Fair Work Act 2009
s.739 - Application to deal with a dispute

Maritime Union of Australia
v
Offshore Marine Services Pty Ltd
(C2013/6917)

Application to deal with a dispute.

[1] This is an application by the Maritime Union of Australia (MUA) for the Fair Work Commission (Commission) to deal with a dispute in accordance with a Dispute Settlement Procedure (DSP) in an enterprise agreement.

[2] The application has been made in accordance with s.739 of the Fair Work Act 2009 (FW Act).

[3] The MUA is in dispute with Offshore Marine Services Pty Ltd (OMS or Employer).

[4] The DSP is contained in the Offshore Marine Services Pty Ltd Integrated Ratings, Cooks, Caterers and Seafarers (Offshore Oil and Gas) Enterprise Agreement 2010 (Enterprise Agreement).

[5] The application was the subject of conciliation conferences but remains unresolved. The parties have been unable to agree on the question(s) for determination in arbitration.

[6] In the absence of agreement on the questions for determination in arbitration, I have reverted to the application which states that the dispute, “relates to the application of Clause 14.9 of the Agreement”.

[7] At the hearing on 13 October 2014, the MUA was represented by Ms E Palmer, Industrial Officer and evidence given on behalf of the MUA by Mr D Heath, Assistant Secretary, Western Australia Branch.

[8] The Employer was represented by Mr N Ellery of counsel. Evidence was given, on behalf of OMS, by Mr M Wakelin, General Manager, Industrial Relations and Employee Relations.

[9] At the conclusion of the hearing, I reserved my decision. This is my decision and reasons for decision.

RELEVANT STATUTORY FRAMEWORK

[10] There is no dispute between the parties that the application has been properly filed in accordance with the DSP in Clause 14 of the Enterprise Agreement and s.739 of the FW Act.

RELEVANT PROCEDURAL BACKGROUND

[11] On 8 October 2013, Mr M Elliott, former Organiser with the MUA, requested a member of the MUA to forward to his supervisor the following email:

“Dear Supervisor

As at 9 October 2011, I had accrued 37.66 “red days” in the course of my employment with Offshore Marine Services Pty Ltd (OMS). Since that time, I have been required to repay these red days to OMS and have done so to the extent that I now have accrued approximately 7 days of leave owing to me.

Upon reviewing the terms of the Enterprise Agreement, I believe clause 14.9 of the Agreement prevents OMS from requiring me to take more than 14 days leave in advance. In the circumstances, I request OMS re-credit me with 23.66 days that it has mistakenly required me to repay over and above the 14 days of leave in advance that I could be required to take.

Phil Lee”. 1

[12] The Employer responded that there had been no mistake with the re-accruing of leave.

[13] Mr Elliott responded on 15 October 2013. The relevant parts are:

“..., as long as an employee is ready, willing and able to work, you are obliged to pay them whether or not you can place the employees on board a vessel.

As such we now seek the reimbursement of Mr Lee’s 37.66 days of leave that OMS deducted from him contrary to the terms of the [2010] Enterprise Agreement”. 2

[14] Further communication between the parties took place, however, the dispute remains unresolved.

[15] The MUA filed application in the Commission for it to deal with the dispute in accordance with DSP pursuant to s.739 of the FW Act.

[16] The MUA’s Statement of Facts, the Employer’s response to the MUA’s Statement of Facts, the Employer’s Statement of Facts and the Agreed Statement of Facts were of little, if any, assistance to the Commission.

[17] This dispute is essentially a competing interpretation of subclause 14.9 of the Enterprise Agreement.

RELEVANT PROVISIONS OF THE ENTERPRISE AGREEMENT

[18] Clause 14 is entitled “Two-Crew Duty System” and reads as follows:

“14.1 A two-crew duty system will operate providing for the appointment of two crews to each vessel, one on duty and the other off duty or in transit.

14.2 To compensate for public holidays, intervals of leave, annual leave, personal/carer’s leave, compassionate leave and time spent travelling in off duty time, a Permanent Employee will accrue time off at the rate of 1.153 days leave, and a casual Employee will accrue one day, for each day spent on duty under the two crew duty system.

14.3 Any extended period of time off (e.g. outside of the normal swing) is to be taken at a mutually agreed time, having regard to the operational necessity of ensuring that only part of the permanent crew members in each department on the vessel take such time off at any one time, to ensure the continued operational efficiency of the vessel.

14.4 When proceeding on an extended period of time off, it will be the responsibility of the Employee to ensure that they have sufficient entitlements due to enable the Employee to draw continuous pay up to the day of the regular crew change when the Employee is due to rejoin their vessel.

14.5 Commencing on the first full swing period after the registration of this agreement the following new sub-clauses 14.5.1 and 14.5.2. The Employees (and/or the Union) are not to make any future claims in respect to swing off day.

14.5.1 The “on duty” period commences on the day the Employee joins the vessel.

14.5.2 The “off duty” period commences on the day after the Employee leaves the vessel.

14.5.2.1 Calculations are done on the basis that the day of joining the ship is counted as a day of duty and the day of leaving the ship will be treated as a dead day.

14.5.2.2 Where in connection with a swing change an Employee spends more than one “off duty” day travelling to or from the vessel, the Employee shall be paid a “dead day” for each additional day or part thereof spent travelling.

Where the two crew duty system is in place and the Employee’s are changing out with one another, it is agreed that the payment of a dead day recognises that there may be a need for work to be performed on the swing off day.

14.6 Off-going crew have the option of breaking their journey home if they can demonstrate to the Master a need, based on:

(a) hours of work performed in the 24 hour period prior to leaving the vessel;

(b) time of crew change; and

(c) flight times.

(d) Where the journey is broken, an Employee will qualify for a travel day should they be delayed by more than one off duty day from reaching their Home Port.

14.7 Where the two crew duty system is in place and successive crews are changing and with one another, that work performed on an Employee’s swing-off day will be paid as a dead day.

14.8 Where the two crew duty system does not operate, or where a crew member has no relief, the swing-off day will be treated as a duty day and will accrue a day’s pay and a day’s leave.

14.9 The extent to which time off granted is more or less than that due shall be debited or credited to the Employee as less or additional time off to be granted; provided that the Employee may not be required to take more than 14 and when agreed between the Parties and due to special circumstances 21 days of leave in advance.

14.10 The maximum time off an employee may accrue under this clause is 105 days. Unless agreement has been reached between the Employee and the Employer an Employee will be required to take time off to ensure that the maximum of 105 days is not exceeded.

14.11 To enable the two crew duty system to operate there shall be interchange ability as follows:

(a) Permanent crew - as between opposite numbers on different swings on the same vessel

(b) Permanent crew - as between opposite numbers on different swings casual relief and on different vessels.” (my emphasis)

RELEVANT HISTORY LEADING TO CLAUSE 14 OF THE 2010 ENTERPRISE AGREEMENT

1974 Award

[19] The earliest relevant predecessor award to a modern award was the Maritime Industry (Survey Vessels) Award 1974 (1974 Award).

[20] Clause 10 of the 1974 Award reads:

“10 - TWO CREW DUTY SYSTEM

(a) In lieu of annual leave, public holidays and accrued leave, a two crew duty system will be employed on the vessels so that each man will be required to spend only 26 weeks per year on board.

(b) ...

(c) It is recognised that due to the erratic work schedule of vessels, it may not be possible to produce the exact time on board referred to in paragraph (a) and (b) of this clause, however, any debits or credits will be carried forward”. (my emphasis)

1991 Award

[21] Subsequent to the 1974 Award and prior to the modern award was the Maritime Industry Offshore Oil and Gas Operations Award 1991 (1991 Award).

[22] Clause 14 of the 1991 Award reads:

“14 - TWO CREW DUTY SYSTEM

(a) A two crew duty system shall operate providing for the appointment of two crews to each vessel, one on duty and the other off duty or in transit.

(b) To compensate for public holidays, intervals of leave, annual leave and time spent travelling in off duty time, an employee shall accrue an entitlement to time off at the rate of 1.153 days leave for each day spent on duty under the two crew duty system.

...

(f) (i) The extent to which time off granted is more or less than that due shall be debited or credited to the employee as less or additional time off to be granted; provided that the employee may not be required to take more than seven days of leave in advance.

(ii) The maximum time off an employee may accrue under this clause is 105 days. Unless agreement has been reached between the relevant union and the employer an employee will be required to take time off to ensure that the maximum of 105 days is not exceeded. Provided that where an employee who is scheduled on the basis of 4 weeks on 4 weeks off the maximum accrual shall be 84 days.” (my emphasis)

Modern Award

[23] The Maritime Offshore Oil and Gas Award 2010 (Modern Award) provides at Part 6 - Leave and Public Holidays provisions. Clause 19 is entitled “Leave factor” and reads as follows:

“19.1 Leave factor and entitlement to leave

(a) Subject to clause 19.2(c) for each day of duty on a vessel or a day during which the employee is necessarily involved in travelling to or from a vessel or place of work as required by the employer, an employee will accrue an entitlement to 1.153 of a day’s leave without loss of pay.

(i) The on duty period commences the day the employee joins the vessel; and

(ii) the off duty period commences the day the employee leaves the vessel.

(b) The extent to which the leave granted is more or less than that actually due will be debited or credited to the employee as less or additional leave.

19.2 Calculation of leave entitlement

(a) The leave entitlement in clause 19.1 gives effect to, amongst other things:

(i) leave with pay for weekends and public holidays worked;

(ii) annual leave with pay of five weeks per year;

(iii) personal/carer’s leave;

(iv) compassionate leave; and

(v) time spent travelling in off duty time.

(b) Where in connection with a crew change an employee spends more than one off duty day travelling to or from the vessel, the employee will accrue a day off for each additional day or part thereof spent.

(c) In acknowledgement that the swing off day is an off duty day under the provisions of this clause and that an employee may be required to perform duties for all or part of the day, the employee will be entitled to an additional payment of one day’s pay at the employee’s normal rate of pay as full compensation for any work performed on each such crew change day.

(d) The maximum time off an employee may accrue under this clause is 105 days. Unless agreement has been reached between the employee and employer, an employee will be required to take time off to ensure that the maximum of 105 days is not exceeded. Provided that where an employee who is scheduled on the basis of four weeks on, four weeks off, the maximum accrual will be 84 days.

19.3 Taking of leave

(a) Any extended period of time off (i.e. outside of the normal swing) is to be taken at a mutually agreed time, having regard to the operational necessity of ensuring that only part of the permanent crew members in each department on the vessel take such time off at any one time, to ensure the continued operational efficiency of the vessel.

(b) When proceeding on an extended period of time off, it will be the responsibility of the employee to ensure that they have sufficient entitlements due to enable them to draw continuous pay up to the day of the regular crew change when they are due to rejoin the vessel.

(c) The extent to which time off granted is more or less than that due will be debited or credited to the employee as less or additional time off to be granted; provided that the employee may not be required to take more than seven days of leave in advance.” (my emphasis)

CONSIDERATION OF INDUSTRIAL INSTRUMENTS

[24] The two crew duty system enables one crew to be on duty, while another crew is off duty or in transit to the vessel. There is nothing remarkable about this arrangement as it provides for a vessel to be crewed 24 hours per day for 365 days of the year.

[25] The scheduling of the two crew system is described as “even time”, that is, the employee being either four weeks on duty and four weeks off duty, or five weeks on duty followed by five weeks off duty.

[26] While scheduling or rostering is premised on an ideal situation, reality intervenes and is impacted upon by generally two sources. Firstly, an employee’s life cannot always be conveniently compartmentalised into four or five weekly blocks. Secondly, and this is best expressed in Clause 10 of the 1974 Award, which states:

“It is recognised that due to the erratic work schedule of vessels, it may not be possible to produce the exact time on board...however, any debits or credits will be carried forward”. (my emphasis)

[27] It is useful to recall that erratic means “uncertain in movement, irregular in conduct, habit, opinion”. In short, there is a level of unpredictability in the industry.

[28] Forty years ago, the framers of the 1974 Award acknowledged the unpredictable nature of the industry and accommodated circumstances which led to employees not being able to be on board the vessel for 26 weeks per year and vessel operators not being able to provide sufficient time for employees to be on board for 26 weeks each year.

[29] The parties adapted to this unpredictable situation, with a classic “swings and roundabouts” approach.

[30] By the time of the 1991 Award, the annual salary was divided by 26 and unless expressly set out to the contrary, the fortnightly salary was the whole remuneration and there was “no additional or other payment shall be payable in respect of overtime or any penalty or disability of any kind or any other feature incident or conditions of employment” (Clause 10).

[31] The 1991 Award maintained the two crew duty system, however, to compensate for “public holidays, intervals of leave, annual leave and time spent travelling in off duty time, an employee shall accrue an entitlement to time off at the rate of 1.153 days leave for each day spent on duty under the two duty crew system”. Consequently, for a person who works an even time roster he or she works six (6) months of the year, has six (6) months off and accrues an additional 28 days per year “time off” in leave.

[32] Shortly put, irrespective of the “swings and roundabouts” of debits and credits, an employee has a further 28 days of leave for each year of service.

[33] How is that leave to be “banked” or utilised?

[34] The 1991 Award provides at subclause 14(c) that outside the normal swing, such time off is to be taken at a “mutually agreed time, having regard to the operational necessity...”

[35] When proceeding on an extended period of time, pursuant to subclause 14(d), it is the responsibility of the employee to ensure that he or she is able to be paid for the period of extended leave. In other words, the employee does not book an extended period of leave for which he is not entitled to be paid. For example, the employee is unable to take 10 weeks extended leave but he or she has only accrued 8 weeks leave.

OPERATIONAL PRACTICES

[36] The MUA submit that the dispute “is not a factual contest. Resolution of the dispute simply requires the Commission to confirm the proper interpretation of clause 14.9 of the Agreement” 3.

[37] Accordingly, the MUA focus is upon the proper interpretation of Clause 14 of the Enterprise Agreement.

[38] While the dispute may be about the proper interpretation of a particular clause in the Enterprise Agreement, the terms of the Enterprise Agreement, like any agreement, does not come into existence, in a vacuum. Terms of enterprise agreements usually deal with a set of circumstances to which, or on which, something takes effect. There are usually conditions which have to be in existence for the “effect” to become operative. Finally, the term usually provides legally for a person (usually the employer, employee or employee organisation) to be able or instructed to take action. For this reason, I consider the context to Clause 14 important.

[39] Mr Wakelin gave the following written evidence:

“The nature of OMS’s operations is such that there are often instances when a permanent employee can not be or is not placed on a vessel to meet an even-time swing. This is often because the timing of swings or requirements to join a vessel depend on a range of unpredictable factors such as weather, employee fitness for work, vessel Flag State requirements, client requirements and operational project schedules.

In addition, there are a whole range of reasons that a permanent employee might take extended leave (that is, longer than 21 days of leave in any given window) at either the employee’s own request or by agreement with OMS, including but not limited to: parental leave, sabbatical leave, a lengthy holiday or in relation to some of the examples listed at paragraph 9 above. In my experience, this sort of request or agreed arrangement is not uncommon.” 4

[40] Mr Wakelin agreed in cross examination that for most of the time, an employee can be placed on a vessel to meet an even time swing 5. However, a weather event may preclude an outgoing crew coming off a vessel and an oncoming crew from boarding In such circumstances, the outgoing crew would be accruing additional days worked and the oncoming crew may be prevented from accruing days on board a vessel. A weather event is just one of a number of events which result in “swings and roundabouts”.

“We've established that the salary and leave accrual is premised, at least in part, on even time swings but that there are various reasons why Skilled might not be able to place the full-time employee to meet an even time swing, and all these examples that we've been discussing are examples where Skilled is simply unable to place an employee and it's outside of the control of the employee. Is that correct? It's through no fault of the employee?---Not always, no.

Well, which of the examples that we've discussed might be through the fault of the employee. It sounded to me like they were all just the particular vagaries of the offshore industry?---In relation to the examples we've discussed, limited client options could well be where an employee has refused to undertake a particular type of ticket or where an employee has not been approved or undertaken some other requirement for that project, that of which would be under the employee's direct control and not ours.” 6

“I put it to you that it must be unusual that a full-time employee would simply refuse to undergo the requirements for the work. I put it to you that it would be much more common that the employee's not been offered work?---I can accept that it would be unusual. I'm not too sure how common or uncommon it would happen though.” 7

“Then at paragraph 10 of your statement, you go on to give some examples of additional reasons why an employee might take extended leave and you say at either the employee's own request or by agreement with OMS, and you give examples where an employee might request extended time off such as a lengthy holiday or you say that this also applies in relation to some of the examples given in the preceding paragraph 9 that we've just been discussing dealing with instances where OMS is not able to place the employee. So is it correct to say that there's a distinction here in your evidence between time off taken at an employee's own request, say for example a lengthy holiday, and time off taken because OMS is not able to place the employee?---I don't know that the two were mutually exclusive. I think it can be one or the other or a combination in that - so in addition to those reasons like operational project schedules, if people have also extended - requested a period of extended leave, the two may actually overlap or involve one another, so if a person is on an extended period of leave that also coincides with a project that moves, those things can combine to be a set of factors that would result in the period of negative leave.” 8

[41] The data which I have is a spreadsheet which sets out 55 employees with negative leave balances and brief comments. Of the 55 employees, five (5) have negative leave balances of over 200 days. Eleven (11) have negative leave balances of over 100 days. Twenty (20) have negative leave balances of over 50 days and the remainder less than 50 days 9.

[42] Put simply, for a variety of reasons, the 55 employees have been paid for but have not worked on those days for a variety of reasons.

[43] Finally, the brief comments which accompany the data is not sufficient to determine whether the “red days” in deficit were driven by the vagaries of the offshore oil and gas industry or at the request of the employee, or a combination of both.

INTERPRETATION OF ENTERPRISE AGREEMENTS

[44] The Full Bench in Cape Australia Holdings Pty Ltd T/A Total Corrosion Control Pty Ltd v Construction, Forestry, Mining and Energy Union [2012] FWAFB 3994 (Cape Australia Holdings) set out under the heading “The Interpretation of Enterprise Agreements” the following:

“[7] As to the general approach to the construction of enterprise agreements the observations of French J, as he then was, in City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union (Wanneroo) are apposite:

“[53] The construction of an award, like that of a statute, begins with a consideration of the ordinary meaning of its words. As with the task of statutory construction regard must be paid to the context and purpose of the provision or expression being construed. Context may appear from the text of the instrument taken as a whole, its arrangement and the place in it of the provision under construction. It is not confined to the words of the relevant Act or instrument surrounding the expression to be construed. It may extend to ‘...the entire document of which it is a part or to other documents with which there is an association’. It may also include ‘....ideas that gave rise to an expression in a document from which it has been taken’ - Short v FW Hercus Pty Ltd (1993) 40 FCR 511 at 518 (Burchett J); Australian Municipal, Clerical and Services Union v Treasurer of the Commonwealth of Australia (1998) 80 IR 345 (Marshall J).”

[8] While his Honour’s observations were made in the context of interpreting an award the same principles apply to the interpretation of enterprise agreements. For example, similar observations were made by their Honours Gummow, Hayne and Heydon JJ in Amcor v CFMEU:

“Clause 55.1.1 must be read in context. It is necessary, therefore, to have regard not only to the text of cl 55.1.1, but also to a number of other matters: first, the other provisions made by cl 55; secondly, the text and operation of the Agreement both as a whole and by reference to other particular provisions made by it; and, thirdly, the legislative background against which the Agreement was made and in which it was to operate.”

[9] The fact that the instrument being construed is an enterprise agreement is itself an important contextual consideration. As French J observed in Wanneroo, at paragraph [57]:

“It is of course necessary, in the construction of an award, to remember, as a contextual consideration, that it is an award under consideration. Its words must not be interpreted in a vacuum divorced from industrial realities - City of Wanneroo v Holmes (1989) 30 IR 362 at 378-379 and cases there cited. There is a long tradition of generous construction over a strictly literal approach where industrial awards are concerned - see eg Geo A Bond and Co. Ltd (in liq) v McKenzie [1929] AR (NSW) 498 at 503-504 (Street J). It may be that this means no more than that courts and tribunals will not make too much of infelicitous expression in the drafting of an award nor be astute to discern absurdity or illogicality or apparent inconsistencies. But while fractured and illogical prose may be met by a generous and liberal approach to construction, I repeat what I said in City of Wanneroo v Holmes (at 380):

“Awards, whether made by consent or otherwise, should make sense according to the basic conventions of the English language. They bind the parties on pain of pecuniary penalties.”

[45] I have adopted the approach of the Full Bench in Cape Australia Holdings in this application.

CONSIDERATION

[46] The 1974 Award provided that an employee was required to be on board a vessel 26 weeks a year, however, due to the erratic work schedule of vessels - debits and credits would be carried forward.

[47] By the time of the 1991 Award, while the designated title of the clause remained the same, the content had significantly changed.

[48] Subclause 14(b) of the 1991 Award provides for an entitlement to “time off” at the rate of 1.153 days “leave” for each day spent on duty. Subclause 14(c) provided for any time off outside the normal swing to be by mutual agreement. Subclause 14(d) required employees to make sure that they have sufficient credits to ensure they remain in continuous pay before rejoining the vessel and commencing on duty.

[49] Subclause 14(e) of the 1991 Award is essentially definitional.

[50] Subclause 14(f) of the 1991 Award deals with the extent to which leave is granted and the issue in dispute in this application.

[51] Subclause 14(b) uses the expression “time off” at the multiplier of 1.153 days for each day worked. With such a multiplier, the amount of days accrued for leave purposes is greater than swing time off in an “even time” swing system.

[52] It would appear, although I cannot be certain, that subclauses 14(b) and (f)(ii) of the 1991 Award are linked. An employee who works an even swing throughout the year will accrue an additional entitlement to leave of 28 days time off. Where that employee works a four (4) week on or four (4) week off swing cycle, the maximum additional entitlement is 84 days (over 3 years) or three (3) swing cycles (3 @ 28 days). Put differently, after three (3) years employment, an employee would be able to take six (6) months time off as a combination of paid leave and an even swing rostered time off. This is simply the relevant employers putting a “cap” on their ongoing leave liability.

[53] I now turn to five (5) week swings. It should be noted that the swings in the schedule to the 1991 Award are either four or five, with one exception in schedule 8.

[54] Where an employee works a five (5) week swing, the maximum additional entitlement the employee can accrue over three (3) years is 105 days. This would enable an employee to also benefit from the equivalent of six (6) swings off. The employee is able to accrue a total of 3 x 35 days off and have the benefit of a total of six (6) swings off. The cap of 105 days is again simply putting a cap on an employee’s leave liability for those employees with five (5) week swings.

[55] Subclause 14.9 of the Enterprise Agreement is a long sentence punctuated by a semi-colon. In doing so, the words after the semi-colon are linked to the words before. The conjunctive is “provided”. “Provided” means that the words coming before the semi-colon, that is:

“The extent to which time off is granted is more or less than that due shall be debited or credited to the Employee as less or additional time off to be granted”

is agreed, on the condition or understanding:

“that the Employee may not be required to take more than 14 days...in advance.”

[56] In the first part of clause 14.9 of the Enterprise Agreement, the circumstances in which “time off” is granted comes into existence, irrespective of whether the employee is in the “black” or “red” (either owed by the employer or the employee) and shall be debited or credited to the employee’s entitlement “balance sheet”. In my view, the framers of the term of the Enterprise Agreement, recognised the vagaries of the industry and put in place a term to reflect the “swings and roundabouts” of vessel crewing.

[57] However, the ability of the Employer to formally require an employee to take “time off” was not to be open ended. For this reason (and this is where the words before and after the semi-colon are connected), the Employer is limited to requiring the employee “to take no more than 14 days leave in advance”.

[58] The question is whether the 14 days or 21 days by agreement is, by occasion, or on an accumulated basis. The parties agreed that it is on an accumulated basis over the life of employment.

[59] Subclause 14.9 of the Enterprise Agreement falls within the taking of leave. The clause, as a whole, recognises “swings and roundabouts” but does not set the parameters except to say that an employee cannot go into credit by more than 84 or 105 days.

[60] On 6 March 2009, the MUA made a submission into what was proposed to be the Seagoing Industry Award 2010 (AM2008/41) (proposed Seagoing Modern Award).

[61] The MUA submitted that the proposed Seagoing Modern Award be substantially in the same terms as the Maritime Industry Seagoing Award 1999 (MISA).

[62] Under the proposed Seagoing Modern Award, it stated at 17.1(a):

“The extent to which the leave granted is more or less than that actually due will be debited or credited to the employee as less or additional leave.”

[63] At 17.3, it states:

“(a) The taking of leave will as far as practicable be correlated with the running of the vessel in which the employee is engaged. The period of leave granted will approximate as closely as possible both to the actual amount of leave due to the employee and to the date and time when the employee can most conveniently return to duty.”

[64] At 17.4, it states:

“(a) Where an employee’s leave has expired, an employer may require an employee to take up to fourteen days of leave in advance. An employee will not be required to take more than fourteen days of leave in advance unless:

(i) there has been prior consent by the employee; or

(ii) a swinger system agreement, applying to the employee, provides otherwise.”

[65] Included in the MUA submission of 6 March 2009 the following two extracts are set out to give context to this dispute, “Leave arrangements of this form have been a feature of this industry for decades” and “the provision should not lightly be disturbed”.

[66] On 18 March 2009, the MUA provided a further submission in which, relevantly responding to an AMMA submission, submit:

“The leave provisions fail to properly reflect what is in the industry currently. The current provisions should be maintained.”

[67] Following a request from the Commission, the MUA prepared a draft award in consultation with AMMA for the Oil and Gas industry alone. The submission states that the clauses are agreed except where there are competing positions. There is no dispute with respect to the draft clause at 19.3(c) which reads in identical terms to 19.3(c) of the current Modern Award.

[68] In summary, I am satisfied that the context to subclause 19.3(c) was, and is, to give the Employer the ability to require an employee to take up to 14 days paid leave in advance. Where special circumstances exist, an employee cannot be required to take more than 21 days.

[69] As can be seen from the schedule, a number of employees have been paid for leave in excess of 14 or 21 days.

[70] Having provided the MUA with the answer to the proper interpretation of subclause 14.9 of the Enterprise Agreement, the Employer can no longer force or require an employee to take paid day(s) off where the employee’s leave has expired up to 14 days in advance, or 21 days where special circumstances exist.

[71] Where to from here?

[72] In the absence of forcing or requiring employees to accrue “red” days beyond 14/21 days, the Employer can cease the arrangements. This will have consequences for the employee’s fortnightly salary.

[73] The parties, by agreement, could seek a variation to the Enterprise Agreement.

[74] Finally, the parties, by agreement, could maintain the current operational practice up until a replacement enterprise agreement is agreed upon. I note that the current Enterprise Agreement nominally expired on 30/31 July 2013.

[75] The parties may consider other alternatives which I have not set out.

CONCLUSION

[76] The MUA has sought the following order that the Employer:

“1. Reimburse employees for all accrued leave deducted in satisfaction of negative leave balances beyond 14 days (or 21 by agreement); and

2. to delete all current negative leave balances beyond 14 days (or 21 by agreement) for employees with existing negative leave balances.”

[77] I am not prepared to make any orders as I have no evidence surrounding the individual circumstances of the accruing of “red” days by these employees. It would be reckless to delete all the accrued “red” days for employees when the particular circumstances indicate that an employee has expired their leave and has not been required by the Employer to accrue “red” days but has sought and been paid “red” days for reasons totally unrelated to the Employer’s inability to provide work.

[78] The MUA urged caution and opposed changes to the terms which have existed for decades in the Modern Award process. These provisions are the subject of this dispute. The current terms of the agreement provide flexibility for both employees and the Employer. To make orders for 55 employees on the basis of one “complaint” may have significant and unknown consequences for a multitude of other employees whose circumstances I have no knowledge. For this reason, I am not persuaded to make the orders as sought by the MUA.

[79] My Associate will contact the parties for the purposes of a conference to determine the most appropriate course of action following this Decision.

COMMISSIONER

Appearances:

E Palmer with D Heath on behalf of the MUA.

N Ellery with M Wakelin on behalf of the Employer.

Hearing details:

2014:

Perth,

13 October.

 1   Exhibit A4(1)

 2   Exhibit A4(1)

 3   Exhibit A1

 4   Exhibit R4 paras 9 and 10

 5   Transcript PN225

 6   Transcript PN253 and PN254

 7   Transcript PN256

 8   Transcript PN258

 9   Exhibit A4(4)

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