Australian Maritime Officers' Union v Remick Pty Ltd t/a Pro Dive Cairns [2020] FWCFB 4856 (7 October 2020)

[2020] FWCFB 4856

Fair Work Act 2009

s.604 - Appeal of decisions

Construction, Forestry, Maritime, Mining and Energy Union

Appeals against decision [2020] FWCA 2441 of Deputy President Lake at Brisbane on 1 June 2020 in matter number AG2020/699.

[1] The Australian Maritime Officers' Union (AMOU) and the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) (collectively the Appellants) have each lodged an appeal, for which permission to appeal is required, against a decision issued by Deputy President Lake on 1 June 2020[1] (decision) in which he approved the Pro Dive Cairns Enterprise Agreement 2020 (Agreement). The Appellants contend that the decision was made in error on various grounds. The appeals were heard together on the basis that they relate to the same decision, notwithstanding that they were advanced on different grounds.

[2] The appeals were originally allocated to a Full Bench consisting of Vice President Hatcher, Deputy President Asbury and Deputy President Kovacic, and were the subject of a hearing on 24 July 2020. Sadly, on 31 July 2020, Deputy President Kovacic passed away. On 12 August 2020, the President of the Commission, Justice Ross, reconstituted the bench to consist of Vice President Hatcher, Deputy President Asbury and Deputy President Dean. The parties were informed of this the same day, and advised that Deputy President Dean would read the submissions and other materials filed by the parties and would join in the decision-making process of the reconstituted Full Bench on that basis. The parties were given an opportunity to object to this course, but no communication of any objection was received, and accordingly the matter has been determined on the basis described.

[3] The AMOU's appeal relates to the application of the better off overall test (BOOT). The AMOU contends that the Deputy President's designation of the relevant modern award for the purposes of the application of the BOOT with respect to employees classified under the Agreement as Masters was erroneous. In summary, the Deputy President determined that the Professional Diving Industry (Recreational) Award 2010 was the relevant modern award for the purposes of the application of the BOOT to Masters. The AMOU contends that the relevant modern award which applied as at the "test time" for the application of the BOOT is the Marine Tourism and Charter Vessels Award 2010.[2]

[4] It is a requirement for approval of an enterprise agreement under of the (FW Act) that, subject to the operation of and , the Commission must be satisfied that the Agreement passes the BOOT. The content of the BOOT in respect of a non-greenfields agreement is provided for in as follows:

When a non-greenfields agreement passes the better off overall test

(1) An enterprise agreement that is not a greenfields agreement passes the better off overall test under this section if the FWC is satisfied, as at the test time, that each award covered employee, and each prospective award covered employee, for the agreement would be better off overall if the agreement applied to the employee than if the relevant modern award applied to the employee.

[5] Under s 193(1), a comparison is required to be made between the enterprise agreement in question and the "relevant modern award" in respect of "award covered employees" and "prospective award covered employees" in order to determine if the BOOT is passed. The definition of the expression "award covered employee" in s 193(4) makes it apparent that a "relevant modern award" is one that at "test time" is in operation, covers the employee in relation to the work they are required to perform under the agreement, and covers their employer. An equivalent definition is contained in the definition of "prospective award covered employee" in s 193(5). The "test time" is, under s 193(6), the time the application for approval of the agreement is made. It is therefore necessary for the relevant modern award(s) to be identified in order to correctly assess whether an agreement passes the BOOT.

[6] The CFMMEU contends in its grounds of appeal that the Deputy President mistook the case it conducted and erroneously dismissed its objections to the approval of the Agreement, thereby denying the CFMMEU natural justice by failing to consider the case that was actually presented to him by the CFMMEU. Essentially that case concerned whether the rates in the Agreement for employees classified as Dive Instructors, Course Instructors, Dive Supervisors and Cooks, were sufficient for the Agreement to pass the BOOT given the hours worked by employees in those classifications. The CFMMEU asserts that the Deputy President proceeded on the assumption that its objection was the same as that advanced by the AMOU, and that the CFMMEU did not advance a case in relation to Masters.

[7] Remick Pty Ltd t/a Pro Dive Cairns (Remick) is the employer bound by the Agreement. Remick made the application for approval of the Agreement on 13 March 2020. The Form F17 statutory declaration which accompanied the application for approval of the Agreement identified (at paragraph 3.1) two awards as being the modern awards that cover employees for the purposes of the BOOT: the Professional Diving Industry (Recreational) Award 2010 (the Diving Award) and the Amusement, Events and Recreation Award 2010 (the Amusement Award). In response to the question posed in 3.2 of the Form F17 Remick provided a table indicating that the classifications in the Agreement for "Divers, Skippers (Masters) and Boat-based cooks", corresponded with a number of classifications in the Diving Award. In relation to Ancillary staff designated as "Retail Shop and Reservations" Remick declared that the Amusement Award covered these employees. Remick made no reference to the Marine Tourism and Charter Vessels Award 2010 (the Marine Tourism Award).

[8] On 23 March 2020, the AMOU filed a Form F18 Statutory declaration of employee organisation in relation to an application for approval of an enterprise agreement stating that the AMOU was a bargaining representative for the Agreement and that it did not support approval of the Agreement on the grounds that:

• the daily rate did not compensate employees for hours worked causing the Agreement to fail the BOOT; and

• the reference instrument for Masters for the purposes of the BOOT should be the Marine Tourism Award.

[9] On 20 March 2020, the CFMMEU filed a Form F18 asserting that the rates in the Agreement were not sufficient to compensate employees for the hours worked, proposing undertakings be requested by the Commission to address this matter and raising issues with various statements in the Employer's declaration including: whether the Agreement was more beneficial than the Award; whether matters said to be additional benefits for employees were in fact benefits; and whether the rates were sufficient to properly compensate Dive Instructors, Course Instructors, Dive Supervisors and Cooks for the hours they were actually required to work.

[16] The Deputy President set out at [5] his understanding of the CFMMEU's issues as follows:

"[5] The initial matter raised by the CFMMEU was that there had been a recent bargaining dispute between the parties that had been determined by Asbury DP in Australian Maritime Officers' Union, The v Remick Pty Ltd T/A Pro Dive Cairns [2020] FWC 431 which called into question in their minds possible compliance with the BOOT test. This was further complicated by a lack of clarity, suggested by the CFMMEU, of the relevant Award applicable to employees."

[17] At [8] the Deputy President stated his conclusion that the Company had taken all reasonable steps to explain the terms of the Agreement and their effect and that the Company had complied with s 180(5) and s 188 of the FW Act.

[18] Under the heading of "Relevant Award and BOOT" the Deputy President considered the award issue, observing at paragraph [9] that Remick had submitted that the relevant "award" was the Diving Award and the Amusement Award. The Deputy President went on to note that this was contested by the CFMMEU and the AMOU as it related to Masters of the vessel and that "they" contended that Masters should be considered under the Marine Tourism Award.

[19] After setting out the submissions advanced by Remick, the Deputy President concluded as follows in relation to the award issue:

"[24] I have considered the parties' submissions as to the appropriate Award and reject the AMOU and CFMMEU's argument that the Marine Award is the most appropriate. While I consider the Applicant's submissions that the Master of the vessel must have a Dive Master Qualification cannot be substantiated, and this is a persuasive factor in terms of the applicable Award, I consider the other arguments raised by the Applicant outweigh this point. The employer is clearly in the business of providing services to recreational divers, both on the water and in pool-based activities. The passengers aboard do not direct where the vessels go or what they do.

[25] The arguments put forward by the applicant persuade me that the relevant Awards for the Boot test for all employees should be the Diving Award and the Amusements Award."

[20] In relation to the BOOT issues raised by both the AMOU and the CFMMEU the Deputy President noted that Remick had adopted a "determination of the definition of work and have instructed employees accordingly and proffered a roster that supports their assertion" and went on to endorse a statement in the earlier dispute matter to the effect that the BOOT is applied by comparing the payment employees would receive for working particular hours under the agreement and payment for the same hours under the relevant award (at paragraph [27]). The Deputy President went on in the decision to conclude at paragraph [28] that given his determination that the relevant award was the Diving Award, the objections raised by the AMOU and the CFMMEU in relation to hours and payment did not arise. This was said to be because the CFMMEU and the AMOU make comparisons to other awards that "are not the reference instrument."[4]

[21] After stating these conclusions, the Deputy President said, at paragraph [29] of his decision, that he considered the undertakings provided by Remick addressed those concerns. The Deputy President then set out at some length Full Bench decisions in Retail and Fast Food Workers Union Incorporated v Hungry Jack's Australia Pty Ltd t/a Hungry Jack's[5] and Australian Nursing and Midwifery Federation v Armest Pty Ltd[6] emphasising that where an employee organisation had given a detailed exposition in a Form F18 in relation to why it said an agreement did not pass the BOOT, it is necessary for members of the Commission to give reasons which at least acknowledge the objection and briefly identify the basis upon which it has been rejected. The Deputy President went on to state that:

"[30] In line with Armest, I have had consideration of the submissions of the CFMMEU and AMOU and have determined for the reasons outlined in this decision that it is appropriate to reject them. I am persuaded that the Agreement is capable of approval subject to the undertakings provided by the Applicant."

[22] The Deputy President went on to identify provisions likely to be inconsistent with the NES but which he found were subject to a clause in the Agreement that ensured that the NES would prevail to the extent that a greater benefit was provided. Further, the Deputy President found that the undertakings provided by Remick had addressed any BOOT or other issues. In this regard, the undertakings accepted by the Deputy President related to the term of the Agreement stating its period of operation, the application of the dispute settlement procedure in the Agreement to disputes arising in relation to the NES, a prohibition on part-time and casual employees being employed to work Sundays in isolation, and clause 6.4.5 which purported to allow an employee to agree to work in a lower paid job from time to time and be paid the lower rate and which would not be applied by Remick.

[23] The appeal grounds advanced by the AMOU are:

1. The Deputy President erred in finding that, in respect of persons employed as Masters, the appropriate reference instrument is the Diving Award because they are not covered by that industrial instrument.

2. The Deputy President erred in finding that, in respect of persons employed as Masters, the appropriate reference instrument is the Amusement Award because they are not covered by that industrial instrument.

3. The Deputy President erred in failing to find that, in respect of persons employed as Masters, the appropriate reference instrument is the Marine Tourism Award because they are covered by that industrial instrument.

4. In making these decisions, the Deputy President referred only to the first limb of the coverage clause of each Award, where it says the employee is covered by the award classification which is most appropriate to the environment in which the employee normally performs the work. In doing so, he ignored the second limb of the coverage clause where it says the award classification which is most appropriate to the work performed by the employee.

[24] In relation to permission to appeal, the AMOU raises various grounds including that failure to correct the decision will erode confidence in the Commission. In its submissions in the appeal, the AMOU contended that the Deputy President focused on the aspect of the coverage related to the environment in which the work is performed, without considering the classification of the employee most appropriate to the work being performed. The AMOU maintained that the Agreement would not pass the BOOT if it was considered with reference to the Marine Tourism Award, and that regardless, the Agreement should have been tested against that Award.

[25] The grounds of appeal advanced by the CFMMEU are that in determining the CFMMEU case on the basis that it was arguing that the Marine Tourism and Charter Vessels Award 2010 was the appropriate award for the purposes of s 193, the Deputy President:

[28] We consider that permission to appeal should be granted in both the AMOU and the CFMMEU appeals. For the reasons which follow, the decision is attended by sufficient doubt to warrant its reconsideration on issues raised in both appeals which affected the Commission's power to approve the Agreement. The question of the coverage of the Diving Award and the Marine Tourism Award and the interaction between those awards has broader consequences for enterprise bargaining in those industries generally. Further, the proper application of the BOOT is a matter of general significance as is the requirement that cases advanced by organisations of employees who are bargaining representatives for an agreement, in relation to whether the agreement should be approved, are properly considered.

[29] We turn first to consider the AMOU appeal in relation to Award coverage. As we have previously noted it is necessary for the relevant modern award(s) to be identified in order for the Commission to correctly assess whether an agreement passes the BOOT. By virtue of s 48 of the FW Act, a modern award covers an employee or employer if it is expressed to do so and a reference to a modern award covering an employee is a reference to the award covering the employee in relation to particular employment. The appropriate test for determining award coverage is the principal purpose test, which requires assessment of the principal purpose or primary function for which the employee was employed.[7]

[30] In interpreting an award provision, the words of the relevant clause are to be given their ordinary meaning.[8] Award history and subject matter may be considered to resolve any ambiguity.[9] In the context of considering whether a modern award covers a person, the test has been stated as: to discern the objective meaning of the words bearing in mind the context in which they appear and the purpose they are intended to serve.[10] Modern awards generally fall into three categories:

1. awards that cover an industry or industries;

2. awards that cover an occupation or occupations; and

3. hybrid awards that have both an industry coverage and also an occupational coverage.[11]

[31] In the present case, by virtue of clause 1.2, the Agreement covers "Parties bound" who are:

• (a) Remick Ltd T/A Pro Dive Cairns (the Employer); and

• (b) Employees of the Employer for whom classifications exist in the Agreement.

[32] Clause 4.1.1 of the Agreement provides that employees will be classified in accordance with the structure in Appendix A. Clause 4.1.2 provides as follows:

4.1.2 Notwithstanding a dive employee's classification, he or she may be required to carry out the duties of deckhands, cooks or masters in addition to instructing and supervising operations, shop work, interviewing prospective clients and undefined duties as reasonably required by the Employer.

[33] In relation to Boat Based Employees, Schedule A provides the following classifications, definitions and pay rates:

• All Pre requisite qualification requirements of Dive Instructor plus:

• Must complete Coxswain/Master V Task book within 6 months of appointment

• Elements of Shipboard safety, equivalent or Higher certificate

[34] The Diving Award, which the Deputy President determined was the relevant modern award for the application of the BOOT for Masters, provides as follows in respect of coverage:

4.1 This industry award covers employers throughout Australia engaged in the provision of underwater services for the purposes of recreational diving and related shipboard services and their employees in the classifications in clause 14 - Minimum wages to the exclusion of any other modern award.

4.2 In this clause Australia includes all such areas as fall within the territorial jurisdiction of the Commonwealth or of a State.

4.3 The award does not cover employers and employees covered by the classifications listed in the Professional Diving Industry (Industrial) Award 2010.

4.4 The award does not cover an employee excluded from award coverage by the Act.

4.5 The award does not cover employees who are covered by a modern enterprise award, or an enterprise instrument (within the meaning of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth)), or employers in relation to those employees.

4.6 The award does not cover employees who are covered by a State reference public sector modern award, or a State reference public sector transitional award (within the meaning of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth)), or employers in relation to those employees.

4.7 This award covers any employer which supplies labour on an on-hire basis in the industry set out in clause 4.1 in respect of on-hire employees in classifications covered by this award, and those on-hire employees, while engaged in the performance of work for a business in that industry. This subclause operates subject to the exclusions from coverage in this award.

4.8 Where an employer is covered by more than one award, an employee of that employer is covered by the award classification which is most appropriate to the work performed by the employee and to the environment in which the employee normally performs the work.

NOTE: Where there is no classification for a particular employee in this award it is possible that the employer and that employee are covered by an award with occupational coverage.

[35] Clause 13, Classifications of the Diving Award provides as follows:

13.1 Employees may be required to carry out the duties of deckhands, cooks or skippers, in addition to instructing and supervising diving operations, shopwork, interviewing prospective clients and other undefined duties.

13.2 Dive instructor means an employee trained to train other divers in accordance with AS 4005.2, .3, .4: 2000 and in keeping with the provisions of the operational standard AS/NZS 2299.3:2003.

13.3 Dive master means an employee trained to the level required of AS 4005.2, .3, .4: 2000 and in keeping with the provisions of the operational standard AS/NZS 2299.3:2003.

[36] Clause 14 of the Diving Award prescribes wage rates for the classifications of Dive Master and Dive Instructor.

[37] The coverage of the Marine Tourism Award is as follows:

4.1 This industry award covers employers throughout Australia in the Marine Tourism and Charter Vessels Industry and their employees in the classifications listed in clause 13 - Minimum wages to the exclusion of any other modern award.

4.2 The award does not cover an employee excluded from award coverage by the Act.

4.3 The award does not cover employees who are covered by a modern enterprise award, or an enterprise instrument (within the meaning of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth)), or employers in relation to those employees.

4.4 The award does not cover employees who are covered by a State reference public sector modern award, or a State reference public sector transitional award (within the meaning of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth)), or employers in relation to those employees.

4.5 This award covers any employer which supplies labour on an on-hire basis in the industry set out in clause 4.1 in respect of on-hire employees in classifications covered by this award, and those on-hire employees, while engaged in the performance of work for a business in that industry. This subclause operates subject to the exclusions from coverage in this award.

4.6 This award covers employers which provide group training services for trainees engaged in the industry and/or parts of industry set out at clause 4.1 and those trainees engaged by a group training service hosted by a company to perform work at a location where the activities described herein are being performed. This subclause operates subject to the exclusions from coverage in this award.

4.7 Where an employer is covered by more than one award, an employee of that employer is covered by the award classification which is most appropriate to the work performed by the employee and to the environment in which the employee normally performs the work.

NOTE: Where there is no classification for a particular employee in this award it is possible that the employer and that employee are covered by an award with occupational coverage.

[38] "Master" is defined in clause 3 of the Marine Tourism Award as an appropriately qualified person appointed in command of a vessel. The classification definitions relevant to Masters are found in Schedule B as follows:

• navigate a vessel of class V status;
• ensure the safe operation of the vessel;
• supervise the crew and entertain passengers; and
• perform routine and preventative maintenance as required.

• Navigate a vessel of class IV status;
• ensure the safe operation of the vessel;
• supervise the crew and entertain passengers; and
• perform routine and preventative maintenance as required.

[39] The Diving Award is a hybrid award having both an industry-based and an occupation coverage. The coverage clause of the Diving Award has two limbs. Firstly, the employer must be engaged in the recreational diving industry. Secondly, to be covered by the Diving Award an employee of such an employer must be in a classification listed in clause 13 of the Award. There are only two classifications - Dive Master and Dive Instructor. It is axiomatic that before clause 4.1 of the Diving Award operates to exclude employees from the coverage of any other modern award, the relevant employees must be employed in a classification listed in clause 13 of the Diving Award in order to be covered by that award in the first place.

[40] There is no classification for Masters in clause 13 of the Diving Award. It is true that clause 13.1 of the Diving Award provides that employees may be required to carry out a range of duties, including the duties of skippers. However, that provision can only operate with respect to employees whose principal purpose or primary function is that of Dive master or Dive instructor and thus may be classified as such so as to fall within the coverage of the Diving Award. It can have no operation with respect to employees who are not employed in one or other of those classifications and as a result are not covered by the Diving Award. We reject the submissions of Remick to the contrary.

[41] It is clear from the terms of the Agreement that employees classified as Masters are required to have a Master V qualification. The fact that Dive master qualifications are also listed in the Agreement does not alter the fact that persons employed in that classification are principally engaged as Masters. This is further emphasised by the job description for Masters which was before the Deputy President at first instance which emphasises that Masters are the agent of the owner of the vessel whilst at sea and have responsibility for the safety of the vessel, crew and passengers. It is also apparent that the Deputy President found that Remick's submissions to the effect that Masters are required to have a Dive master qualification, could not be substantiated. This conclusion was correct and should have led to the further conclusion that Masters are not covered by the .

[44] We now consider the CFMMEU appeal. The CFMMEU submits, and we accept, that it did not at any time raise any issue with respect to the application of the Diving Award to its members. It is apparent that the Deputy President erroneously dealt with the CFMMEU's submission by treating it as being identical to the submission advanced by the AMOU. As a result, the Deputy President purported to determine the issues raised by the CFMMEU in relation to the approval of the Agreement based on a submission that the CFMMEU did not make. This in our view, amounted to a denial of procedural fairness.

[45] Despite setting out the principles stated in Armest concerning the requirement to give reasons for not accepting matters raised by a relevant organisation of employees in a Form F18 declaration, the Deputy President did not apply those principles with respect to the matters raised by the CFMMEU. In this regard, the Deputy President did not engage with the arguments of the CFMMEU in relation to whether the wage rates in the Agreement were sufficient for the Agreement to pass the BOOT having regard to the basis of the work being performed by the employees concerned.

[46] While the CFMMEU did not specifically identify the award it was referring to in its commentary in the Form F18, the CFMMEU identified issues in relation to whether the Agreement passed the BOOT by reference to classifications which are found in the Diving Award. The matters raised by the CFMMEU in its Form F18 went to terms and conditions for Dive Instructors, Course Instructors, Dive Supervisors and Cooks - classifications with award coverage that was not in dispute - and suggested undertakings which would address its concerns with respect to those employees. It was no answer to those submissions to determine that the Diving Award applied rather than the Marine Tourism Award. The Deputy President's conclusion in this regard was in error both because it did not engage with the CFMMEU's submissions and because no reasons were given in his decision that at least acknowledged the CFMMEU's objection and briefly identified the basis upon which it had been rejected.

[47] We consider that the Deputy President erred in finding that the Marine Tourism Award did not cover employees classified as Masters under the Agreement and in not assessing satisfaction of the BOOT approval requirement by reference to the Marine Tourism Award in respect of Masters. Although there is some lack of clarity, we do not consider that the Deputy President found that the Amusement Award applied to Masters. For the avoidance of doubt, the Amusement Award does not apply to Masters, and we express a provisional view that it may not have application to the operations of Remick at all.

[48] We further consider that the Deputy President erred by denying the CFMMEU procedural fairness because he reached conclusions based on submissions the CFMMEU did not make. Further, the Deputy President did not engage with the submissions of the CFMMEU and did not give reasons for rejecting those submissions.

[49] It is therefore necessary to quash the Decision and remit for re-determination the application for approval of the Agreement. We consider the appropriate course in the circumstances is to remit the matter to a member of this Full Bench.

[50] We order as follows:

(1) Permission to appeal in both matters is granted.

(3) The Decision ( [2020] FWCA 2441) is quashed.

(4) The application for approval of the Pro Dive Cairns Enterprise Agreement 2020 (AG2020/699) is remitted to Deputy President Asbury for re-determination in accordance with the above reasons for decision.

Mr J Ludwig of counsel with Mr B Cooper on behalf of Remick.

[1] [2020] FWCA 2441

[2] Since the decision was issued, the 2010 version of the awards referred to in this decision have been replaced by 2020 version of those awards. All references in this decision will be to the 2010 version of the awards, since these were the versions in effect at the test time for the application of the BOOT. However, the coverage of the 2020 version of each of the awards is the same as the 2010 version.

[3] AMOU v Remick Pty Ltd [2020] FWC 431

[4] [2020] FWCA 2441 at [28]

[5] [2020] FWCFB 1693

[6] [2020] FWCFB 2045

[7] Layton v North Goonyella Coal Mines Pty Ltd [2007] AIRCFB 713, 166 IR 394 at [25]

[8] The Clothing Trades Award [1950] CthArbRp 524; (1950) 68 CAR 597; cited in City of Wanneroo v Holmes [1989] FCA 369, 30 IR 362 at [43]

[9] Pickard v John Heine & Son Ltd [1924] HCA 38, 35 CLR 1, 9; cited in City of Wanneroo v Holmes [1989] FCA 369, 30 IR 362 at [43]

[10] Transport Workers' Union of Australia v Coles Supermarkets Pty Ltd [2014] FCAFC 148, 245 IR 449 at [22]

[11] Halasagi v George Weston Foods Limited [2010] FWA 6503 at [5]

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