DECISION

Fair Work Act 2009
s.229—Bargaining order

Australian Maritime Officers’ Union
v
Shell Australia FLNG Pty Ltd
(B2021/441)

Application for bargaining orders – Application refused

[1] On 18 June 2021 the Australian Maritime Officers Union (AMOU) filed an application (Application) pursuant to section 229 of Fair Work Act 2009 (Cth) (FW Act) with the Fair Work Commission (FWC) for a bargaining order (Order).

[2] The Application sought a bargaining order against Shell Australia FLNG Pty Ltd (Shell) in relation to the negotiation of an enterprise agreement to cover maintenance, production and service employees below the level of Team Leader engaged by Shell on the Prelude (Employees). The Prelude is a floating gas production and storage facility which is permanently moored approximately 475km north-north east of Broome in Western Australia. 1

[3] There is currently no enterprise agreement covering the Employees. Shell has been engaged in negotiations with employee bargaining representatives (Employee Bargaining Representatives), the Australian Workers Union (AWU) and the Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) for an agreement to cover the Employees (Proposed Agreement).

[4] The Application arose from the refusal by Shell to recognise the AMOU as a bargaining representative for the Proposed Agreement. Shell dispute that the AMOU has constitutional coverage of, or members among, the Employees who will be covered by the Proposed Agreement.

[5] The AMOU seek an Order that it is recognised as a bargaining representative in relation to the negotiations for the Proposed Agreement.

[6] On 22 June 2021, Shell filed a response to the Application. Shell and the AWU oppose the Application.

[7] The Application was listed for a conciliation conference on 24 June 2021. However, the Application could not be resolved by conciliation.

[8] The Application was listed for a merit hearing on 23 September 2021 (Hearing).

[9] Directions for the filing of materials in advance of the Hearing were issued to the parties, the AWU and the CEPU on 2 July 2021 and subsequently amended on 15 July 2021 (Directions).

Permission to be represented

[10] The Directions invited the parties, the AWU and the CEPU to make submissions as to whether the FWC should grant permission to be represented. A determination of this issue is necessary to ensure that the manner in which the Hearing is conducted is fair and just. ²

[11] Both parties sought permission to be represented at the Hearing by a lawyer. Having considered the submissions of the parties, I exercised my discretion to grant both parties leave to be represented by a lawyer because I was satisfied that it would enable the matter to be dealt with more efficiently, taking into account the complexity of the matter.

[12] At the Hearing the AMOU were represented by Mr Charles Massey, the AWU were represented by Mr Zac Duncalfe, a solicitor employed by the AWU and Shell was represented by Mr Nicholas Ellery of Corrs Chambers Westgarth.

Evidence

[13] The Directions required the parties to file their witness and documentary evidence in advance of the Hearing.

[14] In accordance with the Directions the AMOU filed written witness statements from the following witnesses:

a. Mr Mark Davis (Mr Davis)

b. Mr Brendan Sticpewich (Mr Sticpewich)

[15] At the Hearing the Mr Davis and Mr Sticpewich gave oral evidence on behalf of the AMOU and were cross examined by Mr Ellery.

[16] Mr Davis is the Executive Officer of the AMOU. He provided evidence with respect to the history of the AMOU rules and the registration of the Prelude with various maritime bodies. Mr Sticpewich is employed by Shell in a role which would be covered by the Proposed Agreement.    He gave evidence with respect to inter alia the operations of the Prelude, his role and duties on the Prelude (and those of his colleagues) and his qualifications.

[17] In accordance with the Directions Shell filed written witness statements from the following witnesses:

a. Mr John Kaighin (Mr Kaighin)

b. Mr Stephen Kidd (Mr Kidd)

[18] At the Hearing Mr Kidd and Mr Kaighin gave written and oral evidence on behalf of Shell and were cross examined by Mr Massey:

[19] Mr Kaighin is the Marine Operations Manager Upstream. He is the technical authority level 2 for Prelude and Shell’s subject matter expert on maritime safety for Prelude. Mr Kidd is the Offshore Installation Manager responsible for the operation of Prelude.

[20] In accordance with the Directions a Digital Court Book containing the submissions, evidence and authorities relied upon by the parties was jointly tendered by the parties and marked as Exhibit DCB1 at the Hearing. Shell also tendered a copy of Lloyd’s Rules and Regulations for Offshore Installations and was marked as Exhibit A1 at Hearing.

[21] Final written submissions were filed by the AMOU on 5 October 2021, the AWU on 19 October 2021 and by Shell on 19 October 2021.

[22] The AMOU sought leave to file closing submissions in reply. This request was opposed by Shell on the grounds that the reply submissions merely summarized the AMOU’s prior evidence and submissions and provided no meaningful assistance to the FWC. I tend to agree with this assessment of the submissions but nevertheless have taken them into consideration.

[23] 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.

Background

[24] The origins of the AMOU can be traced back to the Merchant Service Guild of Australasia which was registered under the Commonwealth Conciliation and Arbitration Act 1904 (Cth). On 3 September 1957, the Merchant Service Guild of Australasia was renamed the Merchant Service Guild of Australia. On 2 February 1993, following an amalgamation between the Merchant Service Guild of Australia and the Australian Stevedoring Supervisors Association, the Merchant Service Guild of Australia was renamed the Australian Maritime Officers’ Union. 3

[25] Shell is the company registered under the Corporations Act 2001 (Cth) that operates the Prelude. 4

[26] The Prelude is registered with the Australian Maritime Safety Authority (AMSA) in accordance with the Shipping Registration Act 1981 (Cth). It was registered with AMSA as a barge in 2017. 5 The Prelude has been recorded on the Equasis international shipping database as an Offshore Processing Ship since 2017.6 Prelude is registered under the Rules and Regulations for the Classification of Offshore Units by Lloyd’s Register International as a “Floating LNG, LPG and Gas Condensate Production and Storage installation.7

[27] Lloyd’s Register International is a non-governmental organisation that establishes and maintains technical standards for the construction and operation of ships and offshore structures. It certifies that the construction of a vessel complies with relevant standards and carries out regular surveys in service to ensure continuing compliance with the standards. The information on Equasis (Electronic Quality Shipping Information System) is sourced from public and private sources. Equasis is not a registration database. 8

[28] Prelude houses a floating liquefied natural gas facility (FLNG) which: 9

a. extracts, liquefies and stores gas at sea; and

b. supplies ships with natural gas and by-products for transport to market.

[29] Prelude is 488m long and 74m wide making it the largest offshore floating facility ever built. 10

[30] A team of between 140 to 320 people work on board Prelude during operations.  11

[31] Prelude was built in South Korea and was towed to its current location by three oceangoing tugs. The designated lead tug controlled the speed and direction in which Prelude travelled. 12

[32] The Prelude is permanently moored in 250 metres of water in the Prelude oil and gas field approximately 475km north-north east of Broome Western Australia. The Prelude is moored to the ocean floor by four groups of mooring chains. Each mooring chain is held to the sea floor by piles.

[33] While permanently connected to the seabed through a dedicated turret mooring system, the Prelude is designed to pivot/rotate according to wind and sea conditions while it remains fixed to the sea floor. 13 This movement is known as heading changes.

[34] The Prelude is exposed to, and has been designed to withstand, severe weather and remain in the area where it is moored even in the most extreme cyclonic conditions.  14 

[35] To the extent that the mooring chains permit movement of the Prelude that movement occurs in the following ways:

a. In the Central Control Room (CCR) there is a Storage and Loading Panel which inter alia operates the pumps and valves during ballasting/de-ballasting. Ballasting and de-ballasting operations are critical to the stability and integrity of the Prelude as it involves the release and intake of water to and from the ballast tanks to ensure the Prelude maintains an even keel and a constant 19.1m draft.  15

b. The Prelude facility has three Rolls-Royce USL455FP Azimuth Thrusters. A Thruster Assisted Heading Control (TAHC) is used to control heading changes caused by wind and current. Tankers come alongside the Prelude for cargo to be transferred and condensate tankers come astern for cargo transfer. Specific headings are required for the approach and departure of these tankers depending upon the product operation. The TAHC is used to position the Prelude and prevent heading changes.  16 If there are crane lifts over the side of the Prelude, the TAHC and the thrusters are used to swing the facility away from sub-sea assets. This minimises the risk of damage to these assets should a lift be inadvertently dropped. 17 There is a limit to how much the Thrusters can control heading changes. In some circumstances wind and sea conditions will prevail over the Thrusters.18

[36] Unlike many vessels Prelude does not have a dynamic positioning system to hold it in place. The Prelude is held in place by the mooring chains. 19 The evidence of Mr Kaighin is that Prelude cannot navigate or move itself from one place to another. It has no equipment required for navigation, such as a navigational bridge, navigational radar and collision avoidance, and does not have a team as required for navigation, such as a bridge team or captain. Prelude has a radar but this radar is only to detect vessels that come close to Prelude, not for navigation.20

[37] Prelude is supported by three infield support vessels, which provide security, surveillance, emergency standby and product transfer support.  21 Other multi-purpose supply vessels provide additional transport and logistical support, out of Darwin.22

[38] Mr Sticpewich commenced employment with Shell in 2014 in the role of Lead Production Technician in South Korea where the Prelude was constructed. 23

[39] Mr Sticpewich is currently employed by Shell on the Prelude pursuant to a written contract of employment dated 5 May 2017. The contract identifies his role as Lead Production Technician.  24

[40] Mr Sticpewich holds a Master (Unlimited) Certificate of Competency issued by AMSA. 25

[41] Mr Sticpewich is the only Lead Production Technician who holds a maritime qualification. 26

[42] There are four other Lead Production Technicians working on the Prelude. 27

[43] The Lead Production Technicians have oversight over a number of technicians on the Prelude in the following key areas: 28

a. LNG Operations;

b. Utilities Operations;

c. Storage and Loading Operations; and

d. Upstream Operations.

[44] Each of these key areas of operation requires oversight at any given time whilst a Production Specialist is on the Prelude. 29

[45] The duties of the Lead Production Technicians are to:

a. coach and mentor Production Technicians across Prelude, which includes the Control Room Technicians and Production Technicians in the field;

b. undertake maintenance preparation work;

c. prepare isolations for maintenance activities to occur;

d. confirm that procedures have been executed correctly;

e. assist in setting the work plan for the day for the Control Room Technicians and Production Technicians in the field; and

f. troubleshoot issues that arise with the Control Room Technicians and Production Technicians in the field, such as early identification, diagnosis and rectification of equipment and process issues as they arise.

[46] In addition to the operational work (detailed above), the Lead Production Technicians also spend time performing administrative tasks, for example: performance reports, attending meetings and preparation for future operations. 30

[47] The Lead Production Technicians work an alternating roster of three weeks on the Prelude, four weeks off, three weeks on the Prelude then five weeks off. 31

[48] There are two Lead Production Technicians onboard the Prelude at any given time performing alternate 12-hour shifts. 32

[49] There is currently no enterprise agreement covering the workforce engaged by Shell on the Prelude. 33

[50] On, or about, 14 December 2020, Shell issued a Notice of Employee Representational Rights (NEER) to the Employees to commence negotiations in relation to the Proposed Agreement.  34

[51] On, or about, 14 December 2020, Shell separately provided employees with a Fact Sheet (Fact Sheet 02).  35

[52] On 11 January 2021 the AMOU gave notice to Shell of its interest as a bargaining representative of Mr Sticpewich.  36

[53] On 25 January 2021, Shell informed the AMOU that it did not consider Mr Sticpewich

was eligible for membership of the AMOU and that, accordingly, it did not recognise the AMOU as a bargaining representative.  37

[54] Since on or about 17 February 2021, Shell has been bargaining with the AWU, the EBRs and the CEPU for the Proposed Agreement.  38

[55] On 19 February 2021, the AMOU’s solicitors wrote to Shell setting out the reasons why the AMOU says that it is entitled to represent the industrial interests of Mr Sticpewich in relation to the Proposed Agreement.  39

[56] On 25 February 2021, Shell’s solicitors responded to the AMOU’s solicitors asserting that:  40

a. Mr Sticpewich is not eligible for membership of the AMOU;

b. the AMOU is not entitled to represent Mr Sticpewich’s industrial interests as a bargaining representative; and

c. that Shell would not recognise the AMOU as a bargaining representative.

[57] On 26 February 2021, the AMOU sent a good faith bargaining concerns notice to Shell

pursuant to section 229(4)(b) of the FW Act (Concerns Notice). 41

[58] On 26 February 2021, Shell responded to the Concerns Notice. 42

[59] A second bargaining meeting was held on 3 March 2021. A third bargaining meeting was held on 22 March 2021. A fourth bargaining meeting was held on 21 April 2021. A fifth bargaining meeting was held on 21 May 2021. A sixth bargaining meeting was held on 25 June 2021. Shell invited Mr Sticpewich to attend this negotiation, which he did. He had input during the negotiations and was also invited to attend the negotiations scheduled for 15 July 2021. 43

[60] At the time of the Hearing no agreement had been reached as to the terms of the Proposed Agreement.

Consideration

[61] In order to be eligible to apply for a bargaining order the AMOU must be a bargaining representative of an employee who will be covered by the Proposed Agreement.

[62] Sub sections 176(1)(b) and (c) of the FW Act set out who may be a bargaining representative of an employee who will be covered by a proposed agreement.

[63] Sub section 176(1)(c) of the FW Act provides that an employee who will be covered by an agreement may appoint a person as his or her bargaining representative provided that the person does so in writing.

[64] Sub section 176(1)(b) of the FW Act sets out the circumstances in which an employee organisation will be the default bargaining representative of an employee who will be covered by an agreement:

“(b) an employee organisation is a bargaining representative of an employee who will be covered by the agreement if:

(i) the employee is a member of the organisation; and

(ii) in the case where the agreement is a multi‑enterprise agreement in relation to which a low‑paid authorisation is in operation—the organisation applied for the authorisation;

unless the employee has appointed another person under paragraph (c) as his or her bargaining representative for the agreement, or has revoked the status of the organisation as his or her bargaining representative for the agreement under subsection 178A(2);”

[65] The Proposed Agreement is not a multi-enterprise agreement.

[66] It is agreed that Mr Sticpewich performs work that will be covered by the Proposed Agreement. Mr Sticpewich says that he is a member of the AMOU. Mr Sticpewich also says that he has not appointed any person to be his bargaining representative and has not revoked the AMOU’s status as his default bargaining representative. 44

[67] I am therefore satisfied that the AMOU has a member who is currently employed by Shell on the Prelude of performing work that will be covered by the Proposed Agreement.

Does the AMOU have constitutional coverage of Mr Sticpewich?

[68] An employee organisation such as the AMOU cannot be a bargaining representative of an employee unless the organisation is entitled to represent the industrial interests of the employee in relation to work which will be performed under a proposed enterprise agreement.⁴⁵

[69] An employee organisation is entitled to represent the industrial interests of an employee in relation to work which will be performed under a proposed enterprise agreement, if the employee organisation’s eligibility rules permit it to enrol the relevant employee/s as a member’s. 46

[70] Whether or not the AMOU is entitled to represent the industrial interests of Mr Sticpewich turns on the proper construction of Rule 6, Part 1 of the Rules of AMOU (Rules).

[71] The following principles apply to the interpretation of union eligibility rules:

a. Union rules are to be read in in their “natural and ordinary sense”. 47

b. A liberal and purposive approach should be taken. 48

c. Words in an eligibility rule should not be interpreted in isolation such as to give the rule a wide and indefinite scope that is unlikely to have been intended. 49

d. Words should be read harmoniously with the rest of the instrument. 50

[72] Rule 6, Part 1 of the Rules (Disputed Rule) provide that the AMOU has coverage of:

“… [m]embers of Mercantile Marine and dependent services possessed of certificates of competency issued or recognised by the Commonwealth of Australia, or any State thereof, the Board of Trade, or by any British possession or dependency, or possessed of any qualifications entitling him to undertake any duty connected with the navigation of vessels.”

[73] The AMOU submit that the Disputed Rule requires only two conditions to be met in order for Mr Sticpewich to be eligible to be a member of the AMOU by virtue of the Disputed Rule. Namely that:

a. he is a member of the Mercantile Marine or dependent services; and

b. he holds a certificate of competency issued by an authority listed in the Disputed Rule which entitles him to undertake any duty connected with the navigation of vessels.

[74] Shell submit it is not a member of or in the industry of “Mercantile Marine” and that therefore Mr Sticpewich is not employed in the mercantile marine industry. Furthermore, Shell submit that it is not sufficient merely that Mr Sticpewich holds a relevant qualification. Shell submit that Mr Sticpewich must also use the qualification in the course of his duties to be eligible to be a member of the AMOU pursuant to the Disputed Rule.

Is Mr Sticpewich a member of the Mercantile Marine?

[75] The meaning of the phrase ‘member of the Mercantile Marine or dependent services’ was considered by the Full Bench of the Western Australian Industrial Commission in Merchant Service Guild of Australia, Western Australian Branch, Union of Workers v Fisheries Department [1998] 78 WAIG 3648 for the purposes of determining eligibility for membership of the State registered union.

[76] In that decision the Full Bench held that to be eligible for membership a person must be an officer or crew member of a vessel of a nation engaged in the interchange of goods or commodities on a large scale between different countries or different parts of the same country. 51

[77] In that case, fisheries officers holding navigation qualifications and sailing patrol vessels were held not to be members of the ‘mercantile marine’ because they were engaged in fishery management and conservation and not in commerce.

[78] The AMOU submit that the Prelude is a vessel because it is registered as a barge and as an offshore processing vessel.

[79] The AMOU submit that the Prelude is a vessel engaged in commerce and therefore the mercantile marine because it is involved in commercial activities namely the activities of capturing and transferring commodities from the seabed to other vessels for profit.

[80] In the alternative the AMOU submit that Prelude is a dependent service of the mercantile marine because the activity of loading commercial vessels with commodities at sea is an activity which pertains to shipping and the Prelude is dependent on the mercantile marine to perform this activity.

Is the Prelude a ship or vessel?

[81] The AMOU submit that the Prelude is a vessel because it is registered as a barge and as an offshore processing vessel. The AMOU say the Prelude has a hull, a deck, a bow, a radar and a global maritime distress signal system. They point out that the Prelude is seagoing and is intended to be ‘at sea’ for an extended period of time. In support of their assertion that the Prelude is a vessel they also point out that the Prelude is capable of being moved and sunk.

[82] Shell submit that the Prelude is properly characterised as a floating LNG, LPG and Gas Condensate production and storage facility and not a ship or vessel.

[83] Whether something is a vessel or ship has been given consideration in a number of cases.

[84] In Polpen Shipping Co Ltd v Commercial Union Assurance Co Ltd (1942)74 LI L Rep157 it was said whether something is a ship or a vessel involves: 52

a. it being a hollow structure intended to be used in navigation in the sense that it is intended to do its real work upon the seas; and

b. whether it is capable of free and ordered movement.

[85] In Steedman v Scofield [1992] 2 Lloyd’s Rep 163, it was said that “a vessel is usually a hollow receptacle for carrying goods or people and in common parlance refers to a craft
larger than rowing boat.” 53

[86] In Von Rocks [1998] 2 Lloyds Rep 198 it was said that the object “must not merely be capable of traversing the surface of water but must spend a reasonably significant part of its operative life in such movement.” 54

[87] In Merchants Marine Insurance Co Ltd v North of England Protecting and Indemnity Association (1926) 26 LI L Rep 20126, it was said that having no motive power of its own, having no rudder and only being moved very occasionally suggested an object was more of a “floating platform” than a vessel or a ship. 55

[88] In the more recent case of Guardian Offshore AU Pty Ltd v Saab Seaeye Leopard 1702 Remotely Operated Vehicle Lately On Board The Ship ‘Offshore Guardian’ [2020] FCA 273, the Court considered whether a remotely operated underwater vehicle (ROV) was a vessel of a kind used in navigation, and therefore a “ship” as defined in the Admiralty Act 1988 (Cth). The Court explored a wide range of cases regarding this specific definition and observed that: 56

“… the cases consider the extent to which the particular structure lacks what might be described as the usual attributes associated with the concept of a vessel that can navigate by water and whether the departure is so great that it can no longer be given the relevant description”.

[89] The ROV was found not to be a ship for various reasons including that it was “only self-propelled in a limited sense” and had limited capacity to be steered or navigated through water. 57

[90] Other than when it was towed from the berth in Korea where it was constructed to its location in the Prelude Field, the Prelude is not designed to, and has not moved further than, the constraints of its mooring chains. It is permanently moored to the seabed for its intended life of 25 years. 58 It is designed to withstand all adverse weather conditions in situ.59

[91] Prelude does not have a navigation bridge or a rudder. 60 It is not navigated or self-propelled beyond the constraints of its mooring chains. The Thrusters role is to ‘face’ the vessel in a particular way to facilitate the safe loading and unloading of goods. Similarly, the ballast system is intended to position the vessel in a vertical direction to facilitate the safe loading and unloading of goods. Neither the Thrusters nor the ballast system is intended to propel Prelude so that it might transverse the seas.

[92] The radar is used on the Prelude to alert it to the presence of potential sources of collision not for the purposes of navigation. 61

[93] The primary purpose of the Prelude is to extract, refine and store hydrocarbons. The Prelude is not used to transport goods or people from one geographic location to another. It is in effect a refinery located at sea from and to which goods and people are transported.

[94] I am not swayed in my view that the Prelude is not a ship or vessel by the AMOU evidence that the Prelude is registered under the Shipping Registration Act 1981 (Cth). I am satisfied that its capture by that legislation achieves the statutory purposes of that legislation and should not be relied upon to artificially extend the boundaries of what is recognised at common law as a ship or vessel.

[95] Similarly, I am not swayed in my view that the Prelude is not a ship or vessel by the AMOU evidence that the Prelude is recorded on the Equasis international shipping database as an Offshore Processing Ship. Prelude is registered under Lloyd’s Register International as a “Floating LNG, LPG and Gas Condensate Production and Storage installation. Llyod’s Register International is non-governmental organisation that establishes and maintains technical standards for the construction and operation of ships and offshore structures. It certifies that the construction of a vessel complies with relevant standards and carries out regular surveys in service to ensure continuing compliance with the standards. The information on Equasis (Electronic Quality Shipping Information System) is sourced from public and private sources. Equasis is not a registration database. 62

Is the Prelude engaged in the interchange of goods and commodities?

[96] The AMOU submit that the Prelude is a vessel engaged in commerce and therefore the mercantile marine because it is involved in commercial activities namely the activities of capturing and transferring commodities from the seabed to other vessels for profit.

[97] Shell submit that the Prelude is not part of the mercantile marine because it is not engaged in the shipping goods from one place to another.

[98] The Prelude is not involved in the interchange of goods or commodities on a large scale between different countries or different parts of the same country as contemplated in Merchant Service Guild of Australia, Western Australian Branch, Union of Workers v Fisheries Department [1998] 78 WAIG 7648.

[99] The key characteristic of the mercantile marine is that it uses ships to transport goods for commercial purposes as opposed to the road transport industry which uses trucks or the airfreight industry which uses aircraft.

[100] The Prelude does not ‘ship’, ‘carry’ or move goods from one geographic location to another. The Prelude extracts processes and stores natural gas from the surrounding seabed. The gas is shipped, carried or moved by those vessels which dock alongside the Prelude from the Prelude gas field to customers onshore in Australia and overseas.

Is the Prelude engaged in a dependent service?

[101] The AMOU submit that Prelude is a dependent service of the mercantile marine because the activity of loading commercial vessels with commodities at sea is an activity which pertains to shipping and the Prelude is dependent on the mercantile marine to perform this activity.

[102] Shell denies that the Prelude is a dependent service of the mercantile marine.

[103] In Merchant Services Guild of Australia, Western Australia Branch, Union of Workers v Fisheries Department of Western Australia the Full Bench made it clear that the “dependent services” must a service to Mercantile Marine, that is the relevant service must play a part or assist the Mercantile Marine in the transport of goods by way of commerce or “… assist, facilitate the role of, form an adjunct to or contribute to the function of Mercantile Marine”. 63

[104] The operation of the Prelude does not provide a ‘service’ to the mercantile marine. Rather, the mercantile marine provides a service to the Prelude’s operations in the industry of oil and gas production. In the same way a land-based refinery or even a mine does not provide a service to ships that load gas or ore in a port.

[105] I therefore find that the Prelude is not a dependent service to the mercantile marine and Mr Sticpewich is not a member of the mercantile marine or a dependent service.

Does Mr Sticpewich hold a relevant qualification?

[106] Mr Sticpewich holds a Master (Unlimited) Certificate of Competency issued by AMSA. 64 Shell have agreed to be responsible for the fees associated with renewing this qualification.

[107] I note that Mr Sticpewich is the only Production Specialist who holds a maritime qualification.

Does the Disputed Rule require Mr Sticpewich to use the relevant qualification to undertake his duties?

[108] The AMOU submit that it is clear from the text of the Disputed Rule that eligibility for membership of the AMOU pursuant to the rule does not require that the person be employed to perform a particular role or be required to use the qualifications in the course of their duties.

[109] In support of this submission the AMOU point to other parts of the Rules which specifically make reference to the use of a skill or qualification in employment. For example:

a. Rule 6 Part 1 paragraph 2 provides that Indentured Shipwrights must not only be an Indentured Shipwright as a trade or calling, but also be 'performing the functions of' a shipwright.

b. Rule 6 Part 1 paragraph 3 which provides that Marine Engineers must not only be a Marine Engineer, but also be ‘so engaged’.

c. ROV Pilot/Technicians who must be ‘employed or engaged in the function of ROV Pilot/Technician’.

d. Part 2 generally requires both employment ‘in or in connection with’ the Stevedoring Industry and that the employment be ‘in connection with’ the listed occupations.

[110] The AMOU submit that the presence of an exception for “certificated officers” who performed the role of managing shipowners, marine superintendents or officials of the Navigation department at the time the rule was first formulated, and its subsequent removal confirms the AMOU’s construction of the Disputed Rule.

[111] Shell submits that the Disputed Rule must require that the individual is undertaking duties connected with the navigation of a vessel to be eligible for membership of the AMOU. It cannot be enough for the individual to only hold the certificate of competency or qualification.

[112] The interpretation of the Disputed Rule proposed by the AMOU is nonsensical. It would have the effect that anyone who worked in commercial shipping could be a member of the AMOU provided they had the appropriate certificate of competency or qualification. For example, on the AMOU’s interpretation, a person working as a chef, a cleaner or a professional stage performer on board a commercial ship could be covered by the AMOU if they held a certificate of competency or a qualification, even though they would never be required to use that qualification in any form.

[113] Furthermore, to apply the Disputed Rule as only an industry rule would leave the requirement for a certificate of competency with no work to do. If it is enough for the employer to be in the “industry” of mercantile marine, whether or not the employee has the certificate of competency then becomes of no relevance. The second part of the Disputed Rule is clearly an occupational rule, which requires the employee to be performing duties associated with the navigation of vessels. This is made clear from the words “entitling him to undertake any duty connected with the navigation of vessels…”. If merely holding the competency was sufficient the words “entitling” and “undertake” would be unnecessary.

[114] I am therefore satisfied that eligibility for membership of the AMOU pursuant to the Disputed Rule requires that the person be required to use the qualifications in the course of their duties.

Does Mr Sticpewich use the relevant qualification to undertake any duty connected with the navigation of vessels?

[115] Mr Sticpewich is one of five Lead Production Technicians. The duties of the Lead Production Technicians are to: 65

a. coach and mentor Production Technicians across Prelude, which includes the Control Room Technicians and Production Technicians in the field;

b. undertake maintenance preparation work;

c. prepare isolations for maintenance activities to occur;

d. confirm that procedures have been executed correctly

e. assist in setting the work plan for the day for the Control Room Technicians and Production Technicians in the field; and

f. troubleshoot issues that arise with the Control Room Technicians and Production Technicians in the field, such as early identification, diagnosis and rectification of equipment and process issues as they arise.

[116] While I am satisfied that Mr Sticpewich may hold a certificate of competency, I am not satisfied that he is required to do so to undertake any duty connected with the navigation of vessels specifically or to perform his role more generally.   

[117] Mr Sticpewich says that he brings the skills and experience of a person holding a Master Certificate to the performance his duties. 66 I am not satisfied that he is required to do so to perform his role.

[118] None of the other Lead Production Technicians, who perform the same role as Mr Sticpewich, have these qualifications.

[119] In his own evidence he concedes that Shell employ either directly or indirectly individuals which are required to hold relevant certificates of competency who oversee or guide the performance of his work. For example, he concedes that the storage and loading stability plans are actually created by the Lead Service Technicians who hold a Master Certificate 67, that Shell bring in specialist ballast operators who hold certificates of competency to oversee complex ballast operations68 and that the fixed headings for upstream operations is determined by ‘special vendors’.69

[120] Mr Sticpewich asserts that there are significant issues and delays in Storage and Loading Operations when he is not rostered on the Prelude which he attributes to a lack of marine skills and experience among the other Production Specialists that do not hold a certificate of competency. 70

[121] I note that Mr Sticpewich is only rostered on the vessel for 6 weeks out of every 15 weeks. On those weeks he is rostered only half of that time is he performing his duties. Notwithstanding his absence and the lack of certificates of competency among his peers the activities of the Prelude continue effectively in Mr Sticpewich’s absence.

[122] More specifically I am not satisfied that Mr Sticpewich undertakes any duty connected with the navigation of vessels.

[123] Navigation means “the nautical art or science of conducting a ship from one place to

another.” 71

[124] Mr Sticpewich cannot be undertaking any duty associated with the navigation of vessels as Prelude is permanently moored to the seabed so it cannot move from one place to another. I am not satisfied that changing the direction of the Prelude via the thrusters or changing the height of the Prelude above sea leave via the ballast tanks constitutes sufficient movement to be characterised as movement from one place to another.

[125] For the reasons set out earlier in this decision I am satisfied that the Prelude is not a vessel or ship and therefore even if it can be said to move from place to place, the process of such movement cannot fairly be described as navigation.

Should bargaining orders be issued?

[126] Even if I was satisfied that the AMOU was eligible to apply for a bargaining order in their capacity as the default bargaining representative of an employee who will be covered by the Proposed EA, I would not be inclined to grant such a bargaining order on the evidence before me.

[127] A bargaining representative may only apply for a bargaining order if the prerequisites set out in sub-section 229(4) of the FW Act have been satisfied. Sub section 229(4) of the FW Act provides that:

“The bargaining representative may only apply for the bargaining order if the bargaining representative:

(a) has concerns that:

(i) one or more of the bargaining representatives for the agreement have not met, or are not meeting, the good faith bargaining requirements; or

(ii) the bargaining process is not proceeding efficiently or fairly because there are multiple bargaining representatives for the agreement; and

(b) has given a written notice setting out those concerns to the relevant bargaining representatives; and

(c) has given the relevant bargaining representatives a reasonable time within which to respond to those concerns; and

(d) considers that the relevant bargaining representatives have not responded appropriately to those concerns.”

[128] The AMOU is concerned that Shell, in its capacity as a bargaining representative for the Proposed EA, has not met and is not meeting the good faith bargaining requirements set out in section 228 of the FW Act by refusing to recognise the AMOU as a bargaining representative for the Proposed EA.

[129] Section 230 of the FW Act sets out the circumstances in which the FWC may make a bargaining order:

“Bargaining orders

(1) The FWC may make a bargaining order under this section in relation to a proposed enterprise agreement if:

(a) an application for the order has been made; and

(b) the requirements of this section are met in relation to the agreement; and

(c) the FWC is satisfied that it is reasonable in all the circumstances to make the order.

Agreement to bargain or certain instruments in operation

(2) The FWC must be satisfied in all cases that one of the following applies:

(a) the employer or employers have agreed to bargain, or have initiated bargaining, for the agreement;

(b) a majority support determination in relation to the agreement is in operation;

(c) a scope order in relation to the agreement is in operation;

(d) all of the employers are specified in a low-paid authorisation that is in operation in relation to the agreement.

Good faith bargaining requirements not met

(3) The FWC must in all cases be satisfied:

(a) that:

(i) one or more of the relevant bargaining representatives for the agreement have not met, or are not meeting, the good faith bargaining requirements; or

(ii) the bargaining process is not proceeding efficiently or fairly because there are multiple bargaining representatives for the agreement; and

(b) that the applicant has complied with the requirements of subsection 229(4) (which deals with notifying relevant bargaining representatives of concerns), unless subsection 229(5) permitted the applicant to make the application without complying with those requirements.

Bargaining order must be in accordance with section 231

(4) The bargaining order must be in accordance with section 231 (which deals with what a bargaining order must specify).”

[130] No evidence has been presented to show that the Shell will not bargain with the AMOU, if the AMOU were found to be a bargaining representative. Shell is already bargaining with the AWU and the CEPU.

[131] In its written submissions Shell have confirmed that subject to any appeal rights, Shell will recognise the AMOU as a bargaining representative if they are determined by the FWC to be a bargaining representative.

[132] In these circumstances, I am not satisfied that it is reasonable in all the circumstances to make the orders sought by the AMOU.

DEPUTY PRESIDENT

Appearances:

Mr C Massey for the Applicant.
Mr N Ellery for the Respondent.

Hearing details:

2021.
Perth:
23 September

Final written submissions:

Applicant, 5 October 2021.
AWU, 19 October 2021.
Respondent, 19 October 2021.

Printed by authority of the Commonwealth Government Printer

<PR738035>

 1   Digital Court Book, 57 (DCB).

2 Warrell v Walton (2013) 233 IR 335, 341 [22].

 3   DCB, 57.

 4   Ibid.

 5   Ibid, 57, 176.

 6   Ibid, 177-179.

 7   Ibid, 204-205.

 8   Ibid, 205.

 9   Ibid, 58.

 10   Ibid, 57.

 11   Ibid, 58.

 12   Ibid, 206.

 13   Ibid, 58.

 14   Ibid.

 15   Ibid.

 16   Ibid.

 17   Ibid.

 18   Ibid, 207.

 19   Ibid, 208.

 20   Ibid.

 21   Ibid, 58.

 22   Ibid, 24.

 23   Ibid, 182.

 24   The AMOU describe Mr Sticpewich’s role as a that of Production Specialist. Mr Kidd’s evidence is that title Lead Production Technician and Production Specialist are used interchangeably to describe the same role. Given that Mr Sticpewich’s contract describes is role as Lead Production Technician I have used that job title in this decision.

 25   DCB, 180.

 26   Ibid, 11.

 27   Ibid, 183.

 28   Ibid, 184.

 29   Ibid.

 30   Ibid, 185.

 31   Ibid, 183.

 32   Ibid.

 33   Ibid, 59.

 34   Ibid, 59, 73.

 35   Ibid, 59, 74-79.

 36   Ibid, 59, 80-81.

 37   Ibid, 59, 80.

 38   Ibid, 59.

 39   Ibid 59, 82-83

 40   Ibid 59-60, 84-85

 41   Ibid, 60, 86-87.

 42   Ibid, 60, 88.

 43   Ibid, 60.

 44   Ibid, 193.

45 Fair Work Act 2009 (Cth), s 176(3).

 46   Regional Air Express Holdings Limited v Australian Federation of Air Pilots (2017) 262 CLR 456, 475 [45].

 47   R v Cohen; ex parte Motor Accidents Insurance Board (1979) 141 CLR 577, 580.

 48   Australian Rail, Tram and Bus Industry Union [2020] FWC 1489, [25].

 49   The Australian Manufacturing Workers’ Union v Resmed Limited [2014] FWCFB 3501, [34].

 50   R v Gough; ex parte Municipal Officers’ Association (1975) 133 CLR 59, 69.

 51   Merchant Service Guild of Australia, Western Australian Branch, Union of Workers v Fisheries Department [1998] 78 WAIG 3648.

 52   Polpen Shipping Co Ltd v Commercial Union Assurance Co Ltd (1942)74 LI L Rep157 at 161.

 53   Steedman v Scofield [1992] 2 Lloyd’s Rep 163 at 166.

 54   Von Rocks [1998] 2 Lloyds Rep 198 at 206.

 55   Merchants Marine Insurance Co Ltd v North of England Protecting and Indemnity Association (1926) 26 LI L Rep 201 at 202.

 56   Guardian Offshore AU Pty Ltd v Saab Seaeye Leopard 1702 Remotely Operated Vehicle Lately On Board The Ship ‘OffshoreGuardian’ [2020] FCA 273 at [80].

 57   Guardian Offshore AU Pty Ltd v Saab Seaeye Leopard 1702 Remotely Operated Vehicle Lately On Board The Ship ‘OffshoreGuardian’ [2020] FCA 273 at [84]-[86].

 58   DCB, 207.

 59   DCB, 206.

 60   DCB, 205.

 61   Transcript PN510.

 62   DCB, 205.

 63   Merchant Service Guild of Australia, Western Australian Branch v Fisheries Department of Western Australia (1998) 78 WAIG 3648, 3649.

 64   DCB, 180.

 65   DCB, 219.

 66   DCB, 185-193.

 67   DCB, 185.

 68   DCB, 187.

 69   DCB, 192.

 70   DCB, 185.

 71   Steedman v Scofield [1992] 2 Lloyd’s Rep 163, 166.