Tidewater Marine Australia Pty Ltd v Maritime Union of Australia

IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY FAIR WORK DIVISION WAD 38 of 2014

BETWEEN: TIDEWATER MARINE AUSTRALIA PTY LTD (ABN 49 000 567 395)

JUDGE: MCKERRACHER J DATE: 4 MARCH 2014 PLACE: PERTH

INTRODUCTION 1 After hearing counsel for the parties on 27 February 2014 and having reserved for a short time, I made the orders which appear with these reasons. The reasons relate to an urgent application for injunctive relief to restrain the respondent (MUA) from participating in industrial action. The applicant (Tidewater) contends that the industrial action would be unlawful.

RELEVANT BACKGROUND 2 For some time the parties have been in negotiation in respect of a new Enterprise Agreement. The new Enterprise Agreement is to replace the Tidewater Marine Australia Pty Ltd Integrated Ratings, Cooks, Caterers and Seafarers (Offshore Oil and Gas) Enterprise Agreement 2010. 3 The MUA is the bargaining representative for its members who will be covered by the new agreement. Negotiations towards that agreement commenced almost a year ago. The Australian Mines and Metals Association Inc (AMMA) has been Tidewater's bargaining representative. 4 In addition to negotiations over the proposed new agreement, the Fair Work Commission (FWC) has been involved. In October 2013, the MUA applied to the FWC for a protected action ballot order against Tidewater. Within that application, the MUA made provision for an exemption which requires MUA members engaged in their proposed protected action to perform certain key specified duties focussing on marine safety and security. These safety duties were to be exempt from the proposed protected industrial action (Exempt Duties). 5 The FWC duly issued an order for a protected action ballot on 7 November 2013 to be held for consideration by the employees (FWC Order). Subsequently, on 2 January 2014, the Australian Electoral Commission declared the result of the ballot conducted pursuant to the ballot order. The vote under the ballot was unanimously in favour of that industrial action. Additionally, under the ballot order and in terms of s 443(5) of the Fair Work Act 2009 (Cth) (FW Act) the FWC was satisfied that the three day notice period prescribed in s 414(2)(a) of the FW Act should be extended from three days to six days pursuant to s 414(2)(b).

Proposed protected industrial action 6 The relevant terms of the questions as put to the members under the ballot were as follows: 5. QUESTIONS The questions to be put to voters in the ballot are: Do you, for the purpose of advancing claims in the negotiation of an enterprise agreement to govern the terms and conditions of your employment with Tidewater Marine Australia Pty Ltd, authorise protected industrial action, separately, concurrently and/or consecutively in the form of: 1. An unlimited number of stoppages of work of 4 hours? 2. An unlimited number of stoppages of work of 12 hours duration? 3. An unlimited number of stoppages of work of 24 hours duration? 4. An unlimited number of stoppages of work of 48 hours duration? 5. Bans on tie-ups for an unlimited number of periods of 24 hours duration? 6. Bans on tie-ups for an unlimited number of periods of 48 hours duration? 7. Bans on let-gos for an unlimited number of periods of 24 hours duration? 8. Bans on let-gos for an unlimited number of periods of 48 hours duration? 9. Bans on the use of cranes for an unlimited number of periods of 24 hours duration? 10. Bans on the use of cranes for an unlimited number of periods of 48 hours duration? 11. Bans on anchor handling for an unlimited number of periods of 24 hours duration? 12. Bans on anchor handling for an unlimited number of periods of 48 hours duration? 13. An unlimited number of stoppages of work of 24 hours duration on vessels working outside of Australian territorial waters? 14. An unlimited number of stoppages of work of 48 hours duration on vessels working outside of Australian territorial waters? 15. Bans on accepting work on vessels working outside of Australian territorial waters? Note: In any industrial action taken in reliance on this ballot the following will be exempt: • Watch keeping at sea • Fire rounds • Port security watches • Safety drills • Provisions of meals and mess room services • Movement of perishable devices • All dealings with emergency equipment in any manner • Any and all safety and emergency related issues 6. EXTENDED NOTICE PERIOD The period of written notice referred to at s.414(2) of the FW Act is extended to six (6) days (inclusive of Saturdays, Sundays and public holidays).

Notice given of intention to take industrial action 7 Section 414 of the FW Act as referred to in the FWC Order is relevantly in the following terms: 414 Notice requirements for industrial action Notice requirements - employee claim action (1) Before a person engages in employee claim action for a proposed enterprise agreement, a bargaining representative of an employee who will be covered by the agreement must give written notice of the action to the employer of the employee. (2) The period of notice must be at least: (a) 3 working days; or (b) if a protected action ballot order for the employee claim action specifies a longer period of notice for the purposes of this paragraph - that period of notice. Notice of employee claim action not to be given until ballot results declared … Notice requirements - employer response action (5) Before an employer engages in employer response action for a proposed enterprise agreement, the employer must: (a) give written notice of the action to each bargaining representative of an employee who will be covered by the agreement; and (b) take all reasonable steps to notify the employees who will be covered by the agreement of the action. Notice requirements - content (6) A notice given under this section must specify the nature of the action and the day on which it will start. 8 Pursuant to the provisions of s 414(1) of the FW Act, the MUA gave a notice in the terms which follow to Tidewater on Friday, 21 February 2014 (Notice): 21 February 2014 Mr Clive Patman Tidewater Marine Australia Pty Ltd Tidewater Consultant - Human Resources and Industrial Relations By Fax & Email: (08) 9220 7699 & cpatman@tdw.com Dear Clive, Re: Formal Notice of Intention to Take Employee Claim Action I refer to the outcome of the Protected Action Ballot in Matter No B2013/1329 the result of which were declared on 02 January 2014. Pursuant to Sections 414(2) of the Fair Work Act 2009, I notify you as follows that all members of the MUA employed by Tidewater Marine Australia Pty Ltd and to whom the Tidewater Marine Australia Pty Ltd Integrated Ratings, Cooks, Caterers and Seafarers (Offshore Oil and Gas) Enterprise Agreement 2010 applies shall: • Engage in a stoppage of work for 48 hours and shall cease all work on Friday 28 February 2014 at 04:00 am and shall not resume work until 04.00 am on Sunday 02 March 2014. • Engage in an unlimited number of bans on tie-ups for 48 hours which shall commence on Friday 28 February 2014 at 0:400 am and finish at 04.00 am on Sunday 02 March 2014. • Engage in an unlimited number of bans on let-gos for 48 hours which shall commence on Friday 28 February 2014 at 04.00 am and finish at 04:00 am on Sunday 02 March 2014. • Engage in an unlimited number of bans on the use of cranes for 48 hours which shall commence on Friday 28 February 2014 at 04.00 am and finish at 04.00 am on Sunday 02 March 2014. • Engage in an unlimited number of bans on anchor handling for 48 hours which shall commence on Friday 28 February 2014 at 04.00 am and finish at 04.00 am on Sunday 02 March 2014. • Engage in a stoppage of work on vessels working outside of Australian Territorial waters for 48 hours and shall cease all work on Friday 28 February 2014 at 04.00 am and shall not resume work until 04.00 am on Sunday 02 March 2014. • Engage in an unlimited number of bans on the acceptance of work on vessels working outside of Australian Territorial waters for 48 hours which shall commence on Friday 28 February 2014 at 04:00 am and finish at 04.00 am on Sunday 02 March 2014. The Employee Claim Action of which you are being notified is being taken for the purpose of supporting or advancing claims made in respect of a proposed Enterprise Agreement. (emphasis added)

Tidewater's response 9 On 25 February 2014, Tidewater through its solicitors notified the MUA that the threat of the industrial action was unlawful and if action was taken as threatened in the Notice, the action would be unlawful. Tidewater through its solicitors requested immediate written confirmation that the MUA would withdraw the threat and would undertake that it would not engage in the action described in the letter. 10 The correspondence for Tidewater asserted that the letter did not meet the requirements necessary for the letter to constitute proper notice under s 414(6) of the FW Act as the letter did not properly specify the nature of the proposed action. In particular, Tidewater complained that the letter was plainly inconsistent with the protection action ballot made by the FWC and the result of the ballot which was declared on 2 January 2014. In particular, the Notice failed to refer to any MUA employees of Tidewater continuing to perform the Exempt Duties. This, it was said, created significant uncertainty around the nature of the threatened industrial action. 11 The letter continued: 'given the important purpose of the [N]otice required as section 414 of the FW Act, Tidewater can only reasonably assume from the [Notice] that the MUA is notifying Tidewater that the [Exempt Duties] will not be performed'. The letter went on to say that, as such, any industrial action would be significantly different from the protected action ballot and would be unlawful. It would not be protected under s 409(2) of the FW Act. 12 A second issue raised for Tidewater in this correspondence was that, putting aside the failure to confirm that the Exempt Duties would be performed, the letter still created significant ambiguity for Tidewater in relation to the preparations it needed to take to deal with the action notified. In particular, Tidewater pointed out that the action described in points 2 - 7 of the letter could not sensibly be said to be taken where the action in the first dot point is taken. As such, it was impossible for Tidewater to be clear about what preparations (or appropriate defensive measures) it must take, in particular, to ensure safe operations on board its vessels, in circumstances where some of the forms of action as described in the letter could only be anticipated to occur if Tidewater assumed that the MUA members would act contrary to the intentions specified in the first dot point of the letter. 13 There was then an email response from MUA in the afternoon of that day confirming that the Exempt Duties would be completed in a normal manner and that Mr Tracey had informed the MUA employees that the Exempt Duties were excluded from the protected action and had to be performed. 14 In addition, the email from Mr Tracey of the MUA continued: … re points 2 to 7 we accept in part your proposition that they cannot sensibly be said to be taken at the same time as the other form of action referred to in Point 1. As a result other than the first dot point which is a stoppage of work for 48 hours and which commences 0400 Friday February 28th and ceases 0400 March 2nd all other action is withdrawn. That is the action referred to in points 2 to 7 is hereby withdrawn. (emphasis added)

What effect did those exchanges have? 15 Tidewater seized on the contents of the email as constituting an admission as to the inadequacy of the terms of the Notice both in the omission of reference to the Exempt Duties and the inconsistency between points 1 and points 2 - 7. With the proposed industrial action being imminent, the contents of the email clarifying the terms of the Notice would not be within the six day notification period required. 16 For its part, the MUA rejects any suggestion that the letter constitutes any concession. The clarification that the Exempt Duties will be performed was, it says, no more than confirming its legal obligation and the clarification concerning the inconsistency between the first point and the other dot points was, it says, cured by the withdrawal of notification of the action. 17 The MUA argues that it could hardly be penalised for notifying Tidewater that it would not be pursuing all the elements of the proposed industrial action outlined in the Notice. 18 Tidewater in response argues that it is not possible to cure by email the ambiguous content of such an important statutory notice which failed to achieve the purpose of clearly putting Tidewater on notice of what action would be taken within the meaning of s 414(6) of the FW Act so that it could take responsive or defensive measures to prevent more damage than necessary arising from that action.

The requirements of a notice under s 414(6) of the FW Act 19 In the very helpful argument presented at short notice, the MUA argues with some force that an overly legalistic approach to the Notice including the content of the 'action' which must be notified should not be adopted. Such notices are frequently not drawn up by lawyers and the real purpose of the Notice is to ensure that there is an opportunity for the recipient to take defensive action should it be needed. Those principles do indeed flow from the authorities and the question will usually be a practical question of whether it can be said on viewing the Notice that the action is identified with sufficient practical content so as to achieve its statutory purpose. 20 In Davids Distribution Pty Ltd v National Union of Workers (1999) 91 FCR 463 (at 494-495) although the observations were obiter, the Full Court (Wilcox, Burchett and Cooper JJ) said (at [84] - [87]): 84 The question addressed by North J in the lengthy passage just quoted is one of considerable difficulty, about which people may reasonably reach different conclusions. Parliament did not indicate what degree of specificity it intended by the term "nature of the intended action". To interpret this term, on the one extreme, as requiring no more than an indication of industrial action, as argued by NUW, would be significantly to devalue s 170MO(5); the notice would provide little information. To interpret it, on the other extreme, as requiring precise details of every future act or omission would be to impose on the giver of a notice an obligation almost impossible to fulfil. Industrial disputes are dynamic affairs. Decisions as to future steps often need to be made at short notice, sometimes in response to actions of the opposing party or other people, including governments, and changing circumstances. It would be a major, and unrealistic, constraint on industrial action to require a party to specify, three clear working days in advance, exactly what steps it would take. An unduly demanding interpretation of s 170MO(5) would seriously compromise the scheme of Div 8 of Pt VIB of the Act; it would be difficult for a party to an industrial dispute to obtain the protection contemplated by the Division. … 86 Another reason for rejecting North J's approach is that it places a premium on legalism. Framers of notices would need to undertake a careful analysis of the definition of "industrial action", in the way North J did, in order to identify the paragraph which best fits the contemplated activity. Bearing in mind that notices will often, perhaps ordinarily, be prepared by non-lawyers acting without legal advice, it is unlikely Parliament intended that result. 87 We think s 170MO(5) was designed to ensure that industrial disputants who are to become affected by protected action, in relation to which their usual legal rights are significantly diminished, are at least able to take appropriate defensive action. For example, an employer may operate a sophisticated item of equipment that will be damaged if precipitately shutdown. If warned in advance of a ban that might affect the continued operation of that plant, the employer might choose a controlled shutdown during the period of the notice. More commonly, perhaps, an employer might use the notice time to communicate with suppliers and customers, and thereby reduce the consequences for them of the notified industrial action. Very often, the recipient of the notice will respond in a way that has a legal dimension. For example, a union might react to a notice by an employer of intent to lock out some employees by giving notice that all employees will strike indefinitely as from the commencement of the lockout. Similarly, an employer might respond to an employees' notice of bans by giving notice of a lockout of some or all employees. (emphasis added) 21 The following year saw the question re-examined. In Construction, Forestry, Mining and Energy Union v Yallourn Energy Pty Ltd (2000) 100 IR 52, Merkel J said (at [17]-[21]): 17 In Yallourn Energy I considered whether a notice relating to certain bans and rolling stoppages at the employer's sites complied with s 170(5). I expressed the view (at 214) that, as legal immunity is conferred in respect of protected industrial action, it is of obvious importance that the nature of the proposed action be specified accurately, as a failure to do so will be likely to lead to uncertainty and litigation as to whether the action taken subsequent to the notice is protected under the Act. Accordingly, it is critical that the particularity be sufficient to enable the parties to be aware of the nature of the intended action and whether the action actually taken in reliance on the notice is or is not protected action when it is taken. … 20 In each of the cases to which I have referred the issue related to whether the generality of the notice was such that it had failed to state with sufficient clarity the nature of the intended action. A different issue arises in the present case as the notice relates to action to achieve a particular outcome rather than to action to be taken irrespective of the outcome. Accordingly, it was contended by counsel for Yallourn Energy that the notice relates to action that might be taken, rather than the action intended to be taken, and therefore it failed to describe the nature of the "intended action": see Davids Distribution (at 495; 228). 21 Whether a notice is sufficient to comply with s 170MO(5) can involve questions of fact but will more usually involve questions of degree. When assessing such questions, as was stated in Davids Distribution (at 495; 228), it is important that the inquiry does not place a premium on legalism; rather the inquiry is as to what the notice would convey "in ordinary industrial English" to the reader. Further, the purposes for which the notice is given (to which I have referred above) can be relevant factors in determining whether a notice adequately or sufficiently conveys the nature of the industrial action intended to be taken: cf A1 v National Crime Authority (1996) 67 FCR 464 at 479-481 and National Crime Authority v A1 (1997) 75 FCR 274 at 277 and 294 … 22 A decade later in Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union v Pinnacle Career Development Pty Ltd (2010) 190 FCR 581, Greenwood J also considered the authorities and noted (at [56] and [58]): 56 The Statement of Agreed Facts does not convey any sense of the scope or scale of the respondent's undertaking although it may properly be inferred that an enterprise that provides vegetation inspection services and pruning and removal services is not a large scale corporation. In Telstra at [12] the Full Bench observed that the purpose of the notice requirement is to give the "recipient" (put more generally) of the notice an opportunity to respond to the action by making relevant preparations or considering a particular response. That purpose is entirely consistent with the observations about the purpose of notice provisions expressed by the Full Court of the Federal Court in Davids Distribution Pty Ltd v National Union of Workers (1999) 91 FCR 463 at [87]. In Telstra at [12], the Full Bench also noted that "[w]hether the notice is adequate may depend on the nature of the employer's operations including their size, the number of employees, the number of locations, the time at which the action is to occur and the employees potentially taking the industrial action". In Telstra, the question in issue was the adequacy of notice given on behalf of employees in circumstances where Telstra employed 34,000 employees. … 58 These observations suggest that the adequacy of a notice for the purposes of s 414(6) must be examined in context. An assessment of adequacy must take account of all the circumstances and examine expressions used in the context of whether the concepts embodied in the expressions are well recognised in workplace relations. The adequacy of the notice must take account of the practical applied circumstances of the workplace and whether the purpose of a notice is served by giving the addressee an understanding of what is contemplated and when it will occur so as to provide the recipient with an opportunity to consider his or her position and act or respond in a particular way (or as in this case, engage in the foreshadowed conduct set out in the notices "RF3" and "RF7" to which the challenged notices respond). (emphasis added) 23 These cases give a good flavour of the statutory purpose of the Notice and the degree of flexibility which will be appropriate in the circumstances and context.

Safety issues 24 Specifically in relation to safety issues, however, (bearing in mind that the Exempt Duties all relate to safety matters), Tidewater relies upon CSBP Ltd v Liquor, Hospitality & Miscellaneous Union (2007) 162 IR 81 per Gilmour J where his Honour (at [84]) followed Woodside Petroleum (WA Oil) Pty Ltd v The Australian Institute of Marine and Power Engineers (2005) 147 IR 259 where a similar issue arose. In Woodside Petroleum the notice of intended industrial action served by the union in that case did not make clear whether employees would perform critical safety functions including monitoring of the power supply. The seriousness of the safety issues raised weighed heavily, at least, in the balance of convenience.

Is the concern about the Notice genuine or contrived? 25 Based on the authorities, the real question is whether the Notice on its face gives sufficient information to properly enable defensive measures to be taken. 26 The MUA suggests that the so called confusion is more apparent than real as it has confirmed that the Exempt Duties would be performed and has confirmed that there will be a complete stoppage of work apart from the performance of those Exempt Duties. This should give sufficient information to the recipient Tidewater to know what defensive measures to take. 27 Tidewater, on the other hand, say that such clarification given some days after the Notice is too little, too late, and in any event, the Notice itself is the document to be examined because the period of time in which to take any defensive measures runs from the date of the service of the Notice. 28 In my view, Tidewater's submission on this point is correct. It must be the Notice itself which is examined, not surrounding communications after the event. The potential for real uncertainty being occasioned by such subsequent communications is clear. 29 Mr Edmonds for MUA also points out that s 414(6) of the FW Act was directed to 'actions' which must be specified in notices. In other words, the notice should specify the industrial action that will be taken or the measures of employment that will not be performed which would ordinarily be required to be performed. In contrast, there was no requirement and no logic, the submission went, to specify employment actions which would be performed. These were not actions within the meaning of s 414(6) as they were not industrial actions. This submission had force and is consistent with the proper construction of the subsection in my respectful view. However, the difficulty with it is that the industrial action the Notice was entitled to specify was the industrial action authorised by the ballot which was, in turn, authorised by order of the FWC. The terms of that industrial action have been set out above but expressly require the important Exempt Duties to be exempt from industrial action. While one may certainly accept the submission that it would be pointless for a Notice to specify all the things that employees would continue to do, the actions of which the Notice should have been given should expressly have excluded performance of the Exempt Duties as part of the description of the actions. While at one level, this might be implied by reason of the obligations which are carried over under the ballot and the orders, it is insufficient, in my view, for the recipient of the Notice to infer that, contrary to its terms, Exempt Duties which are required to be performed will still be carried out. Particularly in the context of this somewhat tense industrial environment which, as will be seen below in examining the balance of convenience, the consequences of such ambiguity are potentially significant. 30 The MUA also points to the fact that Tidewater has not given any evidence of defensive measures taken or plausible evidence of actual confusion about what defensive measures should be taken. This, however, as Tidewater contends, is something of a circular argument. If there are sufficient ambiguities and uncertainties in the Notice itself to cause confusion as to what defensive measures should be taken, once again, this will be sufficient to defeat the purpose of the Notice under s 414(6) of the FW Act. 31 The omission of the assurance that the Exempt Duties would be performed was in my view significant. Those Exempt Duties all relate to important, if not critical, safety obligations which could expose employees and others to risk or danger. I approach consideration of this issue in a manner similar to that adopted by Nicholson J in Woodside Petroleum (at [11]-[16]). 32 I accept the argument of the MUA which was eloquently put, that the MUA members have, through following with detailed care, the processes prescribed under statute intended to enable them to prepare for and participate in protected industrial action. The purpose of the action as recognised by the statute is to put pressure on the negotiations. The statute recognises cost will be occasioned to the employer in those circumstances. The statute also recognises that the employees should have the opportunity to advance their interests in this limited way at a limited time. I will turn to this consideration further in the balance of convenience questions but in evaluating this submission from the MUA, it might also be said that had the MUA acted at an earlier time, then another notice could have been given within the window of time provided for under the ballot and the order of the FWC. Having left this action until the last minute (which as counsel for the MUA points out is in many ways meritorious), it will not, on behalf of its members, have another opportunity for some seven or eight weeks. However, had the MUA issued a notice at an earlier point in time then a notice issued in correct form could still have been issued within the window of opportunity.

Balance of convenience 33 Most of the focus of the debate was on the validity of the Notice, that is to say, the arguable case. I have no doubt that the Tidewater case is arguable, although less compellingly than those who advance it. 34 As to the balance of convenience, the balance is strongly in favour of Tidewater. That being so, even if the arguable case was perhaps arguable from both sides, the balance of convenience tips the scales in favour of relief being granted. 35 As the supporting affidavit from Captain Sutton, Operations Manager of Tidewater confirms, if industrial action occurs, some or all of Tidewater's vessels are likely to be taken 'off hire'. If they are taken off hire, each vessel will lose daily hire fees of $35,000 to $46,000 per vessel per day, incur fuel costs of about $18,000 per vessel per day and incur additional labour costs for officers and engineers of about $10,000 to $15,000 per vessel per day. 36 In addition to those losses but of importance, industrial action would expose third parties, being the charterers of Tidewater's vessels to significant losses. ConocoPhillips, according to Captain Sutton, will be exposed to a loss of about a $1 million per day if it is unable to follow its drilling schedule. 37 Chevron will be exposed to a loss of about $2 million per day if Tidewater is unable as the only marine contractor available to supply pipe for pipe laying in accordance with the pipe laying schedule. 38 Tidewater would be at risk of its contract with Anadarko being terminated by Anadarko if Tidewater is unable by reason of the industrial action to supply services to Anadarko at least in respect of the 'Bailey Tide'. 39 On the other side of the ledger, I accept the likelihood that it would be another seven or eight weeks before protected industrial action could ensue should the MUA wish to take this course. That is a factor I take into account as I do the entitlement of the employees to exercise their statutory rights without some overly technical intervention of courts. The delay in their being able to do so is of less weight than the economic factors to which I have alluded.

CONCLUSION 40 For all those reasons, it appeared to me appropriate to grant the relief reflected in the orders made. I certify that the preceding forty (40) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice McKerracher.