of evidence to suggest that it's anything other than a hypothetical construct by the unions after the event and the margin was quite significant in relation to the vote, in the form of 18, but it was a two‑thirds one-third type situation. I think the margin was something like 60-odd votes in a workforce of 300-odd. So it was quite a significant margin.
PN1373
The mechanism by which it could be said that there'd been no genuine agreement reached on the part of the employees was not made clear in the course of proceedings. I don't know if the submissions are going to make it clearer, but it hasn't been made clear in the evidence or the earlier submissions because you need to show that somehow or other the employees have been robbed of the ability to make an agreement, their right to reason about these things or the information provided to them or something was the information was so deficient or something else happened that meant that the vote that they cast wasn't their own or it was cast on the basis they weren't shown the proper agreement or they were denied access to the information or something else of that kind and, therefore, their vote can be taken to be either coerced or so ill-informed it wasn't a genuine agreement.
PN1374
The evidence didn't even come within a country mile of establishing anything of that kind. The most recent decision I can find in relation to that issue is the decision of Commissioner Asbury on the Central Queensland Services matter. Can I hand up a copy of that decision?
PN1375
THE COMMISSIONER: Yes.
PN1376
MR HERBERT: This was the Daunia Mine EBA where almost identical grounds were raised. Paragraph 27 of the decision - I'll take you very quickly just to a couple of comments. Evidence was given by an employee of - the comments are there in Italics in 27 to 28:
PN1377
Because of the price of cold, it's hard to keep the business afloat. We need this vote to get up from the shareholders. If it doesn't get up, it means the shareholders don't have security and we'll have to lock the gates. It's in your interest to vote this up. I can't guarantee what will happen if you don't. It is very likely we'll have to close the mine.
PN1378
And paragraph 30:
PN1379
If you don't vote it up, you won't be here.
PN1380
Paragraph 31:
PN1381
The mine will close because of the price of coal, the current market costs of getting it out of the ground. If the EBA doesn't get up, we'll probably close the mine.
PN1382
That statement is vastly more certain and if they're true likely to influence employees than anything that's said in this case. At paragraph 42:
PN1383
According to the CFMEU, the comments made by BMA managers could only have had the effect alleged by Mr Torrance.
PN1384
He was the witness:
PN1385
It was further submitted the chilling effects of the public statements by senior BMA managers were further compounded by BMA standing down a couple of employees during disciplinary proceedings against high profile activists
PN1386
et cetera, et cetera. Paragraph 43:
PN1387
The effect of BMA's conduct, both in isolation and cumulatively, is said to be that the Commission would have reasonable grounds to believe the agreement was not genuinely agreed by the employees within the meaning of the Act.
PN1388
That was the issue in those proceedings. At paragraph 65 of the decision, the Commissioner set out the approach in considering whether employees were generally agreed and the Commissioner then went through a range of cases over the next many paragraphs and then at paragraph 71 - I'll leave that for your consideration, Commissioner. I won't take you to them now, but in paragraph 71:
PN1389
It can be seen from the cases that the question of whether the Commission is satisfied there are no other reasonable grounds for believing the agreement has not been genuinely agreed to by employees is not limited to a consideration of whether there has been coercion or misinformation in relation to the agreement and its effect. Consideration under section 188(c) is not limited to those matters and incorporates all of the relevant circumstances surrounding the process by which the employees indicate their agreement.
PN1390
And that's the test. Now, in paragraph 83, going forward in the course of her consideration of the matter Commissioner Asbury said this, and we would commend this approach to the Commission as presently constituted:
PN1391
I'm also of the view that the fact that an employer makes negative comments about the economic environment in which it is operating in an attempt to persuade employees to approve an enterprise agreement is not of itself a reasonable ground on which to form a belief that an agreement has not been genuinely reached; that an employer may exaggerate economic circumstances is also not of itself a sufficient basis to justify such a conclusion that an agreement is not genuine. In the present case there is evidence that the information disseminated to employees by the CFMEU about the viability of Daunia Mine may have been exaggerated. In the cut and thrust of bargaining some conduct of this kind from the participants is not inappropriate and is certainly not a basis for finding that a reasonable grounds for believing that an agreement is not genuinely agreed by the employees.
PN1392
And that is this case. There has been no exaggeration about the environment. There's simply been statements about the environment and the reason why they sound a bit gruesome is because the environment is gruesome so far as the economics circumstances are concerned and the unvarnished truth is not necessarily all roses. Paragraph 85, four lines down:
PN1393
It is a matter of public record the coal industry is confronting extremely difficult economic conditions. Employees who work in the coal industry and live in towns that depend on that industry know firsthand of mine closures or retrenchment of mine workers. I do not doubt that employees of Daunia who voted on whether to approve the agreement would have considered the possibility of the mine closing and their jobs being at risk if the agreement is not approved.
PN1394
If you put the community based community maritime goods delivery service in there instead of the mining industry, the employees of this company would know as sure as night follows day about the economic pressures on their business. They know about the competition. They see it coming over the horizon on a daily basis. They know about the economic circumstances. They've been told about it. It's in the press. It was in the press this week when the first thing that the local indigenous representative said to the Prime Minister, "Is the problem the cost of freight?" the Torres Strait and the question of freight subsidies. It's on the public record that that was all raised.
PN1395
A lot of these employees are themselves indigenous inhabitants of these islands. They know the pressure that the company is under and as the Commissioner pointed out, it's and she doesn't use the words, but it's actually a bit insulting to suggest that employees don't know these things and the fact they're raised by the employers is not inappropriate, it's quite sensible. But she goes on to say in paragraph 86:
PN1396
However, I'm unable to accept that the employees were threatened with the loss of their jobs and the closure of the mine as a direct or indirect consequence of refusing to approve the agreement. For an employer to state that it requires certainty and its shareholders view labour costs as an area in which they're not prepared to accept uncertainty is reasonable, appropriate and undoubtedly factually correct. It is not inappropriate for an employer to state that certainty about labour costs and industrial relations stability is needed in order for a business to continue to operate. Neither is it inappropriate for an employer to state to employees who are considering whether to approve an agreement that if the agreement is rejected, it will not resume negotiations at the level of the rejected offer.
PN1397
And I instance there the surreptitiously recorded interview with Captain Russell about, "Are we staying with the 2009 agreement or are we going back to where we were and we'll start it all again?" The Commissioner said that:
PN1398
Employees aren't entitled to expect that once the rejected offer has been put on the table that an employer will continue to put layers on until they say yes. That's not inappropriate. These are the statements the BMA managers made to employees and they do not provide reasonable grounds for the Commissioner to believe the agreement has not been genuinely agreed to by the employees.
PN1399
And she concluded:
PN1400
None of those matters, individually or collectively, would result in that conclusion that the agreement might be genuinely reached.
PN1401
So the two things to be taken from that decision is that the cut and thrust of bargaining, you might expect people to make some robust comments about their economic circumstances and there might even be a little exaggeration or hyperbole in that, but also it is not inappropriate for an employer to let the employees know that if this offer is knocked back, if this agreement isn't accepted then we'll go back to tools and we won't start negotiating on the basis of putting things on top of our last offer, we'll go back and reconstitute something different and there's absolutely nothing wrong with doing that. That's, in effect, all that has happened here.
PN1402
In relation to the interview, and there wasn't any point in cross‑examining the witness from the MUA in relation to this matter because he actually - Mr Farrelly because he actually wasn't present at the conversation and I did object to him giving his views about who inferred what to whom. But if one looks at the transcript of what was said ‑ ‑ ‑
PN1403
SPEAKER: I do apologise, Commissioner. I thought it was on silent.
PN1404
THE COMMISSIONER: All right, Mr ‑ ‑ ‑
PN1405
MR HERBERT: If you look at what was said in the course of that conversation, and if you go to - I think there are page numbers on the transcript - exhibit BF28 to Mr Farrelly's or it's attached to Mr Farrelly's reply statement, there is some transcript there where Captain Russell was quoted as saying:
PN1406
You've seen through the middle of the page - you've seen through the EBA and everybody understands what it is?‑‑‑Right. I saw Jamie's email this morning, which I've only just seen. We feel there is more out there.
PN1407
That's entirely up to you. As a corporation, you have to make that judgment. If the vote goes down, goes back to that's the choice, then we go back to the 2009 EBA and we start again.
PN1408
Somebody said:
PN1409
You mean you stay on the 2000 EBA.
PN1410
And he said:
PN1411
We go back. We stay on the 2009 EBA. But obviously the four-on, four-off will go and that will be renegotiated again over the next because the four‑on, four was four-on, four-off was introduced by Fred against the board's wishes. He asked for a million dollars during the year
PN1412
et cetera
PN1413
if we move forward and the vote is decided, we don't want to have it, which is entirely your call, then we go back and we start the whole process again, back where we were. That's in context where the as I indicated earlier the four-on, four-off shift was not enshrined in the existing agreement, but it is enshrined in the new agreement. So they go forward and vote the new agreement down, therefore, vote down the enshrining of the four-on, four-off then basically what - everything that's in that deal comes off the table and we go back to scratch again.
PN1414
And then there's a comment about:
PN1415
We can't go back from where we are. No, we'll go back to the 2009 EBA
PN1416
et cetera. And over on the next page on page 2:
PN1417
What I'm saying is we'll go back to the 2009 EBA and we'll start again. How long that will take, I have no idea. I can't so we go back.
PN1418
And then there was a backwards and forwards about all of that. But further down the page:
PN1419
Correct. But the 2009 EBA did not include the four‑on, four-off, so what I'm saying is that we'll go back we'll back to either four by two or four by three, depending on the masters, or whoever, then we'll start working our way through again. I'm just giving you an overview. Are there any other questions
PN1420
et cetera; all very sensible, all very correct, all very proper. And then in the middle of page 3 was the apparent threat to unemployment. It actually came from whoever "employees" is:
PN1421
Terry, if we go back to four-on two, four-on four and two, obviously there are going to be people that are going to lose jobs.
PN1422
He said:
PN1423
I can't comment on that. I'm not going to comment on that.
PN1424
This is his threat; very threatening. Further down:
PN1425
If they go back to four-two, we'll have to get a pay rise because they can't disadvantage anybody?‑‑‑Comment noted.
PN1426
And then further down:
PN1427
If we go to four by two, does that mean the working roster leave, et cetera, gets reinstated?‑‑‑No. It will all go back into the pot and we'll sit down and start negotiating again and how long that takes, I have no idea, but it won't be instant. I can tell you it's going to take a long time.
PN1428
Looking at all the stuff that Commissioner Asbury said in the Daunia case is perfectly proper exchanges and then there's some reference on the next page in the middle of page 4, one of the employees refer to as standover tactics:
PN1429
It's not a standover tactic. That's commonsense. If the EBA doesn't go through, you've got to stick with what you've got.
PN1430
And on and over to page 6 and one of the employees has said words to the effect of:
PN1431
These are some of the problems we have the EBA and the reasons why most of us
PN1432
their sentence isn't finished, then Captain Russell says -
PN1433
well, generally, then vote no. That's your choice. Just say, "No, I don't want this." Okay? Not personally I don't care what you vote. You vote. It's your life. You choose your path. That's it.
PN1434
It sounds like pretty threatening behaviour, I don't think. Now, in my submission, that is to suggest that someone is being threatened to lose their job in circumstances is the one thing that isn't being threatened is the loss of jobs. It's, "Well, I'm explaining this to you. If you don't like it, vote it down. That's fine. I don't care":
PN1435
Just don't fear there'll be repercussions. We don't want to think that some of the guys at work will lose their job if we vote no because of things like that in the agreements.
PN1436
Captain Russell said:
PN1437
Why do you think you're going to lose your job?‑‑‑Because you said that we'd go back to four and two.
PN1438
Yeah, go back to where we were and we start negotiating again?‑‑‑Yeah. You said we go back to four and two and some people have to lose their jobs.
PN1439
Not necessarily.
PN1440
That's the threat. That's as high as it got on the union case. That's Captain Russell monstering the employees, with all due respect. It's a nonsense. The only other matter that was raised was the email from Mr White. The email from Mr White has been explained by him and it's a matter that has to be seen in context and has to be read as a whole and the email itself, as he explained in his evidence and he was cross‑examined about all this. He said:
PN1441
It has to be seen in context.
PN1442
What essentially he was telling, and attempting to tell the employees, is that because he thought the message wasn't getting through from other sources is that there is the company in its present shape in its present configuration, given all the uncertainties and the economic pressures under which it is place cannot continue in its existing form. If it can't continue in its existing form the obviously it's going to be in another form. Now, what that's going to be and as he said and by reference to the he went through by reference to the minutes, which are only notes, and he expanded on what it was that the minutes didn't say and what the issues were in relation to those matters and what he said is:
PN1443
The cadetship program costs the company a million dollars a year, money out the door. If the company has to cut costs, that's one of the programs that might very well have to be cut.
PN1444
Why would you withhold that information from the employees and get them to vote in a particular way in circumstances where they found out that they voted in a way which has forced the company to cut the program by which they're employed and they weren't told? I mean, the very point of what's gone on here is the very point of this is the employees have to be given full and fair information. It doesn't have to be pretty information. It has to be true information or accurate information with a certain margin for what Commissioner Asbury called "the cut and thrust".
PN1445
In the circumstances, that's all that occurred when you read the whole of the email and the relevant paragraph, "Let me be crystal clear," and taking clauses and parts of sentences out, as the union submissions have done, and put them in isolation with inverted commas around them doesn't tell the story, but decontextualizes them in a very inappropriate and unfair way:
PN1446
Let me be crystal clear, an overall no vote tomorrow will result in not only the above benefits not flowing
PN1447
which makes pretty clear sense this is attachment G1 of Mr White's statement -
PN1448
an overall vote will not result in the above benefits not flowing through to all employees and risk the ongoing nature of the cadetship program
PN1449
and explained why that was in his evidence
PN1450
will put the very future of the organisation at risk.
PN1451
And he explained in his evidence how that was and he also explained how by reference to the minutes where he told everybody about that, about the tough decisions that were going to have to be made. I made this point clear at the final representative meeting as he did and he was taken to the minutes and he did that:
PN1452
But no doubt this point was not passed through to union representatives, instead they aimed to push for greater membership by encouraging all to vote no. Let me be clear: the heavily unionised Sea Swift will not, and cannot, exist in its current form and will be the death warrant to what is a well-respected provider of essential services to remote Northern Australia.
PN1453
He did not say "will not exist". He did not say "will be wound up and will disappear". He said:
PN1454
It cannot exist in its current form.
PN1455
He did use the word "death warrant" but in the context of the sentence in which he said:
PN1456
It can't exist in its current form
PN1457
it's plain that the death warrant expression is a little hyperbole that it's got that doesn't detract from the fact that he was only describing the matter as being something where the form of the business would have to change and he said:
PN1458
It will be the death warrant to what is a well‑respected provider of essential services in remote Northern Australia
PN1459
all of which the employees knew
PN1460
and that's what I care about above all else. That's why I'm encouraging you all to vote yes.
PN1461
In the circumstances it's pretty mild; by North Queensland standards it's very mild, one would have to say. One would expect a far more robust exchange of views and much more shaking and loud noises exchanged between the parties. It's incredibly restrained. Now, when you hear the evidence as to what circumstances that it is that the company is facing in terms of its economic uncertainty and it's future and the whole exercise and the ACCC and who knows who isn't going to come riding over the hills and pick up the Toll baton and start competing vigorously against them and all those other considerations.
PN1462
It would be absolutely negligent and wrong for a CEO not to put that sort of material on the table and say, "Guys, you need to understand that if you vote this thing down, we're going to have to go back to the table and it's going to be ugly because it's the only way we can do it because that's the environment that we're facing." In those circumstances, there is no threat to anybody's employment. Nobody has said that they're going to be terminated.
PN1463
There is a threat to the business and, of course, it flows from that, a threat to the business means a threat to the employment of all people, but that's not any sort of unfair or inappropriate threatening of people and it falls in exactly the same category of the material that Commissioner Asbury was talking about and that is that's part of the cut and thrust of bargaining. If you tell people that we're facing these terrible economic times, as long as that's largely true then it's quite right to say so. If there's a whiff of exaggeration in that, well that happens, if it doesn't happen on both sides in the circumstances, and that's all part of the cut and thrust.
PN1464
At the end of the day you rely on the awareness and the intelligence of the employees to be able to see through all of that. If there's an employee who doesn't know all of this and doesn't know all this to be true, one would be extremely surprised because they know that they're a community service organisation, in effect, and the customers don't have the customers are some of the least advantages people financially in Australia living in these far flung remote communities. The customers can't afford to pay any more, one would assume, with the freight everything that they get has to be freighted in so that the prices in the stores are ridiculous because of the necessary freight component, et cetera, et cetera, et cetera, without freight subsidies and other things to allow that to happen.
PN1465
People operating these ships know what's happening to their customers because they know how much this is all costing. Why would you suggest then that they'd been monstered into a position that they didn't already know and then say they were somehow cowered and beaten into voting for the agreement in the face of all of that? The answer is you wouldn't and you couldn't. It's just not feasible and in the circumstances it's a complete furphy and a distraction, as I submitted before, an ex post facto construct by the unions to try and find something to throw at this agreement to stop it going forward in order to enhance a bargaining position. Well, that's fine. They're entitled to do what they can to enhance their bargaining position, but the Commission is not bound by those considerations.
PN1466
The Commission, in my submission, should approach the matter in the same way as Commissioner Asbury and find that there was nothing in any of that that would have sufficiently coerced or terrified anybody into anything that they would have changed their vote. As I said at the outset of this topic, were there any such employee out there who was gobsmacked and amazed at this brand new piece of information that's completely untrue and was put on their table for the first time and they were shattered into changing their vote then one would expect there would have been some evidence of that and there was none; not a shred of it, not a suggestion of it.
PN1467
You instead had two union officials come forward saying only one of whom essentially dealt with this topic - Mr Farrelly, who has no particular contact with this part of the world, who simply said, well, you and the submission is made on his behalf or on behalf of his union, I'm sorry, but you couldn't be comforted or you couldn't be confident of the people who'd witnessed that sort of exchange and the circumstances would have been - cast a free and fair vote.
PN1468
That's leaving aside the question of the exchange between Captain Russell and whoever it was that was the crew of the vessel, whichever vessel it was, I think it was the Trinity Bay. That's five or six employees out of 300-odd. That's hardly sort of conduct one would have expect would have influenced the vote in this matter when you had a margin of 60 in the EB.
PN1469
Commissioner, are there any other matters that you had any questions about because subject to me being able to find my notebook, which is ‑ ‑ ‑
PN1470
THE COMMISSIONER: Bear with me for one minute, Mr Herbert, while I ‑ ‑ ‑
PN1471
MR HERBERT: I'm sorry. There was one matter. I reminded myself. Mr Farrelly in his reply material provided the Commission with references to a range and copies of a range of enterprise agreements in which he said, "Well, look, this question has been decided. I know that the only time this award is - you know, if you go any further than three miles off the shore," or whatever the "if you go out to sea in the sense that you leave the bay or the harbour, unless you're hanging around doing some very close water drill then it's always accepted across the industry that Seagoing Industry Award applies.
PN1472
In the course of doing so he presented with a rhetorical flourish in his material, copies of agreements where it would appear, on the face of it, that that is the approach adopted by those parties. Two things he said about that: firstly, what parties sit down and agree between themselves as being the appropriate BOOT test and present to the Commission doesn't necessarily mean that they're right about that at all. They're entitled to adopt that. The Commission may or may not examine it with great closeness, but if the parties have agreed on all of that and the unions have agreed on all that, one would have thought as a matter of practicality the Commission often doesn't challenge that off their own back, although the Commission can.
PN1473
So that's not determinative. None of them are arbitrated decisions of any kind as to what the actual application is and there was no real information that allowed one to understand what it was that the people were doing that made them think, probably erroneously, that the Ports and Harbours Award didn't apply to them. But the other thing to be said is this that we've got a very curious situation. If Mr Farrelly produced one suspects it was produced for him the SeaLink agreement in South Australia.
PN1474
If one gets on to the web site and googles up SeaLink, you get three agreements not just one and we produced the other two and the other two, funnily enough, are SeaLink operations either within or very close to, my client's operations geographically; one of them being the Northern Territory operations to Tiwi Islands and those surrounding areas is fairly and squarely competitive to my client's operations between Darwin and the Tiwi Islands.
PN1475
The evidence, I think, discloses that my client took over a company called Tiwi Barge and commenced its operations out of Darwin and you've seen the runs there that go up around the Tiwi Islands and Bathurst Island. So the SeaLink operation is a direct competitor in and around Darwin and with the concurrence, it appears, of the Maritime Unions, operates under the Ports, Harbours and Enclosed Waters Award, even though they head out and do these runs out, eventually out of sight to go across to the Tiwi Islands and around associated islands.
PN1476
The other one, SeaLink does, and I read the application clause yesterday is their Queensland agreement, where it operates in from in its operations from Townsville to Palm Island, which on the map appears to be about 50 or 60 nautical miles to Palm Island out of Townsville. Interestingly enough, behind the territorial baseline and that part of the world, but it also applies to the operations of SeaLink between Port Douglas and Airlie Beach.
PN1477
On the map Port Douglas and Airlie Beach, that constitutes a very significant part of the Queensland coast. Port Douglas is a significant distance north of here, north of Cairns, and Airlie Beach is the main port operating for the Whitsunday Islands. It's very close to Hayman Island and the main Whitsunday Islands. So from the operations from the Whitsundays to Port Douglas are covered under an agreement with SeaLink which is otherwise a party to an agreement which applies the Seagoing Industry Award in relation to operations in South Australia, so it knows about that award and knows about its applicability, but the Maritime Unions have concurred on two occasions to operations either covering all of, or part of, operations covered by my client or geographical areas where my client's business operates in a way they're doing exactly what my client does for a large part and yet Mr Farrelly didn't tell the Commission about that.
PN1478
He produced the one SeaLink agreement that suited the cause, but not the two SeaLink agreements which contradicted the proposition it was attempting to make and at no point did Mr Farrelly attempt to explain, because he couldn't because he didn't know about these agreements he said at no point did he attempt to explain why it was the Maritime Unions agreed to Port Douglas to Airlie Beach off the Queensland coast and tried to be a party to it and didn't challenge it and yet in relation to my client's operations, which are Cairns to Cape York, they challenged the application of this award and tried to and have brought these proceedings to challenge it.
PN1479
It's an entirely inconsistent stance by the union. Now, I immediately say the fact that the union and SeaLink have agreed to which award might apply doesn't make it so. That's a question to be determined by the Commission. The agreement of the parties in that regard can't change that and I'm not suggesting that that is determinative one way or the other, just that the SeaLink it would appear that the SeaLink agreement in South Australia should have been covered by the Ports, Harbours Awards as well, but and are wrong about that. But we would say they're right about what was done in Queensland and the Northern Territory.
PN1480
We would say that is some evidence, but only peripheral evidence of a consistency between what we say and what has been done in the Commission on those two occasions with SeaLink and it is also evidence of a rank and unexplained inconsistency on the part of the Maritime Union to accepting that position and becoming covered by that agreement, or those two agreements, in circumstances where they adopted a completely inconsistent approach and submission in this case.
PN1481
Again, none of that makes it right, but it does leave the Commission to question why that might be so and whether the and the sincerity with which they make their submissions about the Seagoing Industry Award because if the interpretation of the Seagoing Industry Award is correct then the two other agreements to which they've been a party under the Ports and Harbours Award should not have been approved under that BOOT, but they don't appear to have raised that issue with the Commission at the time, but that will mean they've been quite improperly assessed.
PN1482
On the very preliminary assessment that my clients have been able to do in relation to that and the agreements are with the Commission is that those agreements would not pass the BOOT test by reference to the Seagoing Industry Award. So it's not a case of Mr Farrelly said he can or maybe if the rates were so far over the moon it wouldn't matter whether the Seagoing Industry Award or the other award was applied, it's the rates of the thing, and one can understand why that might be so, but the quick assessment done by my clients is that that isn't the case in relation to those two agreements, but unless somebody can demonstrate otherwise then - Mr Farrelly wasn't able to enlighten us to the evidence.
PN1483
MR QUINN: Commissioner, someone can demonstrate otherwise if we were still in evidence. We're getting continued evidence from the bar table now about an assessment about an agreement that we have no there's no information before the Commission as to the operations involved in the agreement. It shouldn't be then given in submissions.
PN1484
THE COMMISSIONER: We're almost there, I think, aren't we, Mr Herbert?
PN1485
MR HERBERT: We are almost there. But can I say ‑ ‑ ‑
PN1486
MR QUINN: Although with so much rope, though, Commissioner ‑ ‑ ‑
PN1487
THE COMMISSIONER: Well, I'll give you a little more rope.
PN1488
MR HERBERT: Commissioner, can I say we produced these agreements in a big hurry because we got an affidavit on Monday with 100 pages of attachments. Now, we didn't complain about it and for a hearing starting on Wednesday and I was here on Tuesday, so we had to run around and get this material together in a really big hurry in order to so we didn't there wasn't any issue about the proceedings starting on Wednesday and having done so, we were then confronted with a witness who knew nothing about these agreements even though his union was a party to them and we couldn't cross‑examine him about them at all and we were left to our own devices in that regard.
PN1489
They speak for themselves. As I've said, they're in evidence. I've tendered them. The Commission can view them, if you like, but if Commission is of the view that they don't pass the BOOT test under the Seagoing Industry Award on a preliminary view then the theory put forward by the witness that maybe they did and therefore the identity of the award didn't matter can be discounted. It just goes to the inconsistent of the union's position in that regard and protestations by Mr Quinn in that regard.
PN1490
They are facts that can be ascertained. It's not a matter for me to say or to assess. Having said all of that, Commissioner, I think subject to any new matters that might be raised in the submissions from the other end of the bar table those are, together with the written submissions, of course they are the matters that I wish to address in relation to the approval of the agreement.
PN1491
THE COMMISSIONER: Thank you, Mr Herbert. If you just bear with me for a minute. I don't have any other questions.
PN1492
MR HERBERT: Thank you.
PN1493
THE COMMISSIONER: I presume that the respondent parties would agree with me it would be a good time for a break.
PN1494
MR KEATS: Yes, Commissioner.
PN1495
MR QUINN: I'm sure nobody is going to disagree with you on that.
PN1496
THE COMMISSIONER: I mean, are people happy to come back at, say, quarter past 2? Is that enough? All right then. All right. We'll reconvene at quarter past.
LUNCHEON ADJOURNMENT [1.36 PM]
RESUMED [2.19 PM]
PN1497
THE COMMISSIONER: All right. Which union is going to go first? Thanks, Ms Cerrato.
PN1498
MS CERRATO: Firstly, we'd seek to rely on our initial submissions that we submitted. Basically, we press all of the issues that are contained within our initial written submissions. I note that the applicant has now conceded that employees who are employed as truck drivers are covered by the Road Transport and Distribution Award. The question therefore in terms of the relevant award for the BOOT test is which award covers employees in their distribution facilities.
PN1499
In that regard, the purpose of the respondent's distribution facilities is to facilitate the consolidation and packing of freight for transport by road to the respondent's vessels initially and goods are also bought to the distribution facilities by road where they're unpacked and collected by customers. So in that regard we say that the Road Transport and Distribution Award does cover the operations of Sea Swift and not just in respect of truck drivers.
PN1500
Under the award the paragraph (b) in the definition of road transport and distribution industry refers to:
PN1501
The receiving, handling or storing of goods, wares, merchandise, material or anything whatsoever in its raw or natural state, wholly or partly manufactured state or a solid or liquid or gaseous nature or otherwise in a distribution facility.
PN1502
The respondent seems to rely on the definition of distribution facility within the award which the definition is:
PN1503
It means a facility in which goods are distributed by road and that such goods may be stored for the purposes of subsequent distribution which is operated by an employer as part of, or in connection with, the road transport business of that employer.
PN1504
Commissioner, all the goods depart from the applicant's distribution facilities via road and they all come into the distribution facilities via road. There's no requirement the respondent seems to rely on the definition of distribution facility containing the words "road transport business". In that regard business doesn't necessarily mean a commercial transaction. Business can be a concern or a matter or part of the operations of the particular employer.
PN1505
There's no requirement in the definition of road transport that goods are delivered directly to customers. There's no requirement for goods to be picked up from customers. There's also no requirement for the road transport business of the employer to be separate to their main business, although it's noted that in their submissions the applicant refers to freight consolidation, transfer facility, including transport/logistics as a particular division of their operations. That's paragraph 16 of the applicant's submissions.
PN1506
All of the activities conducted in the distribution facilities are done so for the purpose of the transport of goods. Whilst the applicant claims the road transport and distribution industry or the employees in their distribution facilities are not covered by that award, they've put forward no positive submissions that would suggest that the applicant is a storage company or is in the wholesale industry. It doesn't sell anything by wholesale and it's not a storage company. It doesn't offer warehouse facilities or storage facilities for any goods.
PN1507
Certainly the transport functions that the company undertakes are not ancillary to either wholesale or storage activities of the applicant. So the applicant is clearly a transport company. It's not a company that is in the storage services or wholesale industry.
PN1508
THE COMMISSIONER: Isn't the issue, though, that's it's a marine transport company or a road transport company? Wasn't the evidence that it's $60 million worth of maritime vessels and about half a million dollars' worth of trucks?
PN1509
MS CERRATO: Commissioner, we say that that's irrelevant because the definition in terms of the definition of the industry, it talks about in paragraph (a):
PN1510
Where the work performed is ancillary to the principal business undertaking or industry of the employer.
PN1511
So we say that that's the overriding clause in terms of the coverage of the Road Transport and Distribution Award, but more importantly, as I've indicated, there's nothing that the respondent has put forward that would posit Sea Swift in any substantial way in either the storage or wholesale industry. So that particular award we say cannot apply because the company is not in that industry.
PN1512
We say given the goods that are transported by road to and from the applicant's distribution facilities, they're part of the road transport business of the applicant. They're actually a component of that part of the applicant's business, which albeit happens to be ancillary to the main business of the applicant, which is transport by sea. It's still a transport company.
PN1513
It's in that regard that we say that the applicant's reference to the recent Full Court decision in TWU v Coles is misplaced. In that particular case, the truck drivers were found to be covered by the road transport and distribution industry. The other part of that case, though, was that those employees were found to be covered by the General Retail Industry Award and that's because Coles was found to be an employer in the general retail industry.
PN1514
The same, as I've said, can't be said here. This company is not a company in either the storage services or wholesale industry. It was also the case in that particular case that there were classifications within the General Retail Industry Award which covered the delivery of goods to customers. So in that case not only was Coles in the relevant industry, but the General Retail Industry Award actually had classifications in it covering the work that was being done.
PN1515
Under the Road Transport and Distribution Industry Award there's actually two separate classification structures. There's a classification at schedule B as the classification structure for distribution facility employees and the duties that are covered under that classification structure are clearly duties which are mentioned in the statement of Lino Bruno. So the list of duties that are mentioned in Lino Bruno's statement are duties which are covered under the definitions of distribution facility employees under the Road Transport and Distribution Award.
PN1516
Additionally, and this is one of the differences between the Storage Services and Wholesale Award and the Road Transport Award, there are no classifications whatsoever within the Storage Services and Wholesale Award, which can actually cover truck drivers. The evidence in this matter is that the applicant employs general shed hands, a cohort at least of whom are multi-skilled.
PN1517
THE COMMISSIONER: That issue is conceded though, as I understand, isn't it, Mr Herbert? You've conceded truck drivers are under the ‑ ‑ ‑
PN1518
MR HERBERT: Yes.
PN1519
MS CERRATO: Truck drivers ‑ ‑ ‑
PN1520
THE COMMISSIONER: ‑ ‑ ‑ Road Transport Award.
PN1521
MR HERBERT: Yes.
PN1522
MS CERRATO: Yes. No, the evidence in this matter, though, is that the respondent actually employs general hands who perform truck driving duties as a small portion of their other duties. So for anything from five to 80 per cent is the evidence of Mr Bruno in that regard. Under the Road Transport and Distribution Award, just as an example, a distribution facility employee level 2 can operation a three to six ton truck. A distribution facility employee level 3 can operate a truck with a capacity in excess of six tons and up to and including 13.9 tons gross vehicle mass.
PN1523
So under the Road Transport and Distribution Award there is a classification which actually covers people who are general hands in a distribution facility and who also may drive trucks as part of that particular classification. Under the Storage Services and Wholesale Award there's no mention whatsoever of truck driving duties under that classification structure. So there's no classification under that award that would cover distribution facility employees who drive trucks for a portion of their time, whether it's five per cent or whether it's 70 per cent. So our view is that the correct award to cover those people is actually the Road Transport and Distribution Award.
PN1524
Commissioner, I noticed at the end of the applicant's written submissions they included some calculations in respect of truck drivers.
PN1525
THE COMMISSIONER: Yes.
PN1526
MS CERRATO: That comparison was a comparison of the base rate and the rate with an afternoon shift loading which shows that those rates are better than the Road Transport and Distribution Award. I'm just not sure why the applicant chose to include the afternoon shift comparison. They've made it clear that they do not employ any shift workers and in relation to the employees who may work till 8 pm on one day of the week, those employees aren't actually shift workers. So those employees, if they're truck drivers and they're working till 8 pm, they'd actually be entitled to overtime penalties for work outside the ordinary spread of hours and that relates to the definition of shift work under the Road Transport and Distribution Award which is at clause 24. So, basically, shift work means:
PN1527
Work extending for at least two weeks and performed either in daily recurrent periods, wholly or partly between the hours of 6.30 pm and 8.30 am or in regular rotating periods but does not include work performed by day workers employed under clause 20 for ordinary hours of work.
PN1528
What we say is that the drivers and/or shed hands are general hands, who are covered by the Road Transport and Distribution Award, would therefore be entitled to overtime penalties and not the shift allowance in relation to that. That's also a relevant issue in relation to the BOOT test because under the agreement those employees could in fact just be paid the 15 per cent shift loading instead of the 50 per cent for the first two hours of overtime. So that's a BOOT issue. If those employees are being paid 15 per cent for working one afternoon shift a week, then that's clearly a BOOT issue because they would be entitled to time and a half for the first two hours and double time after that under the award.
PN1529
THE COMMISSIONER: I think that was the evidence, wasn't it, that it might happen or the frequency of it was not that common?
PN1530
MS CERRATO: I think it's once a week in Cairns.
PN1531
SPEAKER: One employee was.
PN1532
MS CERRATO: There is also the other one of the other issues in relation to that is for those employees who are general hands under the agreement who drive a truck for only a small proportion of their time, under the agreement the higher duties provision provides that a person has to work a full day before they're entitled to higher duties, for performing higher duties. Under the Road Transport and Distribution Award, if an employee performs higher duties on a given day, they are entitled to the whole day paid at the higher rate.
PN1533
So, for example, here in Cairns, a distribution facility employee who was to drive the truck occasionally and the truck would be - the truck that we saw down at the wharf would fit within the definition of grade 6 under the Road Transport and Distribution Award, if an employee who was a distribution facility employee drove that truck on any given day, they would actually be entitled to truck driver rates of pay for that day. Under the agreement, anybody who didn't do at least a full day of truck driving duties would not be entitled to the truck driver rate of pay for that particular day and that rate of pay is significantly in excess of the rate that's been paid under this particular agreement or would be paid under this particular agreement.
PN1534
Just in relation to some of the evidence of Mr Bruno, just in terms of a couple of calculations, there was evidence there at paragraph 28 of Mr Bruno's statement - I think it's Horn Island and Thursday Island the distribution facility is open from 8 am to (indistinct) pm on a Sunday. If you look at the BOOT test in respect of those particular employees, if an employee were to work eight hours on a Sunday and all of the other hours, all of their other 30 hours, if they're a full‑time employee, were worked as ordinary hours, under the agreement that person would in a week earn $866.04. Under the Road Transport and Distribution Award, they'd be paid double time for those eight hours on a Sunday and their weekly rate would come up to $890.10.
PN1535
Just in relation to if you were inclined to accept that the Storage Services and Wholesale Award applied to those employees, and we say it doesn't, but if you were to decide that way, an employee employed as a level 2 under the Storage Services and Wholesale Award in that same circumstance would earn a weekly rate of $878.60. So even as compared with the Storage Services and Wholesale Award, an employee who worked eight hours on a Sunday would clearly be worse off under the agreement.
PN1536
It may be the case that some of those employees are part‑time or casual. They may not work 38 hours a week, but if that were to be the case, that actually makes the situation or actually makes the disadvantage worse for those employees if they're not working the 38 hours because they're not getting the 30 hours at the rate that's slightly higher than the award based rate.
PN1537
In respect of the BOOT test, it's also important to note that the BOOT test is not a test which is conducted based on existing working patterns or existing rosters. The BOOT test is conducted based on a comparison of the terms and conditions of the agreement as compared with the relevant award and not on current working patterns. In that regard, certainly there are many, many working patterns that could be worked under this particular agreement that would see employees be disadvantaged substantially as compared with the Road Transport and Distribution Award, in particular.
PN1538
Just briefly, in the event that you were to decide that the Storage Services and Wholesale Award had some application, on page 8 of our written submissions I should say it starts at page 8 of our written submissions we listed the range of provisions in the Road Transport and Distribution Award which are less beneficial than the agreement. In that regard, many of those terms and conditions are the same or similar under the Storage Services and Wholesale Award. So just to go through some of those examples: minimum casual engagement, it's four hours under both awards. It's two hours under the agreement.
PN1539
In terms of the allowances, we stand by our submissions that truck drivers would be entitled to the allowance for operating a truck with a side lifting crane, oversized vehicles, furniture carting and also dangerous goods allowances. So all of those allowances come into play under the Road Transport and Distribution Industry Award. In terms of the distribution facility employees, if you were to decide that the Storage Services and Wholesale Award applied to them then you would also have to take into consideration the cold temperature allowance or allowances which are provided for under the Storage Services and Wholesale Award.
PN1540
In terms of the meal allowance, the meal allowance under the Road Transport and Distribution Award is currently $14.93. Under the Storage Services and Wholesale Award it's $15.75 and under that award it kicks in after one hour of overtime rather than two. So it's actually slightly more beneficial than the Road Transport and Distribution Award in that regard.
PN1541
One of the other issues which we say is a big issue in respect of the BOOT test is the averaging of hours. The agreement provides for hours to be averaged over a period of 12 months. Both of the awards, both the Road Transport and Distribution and the Storage Services and Wholesale Award provide for averaging up to 28 days only. So that's another potential disadvantage.
PN1542
In terms of payment of penalty rates on the weekend, there's a minimum engagement in the Road Transport and Distribution Award of four hours' minimum payment for Saturdays and Sundays. Under the Storage Services, it's three hours for a Saturday and four hours for a Sunday. So again it's fairly similar but there's no minimum engagements under the agreement or under the proposed agreement.
PN1543
We also say that the issue of payment of overtime is an important issue. Under the agreement it's time and a half for the first three hours and then double. Under both awards it's time and a half for two hours and then it reverts to double after that. There's also the provisions in relation to public holidays. There are no penalty rates provided for under the agreement for work on a public holiday. There's been no evidence in regards to whether or not public holidays are worked in the applicant's business, however, there are no penalty rates payable for work performed on a public holiday.
PN1544
I think the actually says that the hourly rates in the agreement are sufficiently high to cover any work that might be done on a public holiday or penalty rates for that work. Under the Storage Services Award it's double time and a half for work on a public holiday, which is the same as the Road Transport and Distribution Award except for Good Friday and Christmas Day, which under the Road Transport Award is treble time for Christmas and Good Friday.
PN1545
Both awards provide that part‑time employees are to be paid overtime rates after their agreed part‑time hours. So there's provisions that when a person is first employed, they agree on the regular hours that they will be working per week and then they get paid overtime after those hours. Under the agreement a part‑time employee could work up to 38 hours without being paid any overtime penalty rates.
PN1546
In respect of the Road Transport Award for casual employees, there's also a 10 per cent loading that is payable to casual employees who work overtime and that's not factored into the agreement. So we say it's quite clear that the agreement doesn't pass the BOOT test in respect of employees who we say are covered by the Road Transport and Distribution Award, but even if you were to decide that distribution facility employees were covered by the Storage Services Award, we say that the agreement still does not meet the BOOT test in respect of that particular award either.
PN1547
It would also set up though, if you were to decide the Storage Services Award applied it would also set up an unusual situation in that those distribution facility employees who do occasionally drive trucks would actually be covered by the Road Transport and Distribution Award on one particular rate of pay and the distribution facility employees who did not have a truck licence would be paid a different rate of pay under the Storage Services Award. So there'd be a different comparison to be made.
PN1548
So if there was no agreement applying, it would be a situation where if the Storage Services Award did have any coverage, you'd have employees doing essentially the same work for 95 per cent of the time, being paid under different awards or being covered by different awards, which is clearly a ridiculous situation. So we say that the Road Transport and Distribution Award applies; that it applies to the truck drivers and that it also covers the distribution facility employees.
PN1549
Just in relation to the calculations that were attached to the applicant's submissions for truck drivers, I'd just point out that some of those calculations are wrong. You'll see that they've got a level 3 under the award is 18.54 and then a level 4 as $18. So those figures are actually incorrect. But, as I've said, there's no evidence in respect of whether or not these people actually are shift workers or actually work afternoon shift and our view is that based on the evidence put forward by the applicant under the award, they'd be entitled to overtime rates for any work they do outside of ordinary hours.
PN1550
You'll note that on the form 17 the employer offered an undertaking in respect of the rates of pay associated with cleaners and groundsmen, who would be classified as grade 1 under the Road Transport and Distribution Award. We note that that undertaking has offered to increase the rates of pay from 1 July 2014 and we just press our point that under the agreement the rates are not expressed to increase by any percentage, but the rates are actually so there's certain rates that apply from 1 July 2014 and then there's another list of rates that apply from 1 July 2015.
PN1551
There's nothing in the agreement that says it will be a 3 per cent increase or a 2.5 increase or whatever and there's been no undertaking offered to increase the rates that will apply from 1 July 2015 and they don't increase automatically under the terms of that particular agreement. In any event, we would say that the amount by which the applicant proposes to increase that rate of pay does not come anywhere near covering the amount of disadvantage that those employees suffer as a result of all of the provisions which are less beneficial than the Road Transport and Distribution Award.
PN1552
In that regard, the employers provided no submissions in respect of what current rosters are, no calculations to indicate that the agreement would pass the BOOT test in connection with either of those awards, but in any event, our submission is that the test is what's in the agreement not what it's not a test of current rosters, it's a test of what the agreement provides for and the agreement provides for working patterns which would clearly leave people a lot worse off than they would be under the award. We submit, based on the evidence that they've put forward at this hearing, that there are employees who would clearly be disadvantaged in respect of the relevant award.
PN1553
Just in relation to the NES issues, there are a number of provisions that we've put forward in our submissions which are detrimental when compared with the NES and I've noted that the applicant has offered to provide undertakings to overcome those deficiencies. In that regard, if you're of a mind to look at the possibility of undertakings to overcome the disadvantage as against the award, our submission is that the effect of any of those undertakings would result in substantial changes to the agreement. It would be undertakings in relation to all of those NES issues.
PN1554
As I've already said the undertaking in relation to base rates of pay that's already been offered is insufficient to overcome the disadvantage to employees under the award, so that would be an issue that would need to be addressed and there's also the issue clearly for general hands who drive trucks on an occasional basis and who are classified as general hands and who would be entitled to truck driver rates of pay under the award when they drive a truck for even a short period of time on any given day.
PN1555
So we say that the extent of provisions which are less beneficial than the award are such that there would be a requirement for extensive undertakings in respect of the agreement bringing the agreement up to meeting the BOOT test. While it's not a line by line comparison test, there are so many provisions which are less beneficial that how do you decide which ones require undertakings and which ones don't require undertaking. There needs to be an assessment made that incorporates all of those provisions which are less beneficial and an assessment made of just how much in excess of the award base rates are the rates in the agreement to compensate for all of that disadvantage.
PN1556
We say that the extent of undertakings that would be required would result in substantial changes by necessity to the agreement in order for it to meet the BOOT test. Other than that, Commissioner, I'd commend our written submissions to you, our original written submissions. Unfortunately, the technology defeated me and I haven't got any supplementary written submissions to provide today.
PN1557
THE COMMISSIONER: That's fine. Thanks, Ms Cerrato. Mr Keats?
PN1558
MR KEATS: Commissioner, can I commence by handing up some written submissions together with a Full Bench decision in GJE Pty Ltd FB [2013] delivered on 3 April 2013.
PN1559
THE COMMISSIONER: Thanks, Mr Keats.
PN1560
MR KEATS: I'll try not to read all of them, but I'll point out what we consider are the salient aspects, Commissioner. On paragraph 2 we set out that in our form 18 statutory declaration for the institute we raise three issues; some concerns about the NES and you'll see in paragraph 3 we don't press that objection in this hearing. In paragraph 2(b) we talk about the failing of the BOOT test, which we've spent quite some time on today; and then paragraph 2(c) whether the bargaining representatives were necessarily genuinely independent, which has an effect in terms of genuinely agree.
PN1561
We start with the BOOT test and in paragraph 4 and following we set out the relevant provisions of the Fair Work Act where it requires that the Commission, if it is to approve such an agreement, must be satisfied at 86(2)(d) that the agreement passes the better off overall test. Over the page in paragraph 6, there's some meat on the bone as to what that means. That's found in section 193 subparagraph (1), which we've set out.
PN1562
The debate here, though, is in 193(4), which is set out in paragraph 7. It's relevantly subparagraph (b) and that is what is the relevant modern award. The tension between the parties is, on one part, the Port, Harbours and Enclosed Vessels Award and the other part, the Seagoing Industry Award. In paragraph 10 I take you, Commissioner, to this decision of GJE Pty Ltd. It sets out what might be considered a common law or a commonsense sort of test as to how you work out when you've got two industries you've got to work out and you've got to say, "Well, which industry does this employer fit into?"
PN1563
I've extracted and I've given you the whole decision so you have all of it, what we consider the relevant part. It starts at paragraph 18 of the decision. It sets out there a substantial character test and then in support of that it draws on a decision of a Full Bench in Dyno Nobel Asia Pacific Ltd. But it's a substantial character test. I won't trouble you to read that to you now, but we say that's the test you need to apply.
PN1564
So the first question becomes, not surprisingly, what does Sea Swift do and we have three key witnesses from the company, Mr White, Mr O'Halloran and Mr Bruno and in paragraph 12, I set out what we consider was the relevant evidence of Mr White for this exercise, 350 employees. I'll come back to why that's relevant shortly. Toll Marine Logistics is a direct competitor and I'll give you the references there to his evidence, paragraphs 11 and 12 of his written statement that Sea Swift has sought permission of the ACCC to acquire assets of Toll, and that's at paragraph 12, and that permission has been denied.
PN1565
Under cross‑examination he was taken by me to what is now exhibit 6 in the proceedings, which is the statement of issues of 19 February of this year. If I could just take you to that, Commissioner. You might recall there were two maps on page 5; that it had the green boats in figure A which is where both Sea Swift and Toll Marine operated, and then in figure B similar green boats where Sea Swift and Toll operated. You might recall in re‑examination he said, "Everything to do with the Northern Territory, figure B, is as it is today, and figure A things have changed because Toll's left the field".
PN1566
But the fact remains though that at 19 February 2015 they were direct competitors in that Far North Queensland area and that will be relevant when we start to talk about what agreements applied to Toll and what decisions other members of this Commission have made in relation to Toll. Then in 12E we just remind the Commission that attached to Mr White's statement was the body of the statement of Mr Bernie Farrelly which curiously attached his analysis of the BOOT if the Seagoing Industry Award applied, and demonstrated that it didn't pass the BOOT if that scenario applied and yet no attempt was made to give evidence as to, "This is the calculation we've done. These are all the reasons that it is the Seagoing Industry Award. It passes the BOOT".
PN1567
I can take it one step further now that I've heard the submissions of Mr Herbert. There's no submission made that the BOOT is met if the Seagoing Award is the relevant award. I'll come back to that further later on. The next witness is Mr O'Halloran. He gave evidence relevantly that there are two line haul vessels that operate out of Cairns, that's the Trinity Bay and the Newcastle Bay, and that evidence is in paragraph 6 of his statement; and that there are two vessels, the Malu Titan and the Malu Chief, that travel from Horn Island to a number of Torres Strait Island communities, and that's in paragraph 8.
PN1568
I'll come back to those issues when I take you through the maps, Commissioner. Importantly - and I may as well do it now - I took him to the map and we discussed that when you leave Cairns you go through a small body of water that's marked in blue, and here I might just pause and say I believe you've got the big map which has got the legend you can read, because unfortunately the map that was attached to his statement it's hard to read the legend. So if you're looking at Cairns you'll see just to its north there's a patch of blue and if you go down to the legend in the bottom left you'll see that patch of blue is the area of Australia's internal waters, and then there's a black line and then on the other side of the black line there's an area that's sort of a peppermint green colour, and if you go back to the legend that's the area of Australia's territorial sea, and you might recall I asked him to identify that and he accepted that the green area is the territorial sea.
PN1569
Just on that, his evidence made references to something called the territorial water and he accepted he had used those terms interchangeably. But the legal position, as you were taken to by Mr Herbert in the Sea and Submerged Lands Act, is it's the territorial sea and sea is the relevant language, and you might see where I'm going with that with the "proceed to sea" which we'll get to in the award shortly. So if you look at the maps, if I can return to the marked maps with the journeys, you can see the vessels that leave Cairns, the two line haul vessels, they go through the internal waters of Australia and then almost immediately proceed to the territorial sea before then travelling north.
PN1570
If I go further up the map you've got a number of vessels that leave the area around Thursday Island and Horn Island and you'll see some notes saying it's the Malu Chief and the Malu Titan, and if you follow those lines of the voyages you'll see they directly go into the territorial sea and go to a number of the islands and the islands are noted and marked. If you keep going round the map you'll see that there's a vessel that leaves Thursday Island going round the west coast of Cape York, and you'll see after a small period of time in the internal waters it quickly hits the territorial sea as it travels south down towards Weipa.
PN1571
Indeed again at Weipa there are some lines that initially go through the internal waters of Australia before walking into or travelling into the territorial sea before it goes further south to - I can't quite pronounce it but I'm going to guess Aurukun. I won't trouble you to take you through each and every single voyage that is marked but I encourage you, Commissioner, in your own time to follow the journeys of each and every vessel as marked on these maps and, other than the vessels that go between Horn Island and Bamaga or Horn Island and Thursday Island which are clearly ones within the internal waters of Australia, they all at some stage are journeys or voyages that enter the territorial sea. That will become more relevant when I talk about what the award does.
PN1572
Mr Bruno is the third person that gave evidence. The relevance of his evidence in this regard was that there was about 108, 60 to 180(sic) employees that were marine based, significantly he said about half of the employees and that's relevant when we're talking about a substantial character test. The next relevant thing is he gave evidence as to how cargo is moved and if I could just take you quickly to paragraph 9 of his statement, he sets out there the freight turnover and he points to the two largest facilities they have, one in Cairns and one in Darwin, and you'll see at the Cairns freight transfer facility 102,820 tonnes of freight is moved. The next largest is Darwin, 44,587.
PN1573
The point being that by anyone's calculation it's the vast majority of freight is coming out of Cairns. That's the largest part of the marine cargo that has to be moved by Sea Swift. So let's have a look at the award and the starting point for the award is clause 4.1 which I deal with in paragraph 15 of the submissions. You'll see there that it's an industry award. It covers employers which are engaged in the seagoing industries and their employees in the classifications listed in clauses - and there are two given, 13 and 25. I'll get to that because that's relevant when we come to dealing with exhibits 10 and 11. Back earlier in the definitions we have a definition of seagoing industry and I set it out in the submissions but it's important just to bear in mind what it says:
PN1574
Operation of vessels trading as cargo vessels -
PN1575
And I think we all accept here we're talking about moving cargo so we've got cargo vessels:
PN1576
- passenger vessels or operator's research vessels which -
PN1577
This is the bit we seem to skate over here:
PN1578
- in the course of such trade -
PN1579
Not a substantial period of time but:
PN1580
- in the course of such trade or operation -
PN1581
So at some stage in that trade or at some stage in that operation "proceed to sea" and then in brackets:
PN1582
(on voyages outside the limits of bays, harbours or rivers).
PN1583
I will come to what is in the brackets shortly. Could I hand up two decisions. The first is a decision of the Commission approving the Toll Marine Logistics AIMPE Agreement 2014. It's a decision of Commissioner Wilson of 21 May this year, and the second is a decision approving the Toll Marine Logistics AMOU and MUA Agreement 2014, also a decision of Commissioner Wilson of 4 June 2015. Now we say these are relevant because this is the employer that Mr White said was the direct competitor of Sea Swift and it's the one that was the subject of the issues paper of the ACCC, and if I could just take you first of all to the AIMPE of those agreements. You'll see on the second page there's an undertaking and part of the undertaking is that:
PN1584
The agreement will apply pursuant to clause 5 Scope and Application to all employees current at the approval of this agreement by FWC in the agreement classifications that would be covered by Part A of the Seagoing Industry Award 2010, together with all employees employed subsequent to the approval of this agreement by FWC in the agreement classifications who would be covered by Part A of the Seagoing Industry Award 2010.
PN1585
So it's not as simple as saying there's a cosy deal between the union and the employer and the Commission didn't do anything about what it should do. It is right to say though it is not the subject of an arbitrated decision. But it's a little bit more than just what the parties thought about it. Undertakings in my experience are something sought by the Commission for an agreement to get over the line. In the other agreement - I won't read - - -
PN1586
THE COMMISSIONER: Just so I'm clear. So can you just explain what was the intent of the undertaking in that case? What was the undertaking supposed to cure? What was the problem?
PN1587
MR KEATS: It's to make it clear that the relevant award for the purposes of the BOOT is the Seagoing Industry Award. It's to make sure that the relevant award is notated on the agreement.
PN1588
THE COMMISSIONER: So clause 5 of the agreement refers to the Seagoing Industry Award. I mean, I'm not sure if you were directly involved.
PN1589
MR KEATS: I wasn't, Commissioner.
PN1590
THE COMMISSIONER: Yes, so I'm just unsure as to why - - -
PN1591
MR KEATS: I can't take it any further.
PN1592
THE COMMISSIONER: - - - an undertaking was required if it was already dealt with in the body of the agreement. But there must have been some other reason I presume.
PN1593
MR HERBERT: The other agreement says there was a carve‑out in it, in the undertaking, for other awards. Paragraph 6, "not cover work on vessels".
PN1594
THE COMMISSIONER: Maybe there was some issue in relation to that last sentence in paragraph 6 in the undertaking?
PN1595
MR KEATS: Unfortunately I can't assist you any further.
PN1596
THE COMMISSIONER: No, that's all right.
PN1597
MR KEATS: At paragraph 17 of the submissions I deal with exhibits 10 and 11 and in paragraph 17 I indicate that I don't consider or I submit these don't assist Sea Swift. If I could take you to exhibit 10 first.
PN1598
THE COMMISSIONER: Yes.
PN1599
MR KEATS: You'll see that the scope of works is dealt with in clause 7 and it talks about:
PN1600
Tourism, passenger and cruise ship services to Mandorah and the Tiwi Islands -
PN1601
I'll just pause there. If you've got the attachments to Mr O'Halloran's and you've got the one that has got Arnhem Land and the Kimberley region on it.
PN1602
THE COMMISSIONER: Yes.
PN1603
MR KEATS: Mandorah is on the mainland of Australia round about where Darwin is but a little bit to the south west and the Tiwi Islands will be marked on your map as Melville and a group of other islands round there. Relevantly all within the dark blue area which I have indicated is the internal waters of Australia. They are not - vessels going between the mainland and the Tiwi Islands do not touch the territorial sea so you don't need to proceed to the territorial sea to do that exercise. The rest of the scope of work then continues:
PN1604
- and the operations of vessels of any type wholly or substantially within a port, harbour or other bodies of water within the Australian coastline.
PN1605
That should immediately feel familiar because that's the language of the industry of the Ports, Harbours and Vessels Award. So we say that really doesn't go anywhere. It says it's in the Ports, Harbours Award and ironically it is. The other one, which I just dropped, is the exhibit 11, is the Queensland award and I say two things about that. Again the scope of works in clause 7, it's in relation to the provision of:
PN1606
Tourism, passenger and cruise ship services -
PN1607
I'm sorry, I've just dropped my Seagoing Award. And then it describes where those services go. But just going back to the Seagoing Industry Award you might recall that with the coverage, the coverage of the Seagoing Award is only in relation to employers in the seagoing industry and their employees in the classifications. So we'll turn over in the classifications and let's take clause 13. That's where they are found in Part A of the award. You'll find a heading, "Classifications and minimum wage rates" and following that you'll find a series of tables.
PN1608
The tables initially - I'll just read through the headings. So for, "Dry cargo vessels" there's a particular tonnage and there are three of those different tonnages for dry cargo vessels, and then in 13.1(d) we get to crude tankers and then in (e) other product tankers and (f) gas carriers and then in (g) we get to research vessels. There's no classification for anyone that works on a passenger ship. There's no classification for anyone that works on a tourism vessel. There's no classification for anyone that works on a cruise ship. The Seagoing Award doesn't apply, so for that reason we say exhibit 11 doesn't assist the applicant.
PN1609
In any event we say that there's no evidence as to what, beyond those very broad words that I've just taken you to in clause 7, the actual operation of SeaLink is that is covered by that agreement. So I think we have to unfortunately begin the task of the Seagoing Industry Award. I think for us in this case we are concerned with in the course of such trade do we proceed to (c) and what do the words, "on voyages outside the limits of bays, harbours and rivers" mean? At paragraph 21 I say look, let's start at the beginning. 15B(4) of the Interpretation Act I set out part of, about what the coastal sea is, and in Australia it means the territorial sea and the sea on the landward side of the territorial sea not within the limits of a state of an internal territory.
PN1610
2B of the Interpretation Act then has the provision that the territorial sea has the same meaning as in the Sea and Submerged Lands Act, and Mr Herbert took you to various provisions of the Sea and Submerged Lands Act and I just want to wander through some similar provisions if I could, Commissioner.
PN1611
If I could start - do you still have a copy of that legislation?
PN1612
THE COMMISSIONER: Yes, I do. You might have to give me a minute.
PN1613
MR KEATS: I'm having that trouble with paperwork too, Commissioner.
PN1614
THE COMMISSIONER: It's starting to mount up, isn't it? Here we go, I've got it.
PN1615
MR KEATS: I believe he took you to section 7 of the Act.
PN1616
THE COMMISSIONER: Yes.
PN1617
MR KEATS: That gives the right of the Governor-General to proclaim not inconsistently with section 2 of part II of the Convention, and if we wander back Convention is defined and it means the United Nations Convention and the law of the sea. You'll find that in section 3.
PN1618
THE COMMISSIONER: Yes.
PN1619
MR KEATS: If you go along the - through the Act for a little bit though you'll find in the schedule, which on my copy starts at page 11, part II of the Convention, which is often called UNCLOS.
PN1620
THE COMMISSIONER: Yes, I'm with you.
PN1621
MR KEATS: The three things I want to take you to though are articles 9, 10 and 11.
PN1622
THE COMMISSIONER: Yes.
PN1623
MR KEATS: So article 9 is about what happens around mouths of rivers, baseline - I'll come back to what baseline is, I should have done that first but I'll come back to it; "shall be a straight line across the mouth of the river".
PN1624
So we know that's one of the things we need to worry about is rivers. Article 10 deals with bays, and if I take you down to subparagraph (3), it's a line joining the low water mark of its natural entrance points. And over at 11 we deal with ports. It's, "the outermost permanent harbour works". So what was I talking about with baseline? I believe Mr Herbert took you to it, but it's the baseline for determining where the territorial 12 nautical miles should start from. It's what winds into this map that we've been looking at to create the beginning of the green polygon that's on the maps. Just for the abundance of completeness, can I hand up the proclamation of the Governor-General then Bill Hayden of 9 November 1990 proclaiming that the territorial sea is the 12 nautical miles.
PN1625
THE COMMISSIONER: Yes.
PN1626
MR KEATS: At paragraph 26 I also just give another way of quickly trying to get hold of an understanding of this area and I give you a reference to section 4 - a note of section 4 of the Coastal Trading Revitalise Australia Shipping Act 2012, for a description of what the baseline is.
PN1627
Generally the baseline is the lowest astronomical tide along the coast but it also includes lines enclosing bays and indentations that are not bays and straight baselines that depart from the coast.
PN1628
To go outside the limits of bays, harbours and rivers, we've got to enter the territorial sea. That's what the Seagoing Industry Award is about. It's about vessels in the course of such trade or operation enter the territorial sea. That's the easiest way of understanding what those words means. When you look at what Sea Swift does, except for the little vessels I told you about between Thursday Island and Horn Island, all their vessels enter the territorial sea. The substantial character of what this employer does is work covered by the Seagoing Industry Award.
PN1629
The Seagoing Industry Award has a funny interaction provision. You were taken to it by Mr Herbert. It's got this clause 4.4 exclusions and it says, this award does not cover and (d) employers covered by the following awards. There's a long list and at (vi) - sorry not (vi) - it is (vi) the Ports, Harbours and Enclosed Water Vessels Award 2010.
PN1630
Then over at 4.5 you've really got a sort of recitation of what I took you to in the decision of the Full Bench.
PN1631
Where an employer is covered by more than one award an employee of that employer is covered by the award classification that is most appropriate to the work performed.
PN1632
So you've got to work out the industry, you follow the decision I gave you, look at the substantial character. We say you're then in the Seagoing Industry Award and as soon as you're in the Seagoing Industry Award well then no other award applies, specifically the Ports, Harbours and Enclosed Water Vessels Award does not apply.
PN1633
I think we then need to go to the Ports, Harbours and Enclosed Water Vessels Award, and I might just because I said I would and a printout from the awards audit that was conducted by the Commission as to what awards actually formed part of this award when it was made. I don't hand it up to do anything other than to rebut the suggestion made by Mr Herbert in relation to what went into this award.
PN1634
THE COMMISSIONER: Before I do that I might just start marking documents to make sure we keep a record of everything that's come and gone.
PN1635
MR KEATS: Certainly.
PN1636
THE COMMISSIONER: I might just go back to Ms Cerrato's submission I might mark as, I think it's exhibit 13.
PN1637
MR KEATS: Pardon me, Commissioner, which one was 13?
PN1638
THE COMMISSIONER: I think it's the TWU's submission. I know that the employer's submission - the applicant's submission I marked as 12, didn't I?
PN1639
MR KEATS: You did.
PN1640
THE COMMISSIONER: So that would be next, wouldn't it, 13.
MR KEATS: Yes.
EXHIBIT #13 OUTLINE OF SUBMISSIONS FOR TWU
THE COMMISSIONER: Then I might mark your submission, Mr Keats, as exhibit 14. Then the document you've just handed up, which is the list of awards from the Award Modernisation Program as exhibit 15.
EXHIBIT #14 OUTLINE OF SUBMISSIONS FOR AIMPE
EXHIBIT #15 LIST OF AWARDS FROM THE AWARD MODERNISATION PROGRAM
PN1643
I'm happy for you to proceed.
PN1644
MR KEATS: I'm just struggling with the paperwork, Commissioner. We then turn to the Ports, Harbours and Enclosed Water Vessels Award. You'll see there the coverage of the award is again in 4.1. It's an award that covers employers throughout Australia in the Port, Harbour and Enclosed Water Vessels industry and their employees in the classifications listed in clause 13, to the exclusion of any other modern award. Same sort of language. It goes onto say the award does not cover employers and employees wholly or substantially covered by the following awards, the Seagoing Award.
PN1645
Pausing there, we say from what I just said earlier, the Seagoing Award substantially covers the work of Sea Swift and then under the (a) to (g) there's;
PN1646
For the purposes of 4.1 the Ports, Harbours and Enclosed Water Vessels Industry means -
PN1647
and then there's a definition -
PN1648
the operation of vessels of any type wholly or substantially within a port, harbour or other body of water within -
PN1649
and I stress within -
PN1650
the Australian coastline or at sea on activities not covered by other awards.
PN1651
To answer the question you asked Mr Herbert, we agree with Mr Herbert that the "or before at sea" is disjunctive. It's a separate category.
PN1652
It's important, and I stressed it when I said it, that it's within the Australian coastline. It's not within sight of the Australian coastline, it is not adjacent to and it's not near. We can't substitute words. The Full Bench used the word "within", and the other words have quite different meanings. Because if we use these other words of "adjacent" of "within sight" it really creates a lack of clarity as to where things are. Within whose sight? Using a telescope to see a person sitting on the top of a ship? What's it mean to be within sight? Adjacent to, how adjacent to; a kilometre, five metres, next to? Which meaning of adjacent to you want to give to that word?
PN1653
The Full Bench used "within". What's coastline? Strange word coastline. But it's got to be given its ordinary meaning. It's where land meets water and the water is not internal water in the sense of a river or something like that. It's when you look facing the ocean or the sea, a common sense ordinary grammatical meaning should be given to the word.
PN1654
We say for all those reasons you should be satisfied that you don't need to conduct the exercise that Mr Herbert wants you to conduct as to working out the timings of where the vessels are, how long they are between this port and this port, at what particular time they might crossover the line to the territorial sea and if it was rough weather, whether it might change that and suddenly you're in a different award because it was line ball for some of the vessels, a lot of them around 50 per cent when you look at annexure D, Mr O'Halloran. Maybe wet weather will change how that works or rough weather.
PN1655
It's much simply than that, Commissioner. "Proceed to sea at some stage during the voyage." To sea, the territorial sea. A lot of care's been taken to call it the territorial water so you don't hear the word "sea" but it is the territorial sea.
PN1656
Paragraph 33, I move onto BOOT, which is the second half of the exercise after you work out the award. The only evidence before this Commission as to whether or not this agreement would pass the BOOT if it's the Seagoing Award as conducted by Mr Farrelly. It's paragraphs 64-74 of exhibit 9. He says on his analysis it doesn't. There's no competing analysis and you should take it from that that the company is not putting forward a situation where it doesn't matter which relevant award it is, it still meets the BOOT. Please approve the agreement. That has not been said to you. Instead, it's all about this is the relevant award, it's the Ports, Harbours award and everything's fine for that award, you can see the analysis we did. But if they're wrong about that, it falls over in my submission.
PN1657
I'm going to leave all that subject and move now to the independence of bargaining representatives. If I could commence by handing up a - sorry to keep burdening you with paper, Commissioner, a decision of Roe C in MIDG Pty Ltd trading as Healthy Habits Queen Plaza. I put out the relevant part of it in the written submissions at paragraph 37, and I'll just read it because it's important.
PN1658
The role of the bargaining representative is very important in the bargaining process. The Act provides that an agreement cannot be approved unless the process for advising employees concerning bargaining representatives is strictly followed. The Act also provides that bargaining representatives have clear rights and responsibilities which are codified in some detail in the Act. Hence an agreement cannot be approved unless a proper process to allow employees to select and consult with a bargaining representative has occurred, and unless any appointed bargaining representative has been recognised by the employer. This suggests that if a bargaining representative is not genuinely independent -
PN1659
That's what we'll be talking about -
PN1660
it must have an effect on the question of genuine agreement and therefore on the capacity to approve the agreement.
PN1661
What does the Act say? I've put it out in 36, it's regulation 2.06. I set it out before
PN1662
A bargaining representative of an employee must be -
PN1663
And there's two bits, they both have to be met.
PN1664
Free from control by the employees' employer or another bargaining representative and free from improper influence from the employees' employer or another bargaining representative.
PN1665
What was the evidence? The evidence starts, in my submission, with a form F16 that's been filed. It's the application for approval that's before you. In the written submissions I take you to 5.1, it shows you that bargaining representatives by employees had been nominated. 5.2 says 23 had been appointed in writing, and then in 5.3 the details of those who were appointed were set out. Relevantly, Bob O'Halloran (Fleet Master, Cairns Marine) and Lee Fitch are nominated by the HR Manager who signs this form, that's Dan Erbacher.
PN1666
THE COMMISSIONER: So we're looking at the F16.
PN1667
MR KEATS: Correct.
PN1668
THE COMMISSIONER: We're at 5.3.
PN1669
MR KEATS: 5.3. First of all there's a series of people that are on page 6 but if you turn over to page 7, Commissioner, there's a further list of them.
PN1670
THE COMMISSIONER: Yes.
PN1671
MR KEATS: At the top of the page there are four names given.
PN1672
THE COMMISSIONER: Yes.
PN1673
MR KEATS: The first is Bob O'Halloran (Fleet Master, Cairns Marine). Then the next name is Lee Fitch, described as the NT Marine Manager. The linkage between 5.3, 5.2 and 5.1 is that this is the providing of details by the applicant to the Commission as to instruments of appointment signed by an employee, appointing a bargaining representative that were given to the employer.
PN1674
THE COMMISSIONER: So the point you say is that Mr O'Halloran and Mr Fitch - - -
PN1675
MR KEATS: That they are both bargaining representatives, importantly employee bargaining representatives. I'm getting to why that's important, I've got a few bits of evidence to take you through, Commissioner.
PN1676
THE COMMISSIONER: Sure.
PN1677
MR KEATS: The first I will say about that is it's completed by the HR Manager, Dan Erbacher. You heard the evidence of Mr White, that there's an expectation of him as the CEO that that would be completed accurately but importantly Mr Erbacher is not called to give evidence, and that's particularly of importance when the submissions for Sea Swift contain a denial that Mr O'Halloran was appointed in writing as an employee bargaining representative. He's not called to explain the Jones v Dunkel inference that can be drawn there.
PN1678
To further support that he was a bargaining representative, in paragraph 40 I go through the bits and pieces that we were told; minutes of the first meeting - I'll take you to it, Commissioner.
PN1679
THE COMMISSIONER: I'm just trying - but his evidence, Mr O'Halloran's own evidence was that he never completed or nominated in a written way as a bargaining rep. Wasn't that his oral evidence?
PN1680
MR KEATS: He did say that in the end, Commissioner, that's right.
PN1681
THE COMMISSIONER: Yes.
PN1682
MR KEATS: But you've got the - - -
PN1683
THE COMMISSIONER: I'm only asking that because I'm trying to get to the point that you're making, that's all. I want to be clear on it so I understand your argument.
PN1684
MR KEATS: To take that directly yes, he does say that.
PN1685
THE COMMISSIONER: Yes.
PN1686
MR KEATS: But then in the application made to you, Commissioner, the HR Manager says he was appointed and that he has these 23 bits of paper received appointing them. There's no amended application and there is no calling of Mr Erbacher to explain the application. There's no evidence on - this is all the written documents we received appointing people in writing and O'Halloran's not here on this list, and they were on notice because it's in the F18 that my client filed.
PN1687
Now I then take you to the minutes about what Mr O'Halloran said himself during bargaining, which is inconsistent I would submit to what he told you, Commissioner. The statement of Mr White, attachment A, it's the minutes of the first meeting. Do you have that, Commissioner?
PN1688
THE COMMISSIONER: Yes, just bear with me and I'll - - -
PN1689
MR KEATS: Not a problem.
PN1690
THE COMMISSIONER: Attachment A, yes, got it now.
PN1691
MR KEATS: Front page, about a third of the way down you'll see that Mr O'Halloran is present. Over the page, second row of the table, about two thirds of the way down the page records BOH, Mr O'Halloran, outlined as a bargaining representative himself and some other marine employees. You'll recall that I asked him, Mr Bruno and Mr White whether they recalled him saying that at the meeting and they all said yes. Except for Mr O'Halloran, he said initially, "I'm not sure, I don't really recall", and when I asked him "Do you have a positive memory to deny it?", he said he didn't, "I just don't recall".
PN1692
Everyone accepted that Ms Poa, and you'll see at the front page Sheena Poa took the minutes, was an accurate minute taker. The evidence of Mr O'Halloran, supported by others, was that he reported directly to the CEO. That makes him a pretty senior employee in the management of business. He's also a shareholder of the ultimate holding company. The evidence for that is found in annexure BF27, the statement of Mr Farrelly which is exhibit 9.
PN1693
His evidence about that was he's only a small shareholder and I think the shareholdings - forgive me if I get this 100 per cent wrong - I understand he had 100,000 shares and there's about 14 million shares altogether, so about a one per cent shareholder. But a shareholder. We say both those things are red flags as to his genuine independence and then we say you've got to look at what he did in bargaining.
PN1694
I just want to take you to a couple of things. These are set out in paragraph 42 of the written submissions but it might be useful just to have a look at them. The first is found in annexure B to the statement of Mr White, which is where you find the minutes of the second meeting. If we turn over roughly four pages you'll see at item 17 an entry for Mr O'Halloran. Just turn back the page though so you see what we're talking about here. It's item 5 in the order of business, "agreement coverage" is what we're talking about. A rather critical issue. In fact BC in item 1, and BC you'll recall is Bob Campbell, described it as critical issue that needs to be addressed.
PN1695
In Item 17 Mr O'Halloran says - is recorded as this, "Advises that he's spoken to a great number of vessels who advised satisfaction". What else does he do? I took him to a comment by Jamie Leitner as to a complaint that long term employees have been offered full-time work. I won't take you to it, Commissioner, again but he responds in more an employer fashion saying, the numbers are insignificant. Not the sort of thing you'd expect an employee bargaining representative to do. That's the role of management.
PN1696
You can then turn to Mr Lee Fitch. If I remember the evidence of Mr Bruno correctly that came out of the cross-examination conducted by my friend Mr Quinn. Mr Fitch was one of the marine managers in the Northern Territory but importantly he conducted meetings with the employees in relation to bargaining. It's my recollection that they were in relation to explaining the terms of the agreement. Mr Bruno gave evidence that he did that as marine manager.
PN1697
At the same time he's wearing the hat as an employee bargaining rep but he's going to see the other employees saying as marine manager, this is what the agreement means.
PN1698
We also should look at what he did in bargaining. I set them out at 44. The first meeting he rebutted claims by the MUA that unions don't harass staff. In the same meeting he joined with the HR Manager to rebut an institute log of claims for payments for working on a swing day. I set out the references in the submissions.
PN1699
On a fair and reasonable analysis neither Mr O'Halloran nor Mr Fitch are free from control of the employer. They should not be considered to be independent bargaining representatives. They do not meet the test of regulation 2.06. Given their involvement which I've just taken you to, we submit you should have serious doubt as to whether the employees genuinely agreed to the agreement. Given the fundamental aspect of this part of the process, of making an agreement, you cannot be satisfied that they genuinely agreed to the agreement, and on this basis alone you should refuse the application.
PN1700
At paragraph 48 I deal with the suggestion in the applicant's submissions at paragraph 109, that different laws should apply to Mr O'Halloran because his participation was minimal. I have to say that has to be plainly wrong. If you go back to read the regulation it doesn't say you're independent unless your involvement's minimal or you only just do a little bit. It just says if you're a bargaining representative for an employee you have to be independent, full stop.
PN1701
THE COMMISSIONER: I guess it raises - there's the issue of - because we know that once an agreement gets to the point of going through the approval steps then the issues that might arise in an application in connection with section 228, it's past the point of dealing with those issues. But I see from your submissions, you're really saying these issues are all relevant for the purposes of 188C.
PN1702
MR KEATS: Correct.
PN1703
THE COMMISSIONER: So your argument would be that if the evidence would support the conclusion that persons identified as employee bargaining representatives weren't genuinely doing that and could have influenced, or did influence people's voting that that might impact on my conclusions on 188C.
PN1704
MR KEATS: Correct.
PN1705
THE COMMISSIONER: That's the argument.
PN1706
MR KEATS: That's the argument, and I have shown how bargaining worked and for Mr Fitch, his involvement in explaining the terms of the agreement. In conclusion, it's our submission that first of all primarily the agreement doesn't meet the BOOT, because when you apply the relevant award, the Seagoing Industry Award, it doesn't meet it and then secondly, you can't be satisfied that the employees genuinely agreed to it, because of the lack of independence of these people we've just identified. Unless there's anything further, they would be my submissions, Commissioner.
PN1707
THE COMMISSIONER: I think - and again just in terms of the way that the legislation operates, you made a submission to the effect that if I was to form a view that the Seagoing Industry Award was the applicable award, because the employer hasn't made submissions about the BOOT, that that would be the end of the matter. I don't want to put words in your mouth but I got the - because I'm sure you've - the legislation I think requires the Commission to give parties an opportunity to offer undertakings.
PN1708
MR KEATS: It does give an - - -
PN1709
THE COMMISSIONER: Yes, well I think you understand where I'm going.
PN1710
MR KEATS: I didn't take that very last step, Commissioner. I didn't say that's the end of it.
PN1711
THE COMMISSIONER: No.
PN1712
MR KEATS: Because at the end of the day it's your task. You could still do that without the benefit of the submissions of anyone about the BOOT, and form a view about that. That quite rightly is not something I can say, but what I am saying to you is that there's a very strong inference that you can draw by the fact that they haven't done it. They haven't made any attempt to do it. They haven't even made the bold submission about it, that they don't believe that's the case, and that's a matter of significance we'd say. Thank you, Commissioner.
PN1713
THE COMMISSIONER: Thank you, Mr Keats. Mr Quinn.
PN1714
MR QUINN: Thank you, Commissioner. I have some written submissions that I'm going to rely on. If I might, given the time and I'm not sure how Mr Herbert's gone re-arranging his flight. I might try to skip through these and try to avoid repetition with anything my friend has just said. I'll also hand up in one bunch if I may then a few more papers, papers that I might respond to or sorry rely on. I have discovered, I apologise in advance, there are two cases that I intend to refer to that aren't in the bundle.
PN1715
THE COMMISSIONER: Sure.
PN1716
MR QUINN: But the references are in the written submissions but unfortunately I don't have copies with me. If I might start by addressing the issue of the priority between the two awards. It is of some significance, I think, that I think we spent an hour 40 or 45 listening to Mr Herbert's explication of the award covering issue 4. I think we first heard the one substantial or the word character. There was a studied avoidance of that primary Dyno Nobel test. What we have here is two industry awards, the coverage for one which is limited to employers in the seagoing industry. Coverage for the other to employers in the ports, harbours and enclosed water vessels industry. The seagoing industry in its clause 4 is defined by we say, by two characteristics but firstly the operation of vessels, trading as cargo vessels, passenger vessels or operated as research vessels and then second characteristic is in the course of such trade or operation proceed to sea (on voyages outside limited bays, harbours or rivers".
PN1717
So firstly, the industry is defined by the purpose of the activity engaged in by the employer and its vessel or vessels, and then secondly there's a conditioned precedent that the vessel enters a particular location where part of that activity is engaged in. The ports, harbours and enclosed water vessels industry is also defined as having two characteristics but two quite different characteristics. Firstly, the operation of vessels of any type wholly or substantially within a port, harbour or other body of water with the Australian coastline or at sea. Secondly, on activities not covered by the seagoing award, so that is the ports, harbours industry is defined firstly by where the activity is substantially engaged in, and secondly by a condition precedent that the vessel is not engaged in certain activities which are covered by one of the other listed awards.
PN1718
So to put it another way, the ports, harbour award establishes the first defining characteristics of its industry as the operations of any vessel within a particular type of location. The second defining characteristic is that certain activities undertaken in that location do not form part of that industry and then the award goes on to explicitly provide that those excluded activities are the activities covered by the Seagoing Industry Award, so there is no potential for, there can't be any determination of coverage of the ports and harbour award or any employer operating any vessel in any activity without a prior determination as to whether those activities are covered by the Seagoing Industry Award or any of the other awards that are explicitly given precedence over the ports and harbour award by its own definitions.
PN1719
So the coverage of the Seagoing Industry Award and the coverages of the Sea Swift by other the ports and harbours or the seagoing award is the only place that that process can start, by the priority allocated to it by the ports and harbour award itself. That activity has to be gone through before there's then any capacity to consider the coverage of the ports and harbour award itself, only if the activities of the employer are not covered by the Seagoing Industry Award is it then relevant to consider whether the activities involved the operation of vessels of any type, wholly or substantially within a port, harbour of other body of water.
PN1720
We first have to turn to the coverage of the Seagoing Industry Award. There's no dispute that Sea Swift vessels are engaged in trading with cargo and to a much more lesser extent passenger vessels, and really the only matter in dispute in relation to the Seagoing Industry Award is in connection with the reach of the award in relation to the course of such trade and proceed to sea. The definition of the industry in the award makes plain clearly, unequivocally what proceed to sea means for its purposes. The explanation operates to qualify that proceeding to sea is restricted to voyages outside the limits of bays, harbours or rivers. The award doesn't attempt to define sea, it doesn't need to beyond that parenthesis and the award doesn't further attempt to define what are the limits of bays, harbours or rivers and there's no reason why it would need to.
PN1721
"Sea" is an ordinary English word with an ordinary English meaning. I think in the Oxford;
PN1722
The expanse of salt water that covers most of the earth's surface and surrounds its land masses or any parts of this sea.
PN1723
So the only potential ambiguity there is resolved by the words of the award itself, that is proceeding beyond the limits of bays, harbours and rivers. Now the limits of those bodies of waters are simply the limits contained within the meaning, the very plain English meaning of those geographic features. For example the example relied on by the respondent of bay and according to the definition relied on by Sea Swift is:
PN1724
The recess or inlet between two capes or headlands.
PN1725
That is the limit of a bay, and by its very definition is correspondingly the imaginary line between its headlands entering the body of water beyond that imaginary line is a voyage which involves proceeding to sea. Similarly, with the other types of inlets identified in the award.
PN1726
Now for certain purposes those imaginary lines have been established by legislative fiat for some ports and some bays and some harbours but those legislatively determined imaginary lines in substance are not any different to the imaginary lines that will be drawn relying simply on the normal meaning of bay or harbour or port or river. It doesn't in any substantial sense relevant to these proceedings alter the concept of proceeding to sea, item 4 in the Seagoing Award. Nor for that matter does the marginal extension of those areas again define for peculiar or particular purposes by legislative provisions in relation to the notion of smooth or sheltered waters. Nor for that matter do the legislative schemes relied upon by Sea Swift effect that simple and unambiguous coverage of the award.
PN1727
The submissions of my friend I've already set out in detail the (indistinct) to Seas and Submerged Lands Act and the Convention law of the sea how it applies the work undertaken by Sea Swift in relation to the territorial sea and the AMOU and the MUA concur with that analysis, that in short by leaving the confines of the Port of Cairns, was the initial example, Sea Swift vessels enter the territorial sea and thus they proceed to sea by any definition of the term.
PN1728
Now there's no argument, there can't be any argument the substantial character if not really the defining character of Sea Swift's enterprise is the operation of vessels trading as cargo vessels, and Sea Swift has made no submissions in relation to that issue that might negatise that presumption and so by applying the standard substantial character test from Dyno Nobel et cetera, the Seagoing Industry Award inevitably, inescapably applies to Sea Swift's activities.
PN1729
Despite the extensive submissions of our coastal seas and territorial baselines and territorial waters, there's been no submissions made by Sea Swift that its vessels do not meet the condition precedent of proceeding to sea in the normal sense of that term. In the course of those trading activities, with one or two minor exceptions, and again correspondingly the Seagoing Industry Award necessarily then applies to Sea Swift activities.
PN1730
So the attempt to compartmentalise the time engaged in by the various elements of the voyages undertaken by the vessels by Sea Swift, in particular by breaking it down into the various categories of sea provided for in international law is entirely irrelevant to the exercise that the Commission is required to undertake in relying upon the standard substantial character test. Essentially the time that the vessels turn left out of Cairns, they're in the sea, whether it's the territorial sea or some other characterisation of the sea, that's where they are and that's where they stay.
PN1731
If while we say it's not relevant, if there was any suggestion that there is some relevance of these other categories of sea that somehow make them not sea for the purposes of the award coverage, we submit in the alternative that nevertheless every time any of Sea Swift vessels leave the confines of bays, harbours or rivers during their commercial operations, they nevertheless proceed to sea and they remain at sea throughout the entire of those voyages with the exception of their passage into and out of bays, harbours and rivers because sea is an ordinary English word.
PN1732
There's no suggestions in the provisions that will be going in this report in the decisions establishing an award nor in its predecessor Marine Industry Seagoing Industry Award 1999 that the Commission gave any consideration to, was relying upon or was intending that the words "proceed to sea" actually means proceed to territorial sea or some other international law categorisation of the coastal sea or any other, or limited category of sea for some peculiar or particular international law focus or domestic constitutional law purposes. None of those definitions exclude from the ordinary meaning of sea. None of those areas of sea are excluded from the ordinary definition of sea and the legislation that Sea Swift is relying upon makes that plain in submerged seas - Seas and Submerged Lands Act which I understand you still have a copy of although it is in those relevant extracts that are in the bundle that continues to use the normal meaning of sea, identify that - internal waters are identified under the Convention are the sea on the landward side of the baseline of the territorial sea, as does the Coastal Waters State Powers Act, which is the primary legislation establishing the constitutional settlement between the states and commonwealth over the jurisdiction in the near sea.
PN1733
It similarly defines that if coastal waters of the state has any sea that is on the landward side of any part of the territorial sea, as also does the Act's interpretation which defines the coastal sea as the sea on the landward side of the territorial sea. So whether we turn left, right or go straight ahead out of the Port of Cairns, every relevant piece of legislation identifies that what we immediately hit is sea. For particular purposes it might be identified as - also as the territorial sea but what we hit once we go across that imaginary line is the sea. Every vessel that leaves Cairns and every vessel that leaves all of the other ports immediately or shortly after crossing those imaginary lines is and does proceed to sea.
PN1734
What's clear from the shall we say overwhelming preponderance of enterprise agreements that the parties have unearthed relevant to these proceedings is that there is also a settled interpretation of those coverage provisions of the Seagoing Industry Award amongst the participants in the industry. As my friend's already walked you through the two examples relied upon by Sea Swift to suggest otherwise are really of no assistance to the Commission in determining these issues. But the issue of significance I might add at that point it's appropriate to, at least formally reject the insinuation in the submissions from the applicant that there was some sort of improper conduct by my client in how their evidence was put together or they've had some duplicitous conduct or unfair conduct in relation to their involvement in these proceedings, and their involvement in the potential lack of limited involvement in the approval of the term enterprise agreements that the applicant was relying upon.
PN1735
A mere aside, Commissioner, what's important is that for the Commission in these proceedings to determine that Sea Swift engaged in what appear to be on the face of the agreements and on the basis of the evidence presented to the Commissioner in these proceedings is Toll agreements precisely the same area of work and precisely the same operations result, and I might add that similar operations with precisely the same activities under the Aboriginal manning agreement as well that would - a decision by the Commission as currently constituted would alter the settled, or what would appear to be the settled arrangements within the industry, and in effect give an unfair and a competitive advantage to Sea Swift over the potential and current competitors, through the mechanism of a decision which would be inconsistent with multiple previous decisions made by multiple previous members of the Commission, as to the proper application of the Seagoing Industry Award to do work similar or identical to that of Sea Swift. In particular in relation to the Toll agreements where clearly the Commission's attention was specifically drawn to or the Commission alerted itself to the issue of award coverage, and went to some particular and peculiar effort to ensure that the Seagoing Industry Award was applied as the appropriate comparator award for that area of work.
PN1736
The proposed Sea Swift agreement provides for a range of substantive entitlements, none of which apply to the - by the evidence of the applicant's witnesses, none of which apply to the senior managerial staff of the applicant that purport to be covered by the agreement. Minimum hourly rates of pay, ordinary hours of work, span or ordinary hours, roster arrangements, overtime arrangements, penalty payments for hours in excess of ordinary hours, the agreement does not directly provide for any particular let alone peculiar leave entitlements which instead the agreement provides that employees are entitled to, in accordance with the National Employment Standards, various types of leave; annual leave, personal carers leave, et cetera, the NES minimum. Then similarly, under the agreement are entitled to long service leave in accordance with relevant state or territory legislation, that is the agreement signposts these statutory entitlements.
PN1737
Again, there are no substantive entitlements under the agreements which apply to the senior managerial staff. He also refers to various policies which do not form part of the agreement so again can't apply to the senior staff. The evidence of the Sea Swift managers was that they weren't paid by reference to the classifications provided for in the current agreement, that the proposed agreement would replace these. They are not paid by reference to an hourly rate, nor paid by the overtime or other penalty payments that are mandated but paid by - mandated to be paid by the agreement notwithstanding the significant hours they work outside of the ordinary span of hours and the ordinary hours of work provided for and mandated by the agreement. They identified their arrangements were contained in contracts of employment, none identified that there was any IFA that had been entered into or varied any entitlements provided for in the agreement.
PN1738
Notwithstanding the submissions of my friend, it's not possible to simply to buy your way out of an agreement other than through the process of making an IFA, irrespective of the ultimate salary levels provided to the various senior staff members of the applicant. They are - if they were covered by the agreement, they would be entitled to overtime, penalty rates and application of the ordinary hours of work and span of work provisions by the agreement they cannot be contracted out of other than through an IFA. So either Sea Swift is contentiously breaching its own agreement by persistently failing to pay overtime and other entitlements, due to those senior managers under the agreement, or Sea Swift and those managers are aware and intended and continue to intend that the agreement does not and will not apply to them and it was made by them on that basis.
PN1739
Now in the absence of the agreement applying to them and because of a construction of the agreement which enabled them to be covered, that is by establishing rates or other entitlements that do actually apply to them, and the applicant having a corresponding intention to apply to that group of employees, if those employees purport to be covered by the agreement were provided a vote in relation to the approval of the proposed agreement, then the agreement has not been genuinely agreed to by those employees who are to be covered by the agreement.
PN1740
There's an issue I might raise there that's relevant to some matters that were raised by my friend and also I think relevant elsewhere in our submissions. Whether there's 1, 2, 10 or 50 senior managers who fall into that category, the issue is not how many of them they are, what the margin is between the yes and the no vote and whether or not their votes could have effect to the result. The issue is whether employees genuinely agreed. The time at which that test is to be applied is the time of a vote, that is before there is any results for any consideration were to be given to whether or not there's - whether or not the number of employees involved in that process could have affected the result, that's the decision of the Full Bench in C J Mansfield Pty Ltd which is relied upon by Asbury DP in the Central Queensland Services, a decision handed up to you earlier by my friend, paragraph 65 of that decision.
PN1741
If nevertheless the Commission determines that the agreement does cover all the employees at Sea Swift then the MUA and AMOU would submit that the employees to be covered by the agreement have not been fairly chosen. Under section 186(3), I may have misunderstood the submissions of my friend because as I understand section 186(3) it provides that the Commission must determine whether the group of employees to be covered has been fairly chosen. There's no exclusion from that section in relation to a proposed agreement that covers all of the employees.
PN1742
Section 186(3A) provides some particular test that the Commission must apply if the agreement doesn't apply to all employees. Nevertheless, 186(3) applies to all agreements including agreements which cover all - purport or proposed to cover all employees and an employer, and there are at least two decisions relating to that sort of coverage or that sort of potential coverage. I'll refer you to the Cimeco v CFMEU [2012] FWIFB 2206 for all of that issue and unfortunately a couple of other issues that I'm going to refer to, and I say unfortunately because it's the decision that's not in the pile that you have before you.
PN1743
THE COMMISSIONER: If I was to conclude, as you said the agreement covers everyone, how could an agreement that covers all employees be unfair - that group be unfair? Or do you have some authority that might tackle that issue that you can refer me to? A group where everyone was selected?
PN1744
MR QUINN: The matter was considered extensively in the United Firefighters which again I'm afraid is the other case I don't have in the file. United Firefighters Union of Australia versus ‑ ‑ ‑
PN1745
THE COMMISSIONER: That was the scope order issue, wasn't it?
PN1746
MR QUINN: It is, but the decision about fairly chosen was still or the issue of fairly chosen was considered at some length in that decision as to whether or not it would be fair for senior managers to be covered by the agreement. And so the issue is not whether or all per se, or the issue to be considered is not whether it's fair for all employees per se to be covered, the issue, in our submission, that it's not fairly chosen if senior managers have been included in the agreement because of their very different obligations, responsibilities and interests compared to the employees who work underneath them, and the company, the board that they report directly to, and their peculiar obligations to the company.
PN1747
The Sea Swift senior managers have operationally distinct roles or fundamentally different to the marine and shore-based operational employees, organisationally distinct, managerial functions. They have a high degree of control over those employees. They have control over matters which are at issue in the bargaining process, particular, for example, the inclusion of various policies that are applied by these senior managers that give them a certain degree of autonomy, flexibility and authority over employees and whether or not those documents can be and should be included within the agreement, and therefore limiting, when they're wearing their hat as a senior manager, limiting their authority and autonomy have a serious conflict in their role as managers compared to the interests of the employees who are to be subject to those policies applied by those senior managers.
PN1748
Nor is there inclusion in the agreement consistent with their fundamental obligations as senior managers, officers of the company, including the statutory and fiduciary obligations towards the company to act in the best interests of the organisation, and nor is it capable with their distinct financial interests as shareholders. They have entirely different working arrangements and remuneration arrangements, and they have as their primary focus the efficient and effective management of the operational resources including the staff, and the planning and implementation of business strategies and representing the company.
PN1749
But they are clearly separated from operational staff by the extent of those responsibilities. They are inherently organisationally distinct and their negotiation interests, if I can quote from United Firefighters:
PN1750
The negotiation interests as management employees would, on occasion, be very difficult to reconcile with those of operational employees generally, and in the context of bargaining and the equivalent of an enterprise agreement generally there can be no doubt that such a conflict of interest exits between management employees and those whom they manage.
PN1751
Now, the senior officers, in particular, Mr White, as a member of the board, have obligations to act in the best interests of the company of a fiduciary character and they stand in the shoes of the employee for many purposes including dispute prevention and resolution, negotiation and terms and conditions of employment. If I were to focus for a moment on Mr White he is sitting on one side of the bargaining table representing the company. He has a fiduciary obligation to advance the company's interest in performing that role, and he gives himself a vote on the agreement. It's impossible for him to wear those two hats. It's impossible for him to reconcile those interests. It's impossible for him to bring a fair and open mind as a mere employee of the company to his role in that process. He cannot perform that role and if he and his senior colleagues are unable to perform that role to wear that hat, as an employee, then they cannot have a vote in the agreement, and if they have been given the vote in the agreement which, on the evidence, they have, the agreement has not been genuinely agreed to by the employees who are going to be covered by the agreement.
PN1752
Because you don't have a copy of the decision in front of you I will just quote once more from United Firefighters.
PN1753
There is such potential for a conflict of interest to arise based on managerial responsibility if agreement coverage of operational employees extends into the senior management ranks.
PN1754
And it recognises the potential for such conflict to arise even at the lower levels of management but we have in mind conflicts of interest of a more substantial character arising at senior management levels. We have no doubt that conflict interest considerations may be relevant to the citing whether the group was fairly chosen.
PN1755
Now in the case in front of you, not only does that inherent conflict exit, but the evidence identifies that various senior managers, including those who are also shareholders in the agreement, have either misled the Commission or misled other bargaining representatives or misled employees in relation to the issues of representation in the bargaining process, confirming that in these circumstances, that potential has already become manifest.
PN1756
But in addition to those issues concerning genuine agreement, MUA and AMAU would further submit that the agreement has not been genuinely agreed to because of the level of intimidation directed towards employees in communications by Sea Swift Management concerning the approval process for the agreement. Not in contention that various forms of misleading conduct or intimidation can provide the basis for determining employees who have not genuinely agreed to an agreement without any doubt coercion or undue influence, would clearly be quote from Air Peninsula case that is in your pile at 24:
PN1757
Coercion or undue influence would clearly reasonable grounds for believing the agreement has not been genuinely agreed by employees as contemplated by 188(c).
PN1758
In the Central Queensland Services case that you have in front of you, Asbury DP reviewed a large number of decisions relating to the issue "generally agreed" and the variety of circumstances in which it might be found that employees have not been genuinely agreed. To summarise she identified the provision of:
PN1759
material or information which is misleading or intimidating, whether there was coercion, that is the freewill of employees in deciding whether or not to approve borne by intimidation or threat to dismiss or otherwise injure the employees in their employment or generally.
PN1760
Now, this is all at 65, 73 and 74 of that decision.
PN1761
Or the employees have been coerced, intimidated, misled or misinformed in relation to agreeing to the terms of an agreement.
PN1762
She confirmed that there was no requirement of the conduct of a person presently involved was intentional. The issue focused on the employees. A longstanding approach to the issue of coercion that appears in multiple of the cases is the formulation one element of the formulation by master of the roles of Romilly that:
PN1763
Coercion may take an infinite number of forms but the moment that a person who influences another person by threatening to take away something he then possesses or by preventing him from obtaining an advantage he would otherwise have obtained it then becomes coercion and it ceases to be persuasion.
PN1764
That's the line that's been crossed in these circumstances. And that quotation is from the Fair Work Ombudsman and Toyota Material Handling and it's also in your pile, but a statement of Lord Romilly that crops up in various places.
PN1765
Amongst the material you have also Picos and HealthEngine Proprietary Limited which reviews the issue of undue pressure which I won't go through, but essentially confirms that undue pressure is something that is less than coercion; it's something that must be excessive or disproportionate or unjustified.
PN1766
Now, the evidence in the matter before the Commission is that immediately prior to the vote taking place Sea Swift through Mr Wright informed bargaining representatives that if the agreement was not endorsed by employees Sea Swift would return to the bargaining table but potentially with a different package, and that it might have to make some tough decisions if the deal was not approved by ACCC.
PN1767
Now nobody cavils with the analysis undertaken by Asbury DP. Nobody cavils that. Nobody at this table, I imagine, cavils that. There is a certain amount of cut and thrust. There's a certain margin there that some allowance has to be made for in the toing and froing of bargaining. And the statements by Mr White to the bargaining representatives are perfectly reasonable and perfectly sensible within that sort of a framework. Some tough decisions and they'd return to the bargaining table but they won't come back with the same package.
PN1768
Inexplicably Mr White then turned around and on the eve of the vote informed employees that if the agreement was not approved it would put the very future of the organisation at risk and a heavily unionised Sea Swift will be the death warrant for the company. Mr White could not provide any reasonable answer to the question why he used such intimidatory language and overblown threats to employees compared to the language used when conversing with the bargaining representatives. Instead he made the incredible, incredulous assessment that his language was to employees was fair and reasonable.
PN1769
As to that issue of fair and reasonable his language was in direct response to what was an entirely innocuous vote no email sent by an individual employee and bargaining representative that contained no overblown, rhetoric or obvious untruths or colourful assertions or defamations of the character of any of the Sea Swift senior employees. It contains nothing that would establish that Mr White's email was merely a response in kind and thus the thrust to the cut.
PN1770
Secondly, his email sent a specific message to cadets that their positions were at risk, that is, the youngest and most junior employee whose positions were precarious because of the lack of an alternative cadet program anywhere in Australia. They were specially targeted and given special treatment by Mr White in his eve of the vote email.
PN1771
Indigenous employees working and living on the island communities were also specifically targeted. Targeted for a message to their communities that their communities were at immediate risk if the agreement was not approved. And the language directed at them, including those that the evidence from Sea Swift has identified, some of whom have limited written language skill, was of the most intimidatory, and I have to say, unjustifiable kind.
PN1772
Thirdly, not content to stop there, Mr White then his threatened to union members and employees contemplating joining the union telling them with an explicit threat of the adverse consequences that will follow, that will follow by the employees joining the union.
PN1773
Fourthly, as to the issue of proportionality, the evidence before the Commission, even the evidence given by Mr White in re-examination, is clear that Sea Swift faces various risks of (indistinct) but nothing, nothing at all would come immediately of a successful no vote. Instead Sea Swift would continue as it still continues in limbo as it awaits the ACCC decision. It would provide wage increases for employees covered by the agreement on 1 July. It would recommence negotiations most likely with a revamped package of proposals. Nothing would come from a no vote beyond a return to the bargaining table and that's precisely what he told the bargaining representatives. That's precisely what a sensible, reasonable, proportional and cut and thrust process would involve. But there was nothing measured or proportional or even accurate for that matter about the message from Mr White to employees that would explain it or justify it as anything other than an attempt to remove their effective free choice in determining whether or not to vote out the agreement.
PN1774
All that intimidation was then combined with a further message to the staff that they would lose their existing even time roster if they refused to vote out the agreement. Sea Swift haven't provided any evidence from Mr Russell and provided no excuse for that evidence. The Commission is entitled to presume on a Jones and Dunkel basis that his evidence wouldn't have assisted Sea Swift's case.
PN1775
What is evident from the transcript is that the threat was direct; it was repeated; there was no mere slip of the tongue; and correspondingly Mr Russell must have been provided with clear writing instructions to pass on that message to employees. And the Commission cannot but conclude that that threat came from the very top, and that it was not an idle threat. Mr White's email of 29 May confirmed the same intention, to take away an existing benefit if employees, or their representatives, had the temerity to exercise their workplace right to oppose the approval of the agreement. Again, the message was unequivocal that the benefit would be removed and it was unequivocal that the reason for taking that action would be the successful challenge, as it was first time around, that the reason for the action would be a no vote.
PN1776
In light of that second threat, and in the absence of any evidence concerning Mr Russell's conduct, the Commission has no alternative but to conclude that Mr Russell was informed of the intention to remove that benefit and directed to inform the employees of that threat. Once they'd been informed of that threat and the employees, meaning Mr Russell, then asked about the obvious result of that change in the roster and of that result being a necessity for a crew reduction, Mr Russell didn't attempt to provide any context or comfort or identify any alternatives or probabilities or that he'd asked for more advice or provide more information, just let the employees stew in their own juice and ponder the two proffered alternative: approve the new agreement or some of you are going to get a bullet.
PN1777
Now, what the transcript also identifies is that the threats had their intended effect and the employees were immediately concerned with their jobs and even about contemplating changing their position. The issue was raised by my friend of the capacity of the applicant to remove the even time roster or to alter the roster, if I can put it that way, under the 2009 agreement and therefore there cannot be any relevant threat in these circumstances. But a question before the Commission is not whether there's any legal entitlement to change the roster, the question to be addressed in these circumstances is whether the threat to remove was made for a coercive intent or whether the threat to remove was made for a prohibited intent. Whether or not there was a legal entitlement to do it is really irrelevant to that question.
PN1778
The issue is what was the intent of the making of that threat. And, as I say, on both Mr Russell and Mr White the evidence is clear that the sole trigger to remove the existing benefit of the four by four roster was the failure of the EBA to get up either by the vote or through the approval process. Mr White's evidence was clear that the four by four roster was introduced in the last quarter of 2014. It was introduced independently of anything to do with the enterprise agreement negotiation. It was a benefit that was being enjoyed by marine employees and had been enjoyed by them for some time, and they were threatened with the removal of that benefit immediately upon and because of a no vote, because of exercising their workplace right to reject the agreement.
PN1779
So the issue to be addressed by the Commission is not whether or not employees were coerced or were unduly influenced or the specific tests in relation to those concepts, the issue is whether the Commission can be satisfied that employees genuinely agreed to the agreement. The evidence before the Commission is that all employees were sent on the eve of the vote an intimidatory email from Mr White and at least some employees, and we don't know what number or proportion of marine employees had these meetings, were also given the message before the vote that they would lose their existing benefit, or an existing benefit if they had the temerity to vote against the agreement.
PN1780
On the face of that evidence the Commission cannot be satisfied that the employees genuinely agreed to the agreement. When that conduct is combined with the other conduct that's been relied upon in relation to not genuinely agree we say the Commission has no option but to reject the agreement. No evidence and no submissions have been made by the applicant in relation to the issue of the BOOT as it concerns the Seagoing Industry Award, and we take that effectively as an admission by the applicant that it does not meet the BOOT in relation to the award and we rely on our previous submissions in that regard in relation to the issue of measures taken in explaining the agreement for the applicant's indigenous employees. The evidence from the applicant was that marginally summarised we didn't do anything in 2009. Nobody complained. And we didn't do anything again in 2015.
PN1781
There's a positive obligation on the employer in relation to groups with special interests and a positive obligation upon the Commission to confirm that in relation to those groups the agreement was appropriately explained to them. The evidence from Sea Swift confirmed that no process was undertaken to identify whether there was any need to engage in any particular process in relation to those employees. In the absence of Sea Swift undertaking any such exercise, again, the Commission cannot be satisfied that it was properly explained in the manner required by the Act. In the absence of either some evidence of positive activity or evidence of some form of arrangement, investigation, process that would have addressed any potential deficiency, there is no basis, we say, upon which the Commission can be positively satisfied that those requirements of the Act have been met. For all of those reasons we refer to our submission that the application for the agreement to be approved should be dismissed, Commissioners, subject to any questions you may have.
PN1782
THE COMMISSIONER: Thank you, Mr Quinn. Right. Mr Herbert?
PN1783
MR HERBERT: Well, Commissioner, there's an awful lot of new material that we had no idea was coming. I am not in a position to answer everything that's been said this afternoon. Might I ask that we have the opportunity I've got a few things I can say now, but as to the balance of those matters, might we have the opportunity to put in a written submission so as not to detain the parties here any longer.
PN1784
THE COMMISSIONER: I'm content with that. How long do you want?
PN1785
MR HERBERT: Well, I was hoping I'd have the benefit of the transcript because there's been an awful lot, as I say, cases referred to that we haven't - there's no prior warning that we were to have of any of that. But I was hoping to have the benefit of the transcript and if that's not possible then - I don't know how long that takes.
PN1786
THE COMMISSIONER: Normally three or four days unless I order it urgently.
PN1787
MR HERBERT: But if we could have a fortnight that would be sufficient. There's some things I can deal with now but there are some other issues that we just need to undertake a little bit of checking.
PN1788
THE COMMISSIONER: Right. Well, what about Friday the 11th.
PN1789
MR HERBERT: Thank you. Mr Quinn?
PN1790
MR QUINN: A formality, Commissioner, of marking our submissions.
PN1791
THE COMMISSIONER: Yes, we'll mark the submission that was filed by the the closing submissions.
PN1792
MR QUINN: Yes, the two. Yes.
PN1793
THE COMMISSIONER: Yes.
PN1794
MR QUINN: We might mark the originals and the ‑ ‑ ‑
THE COMMISSIONER: We'll mark the original as 16.
EXHIBIT #16 ORIGINAL OUTLINE OF SUBMISSIONS OF MUA AND AMOU
THE COMMISSIONER: And we'll mark the closing submissions as 17.
EXHIBIT #17 CLOSING SUBMISSIONS OF MUA AND AMOU
PN1797
THE COMMISSIONER: Thanks, Mr Quinn. Mr Herbert?
PN1798
MR HERBERT: In relation to the submissions by the TWU, the reasons that we put earlier, the Boat Transport and Distribution Centres Award cannot apply in relation to shed hands or the general hands because there's no road transport business, and therefore all the submissions based on the application of that award can be disregarded, in my submission.
PN1799
And that applies in particular to what was said to be a general hand who might drive a truck occasionally. If the award doesn't apply to the shed hands, well then that provision about driving a truck occasionally has no application to them because the award doesn't apply. You can't cut in and cut out depending on whether they happen to be in a truck that day or not, it simply doesn't apply.
PN1800
But in relation to the other matters in relation to which it was said that there was a failure in respect of the BOOT test in relation to its Services Award, to the extent they haven't already been answered, and we need to examine carefully what was said or make sure, in the written submission that we put in, that we deal with any machinery issues in relation to that.
PN1801
In relation to the submissions on behalf of AIMPE, as I understood, the submission as to the operation of the BOOT test came down to a concept that so soon as one leaves the limits of a bay or a harbour or a river that's it. The question has been answered, and that is the vessel concerned must be covered by the Seagoing Industry Award, and it's the proceeding to sea that is arriving in territorial waters is the relevant point of discrimination, as I understood the submission. And I'd need to consider that in a bit more detail because it was a new submission.
PN1802
But the words which were not given any attention in either of the submissions, on behalf of any of the Maritime Unions are the words in the brackets in the definition in the Seagoing Industry Award, because it requires that the they qualify their words "proceed to sea" in such a way as to diminish what would otherwise be the extraordinary breadth of them. And quite literally to proceed to sea, as it was put, the sea is everywhere. As soon as you get out of the river you're in the sea according to the submissions put. Anyone who goes out of the river, in that sense, has proceeded to sea, and the Seagoing Award applies.
PN1803
Now, but the qualifying words in the brackets in the definition of proceeding to sea relate to voyages outside the limits of harbours, et cetera, et cetera. Now, the submission that we make about what was said is that the voyage has to be outside the limits of bays and harbours. There seemed to be an acceptance that a baseline where it closes off a bay or a harbour is a suitable point at which to determine that you have left the internal waters and you have gone to sea. And you go from internal waters to territorial waters and therefore you are, at that point, at sea. That voyage has to be outside the limits of bays and harbours, and yet the territorial baseline in which the substantial proportion of the substantial parts of the operations of the vessels in accordance with the annexure indeed to Mr O'Halloran's statement is that the operations of the vessels, not just the length of their journey from A to B, that the time during which they operate out of all of their operational hours, how many of those operational hours are conducted in internal waters. Those figures all point to a substantial majority of operational hours in internal waters in the case of those that are listed in the list, and in the case of the rest of those in Torres Strait, in respect of which there was no direct submissions put, the operational hours of those vessels are almost all conducted within view and scope of the various islands.
PN1804
Now, we certainly put the submission that around the Torres Islands isn't all internal waters, but it's all within and amongst parts of Australia scattered around by way of reefs and islands and other things in that area, and therefore was within all sorts of parts of the Australian coastline in the sense that there was, no matter where you looked, there was a part of Australia that was in one direction or another and all around in relation to the way that the islands are scattered. But we point out the combined effect of the two means that the voyages which are being conducted are not outside the limits of bays, harbours and rivers because the territorial baseline is the limit of the bays, harbours and rivers wherever it can be found, and it's either the limit of one bay, the coast Trinity Inlet or it's the limit of 20 bays, 30 bays up the Queensland Coast. And if you're inside that limit it doesn't matter whether you're inside Trinity Inlet or you're inside the territorial baseline halfway up Cape York, in either case you're in internal waters and therefore inside the coastline of Australia for relevant purposes.
PN1805
And there seemed to be a complete failure on the part of the submissions put to address the question as to whether a voyage which occurs, which commences by leaving internal waters and going in to territorial waters, and then returning to internal waters are a very significant part of it, whether that voyage, which spends a significant, if not a majority part of the distance, and definitely a majority of the time, is a voyage outside the limits of bays and harbours. If one accepts the territorial baseline, for example, as being the designated limit of all those bays and harbours up the coast, then that voyage is conducted in a very large part inside the limits of bays and harbours because that's the very purpose of the designation of a territorial baseline in the first place. So that that and a voyage which is conducted inside those areas, it doesn't matter if goes out for some period of the time, and comes back in, a voyage which is conducted inside the territorial waters for a very significant proportion thereof is not a voyage outside. It's a voyage inside, and therefore the Seagoing Award cannot apply.
PN1806
Now, in relation to the Ports and Harbours Award conversely it focuses on the location of operations. Where is the location of the operation, and the location of its operations when measured by the operational hours of the vessel in internal waters compared to the operation of hours of the vessel not in internal waters, or in the case of the Torres Strait in and amongst the islands which we say amounts to the same thing. Then the amount of time spent in those locations in operational hours is dramatically in favour of the idea that the operation of those vessels occurs at those locations when you add up the amount of operating time spent in those areas, so there is a clear distinction between the two.
PN1807
But the notion that, in effect, the core business of Sea Swift is to go to sea in the territorial waters because at various parts of various journeys they do so, is quite wrong. The core business of Sea Swift is to conduct its operations, as we've measured them, and we've measured all of the relevant vessels conducting these things, not just one or two, the core business of those vessels is to operate as is shown in attachment D to the statement of Mr O'Halloran. And that really disposes of the - and that is the characteristic of the principal aspects of its business and that of course is the relevant point of discrimination.
PN1808
Can I also deal with: the point was made, which wasn't made by the MUA witness yesterday, that despite the industry being described in the Seagoing Industry Award as including passenger vessels, which it does, it's described by reference to passenger vessels, the award itself makes no provision for classifications for passenger vessels within it, and on the face of it, it would appear that although curiously the description of the industry refers to passenger vessels that it then makes no provision for them within the award which is yet another strange aspect of these matters, and the point is made that that explains why it is that the Northern Territory and the Queensland SeaLink agreements can't be made under the Seagoing Industry Award because the Seagoing Industry Award has no provision for passenger vessels within it despite what the award coverage clause says. And ‑ ‑ ‑
PN1809
THE COMMISSIONER: Which of, if any, of Sea Swift's vessels would you describe as a passenger vessel?
PN1810
MR HERBERT: None. None. Not as such. However, the point made is not entirely true because vessels which arrive in Australia, under a temporary permit, there are a number of them which operate, are not constrained in that way. There is no constraint by reference to cargo vessels or anything else. But if the vessel in question is operating in Australia under a temporary permit under the Seagoing Industry Award, passenger vessels are covered by that award.
PN1811
Now, I can't say whether SeaLink has any vessels of that kind in its fleet operating under temporary permits, but we were not provided with any information about any of that. We took the award at face value. But the Seagoing Industry Award does cover passenger vessels if they're operating in Australia under temporary permits because it has a set of classifications which are not distinguished between passenger and any other vessels. So to that extent the coverage clause does have its full scope of operation in relation to vessels of that kind, and it's not correct to say, as Mr Keats did, that the Seagoing Industry Award does not apply to passenger vessels. It certainly does. So long as they're operating under a temporary permit. And temporary permits in Australia are a very common thing in relation to ships on the Australian coast.
PN1812
And can I also indicate, Commissioner, we got to the bottom of the question of the Sea Swift enterprise award. Sea Swift enterprise award was named by the Full Bench in the 2009 statement as being an award which was thought by the modern award team to have relevance to the stage 3 industries and occupations and it was named by reference to the list of maritime awards, the awards that were said to have reference to the maritime industry. It's the last award on that list, except it is characterised at the end of the maritime industry awards, it's characterised as private transport industry, but it's in the maritime award list, and immediately followed after maritime, and after that award it's followed by the meat industry awards, so although it was for some strange reason characterised as a private transport industry, the Sea Swift enterprise award was contained within the list of awards that was said to have relevance to the maritime industry, and that's to be found in the award modernisation statement of 30 January 2009 by the Full Bench as an attachment, and the award is named at page 52 of that attachment.
PN1813
However, for reasons which are not explained, and a lot of things weren't explained in this process, when the two awards in contention in these proceedings were made, the Sea Swift enterprise award, it wasn't mentioned in either of them in relation to the awards which are supposed to be it disappeared off the scene, it appears. But it's not named in the much later award audit that was done as to what awards were taken into account in making the two awards. It seemed to have fallen off the table all together in that respect, so the error that I made earlier was that in my reference to that award was by reference to the maritime industry awards mentioned in the original stage 3 award process. When the awards were later subsequently made it is not referenced in either of them. Strangely enough for awards like the Shipping Industry Award I mentioned in relation to both awards, there's not a lot of guidance as to what all that means in relation to the earlier modern awards.
PN1814
The Masters Mates and Engineers Award in Queensland which is the coastal shipping award is named in relation to the Ports and Harbours Award but it also seems a number of those awards seem to have crossed backwards and forwards. What use was made of them, how they were applied, et cetera, is not revealed. There's simply an audit of the awards that were said to have been more or less translated to those awards. But the Sea Swift award disappeared off the table in the middle of that process.
PN1815
Now, can I deal very briefly for present purposes with the question of the independence of bargaining representatives that was raised. We put the submission earlier that Mr O'Halloran was not a bargaining representative for the purpose of the Act or the regulations. And accordingly the regulations which talk about what a bargaining representative must be and what their obligations must be, et cetera, do not apply because he's not a bargaining representative because he was not, by his own evidence, he did not ever appoint himself, or was not appointed by anybody else in writing, and that is a requirement that must occur before a person can claim status and the obligations of a bargaining representative. He may have, in his own lay understanding, as one saw in the witness box, believed that he was. And Mr Erbacher might have also obviously thought that he was.
PN1816
The application was put to witnesses yesterday that the application that was filed as a sworn document is not. It's simply an application which is filled out which actually refers to a number of persons. It is evident from the evidence that you've heard in these proceedings that an error was made in relation to the technical standing of Mr O'Halloran, at least, because there he did not ever become a bargaining representative for the purposes of the Act and therefore the provisions of the Act relating to that do not apply to him.
PN1817
That said, all that is put against Mr O'Halloran is that he is both a manager and an employee in the company structure. The agreement applies to him and he went to some of the bargaining meetings and participated in the most low key fashion possible. And you've had read to you the contributions that he made in the discussions and they were next to nothing in the discussions. Similarly, there is the reference made to Mr Lee Fitch, who made contributions that were even less than Mr O'Halloran to those discussions in the enterprise bargaining.
PN1818
Now, what is said then is because they are aligned with management which nobody could suggest they weren't, that meant that somehow or other the entire well was poisoned by their mere existence. They somehow or other, they have rights much less than any other employee and they're not allowed to turn up and they're not allowed to participate in the negotiations about an EBA that affects all of their futures. They're not allowed to contribute in any way. Being in the room poisons the room and it's the agreement is poisoned fruit from a poisoned tree. One simply can't have an agreement that might be made after a process in which a manager was in the room having the faith and trust of some of his fellow employees to come along and make comments as they see fit which he hardly ever did and listen to what's going on and then report back to the people who trust him. There is no suggestion in any of that that there was anything untoward much less so wrong that it would poison the process. Nothing was put that could possibly reach that standard.
PN1819
There was no employee who was even suggested to have been influenced by the fact that somebody such as Mr O'Halloran, who's been there over 30 years, that everybody in the company must have known who he was and what he was, but the fact that he was there representing those persons or purporting to represent friends or colleagues and himself in that room, that somehow or other that caused the entire negotiation process to go off the rails. He was in there with 15 or 20 other people in the room. There were many unions and union representatives there. There were many people who weren't union representatives there. They were having a healthy, robust, around the table discussion about the whole question of enterprise bargaining and he happened to be in the room, and what's put to you is the fact that he and Mr Fitch were there means that the whole process just simply should be thrown in the bin, to what end I don't know, other than I suppose they would prefer the agreement be in the bin than out of the bin, but beyond that, there does not appear to be any purpose suggested to this.
PN1820
And there isn't the faintest suggestion that anybody changed their vote as a result of this. There isn't the faintest suggestion that Mr O'Halloran or Mr Fitch were in a position to so poison the minds of employees that they didn't know what they were doing and they voted for something that they didn't understand. Not an ounce of it anywhere, and you would require some evidence of that before you could act on these wild presumptions and inferences that are being put forward in the course of these proceedings.
PN1821
And there is the related submission that the fact that Mr O'Halloran, Mr White and Mr Fitch may have voted on the ballot, and that one could infer which way they voted because they had strong views about the matter, means that the entire ballot should be put asunder. The nearest, or the most recent decision in relation to that issue, and I wasn't conscious that I was going to need the decision here but it's the recent Thiess Brothers series of the most recent decisions in relation to the Thiess Brothers saga that's been going on for about three years in the Commission about their agreement in relation to which there was a group of, I think, 17 trainee managers who were allowed to vote in the ballot and the margin of the ballot was about 10 or 11, and the inference being if those 17 were taken out of the equation the result could have been different because if they presume they'd voted one way, then would alter the balance of the ballot.
PN1822
The figures in the form F17, at paragraph 2.10 of the Form F17, there were 283 votes cast, 169 in favour, which, by subtraction means there were 114 against which is a margin of 55 votes in this ballot. Even if Mr White, Mr O'Halloran and Mr Fitch all voted one way, and you excluded them from the ballot as being they shouldn't have voted because they're senior managers, for example, then the margin would be 52 instead of 55. And on the somewhat insulting inference that employees were so beguiled by Mr O'Halloran and Mr Fitch and Mr White, that they were somehow or other tricked into voting in a way differently than they otherwise would have voted, as I submitted earlier, you would require some evidence of that. It just appears to be beyond any reasonable assessment of the facts and circumstances, and it is also really quite wrong to suggest that someone such as Mr Fitch or Mr O'Halloran, who had an interest in the company, who wanted to be involved in the discussions and wanted to contribute what they could to the discussions, in so doing poison the process and that they should have stayed out of the room and left the negotiations to people who didn't really know all of the facts for example. And Mr O'Halloran would be a person certainly who could give them the facts if they wanted to to make sure that the negotiations didn't go off on the wrong factual premise.
PN1823
And that's on the basis, and the basis of what you've seen, Mr Fitch and Mr O'Halloran, that's all they contributed, was correcting what they saw to be an incorrect factual positions which is a good thing and not a bad thing. So on that sense there is simply no basis for saying that the involvement of those three persons, Mr White, Mr Fitch and Mr O'Halloran would have had any change, or any effect, other than beneficial on their bargaining process.
PN1824
Very much was said by Mr Quinn about this question of coercion and such other things. But I refer you, and the submission was actually put, as I heard it, that it doesn't really matter what the intent was in relation to the matter, it doesn't matter how they went, so long as people are affected by this thing, then that's really the end of the discussion. Could I refer you, you have the case before you, and it's Asbury DP's decision in the Services case. At paragraph 72 her Honour quotes the decision of Merkel J in the Seven Network Operations in the CEPU matter, and his Honour said, after summarising the relevant cases at the end of paragraph 72:
PN1825
The above cases establish there must be two elements to prove intent to coerce under section 130NVI. First it needs to be shown
PN1826
And again, this was in the context of the identical factual situation to what we have here.
PN1827
First it needs to be shown it was intended the pressure be exerted which, in a practical sense, will negate choice. Secondly, the exertion of the pressure must involve conduct that is unlawful, illegitimate or unconscionable.
PN1828
Her Honour then said:
PN1829
In that case Merkel J was considering a legislative provision that required "intent to coerce". I accept the proposition that a finding that employees have been coerced in a proven agreement requires more than persuasion or inducement. It may be a persuasion and inducement are usual in the process of bargaining or an approval of enterprise agreements. What is required to establish coercion is that the freewill of employees in deciding whether or not to approve an agreement is overborne by force, intimidation or a threat to dismiss or otherwise injure the employees in their employment or generally.
PN1830
Now, I'm also of the view, that when considering whether employees have been coerced, intimidated, misled or misinformed in relation to agreeing to the terms of the agreement there's no requirement for the conduct of the person or persons was intentional which is the point that Mr Quinn made, but it still must be unlawful, illegitimate or unconscionable, in my submission.
PN1831
So then what arises from all of that is to tell employees that the circumstances of the business are such that the business is going to have to make some hard decisions and is going to have to trim its sails as it were to a certain extent, and that the business, in its present form, will not be able to continue to exist in this way, if we can't get this agreement over the line, is not a threat to terminate anybody's employment, and worse Mr Quinn actually characterised Captain Russell's comments to one crew on one ship on one occasion as saying, in effect, "Vote yes or some of you will get the bullet."
PN1832
Commissioner, I took you through the transcript of what he said. An employee said, "Are we going to lose our jobs?" and he said, "I'm not going to comment about that. I have nothing to say about that." So the question about dismissals came from the employee not from him. And then later on it's said, "But you said that we're going to be terminated", and he said, "Not necessarily at all." So that he was obviously somebody who knew they had the tape-recorder on and was, it seems from the conversation, and were trying to get Captain Russell to say something along the lines of, you know, "People are going to be terminated", and he absolutely did not say that. Nothing he said could possibly be characterised as a threat. In fact, he dodged the question or denied it, either way. He certainly didn't assert it as a fact.
PN1833
And yet to hear the submissions that we heard from the MUA that he was there saying, you know, "Vote for this or you're all dead." He actually said, "I don't care how you vote. You can vote if you like, you can vote this thing down. If you don't like it, vote it down, matter for you. It's your life. I don't care frankly." And that's what he said. So this whole this more than rhetorical flourish all hyperbole the absolutely untrue submission that Captain Russell said anything that could conceivably be directed towards or constitute a threat that anybody was going to lose their job is just simply untrue.
PN1834
So that all of the coercion, all of the presence of Mr O'Halloran and others present and in the room when discussions were being had, the fact of whether or not they voted in relation to the matter, given the margin of the matter, in the I omitted to mention that it was the Full Bench decision I think that preceded the Federal Court matter and just if one is looking for the decision and I may be able to refer to it in my submissions in reply, in relation to the Thiess Brothers matter, in which it was taken as granted that the only reason why there was any concern about the question of these employees was because of the fact that their presence could have influenced the outcome of the vote, and that seemed to be a given throughout the course of this that affected that matter.
PN1835
Unless it could be shown in some way that the presence of three management employees in there who it is said shouldn't have been granted a vote, or said what we said about that, of course they should have been, it could not possibly have affected the outcome of the matter. And when one brings all of these arguments back to section 188(c) the extent to which any of these matters could possibly have been borne upon the question as to whether the employees genuinely agreed, in the absence of a shred of evidence to suggest that any employee was, or ever complained about, or ever suggested that their opinion or their position had been changed in some way, then all of those submissions must be given the weight they deserve which is approximately none.
PN1836
Finally, in this respect, can I say we were handed a copy of the MIDG decision by Roe C in relation to the question of bargaining representatives and what they can and shouldn't do, and whether that would bear upon the validity of the agreement. I invite you, Commissioner, to read the facts of that matter because you weren't taken to them, and upon me reading them quickly it became fairly clear why not. That was, as the title suggests, a very small retail outlet in relation to which there were the four to six employees and one person who purported to be a bargaining representative, who was, in fact, a manager who wasn't covered by the agreement, who then purported to make the agreement on behalf of the casual employees, although she was a manager and not covered by it, and then purported to sign it. And the implication being absent the intervention of that person, the employee is well, if you take that person out of the equation there didn't appear to be much evidence that any of the other employees had actually be given a proper opportunity to consider what was going on.
PN1837
Now, that suggestion, in the strongest possible terms, as appears from paragraph 25 of the decision, there are six employees to be covered by the agreement and five employees have cast a valid vote, but all five of them voted in support of the agreement. It states that the agreement does not cover managerial employees. The agreement is made between us and covers our employees, representatives other than management. It states there are six female and six casual employees, and four employees under the age of 21. One can only assume there are six employees to be covered by the agreement. This means there are six female casual employees of whom four are under the age of 21.
PN1838
The agreement itself is signed by Wendy Pendergast, as the employer and by Nicole Hart, as the employee representative. The roster shows that under the heading, "Managers", two names, Nicole and Bess, and under the heading of team members six and eight, depending on the roster, et cetera. This strongly suggests the employees who voted on it, who are covered by the agreement, do not include the management employee, Nicole, who signed the agreement as the employee representative and identified as such on a form F16 and F18. Really, it was four or six employees who looked as if they'd been overborne by a management employee who appointed herself as the representative, acted on their behalf, and signed the agreement on their behalf and wasn't covered by it, and obviously was a management representative. Totally, one would imagine, blew the bargaining process out of the water without any doubt whatsoever, facts which bear absolutely no resemblance whatsoever to the circumstances of this case.
PN1839
And I've been speculating all along as to how it is the unions say the existence of Mr O'Halloran and Mr Fitch and Mr White, as representing the employer in the room, could have poisoned the bargaining process. Well, it doesn't and it can't unless you've got a situation which is obvious and as blatant as that where the whole bargaining process was completely hijacked by a management representative who took it over and took everybody with them, and in the case of 300-odd employees at Sea Swift, where 283 of them cast a vote, and 169 of them voted in favour, Mr O'Halloran and Mr Fitch must have a mighty reach to be able to drag all them along with them, in the circumstances, and by dishonestly misrepresenting things in relation to everything else that had gone before.
PN1840
So, on that basis, in my submission, Commissioner, there is no basis whatsoever for the Commission to concern itself with the validity of the agreement or as to whether the agreement was genuinely made. All those grounds as has been put before are really an ex post facto confection and are not matters which could possibly be genuinely thought to have anything do with the way in which the employees considered this matter.
PN1841
But in relation to the other substantive matter, and that is the BOOT test issues that have been raised, and the NES issues that were raised by the TWU which I think we've answered but we need to check the detail of each of them, so that we can present the Commission with a final list of the undertakings that we believe might be necessary in relation to the awards that we say apply, and some of the details of the submissions put by Mr Keats by reference to some of the legislation and other things that he's produced here today for the first time, we would like that opportunity to put in a written submission.
PN1842
THE COMMISSIONER: All right. Well, look, as I said, I'm happy for you to have till 11 September to get a written reply in on those things. I think we're just going to make it, I think, my Associate is telling me that security are getting interested in how much longer we're going to be in the room. So is there anything else that anyone wants to raise?
PN1843
MR KEATS: I just might raise something.
PN1844
THE COMMISSIONER: Yes.
PN1845
MR KEATS: I'm just conscious that, in this written statement in reply or submissions in reply, they might raise something that hasn't been thought of before in these proceedings, and that I might just flag that I might apply for leave to put on something in response.
PN1846
THE COMMISSIONER: Sure. All right, Mr Keats. Well, look, Mr Herbert, I guess you're alive to the fact that there might be an application like that if you do stray into something new, but I expect that you'd be proposing not to do that.
PN1847
MR HERBERT: No, I'm not proposing to do anything new, I'm proposing to answer something that's been brought in here for the first time today.
PN1848
THE COMMISSIONER: All right. Thanks, everyone. That being the case I'll adjourn the matter and wait for those written submissions. All right.
ADJOURNED INDEFINITELY [5.24 PM]
LIST OF WITNESSES, EXHIBITS AND MFIs
EXHIBIT #12 OUTLINE OF SUBMISSIONS FOR THE APPLICANT.... PN1122
EXHIBIT #13 OUTLINE OF SUBMISSIONS FOR TWU............................ PN1641
EXHIBIT #14 OUTLINE OF SUBMISSIONS FOR AIMPE........................ PN1642
EXHIBIT #15 LIST OF AWARDS FROM THE AWARD MODERNISATION PROGRAM............................................................................................................................... PN1642
EXHIBIT #16 ORIGINAL OUTLINE OF SUBMISSIONS OF MUA AND AMOU PN1795
EXHIBIT #17 CLOSING SUBMISSIONS OF MUA AND AMOU.............. PN1796
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