Construction, Forestry, Maritime, Mining and Energy Union

Alleged dispute about any matters arising under the enterprise agreement and the NES;[s186(6)]

• [1] On 1 April 2022 the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) filed an application (Application) pursuant to section 739 of Fair Work Act 2009 (Cth) (FW Act) with the Fair Work Commission (FWC). The Application sought that the FWC deal with a dispute between the CFMMEU and Qube Ports Pty Ltd T/A Qube Ports and Bulk (Qube) in accordance with the dispute resolution procedure contained in Clause 49 of the Qube Ports Pty Ltd Port of Fremantle Enterprise Agreement 2020 (2020 Agreement).

• [2] The dispute arose when the annualised salary of Employees was withheld during periods in which the Employees took protected industrial action and no adjustment were made to the minimum number of hours of work the Employees were required to perform in that year.

• [3] On 2 May 2022, the parties participated in a conciliation, but the issues in dispute could not be resolved.

• [4] Directions for the filing of materials in advance of a hearing to determine the jurisdictional objection were issued to the parties on 5 May 2022 (Directions). The Application was listed for hearing in Perth on 4 August 2022 (Hearing).

• [5] The Directions invited the parties to make submissions as to whether the FWC should grant permission to the parties to be represented. A determination of this issue is necessary to ensure that the manner in which any hearing is conducted is fair and just.[1]

• [6] The CFMMEU and Qube sought permission to be represented at the Hearing.

• [7] Having considered the submissions of the parties, leave was granted to the CFMMEU and Qube to be represented pursuant to section 596(2)(a) of the FW Act on the grounds that it would enable the matter to be dealt with more efficiently taking into account the complexity of the matter.

• [8] At the Hearing Mr Tony Slevin of Counsel, , appeared on behalf of the CFMMEU and Ms Heather Millar of Counsel appeared on behalf of Qube.

• [9] The CFMMEU filed witness statements setting out the evidence in chief of the following witness in advance of the Hearing:

• [10] Mr Booth is employed by Qube as a Grade 6 Foreman/Team Leader at Fremantle Port. Mr Smith is Divisional Deputy National Secretary of the CFMMEU Maritime Union of Australia Division. Mr Booth gave further evidence in chief at the Hearing and was cross examined by Ms Millar. Mr Smith was not required for cross examination and did not attend the Hearing.

• [11] In advance of the Hearing Qube filed a witness statement of Mr Daniel Coulton setting out his evidence in chief.

• [12] Mr Coulton is Qube's General Manager of Industrial Relations. Mr Coulton gave further evidence in chief at the Hearing and was cross examined by Mr Slevin.

• [13] The parties jointly prepared and filed a digital court book containing the evidence and submissions of the parties which was admitted at the Hearing and marked as an exhibit (DCB).

• [14] Final written submissions were filed by the CFMMEU on 29 August 2022 and by Qube on 12 September 2022.

• [15] In reaching my decision I have considered all the submissions made and the evidence tendered by the parties, even if not expressly referred to in these reasons for decision.

• [16] Qube conducts a bulk and general stevedoring operations at multiple ports in Australia including at Fremantle Port in Western Australia.[2]

• [17] Stevedores employed by Qube at each port it operates at are covered by separate enterprise agreements. The enterprise agreements which apply at each port are composed of two parts - Part A and Part B. Part A consists of terms resulting from national negotiations and which are duplicated in the enterprise agreements registered at each Port. Part B is composed of terms negotiated to apply only at a particular port.[3]

• [18] Stevedores employed by Qube at each port at which it operates. are, or are eligible to be, members of the Maritime Union of Australia Division of the CFMMEU (MUA).[4]

• [19] Stevedores employed by Qube to perform work for Qube at Fremantle Port (Employees) were covered by the Qube Ports Pty Ltd Port of Fremantle Enterprise Agreement 2016 (2016 Agreement) until 28 December 2021. The 2016 Agreement reached its nominal expiry date on 30 June 2020.[5]

• [20] Bargaining for a new enterprise agreement commenced in 2019 (Proposed Agreement) and was the subject of protracted industrial disputation involving many weeks of protected industrial action. [6]

• [21] On 5 July 2021, the MUA made an application for a protected action ballot in relation to the Proposed Agreement. The application was granted[7]. The protected action ballot was held, and the results declared on 22 July 2021. That ballot authorised all forms of action contained in the ballot. [8]

• [22] A Notice of Protected Industrial Action was sent by the MUA to Qube on 22 July 2021 advising that protected industrial action would begin from 30 July 2021 (PIA). The PIA continued for 78 days. [9]

• [23] The parties reached agreement on the terms of the Proposed Agreement in December 2021.[10]

• [24] On 21 December 2021 the FWC approved the Qube Ports Pty Ltd Port of Fremantle Enterprise Agreement 2020 (2020 Agreement). The 2020 Agreement operates from 28 December 2021 and replaces the 2016 Agreement from that day.[11]

• [25] The 2020 Agreement provides for the following types of employment:[12]

1. Full Time Salaried Employee (FSE)
2. Provisional Full Time Salaried Employee (PFSE)
3. Variable Salary Employee
4. Provision Variable Salary Employee
5. Guaranteed Wage Employee
6. Supplementary Employee
7. Graduated Retiree Employee
8. Trainee
9. Apprentice.

• [26] The demand for labour in the stevedoring industry is highly variable. In order to secure a stable core workforce by offering a consistent weekly wage the 2016 and 2020 Agreements guarantee a minimum annual salary to FSEs and PFSEs. In return for this minimum annual salary FSEs and PFSEs must be available to work 1820 hours per year. This sum is calculated by multiplying 52 weeks x 35 hours over a defined 12 month period. The 1820 hours is inclusive of annual leave which accounts for 175 hours of the 1820 hours.[13]

• [27] While the average worked hours is 35 hours per week, employees can be required to work for over 80 hours in a week. In other weeks they may be engaged for as few as 20 hours. Qube is responsible for managing the hours allocated to FSEs and PFSEs to ensure they meet the total of 1820 hours in the relevant 12 month period.[14]

• [28] Clause 9.1.1 of the 2020 Agreement sets out the terms of the engagement of a FSE and relevantly provides as follows: [15]

a. An FSE has an AAH requirement of 1820 hours, inclusive of all forms of approved leave.

b. FSE hours and salary will be adjusted on a pro rata basis for any approved leave of absence without pay."

• [29] An identical provision is contained at clause 9.2.1 of the 2020 Agreement for PFSEs.

• [30] Clause 2 of Part A of the 2020 Agreement defines AAH as "Annualised Accumulated Hours". [16]

• [31] Clause 3 - Remuneration of Part B of the 2020 Agreement sets out the annualised salary payable to FSEs and PFSEs. [17]

• [32] Pursuant to clause 30.1 of Part A of the 2020 Agreement once FSEs have reached the 1820 AAH target in a financial year, they are entitled to decline to accept additional hours of work. If they do accept additional hours of work they are entitled by clause 30.5 of Part A of the 2020 Agreement to be paid overtime at a double time rate for all hours worked beyond 1820.

• [33] During the protected action, FSEs and PFSEs who were rostered on to work and did not work, instead engaging in the PIA had their salaries deducted in accordance with section 470 of the FW Act. No adjustments were made to their AAH requirement of 1820 hours. [18]

• [34] As a consequence FSE's and PFSEs either didn't reach their AAH Target or did so later in the year as compared to a year when no PIA occurred, as a result they performed none or more limited hours of work at an overtime rate as compared to other years.[19]

• [35] There is no relevant difference between the 2016 Agreement and the 2020 Agreement in relation to this dispute. [20]

• [36] It is agreed by the parties that the MUA complied with the provisions of the dispute resolution procedure found at clause 49 of the 2020 Agreement before filing the Application. [21]

• [37] The power of the FWC to deal with disputes is set out in section 595 of the FW Act. Section 595 provides that the FWC may only deal with a dispute if it is expressly authorised to do so under, or in accordance with, a provision of the FW Act.

• [38] The Application was made pursuant to section 739 of the FW Act.

• [39] Section 739 of the FW Act allows the FWC to deal with a dispute about an agreement if the agreement includes a term containing a dispute resolution procedure.

• [40] The 2020 Agreement contains a dispute resolution procedure of the nature contemplated by section 739 at clause 49. Clause 49 provides as follows:

"49.1 In the event of a dispute arising in the workplace, the following procedure will apply:

Step 1 . The matter will in the first instance be discussed between the Employee(s) and the relevant manager.

Step 2. It will be referred for discussion between the Union delegate or other employee representative and the relevant manager.

Step 3. It will be referred for discussion between the appropriate state Union Branch official or other Employee representative and the state/ regional manager.

Step 4. It will be referred for discussion between the appropriate national Union official or other Employee representative and the relevant national manager.

Step 5. Where the dispute has not been resolved despite the foregoing procedures being followed and subject to there being no stoppage of work in relation to the issue at hand, either party may refer the matter to the FWC for conciliation/arbitration pursuant to section 739 and section 595 of the Act, if necessary, in which case the decision will be accepted by the parties, subject to any appeal rights.

49.2 An Employee may appoint a representative at any step of the dispute resolution process outlined above.

49.3 If the matter is referred for conciliation, both parties will participate in the process in good faith.

49.4 During the time when the parties attempt to resolve the matter, either at the workplace level, or through conciliation or arbitration, the parties will continue to work in accordance with their contract of employment.

49.5 The parties must co-operate to ensure that the dispute resolution procedures are carried out as quickly as is reasonably possible."

• [41] The FWC may deal with a dispute only on application by a party to the dispute.[22]

• [42] There is no dispute, and I am satisfied, that the issues in dispute between the parties fall within the scope of clause 49 of the 2020 Agreement.

• [43] There is no dispute[23] and I am satisfied that the MUA has complied with the procedural steps contained in clause 49 of the 2020 Agreement.

• [44] I am satisfied that the MUA has standing to make the Application and that I have the jurisdiction to determine the dispute.

• [45] In dealing with the dispute the FWC can not exercise powers limited by the term.[24] If, in accordance with the term, the parties have agreed that the FWC may arbitrate (however described) the dispute, the FWC may do so. The FWC must not make a decision that is inconsistent with the FW Act or the Agreement.[25]

• [46] In Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v ALS Industrial Australia Pty Ltd[26] the Full Federal Court said at [70] to [71] that the powers and functions of the FWC identified in sections 577, 578, 590, 593, 595, 677 and 678 of the FW Act are available to the FWC when conducting a private arbitration.

• [47] Relevantly sections 577 and 578 of the FW Act provide as follows:

The FWC must perform its functions and exercise its powers in a manner that:

(b) is quick, informal and avoids unnecessary technicalities; and

(d) promotes harmonious and cooperative workplace relations."

"s.578 Matters the FWC must take into account in performing functions etc.

In performing functions or exercising powers, in relation to a matter, under a part of this Act (including this Part), the FWC must take into account:

(a) the objects of this Act, and any objects of the part of this Act; and

(b) equity, good conscience and the merits of the matter; ..."

• [48] The parties are in dispute about the number of 'ordinary' hours FSE's and PFSEs are required to work when their annualised salary is withheld because they are engaging in PIA.

• [49] The MUA argue that PIA is a form of 'approved leave without pay" and submit that AAH Target required to be worked by FSEs and PFSEs should be reduced to account for the 78 days of PIA because a plain reading of clause 9.1.1 of Part A of the 2020 Agreement requires that the AAH Target must be reduced to account for "approved leave of absence without pay".

• [50] In the alternative, the MUA submit that if the 2020 Agreement is silent on whether the 1820 AAH target should be reduced in circumstances where PIA is taken, that fairness dictates the 1820 AAH target should be reduced to account for any time taken by FSEs and PFSEs as PIA and that therefore the FWC should read such a provision into the 2020 Agreement.

• [51] Qube argue that PIA is not a form of "approved leave without pay" nor is it analogous to "approved leave without pay" and a plain reading of the text of clause 9.1.1(a) Part A demonstrates that it does not apply to PIA. Qube argue that the Agreements are not silent with respect to the treatment of PAI but in fact expressly deal with when the AAH target can be reduced and that those circumstances do not include PIA.

• [52] The Full Bench, in Princess Linen Services Pty Ltd v United Workers' Union[27] at [15] and [16] of its decision, recently confirmed the principles of interpretation of enterprise agreements as follows:

"The most succinct expression of the correct approach is that articulated by the Federal Court Full Court in WorkPac Pty Ltd v Skene as follows (citations omitted):

"[197] The starting point for interpretation of an enterprise agreement is the ordinary meaning of the words, read as a whole and in context. The interpretation "... turns on the language of the particular agreement, understood in the light of its industrial context and purpose...". The words are not to be interpreted in a vacuum divorced from industrial realities; rather, industrial agreements are made for various industries in the light of the customs and working conditions of each, and they are frequently couched in terms intelligible to the parties but without the careful attention to form and draftsmanship that one expects to find in an Act of Parliament. To similar effect, it has been said that the framers of such documents were likely of a "practical bent of mind" and may well have been more concerned with expressing an intention in a way likely to be understood in the relevant industry rather than with legal niceties and jargon, so that a purposive approach to interpretation is appropriate and a narrow or pedantic approach is misplaced."

The Full Court observations are consistent with the approach taken by the Full Bench of this Commission in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers Union (AMWU) v Berri Pty Limited (Berri)."

• [53] It is justifiable to read the Agreements to give effect to their evident purpose, having regard to such context, despite mere inconsistencies or infelicities of expression which might tend to some other reading. A Court or Tribunal should not adopt a narrow or pedantic approach to the interpretation of enterprise agreements.[28]

• [54] The demand for labour in the stevedoring industry is highly variable. Clause 9.1.1 of Part A allows Qube to secure a stable core workforce by offering a consistent weekly wage while rostering employees only for the hours they are needed each week. Depending on Qube's business needs employees may be required to work more than 80 hours in a week.[29]

• [55] In return for this minimum annual salary FSEs and PFSEs must be available to work 1820 hours per year. This sum is calculated by multiplying 52 weeks x 35 hours over a defined 12 month period. The calculation includes within five weeks annual leave of 175 hours.[30]

• [56] Once FSEs and PFSEs complete 1820 hours they have the option of declining further work or performing additional work at overtime rates.

• [57] Clause 9.1.1(b) sets the circumstances in which those hours and salary can be adjusted. The circumstances are "any approved leave of absence". The clause provides that the adjustment is to be made on a pro rata basis. So for example if an employee took unpaid leave to travel for six months they would be required to only work half of the 1820 hours and only be entitled to half the minimum annual salary.

• [58] As a consequence of the Qube's refusal to adjust the AAH Target in light of the withholding of salary as a result of the PIA:

• a. FSE's and PFSEs either didn't reach their AAH Target or did so later in the year as compared to a year when no PIA occurred, as a result they performed none or more limited hours of work at an overtime rate as compared to other years;[31] and

1. FSEs and PFSEs lost pay for not working during the PIA but were then required to work those hours later in effect for no pay.

• [59] The drafters of the Agreements are not lawyers. The language contained in the Agreements is familiar to those working within the industry and in some cases is peculiar to the industry. The Agreements were not drafted with an eye to detail or to legal technicalities and contain phrases which may have a different legal effect when used in a different context.

• [60] Qube argue that 'approved leave of absence' is limited to leave approved by Qube. The parties could have, but did not, expressly so confine the words. The context and purpose of clause 9.1.1 of Part A and the 2020 Agreement more broadly does not suggest that the term was intended to be so confined.

• [61] Absences from work may be approved, or legally or formally sanctioned, other than by an employer. Under the Agreements employees are entitled to be absent for the purpose of taking personal leave for 13 days per year.[32] Absence on personal leave is not approved by the employer. It is approved by the Agreements. The Agreements are not approved by the employer. They are approved by the FWC.

• [62] Similarly, the 2020 Agreement approves employees' absence on Family and Domestic Violence leave in clause 37. Such leave does not require the approval of the employer. It includes periods of unpaid leave. Absence on Family and Domestic Violence Leave is not approved by the employer. It is approved by the 2020 Agreement. The 2020 Agreement is not approved by the employer. It is approved by the FWC.

• [63] Another example of absence that does not require employer approval is worker's compensation. Such absence must be due to a compensable injury. Whether an injury is compensable is determined by the relevant workers' compensation legislation. The absence from work is authorised by the relevant legislation not by Qube.

• [64] A Full Bench of the predecessor to the FWC in WorkPac Pty Ltd v Bambach[33] dealt with the similar concept of an "authorised absence" and found that it means nothing more than an absence that is "legally or formally sanctioned".

• [65] In the circumstances of protected industrial action, the employee's absence is approved by the FW Act. Part 3-3 of the FW Act. Those provisions were recently described by the Full Federal Court in Construction, Forestry, Maritime, Mining and Energy Union v Boggabri Coal Operations Pty Ltd[34] as follows:

"Protected industrial action" is a species of industrial action established under Div 2 of Pt 3-3 of the FW Act. It is industrial action that may be organised and taken to support claims that are advanced during bargaining for a proposed enterprise agreement. In order that industrial action might qualify as "protected industrial action", various statutory requirements must be met. Key amongst them (for present purposes) are that:

(1) the action must be authorised by a "protected action ballot" that was conducted pursuant to Div 8 of Pt 3-3 of the FW Act: FW Act, s 409(2); and

(2) before a person may partake in it, his or her bargaining representative must provide to the relevant employer written notice of the action to be taken: FW Act, ss 413(4), 414(1)."

• [66] Consequently, absence on protected industrial action, to use the expression used in WorkPac Pty Ltd v Bambach[35], is legally or formally sanctioned or 'approved'.

• [67] An interpretation of clause 9.1.1 that provides that an absence from work must result in an adjustment to AAH is consistent with clauses in the balance of the Agreements. Both Agreements are explicit in linking leave and approved absences without pay (which is deducted from an annualised salary) to the equivalent hours being deducted from an FSE's/ PFSEs annual 1820 AAH target.

• [68] See for example the provisions dealing with personal leave.[36] Clause 35.2 of Part A of the 2020 Agreement provides for an entitlement of 13 days paid personal leave per year. Clause 2.1.4 of Part B of the 2020 Agreement provides that an employee who is absent on personal leave will have seven hours or part thereof deducted from his or her AAH for each day of leave. See also the provisions in relation to public holidays.

• [69] The interpretation of clause 9.1.1 proposed by the MUA is also consistent with the statutory context in which the deductions from salary were made by Qube and with the purpose of those provisions.

• [70] Section 470(1) of the FW Act provides that:

"470 Payments not to be made relating to certain periods of industrial action

(1) If an employee engaged, or engages, in protected industrial action against an employer on a day, the employer must not make a payment to an employee in relation to the total duration of the industrial action on that day." [EMPHASIS ADDED]

• [71] The statutory scheme provides that the payment is withheld only in relation to the day on which the industrial action occurs. It does not authorise the withholding of pay for work performed on other days. For example, an employee who produces 10 widgets per day takes industrial action they are not entitled to payment for the day on which they withheld their labour however they are entitled to pay the following day when the employee returns to work and produces 10 widgets.

• [72] The words contained in the Agreements are not to be interpreted in a vacuum divorced from industrial realities.

• [73] If the interpretation of clause 9.1.1 of Part A proposed by Qube is adopted an employee who took protected action for six months from 1 July could be required to work 1820 hours in the remaining 26 weeks of the year. They could therefore be rostered for up to an average of 70 hours every week for 26 weeks. However, they would only be paid $63,144.12 of their salary of $126,288.26. Reducing their hourly rate of pay from $69.39 to $34.69 per hour. The industrial reality is that a majority of the workforce would not have voted to approve such a term in either Agreement.

• [74] When the words of the relevant clauses are read as a whole and in context, understood in the light of the customs and working conditions of the stevedoring industry I am satisfied those words require that the number of 'ordinary' hours FSE's and PFSEs are required to work when their annualised salary is withheld because they are engaging in PIA must be reduced on a pro rata basis.

Applicant's final written submissions, 29 August 2022.

Respondent's final written submissions, 12 September 2022.

[1] Warrell v Walton [2013] FCA 291; (2013) 233 IR 335, 341 [22].

[7] PR731492

[12] Clause 8.1 of the 2020 Agreement, Ibid 90.

[15] Ibid 3, an equivalent clause exists for PFSE at clause 9.2, Ibid 91.

[22] Ibid; Fair Work Act 2009 (Cth) s.739(6).

[24] S.739(3) of the Fair Work Act 2009 (Cth).

[25] Ibid S.739(5).

[26] [2015] FCAFC 123; 235 FCR 305.

[27] [2021] FWCFB 1903.

[28] See Kucks v CSR Ltd [1996] IRCA 166; (1996) 66 IR 182, 184_; WorkPac Pty Ltd v Skene_ [2018] FCAFC 131 at [197]; Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union' known as the Australian Manufacturing Workers Union (AMWU) v Berri Pty Ltd [2017] FWCFB 3005 at [114].

[32] See clause 35 of the 2020 Agreement.

[33] [2012] FWAFB 3206; (2012) 220 IR 313 at [31].

[34] [2021] FCAFC 211; 310 IR 468.

[35] [2012] FWAFB 3206; (2012) 220 IR 313 at [31].

[36] See also the arrangements with respect to other absences such as public holidays and workers compensation.

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