s.739 - Application to deal with a dispute

Construction, Forestry and Maritime Employees Union

Application under s 739 of the Act - Dispute about whether selection process for compulsory redundancy is "procedurally fair and equitable"

• [1] On 10 July 2025, the Construction, Forestry and Maritime Employees Union - Maritime Union of Australia Division (MUA) applied for the Fair Work Commission to deal with a dispute under s 739 of the Fair Work Act 2009 (Cth) and in accordance with Schedule 1 - Dispute Resolution Procedure in the MIRRAT Enterprise Agreement 2022.

• [2] The respondent/employer is Australian Amalgamated Terminals Pty Limited (AAT). AAT operates the automotive, roll-on/roll-off terminal at Webb Dock West in Melbourne.

• [3] The agreement is the MIRRAT Enterprise Agreement 2022. It was approved on 22 February 2022 and began to operate on 1 March 2022. The Agreement's nominal expiry date is 30 December 2025.

• [4] The clauses of the Agreement that are relevant to this dispute are:
  • Schedule 1 - Dispute Resolution Procedure
  • Clause 10 - Consultation about Change
  • Clause 16 - Redundancy Arrangements

• [5] In May 2025, Qube Holdings Limited acquired AAT, which had previously been known as MIRRAT. In June 2025, AAT announced a restructure that would affect the size of the workforce and started a consultation process under clause 10.2 of the Agreement. Initially AAT decided that 12 roles would be redundant. Six of the roles, being Yard Operatives, were performed by employees covered by the Agreement. Following a dispute with MUA, the number of roles to be removed was reduced from 6 to 4.

• [6] Two employees volunteered for redundancy. AAT continued to want to remove a further 2 Yard Operative roles and began a process to select 2 employees for redundancy.

• [7] Clause 16 of the Agreement deals with "Redundancy Arrangements." Relevantly, clauses 16.6 and 16.7 provide:

16.6 If the redundancies cannot be achieved through volunteers, the Company will move to compulsory redundancies.

16.7 Employees will be selected for compulsory redundancy based on a procedurally fair and equitable process. [the rest of clause 16.7 is not relevant to this dispute and deals with when the Company will not be liable to make a redundancy payment]

• [8] The dispute concerns the selection criteria that AAT proposes to use to select 2 employees for redundancy. MUA say that the proposed selection criteria is "not procedurally fair and equitable."

• [9] I set out the reasons for my answers to the agreed questions for determination in detail below; I answer the questions as follows:

Is the respondent's proposed selection process for compulsory redundancy, including the selection framework, a procedurally fair and equitable process as required by Clause 16.7 of the Agreement?

If the answer to the above question is no, what are changes to the proposed selection process, including to the selection framework's criteria and weightings, and any other changes to ensure a procedurally fair and equitable process as required by Clause 16.7 of the Agreement?

• [10] I conducted conferences in this matter on 1 and 26 August 2025 but was unable to assist the parties to resolve the dispute. I arbitrated the matter on 15 October 2025.

• [11] MUA relied on the following:
  • the uncontested statement of Mr Warren Smith, MUA Deputy National Secretary;
  • the statement and oral evidence of Mr Robert Lumsden, MUA Victorian Branch Secretary; and
  • the statement and oral evidence of Mr Aaron Moon, MUA Assistant Victorian Branch Secretary.

• [12] AAT relied on the statement and oral evidence of Mr Aaron Mato, Terminal Manager.

The Commission's jurisdiction to deal with the dispute

• [13] It is not in dispute between the parties, and I am satisfied based on the evidence provided by Mr Moon, on behalf of the MUA, and Mr Mato on behalf of AAT, that MUA has followed the procedure in Schedule 1 of the Agreement and is able to refer the dispute to Commission for resolution, including arbitration.

What does "procedurally fair and equitable process" mean?

• [14] The principles for interpreting enterprise agreements are well-settled. They have been recently and comprehensively set out by Full Benches of the Commission in AMWU v Berri Limited [2017] FWCFB 3005 at [114]; and HSU v Mercy Hospitals Victoria Ltd [2024] FWCFB 235 at [112], and by the Full Court of the Federal Court in James Cook University v Ridd [2020] FCAFC 123 at [65]. In summary, the starting point for interpretation is the ordinary meaning of the words, read as a whole and in context. A purposive approach to interpreting the agreement is to be preferred over a narrow or pedantic approach, and a generous construction over a technical or strictly literal one. Last, the words of the agreement must be understood in light of its industrial context, and the customs and working conditions of the industry in which it operates.

• [15] There is no significant dispute between the parties about what "procedurally fair" and "equitable" mean. "Procedurally fair" imports notions of natural justice - that a person has the opportunity to be heard and that a decision maker is impartial and open to persuasion. The opportunity to be heard also requires that a person knows the case against them. "Equitable" means fair and just, and that the process would treat all concerned reasonably and equally.

What is the respondents proposed selection process?

• [16] Mr Mato gave evidence of the selection process that the Company proposed to engage in. Mr Mato developed the selection framework and criteria as AAT had not previously engaged in any redundancy processes and did not have an existing template or framework to work from. MUA challenged the initial criteria and weighting that Mr Mato proposed, and he revised it to address what he understood were the MUA's concerns balanced with maintaining the approach the Company wished to take.

• [17] At the time of the hearing, the Company's proposed selection criteria has 5 components being

• (1) Required skills, to be given a 30% weighting;
• (2) Performance record, to be given a 25% weighting;
• (3) Safety Record / Incidents, to be given a 25% weighting;
• (4) Teamwork / Adaptability, to be given a 10% weighting; and
• (5) Leading by Example, to be given a 10% weighting.

• [18] Mr Mato says that 2 managers will perform the assessment together so that there is one consolidated score for each criteria, with the exception of (4) Teamwork, where each manager will make a separate assessment. Each employee will be ranked on a scale from 0 (being the lowest) to 3 (being the highest) for each of the criteria.

• [19] In relation to required skills, the Company proposes to consider an employee's experience, tickets, training and certifications, to be matched to the Company's forecasted requirements. The Company provided me with a copy of the skills matrix, which outlined various competencies, skills (such as roles held, e.g. First Aid Officer, Health & Safety Representative and MUA Delegate) or qualifications (such as Maritime Security ID Card, and forklift licences for different sizes and types of forklifts). The skills matrix includes a column for tenure/years of service.

• [20] In relation to performance record, the Company proposes to consider whether the employee has performed at a consistently high level, and will consider formal and informal incidents and issues over the past 3 years provided there is some record related to the incident or issue.

• [21] In relation to safety record/incidents, the Company proposes to consider the number of incidents or near misses, and their total number and severity over the past 3 years. The assessment will be based on observations by management.

• [22] In relation to teamwork/adaptability, the Company poses the following questions to be assessed by the 3 Senior Site Managers:
  • Does the employee work well within the entire team and contribute in a positive manner?
  • Does the employee have a flexible attitude and capable of adapting to changes in a positive manner?

• [23] In relation to leading by example, the Company poses the following question, and intends to answer it by considering the individual's performance record from the prior 3 years:
  • Does the employee demonstrate traits leading by example in their work ethic, dealing with customers and contractors?

• [24] Mr Mato also proposes that the criteria above is assessed over a 3-year period, which he considers to be a substantial enough period for an assessment to be made and that would allow for employees to be distinguished from each other.

• [25] Further, Mr Mato says that the Company proposes to rely upon file notes, and employees will have the opportunity to provide feedback on their scores before any final outcomes are determined.

• [26] The Company submits that a selection process may be procedurally fair even where it includes subjective elements. The Company also submit that, as the Agreement does not contain any selection process or criteria, and has a 'no extra claims' clause at clause 4.3, it would be wrong for the Commission to impose upon the Company criteria or process from any other agreements, and doing so would be an impermissible interference with the Company's managerial prerogative. Finally, the Company say that there has been no predetermination.

How does the MUA say the proposed process is not procedurally fair and equitable?

• [27] MUA challenges the Company's proposed criteria. In relation to the criteria that appear objective - (1) required skills; (2) performance record and (3) safety record - MUA challenge how the Company proposes to assess each criteria, particularly where the Company may rely upon matters of which an employee has not been informed nor given an opportunity to respond, such as the inclusion of complaints as a basis for the assessment. MUA submit that the selection criteria relating to (4) Teamwork/Adaptability and (5) Leading by Example are inherently subjective.

• [28] MUA propose the use of processes from other sites and agreements that it has experience of and which it says involve only or predominantly objective criteria. The processes from other sites include weighting for length of service, reliance only upon documented disciplinary outcomes and a process where employees are informed of their scores and given an opportunity to respond.

• [29] MUA challenge the Company's proposed selection process because they are of the view that the Company have already predetermined who is to be selected for compulsory redundancy, and that it includes Mr Chris Caruana, MUA member who has made complaints against Mr Mato and against whom the Company have brough allegations for the making of complaints against Mr Mato. In June 2025, the final and only outcome of the allegations against Mr Caruana was for Mr Mato and Mr Caruana to participate in agreed mediation.

• [30] The only requirement that the Agreement imposes for a compulsory redundancy selection process is that it is procedurally fair and equitable. There is no selection criteria or framework. I agree with the Company that, as a result, it has the discretion to impose the process including selection criteria, provided that the process is "procedurally fair and equitable," as required by clause 16.7. I consider that the selection criteria is within the managerial prerogative that the Commission should not interfere with other than where it is unjust, unfair or unreasonable: see Australian Federated Union of Locomotive Enginemen v State Rail Authority of New South Wales (the XPT Case) [1984] CthArbRp 432; (1984) 295 CAR 188 at 191.

• [31] It is important to note that the Company has not yet made its assessments. After MUA raised this dispute, the Company did not take any further steps, and are awaiting the resolution of the dispute before it does take further steps.

• [32] Mr Smith gave unchallenged evidence of his conversation with Mr Antony Perkins, AAT Managing Director about the Company saying that it "wanted to pick heads" and referred to "there being a particular individual who would need to be performance managed out" if they did not go in the redundancy process. However, I accept the Company's evidence that Mr Perkins will not be an assessor. In addition, during the hearing, the Company undertook to not take into account the matters relating to complaints made by Mr Caruana against Mr Mato and the consequent allegations the Company raised against Mr Caruana in its assessment.

• [33] The selection criteria includes 5 categories of assessment, weighting for each category as well as identification of who the assessors will be (2 managers - Mr Duclos and Mr Deustcher). I consider the selection criteria, particularly skills matrix, appropriate in the circumstances. The skills matrix itself is detailed. There is some overlap in the skills matrix and considerations under other selection criteria (for example, safety record), as well as overlap generally across the criteria.

• [34] I agree with the MUA that selection criteria (4) Teamwork / Adaptability and (5) Leading by Example are subjective. But I agree with the Company that a subjective element does not render an entire process unfair. In considerations of procedural fairness, the decision-maker must be open to persuasion: see Minister for Immigration and Ethnic Affairs v Teoh [1995] HCA 20; (1995) 183 CLR 273 per Gaudron J at 305. In this context, that would require that the assessor's reasoning for whatever score an employee is given is made clear and the employee is given the opportunity to contest that score and the reasons underlying the score.

• [35] I further agree with the MUA that it would not be procedurally fair nor equitable for the Company to rely upon incidents or issues that have not been brought to the attention of an employee such that they had the opportunity to be heard on the incident or issue.

• [36] I accept Mr Mato's evidence that the Company will rely on documents such as file notes, and that employees will have the opportunity to provide feedback on scores before any final outcomes are determined.

• [37] I consider the timeframe over which the Company wishes to make its assessment (3 years) to be an appropriate timeframe to ensure distinction amongst employees, provided that any disciplinary outcomes that may have elapsed are not taken into account.

• [38] Last, I observe that the MUA's preference for selection processes that favour "last on- first off" approaches may be problematic in that the principle of "last on-first off" has the potential to be discriminatory: see Australian Iron & Steel Pty Ltd v Banovic [1989] HCA 56; 168 CLR 165.

• [39] I consider that the Company's proposed selection process is procedurally fair and equitable, and so I answer the first question for determination - YES.

• [40] As I have answered the first question - yes - it is not necessary to answer the second question for determination. However, for completeness, I make the following observations.

• [41] Mr Mato gave evidence that the basis for the redundancies was an expectation that the duties of Yard Operatives would remain the same except for cargo-scanning, but that the Company required fewer Yard Operatives. In particular, because cleaning work had dropped off. In relation to cargo-scanning, the Company has developed a more efficient system, so that a Yard Operative's cargo-scanning tasks are reduced. On this basis and considering the nature of the affected employees' work and the industry, the weighting of the criteria should be adjusted so that (1) required skills is weighted more greatly. The skills matrix is detailed and included elements that relate to the other criteria, particularly (2) performance and (3) safety record. I recommend that it is weighted at 50% and each of the other 4 criteria are weighted at 10% each.

• [42] The Company have indicated that they will provide employees with the opportunity to provide feedback on their scores. This necessarily requires the Company to provide information about the assessors' reasoning to employees (and their union representative) to allow them a proper opportunity to challenge the score if they disagree. I consider that it would also be relevant to an equitable process that employees are provided with information about where they ranked among employees (without disclosing identities), particularly in relation to the more subjective criteria of (4) teamwork/adaptability and (5) leading by example.

• [43] I answer the questions for determination as follows:

Is the respondent's proposed selection process for compulsory redundancy, including the selection framework, a procedurally fair and equitable process as required by Clause 16.7 of the Agreement?

If the answer to the above question is no, what are changes to the proposed selection process, including to the selection framework's criteria and weightings, and any other changes to ensure a procedurally fair and equitable process as required by Clause 16.7 of the Agreement?

Answer: Not necessary to answer but observations made

Mr B Holding of Counsel, with permission, on behalf of the Respondent.

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