[2021] FWC 725
The attached document replaces the document previously issued with the above code on 3 March 2021.
Typographic error at [193] amended, “four to six” now reads “six to four”.
Associate to Deputy President Anderson
Dated 11 March 2021
| [2021] FWC 725 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
Section 739 - Application to deal with a dispute
Australian Workers' Union
v
Santos Limited
(C2020/8316)
Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers' Union
v
Santos Limited
(C2020/8333)
DEPUTY PRESIDENT ANDERSON |
Alleged dispute about any matters arising under the enterprise agreement and the NES;[s186(6)] – two applications – dealt with concurrently by consent – five remote work sites in Cooper Basin – inconsistent policies regarding provision of alcohol - proposed change to standardise service of alcohol policy – dispute as to amenities to be provided and consultation requirements – scope of Commission’s power – jurisdiction found - consultations genuinely undertaken but narrowly framed – proposed change not harsh, not discriminatory and is reasonable – recommendation issued concerning implementation
[1] On 13 November 2020 the Australian Workers’ Union (AWU) and the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers’ Union (AMWU) (collectively, the Unions) applied to the Commission under section 739 of the Fair Work Act 2009 (the FW Act) to deal with a dispute.
[2] Both applications concern a common subject matter and, by consent, the applications have been dealt with concurrently.
[3] The Respondent to the dispute is Santos Limited (Santos or the Employer).
[4] The subject matter of the dispute is a decision by Santos to introduce an Alcohol Standardisation Policy at its operations in the Cooper Basin.
[5] The dispute came before the Commission under the Dispute Settlement Procedure of the Santos Ltd Cooper Basin Enterprise Agreement 2019 (the Agreement) (clause 3.1). The dispute was not resolved at the workplace level. It was referred to the Commission by the Unions under clause 3.1.2.5.
[6] Conciliation was conducted on 16 November 2020. I issued a Statement on 18 November 2020. 1 A report back was conducted on 9 December 2020. Private discussion occurred between Santos and the Unions in the period between the conciliation and report back. Despite these endeavours, the dispute did not resolve.
[7] The Unions (on behalf of employee members) sought arbitration under clause 3.1.2.6 of the Agreement.
[8] On 10 December 2020 I issued directions requiring the filing of materials. Further private discussions occurred between Santos and the Unions, as directed. The dispute remained unresolved. Materials were then filed by the Unions and by Santos.
[9] On 29 January 2021 I granted permission for the Unions and Santos to be legally represented.
[10] I heard the matter by video conference on 3 February 2021.
[11] I received written and oral evidence from three persons:
• Gary Henderson (South Australian Branch Organiser and President, AWU);
• Thomas Radzevicius (Vice President, Onshore Production Operations, Santos); and
• Thomas Rudkin (Senior People Business Partner, Midstream Infrastructure & Low Carbon Operations, Santos).
[12] I also received into evidence, by consent, statements of four employees called by the Unions – none of whom were required for examination 2:
• Todd Beighton (Operator Maintainer, Watson Oil Fields Qld – called by AMWU);
• Craig Mann (Process Operator, Moomba SA – called by AWU);
• Nathan Barnes (Process Operator, Moomba SA – called by AMWU); and
• Troy Holt (Process Technician, Moomba SA – called by AWU).
[13] Substantial materials were attached to the statements of Mr Henderson and Mr Rudkin. Other documents were admitted by consent.
[14] Each person giving oral evidence did so conscientiously and with care. The evidence of each witness was reliable insofar as it concerned matters within their direct knowledge. No challenges to creditworthiness were made. The employee witness statements are equally plausible. I am not required to determine disputed facts, though the weight to be attached to hearsay evidence of some past incidents of alcohol abuse amongst employees and contractors was a matter of submission.
[15] In determining this matter I have regard to all material before me, including the Agreement.
[16] One agreed fact was formally submitted in the following terms: 3
“With the exception of persons specifically contracted by Santos to provide amenities, Santos policy prevents all persons performing work for it on the Cooper Basin, whether as employees or contractors, from bringing alcohol into the Cooper Basin or arranging for alcohol to be brought into its facilities in the Cooper Basin.”
[17] The remainder of the facts emerge from the evidence and are not in particular dispute. I make the following findings.
[18] Santos is a publicly listed company which conducts mining exploration and production activities in the Cooper Basin and elsewhere throughout Australia. The Cooper Basin is a vast area of remote north-east South Australia and south-west Queensland.
[19] In the Cooper Basin, Santos operates five sites (company towns) where residential facilities have been established: Moomba (South Australia) and Jackson, Tillawarra and Dullingari (in Queensland). In addition to these company towns, Santos also operate at remoter locations (camps) in the Cooper Basin where no company-supplied residential facilities are provided.
[20] Work performed in the Cooper Basin involves high-risk activities performed in a remote environment of heat and extreme day and night temperature fluctuations. Long distances exist between the company towns, the remote camps and civilian townships.
[21] Moomba is the largest Santos operated site (company town) in the Cooper Basin. It is a declared Major Hazard Facility under work health and safety legislation.
[22] The workforce on Santos sites in the Cooper Basin includes a mix of fly-in fly-out (FIFO) workers. Between 1,500 and 2,000 FIFO employees and contractors are engaged on its operations in the Cooper Basin with 500 to 1,000 resident at any one time across the various sites.
[23] Employees working in the Cooper Basin generally work for fifteen consecutive days on, then thirteen days off. The span of each shift is eleven or twelve hours (per day or night), with approximately a twelve hour break between shifts.
The Agreement
[24] The industrial instrument relevant to the dispute is the Santos Ltd Cooper Basin Enterprise Agreement 2019.
[25] The Agreement binds the Employer and persons it employs in production and maintenance work in the Cooper Basin and in certain other locations.
[26] All Santos sites in the Cooper Basin (whether with residential facilities or not) are covered by the Agreement.
[27] Where residential facilities on site are provided, accommodation and meals are provided at Santos’s expense.
[28] Relevantly, one site not geographically in the Cooper Basin is covered by the Agreement: Port Bonython (near Whyalla, South Australia). The Port Bonython site does not include residential facilities.
[29] The Agreement binds employees only, not contractors.
[30] The Applicant Unions are employee organisations covered by the Agreement.
[31] The Agreement was made on 29 November 2019 and approved by the Commission on 4 February 2020. It has not reached its nominal expiry date (4 July 2021).
[32] Santos and those covered by the Agreement have not yet commenced bargaining for a new agreement. It is intended that discussions for re-negotiation will commence in April 2021 (three months prior to its nominal expiry 4).
Existing Alcohol Policy
[33] Santos operates wet sites (where workers reside on-site and where alcohol is permitted to be consumed outside of working hours), dry sites (where workers reside on-site and where no alcohol is permitted) and non-residential sites (where workers travel off-site to their private residence).
[34] Each of the five sites in the geographic area of the Cooper Basin are wet sites.
[35] A number of the remote camps in the Cooper Basin to which employees and contractors travel are also sites where alcohol is permitted to be consumed. In these instances, Santos permit those employees to bring alcohol into the remote camp purchased from the wet site according to the ratios permitted as if the workers were working at the wet site.
[36] As a non-residential site, Port Bonython is a dry site.
[37] Aside from the five Cooper Basin wet sites, Santos operates two other wet sites in Australia: Varanus Island and Devil’s Creek, both in Western Australia. These sites were acquired by Santos in 2018-19 from Conco Phillips and Quadrant. Persons working at these sites are not employed under the (Cooper Basin) Agreement.
[38] The five wet sites in the Cooper Basin (particularly Moomba) have a long history as wet sites.
[39] Whether a site is a designated wet site, dry site or non-residential site, two policies (with respect to alcohol) exist and are strictly enforced:
• no employee or contractor is permitted to work with a blood alcohol reading above 0.00%. In other words, working under the influence of any alcohol is a breach of policy and renders the person liable to summary dismissal or removal from site; and
• no alcohol is permitted to be brought on site by an employee or contractor. In the case of a wet site, the alcohol on-site is brought on-site by Santos (via its supplier) and must only be purchased and consumed according to Santos policy.
[40] Blood alcohol tests are randomly and not uncommonly conducted on Santos employees and contractors.
[41] Inspection of private baggage for alcohol being brought on-site (contrary to policy) is less commonly conducted.
[42] On wet sites operated by Santos, two different standards relating to the consumption of alcohol apply.
[43] In the five Cooper Basin wet sites, a more flexible standard (discussed below) applies.
[44] In the two remaining wet sites (Varanus Island and Devil’s Creek) a more restrictive standard applies. Santos inherited the more restrictive standard when it acquired the Varanus Island and Devil’s Creek businesses in 2018.
[45] The existing alcohol consumption policy in the Cooper Basin (applicable to employees and contractors) has the following features:
• a maximum of six beers or one bottle of wine can be purchased per worker per day;
• no limit exists on the maximum number of beers or wine per transaction except as required by the Responsible Service of Alcohol guidelines imposed on Santos by licensing authorities;
• all alcohol must be purchased at the wet mess bar but can then be consumed either in the wet mess or taken by a worker to their private room;
• no requirement exists that alcohol must be consumed in designated areas;
• alcohol purchased at the wet mess bar can be purchased unopened;
• when alcohol is purchased, purchaser identification is not recorded; and
• full strength beer as well as mid and light strength beer is available for purchase.
Proposed Alcohol Standardisation Policy
[46] Santos seeks to apply the more restrictive standard for alcohol consumption applying at its Varanus Island and Devil’s Creek wet sites to its Cooper Basin operations. This necessarily means implementing a changed policy at those sites (all in the Cooper Basin) where Santos has more flexible (but far from unregulated) arrangements.
[47] In practice, Santos describe its intention as an Alcohol Standardisation Policy.
[48] The proposed alcohol consumption policy for the Cooper Basin (to be applicable to employees and contractors) has the following features:
• a maximum of four beers or one bottle of wine can be purchased per worker per day;
• a limit of two alcoholic drinks per transaction will apply in addition to the Responsible Service of Alcohol guidelines imposed on Santos by licensing authorities;
• all alcohol must be purchased and consumed at the wet mess bar. No alcohol will be permitted to be taken by a worker to their private room or consumed or stored in a private room;
• a requirement will exist that alcohol purchased must be consumed in designated areas only (that is, in the wet mess bar and its environs, as designated);
• alcohol purchased at the wet mess bar must be purchased opened;
• when alcohol is purchased, purchaser identification will be required and recorded (that is, alcohol cannot be purchased for other persons); and
• only mid and light strength beer (not full strength) will be available for purchase.
Consultation
[49] Santos made the decision to introduce its Alcohol Standardisation Policy in mid-2020 and proposed to introduce the change from 15 November 2020.
[50] Santos commenced consultation on 7 October 2020.
[51] On 7 October 2020 Santos forwarded a communication pack to the AWU and AMWU.
[52] On 9 October 2020 Santos convened a meeting of the Cooper Basin Consultative Committee 5 (CBCC). The CBCC comprises Santos management and employees (including some Union delegates) but not Union officials.
[53] Between 9 and 20 October 2020 employees and contractors generally were briefed on the proposal via toolbox meetings held by managers with work groups.
[54] On 9 October 2020 Santos received a request from AWU and AMWU officials to attend meetings of the CBCC on the proposed change. Santos declined this request on the ground that the CBCC was said to be a local employee only forum dealing with site facilities.
[55] A further CBCC meeting was held on 20 October 2020 at which Santos provided responses to certain issues raised by employees.
[56] Santos made a further presentation to employees and contractors gathered collectively on 30 October 2020.
[57] In addition, at least five individual employees wrote to Santos managers raising issues with the proposal. Santos individually replied to each of these persons. 6
[58] On 2 November 2020 Santos issued a revised communications pack to employees.
[59] On 4 November 2020 the Unions notified Santos of a dispute under the Agreement.
[60] On 9 November 2020 (five days after the dispute notification) Santos met with AWU and AMWU officials and discussed the dispute. The Unions repeated their opposition to the proposed change.
[61] On 9 November 2020 Santos managers who had met with the Unions that day provided other managers with a summary of the discussion. 7
[62] Correspondence was exchanged between Santos and the Unions on 10 November 2020 but the dispute remained unresolved. Santos maintained its position but provided details to the Unions on how it intended the new policy to apply in remote camps.
[63] Proceedings were commenced by the Unions in the Commission on 13 November 2020.
[64] Conciliation before the Commission occurred on 16 November 2020.
[65] On 20 November 2020 private discussions occurred between Santos and the Unions. In advance of that meeting (19 November) Santos provided certain further information. 8
[66] On 27 November 2020 further private consultation occurred between Santos and the Unions. In advance of that meeting (24 November) Santos again provided additional information. 9
[67] On 2 December 2020 further private consultation occurred between Santos and the Unions.
[68] A directions hearing before the Commission was held on 9 December 2020, at which time the Unions advised that the dispute was unresolved. Although further progress on areas of dispute had been made, the matter was listed for hearing.
[69] On 11 January 2021 further private consultation occurred between Santos and the Unions, at the Commission’s direction. No resolution was reached.
[70] During the period of consultation, and in view of clause 3.11.3 of the Agreement (requiring the status quo to be maintained whilst the dispute procedure is invoked), the proposed change has not been implemented.
[71] As evident from the aforementioned narrative, the dispute, in practice, concerns a change proposed by Santos to its alcohol consumption policy in the Cooper Basin.
[72] The Unions, in their originating applications, describe the dispute as follows: 10
“a dispute regarding the disagreement of the proposed alcohol services changes and the process that was undertaken by Santos.”
[73] In more formal terms, the dispute concerns the proper application of clause 7.5 ‘Site Conditions and Amenities’ and clause 3.2 ‘Management of Change’ of the Agreement.
[74] The Unions seek that the Commission order Santos to “refrain from implementing the proposal”. 11
[75] The effect of such an order, in the view of the Unions, would be that the issue would then become the subject of negotiation during the next round of collective bargaining in pursuit of a renegotiated Agreement.
Relevant provisions of the Agreement
[76] Clause 7.5 Site Conditions and Amenities relevantly provides:
“7.5.1 Site Conditions – (Cooper Basin)
The Company will provide Employees with accommodation, the servicing of accommodation, meals and recreational facilities. Any disagreement about the adequacy of facilities and amenities will be dealt with through the consultative process of this Agreement (Part 3 – Employee Relations Management).”
[77] Clause 3.2 Management of Change provides:
“3.2 MANAGEMENT OF CHANGE
3.2.1 The Parties are committed to effective consultation on major changes that will or will be likely to have Significant Effects on Employees (“Significant Effect”). In this Clause, Significant Effects may include an outcome of change that may lead to:
• Termination of employment; or
• Major changes in the composition, operation or size of the workforce; or
• Major changes in the skills required of the workforce; or
• Elimination or diminution of job opportunities, promotional opportunities
• or job tenure; or
• A change to the regular roster or ordinary hours of work of an Employee.
• Where this Agreement makes provision for a change to occur, the change will
• not be a Significant Effect.
3.2.2 Effective consultation between the Parties is dependent upon information sharing, trust and recognition of each other’s needs and concerns. The Company is committed to a process of making an informed decision with due consideration being given to alternatives raised by the Employees or their chosen representatives.
3.2.3 When the Company has finalised a proposal to introduce change that may have Significant Effects on Employees (and prior to a final decision being made in respect to that proposal), the Company shall discuss the proposal with the Employees or their chosen representatives. These discussions will address the changes that will or may have Significant Effects, the basis for such changes and measures which may be taken to mitigate or lessen any adverse effects on Employees. This information shall also be provided in writing.
3.2.4 The Company shall consider matters raised and alternatives submitted by the Employees or their chosen representatives. It is acknowledged that agreement may not necessarily be achieved between the Parties, and provided that the change is Safe, Efficient, Legal and Logical (the SELL principle) there will be no impediment to the change being introduced.
3.2.5 The Company and Employees are jointly committed to implementing initiatives and change that is consistent with the SELL principle.
3.2.6 The Parties may refer any dispute over the application of this Clause to FWC (provided that they have complied with the prerequisite steps of the Dispute Settlement Procedure at Clause 3.1 of this Agreement).”
[78] Though there is no dispute as to the subject matter of the dispute, there are significant differences of view between the Unions and Santos on the jurisdiction of the Commission to arbitrate, and on the merits of the proposed change.
Santos
[79] On jurisdiction, Santos submit that the Commission is only able to arbitrate whether it (the company) has complied with the consultation obligations in clause 3.2.4 of the Agreement and met the requirements of clause 7.5. 12 It says that the orders sought by the Unions would be inconsistent with the right of the company to implement new policy under clause 3.2.4 of Agreement and thereby cannot be granted because of section 739(5) of the FW Act.
[80] On the issue of consultation, Santos submit that it has met its consultation obligations. It contends:
• it has consulted with employees collectively through the SBCC and individually;
• it has consulted with the Unions via meetings and exchanges of correspondence;
• it has listened to feedback and concerns;
• it has made some modifications to its initial proposal as a consequence the feedback received; and
• the obligation to consult does not mean that employees or the Union have the right to prevent the implementation of policy or to compel Santos to agree with views or proposals put.
[81] In the alternative, Santos submit that the Alcohol Standardisation Policy is, on merit, fair and reasonable. It contends:
• the Cooper Basin is an environment where safety risks are real and significant;
• the obligations held by Santos with respect to workplace health and safety are substantial, legally imposed and reflected in company values and practice. Those obligations do not differ between employees or contractors or between sites;
• the proposal is consistent with and will assist compliance with the existing obligation of employees and contractors to present for work unimpaired and with zero alcohol in their blood;
• there have been recent incidents of alcohol abuse in the Cooper Basin, and the nature of the incidents in the Cooper Basin are more frequent and serious than those in other wet sites operated by Santos;
• the proposal works effectively in other wet sites, and has not given rise to industrial complaint;
• a standardised policy concerning alcohol consumption in wet sites is consistent with the national character of the company, will reduce complexity or confusion and will facilitate a stronger internal common culture and the movement of employees and contractors between sites;
• the settings of the proposal have regard to and are compliant with Australian government guidelines concerning the safe consumption of alcohol; and
• Santos proposes measures in the Cooper Basin (and particularly at the Moomba site) to improve wet area facilities to address some of the issues raised by employees and the Unions.
The Unions
[82] On jurisdiction, the Unions submit that the Commission has jurisdiction to arbitrate both compliance with consultation obligations of the Agreement as well as the merits of the Employer’s proposal.
[83] It follows that the Commission is empowered to make orders preventing the implementation of the new policy if, on merit, that is the appropriate course.
[84] The Unions submit that the Alcohol Standardisation Policy is an extra claim and prohibited from implementation by clause 1.8 of the Agreement (No Extra Claims).
[85] On the issue of consultation, the Unions submit that Santos has not met its consultation obligations. They contend:
• Santos has an obligation under clause 7.5.1 of the Agreement to apply the full text of clause 3.2 (Management of Change), and not merely clause 3.2.4. This required consultation with Unions prior to a proposal being finalised or a final decision being made;
• Santos had finalised its proposal and made a final decision before it consulted the Unions, or for that matter, employees;
• Santos failed to consult on measures to avert implementation of the proposal. The only matters on which Santos consulted or was willing to consider were matters of detail or mitigation – not any of the six core changes proposed; and
• Santos unreasonably excluded the Unions from the SBCC consultations.
[86] The Unions submit that the Alcohol Standardisation Policy is not, in the circumstances of the Cooper Basin, fair and reasonable. They contend:
• the Cooper Basin is an environment where safety risks are real and significant. Those risks are not, however, new. They do not warrant a change of policy;
• being the party that wants to change an existing and longstanding arrangement, Santos carries the onus of establishing the case for change;
• the evidence in support of change is weak, particularly having regard to the almost complete lack of evidence about alcohol abuse or incidents involving employees in the Cooper Basin. Most of the alleged incidents, as few as they are, have involved contractors not employees, and persons not covered by the Agreement;
• the tail is wagging the dog. A policy inherited from smaller and recently acquired operations in Western Australia is being used to regulate and restrict a long-standing policy that has existed in a much larger operation, being wet areas in the Cooper Basin (and Moomba in particular);
• the policy is discriminatory because management based in Adelaide or Brisbane are able to consume unrestricted volumes or types of alcohol in any location (including at their private residence) after work, whereas employees in the five wet sites at the Cooper Basin will be required to work under a different standard;
• similarly, the policy discriminates between Cooper Basin employees under the Agreement working on wet sites and those working under the Agreement at Port Bonython, who can return to homes in and around Whyalla and consume alcohol freely;
• the policy wrongly applies government guidelines which were not intended to set a standard for the workforce profile of the Cooper Basin;
• the policy is likely to adversely impact the mental health and wellbeing of employees who need and value time to retire to their private room and speak privately to family or friends, or study, or speak on a one-to-one basis with a colleague, whilst having a drink; and
• the policy is impractical to implement and would be likely to create disputes and risk invading privacy.
[87] Principles for construction of enterprise agreements are well established. Interpretation of the instrument should be founded on language used in light of the Agreement read as a whole and its industrial, commercial and legislative context and purpose. 13
[88] These principles reject “narrow or pedantic approaches” and recognise that those who draft such provisions are likely to have “a practical bent of mind” and have been “more concerned with expressing an intention in ways likely to have been understood in the context of the relevant industry and industrial relations environment than with legal niceties or jargon.” 14 As recently stated by the Full Court of the Federal Court:15
“Words are not to be interpreted in a vacuum divorced from industrial realities but in the light of the customs and working conditions of the particular industry.”
[89] Surrounding circumstances (drawn from objective background facts including the industrial context known to the ‘parties’) can inform the interpretation of an Agreement; for example, where there are equally open alternate interpretations of its terms or where the language used is ambiguous. 16 Surrounding circumstances may include relevant history of the disputed provisions:17
“Recourse may be had to the history of a particular clause “where the circumstances allow the court to conclude that a clause in an award is the product of a history, out of which it grew to be adopted in its present form …”
[90] Further, all words in an enterprise agreement must prima facie be given some meaning and effect. 18 The construction should “contribute to a sensible industrial outcome” and one “that will operate fairly towards both parties.”19
[91] However, the task of the Commission is not to rewrite or reframe the policy intent of an industrial instrument. 20 It is a narrower undertaking: to interpret an Agreement according to its language consistent with these canons of construction.
Jurisdiction
[92] The role of the Commission in this matter is one of private arbitration, defined by the terms of the Agreement.
[93] Section 739(4) of the FW Act provides that “if, in accordance with the term, the parties have agreed that the FWC may arbitrate (however described) the dispute, the FWC may do so”. However, the Commission “must not exercise any powers limited by the term” (section 793(3)), and “must not make a decision that is inconsistent with this Act, or a fair work instrument that applies to the parties” (which includes an enterprise agreement) (section 93(5)).
[94] Clause 3.1 of the Agreement relevantly provides:
“3.1 DISPUTE SETTLEMENT PROCEDURE
3.1.1 The purpose of this procedure is to provide a process to discuss and resolve individual and/or collective grievances and disputes relating to any matter in relation to the Employee(s) employment relationship or the operation and application of this Agreement and the National Employment Standards (“Issue”). The following steps will be taken to ensure that the Issue receives prompt attention and is resolved at the earliest possible stage.”
[95] Clause 7.5.1 of the Agreement requires Santos to provide employees in the Cooper Basin with accommodation, the servicing of accommodation, meals and recreational facilities. It is not disputed that the provision of alcohol on a regulated basis in the Cooper Basin is an amenity falling within the scope of clause 7.5.1.
[96] I am well satisfied that the proposed implementation of the Alcohol Standardisation policy in the Cooper Basin is a “collective grievance and dispute” relating to any matter in relation to the “operation of application of the Agreement”.
[97] There is thus a sufficient connection between the dispute and the Agreement for the Commission’s private conciliation and arbitration jurisdiction to be enlivened.
[98] However, Santos submit that the dispute settlement “term” in the Agreement limits arbitration of this matter to consideration of compliance with the Agreement’s consultation obligation only.
[99] For the following reasons, I do not agree.
[100] Firstly, clause 3.1.2.6 does not contain words of limitation. It provides that “if conciliation fails to resolve the Issue, the Company or the Employee(s) involved in the dispute may request FWC to arbitrate the issue.” The “Issue” is that defined in clause 3.1.1. I have earlier concluded that the subject matter of this dispute, as notified, falls within the scope of clause 3.1.1. It is thus an “issue’ open to conciliation and arbitration by the Commission under clauses 3.1.2.5 and 3.1.2.6.
[101] Secondly, clause 7.5.1. provides that “any disagreement about the adequacy of facilities and amenities will be dealt with through the consultative process of this Agreement (Part 3 – Employee Relations Management)”. These are not words of limitation. I have earlier noted that the provision of alcohol on a regulated basis in the Cooper Basin is an amenity falling within the scope of clause 7.5.1.
[102] Thirdly, all components of the ‘Management of Change’ provision in clause 3.2 of the Agreement apply and are thus capable of being the subject of conciliation and arbitration. I do not accept the submission by Santos that clause 7.5.1 invokes clauses 3.2.3 and 3.2.4 only. No such words of limitation appear in clause 7.5.1. That clause engages the consultative process in the whole of Part 3 ‘Employee Relations Management’. Conciliation and arbitration of the whole of clause 3.2 is expressed in clause 3.2.6 which provides:
“The Parties may refer any dispute over the application of this Clause to FWC (provided that they have complied with the prerequisite steps of the Dispute Settlement Procedure at Clause 3.1 of this Agreement).”
[103] In exercising arbitration powers, even where private arbitration is otherwise within jurisdiction, the Commission must not “exercise any powers limited by the term” (section 739(3)).
[104] The “term” for the purposes of section 739(4) is the term in the relevant dispute settlement clause. Clause 3.1 of the Agreement contains no relevant limitation on the arbitration power.
[105] However, clause 3.2.4 of the Agreement expresses an agreed limit on the implementation of change where change has been the subject of consultation, but disagreement remains. It provides:
“It is acknowledged that agreement may not necessarily be achieved between the Parties, and provided that the change is Safe, Efficient, Legal and Logical (the SELL principle) there will be no impediment to the change being introduced.”
[106] The clause goes on to provide that “the Company and Employees are jointly committed to implementing initiatives and change that is consistent with the SELL principle.”
[107] However, the exercise of power by the Commission, even on matters within the private arbitration jurisdiction, must be consistent with the terms of section 739 of the FW Act, including section 739(5). Section 739(5) provides that the Commission must not “make a decision that is inconsistent with…a fair work instrument that applies to the parties.”.
[108] It has been observed by the Full Court of the Federal Court that section 739(5) concerns itself with the exercise of power within jurisdiction, not jurisdiction itself: 21
“Section 739(5) does not alter the character of the arbitration which the Commission undertakes under an enterprise agreement in the terms of the Agreement. It merely places a limit on the range of arbitrated (but not conciliated, it may be noted) outcomes available to the Commission in those cases in which the parties have agreed that the Commission may arbitrate.”
[109] Consequentially, whilst clause 3.2.4 of the Agreement is not a limitation on jurisdiction, it is a significant and material factor to taken into account in the exercise of the Commission’s discretionary power.
[110] Indeed, in this matter a determination inconsistent with clause 3.2.4 would be in breach of the statutory prohibition in section 739(5) of the FW Act, and of no effect.
[111] It is well established that a merit arbitration on a matter of policy that would otherwise fall within managerial prerogative involves a consideration of whether the policy imposes an unjust or unreasonable burden on employees. 22 The Unions in this matter advance their merit contentions on that basis. Those merit contentions go no further than submissions that the change proposed by Santos fails the “Safe, Efficient, Legal and Logical” principle in clause 3.2.4 of the Agreement.
[112] Hence, in this matter it is moot whether the Commission’s arbitration powers on merit are as generally available (assessing whether the change is unjust or unreasonable) or limited by the SELL principle. If the proposed change does not comply with the SELL principle it will necessarily be unreasonable or unjust. If it does comply with the SELL principle, weight must be given, as a discretionary consideration, to the Agreement stipulation that “no impediment” exists to implementation of change that complies with that principle. As noted, a failure to give effect to clause 3.2.4 of the Agreement would render a determination inconsistent with the Agreement and impermissible under section 739(5) of the FW Act.
[113] For these reasons, I conclude that arbitration of both the adequacy of consultation and of the merit of the proposed change is within the Commission’s jurisdiction, but that any outcome determined must not be inconsistent with the Agreement, including clause 3.2.4 which permits changes consistent with the SELL principle to be implemented without impediment.
No Extra Claims
[114] One further threshold issue is raised by the Unions. It is submitted that the proposed change is an extra claim and as such a breach of clause 1.8 of the Agreement. An allied submission is that any determination permitting the introduction of the change would be inconsistent with section 739(5) of the FW Act.
[115] Clause 1.8 provides:
“The parties to this Agreement will not pursue any further claims relating to the relationship of Employer and Employee, whether dealt with in this Agreement or not, until the nominal expiry date of this Agreement.”
[116] The Unions submit that the Alcohol Standardisation Policy is a further claim. The Unions recognise that the existing alcohol policy and the proposed policy is a matter of management decision, not regulated by the Agreement. However, emphasis is placed on the words in clause 1.8 “whether dealt with in this Agreement or not”.
[117] Santos has proposed a change to an existing policy not provided for by the Agreement. A change proposal, without more, does not constitute a claim with the meaning of clause 1.8. Were this to be so, clause 3.2 which contemplates the introduction of change (including change with significant effects) would sit inconsistently with the no-extra claims clause of the Agreement. Even more nonsensical would be clause 3.2.4 which provides no impediment to implementing non-agreed change that meets the SELL principle.
[118] The question then arises is whether there is some peculiar characteristic of the proposed change which would characterise it as a claim.
[119] I think not.
[120] Firstly, whilst the dispute is a matter concerning an amenity provided in the Cooper Basin within the meaning of clause 7.5 of the Agreement, the source of the amenity is not the Agreement. Its source is the policy established by Santos that its five existing sites in the geographic area of the Cooper Basin are wet areas and thus sites where the company will bring in alcohol for purchase by employees and contractors, within the scope of policy.
[121] Secondly, the evidence before me is that Santos’s existing practice and policy concerning the consumption of alcohol in the Cooper Basin was not the subject of collective bargaining at the time of making the Agreement. It was neither the product of a claim, a rejected claim or a claim reserved for future bargaining.
[122] Thirdly, in the absence of evidence of the existing policy being a term of the Agreement or a term of an employee’s contract of employment, the change doesn’t propose to vary established legal rights. It proposes to vary a discretionary company policy.
[123] The Full Court of the Federal Court has observed in Marmara that for a “claim” to exist it must in some sense be a “presumptively advantageous alteration to the existing state of affairs”. 23
[124] No doubt some employees, and certainly the Unions, consider the change to be an alteration to the advantage of the company, and to the disadvantage of employees. Santos however consider the change to be advantageous to both its interests and that of its workforce, having regard to common interests in workplace health and safety.
[125] The Court’s observation in Marmara is not to be read in isolation or out of context. The example given by the Court that follows is that of a group of employees seeking a change to a roster where they have no other means to do so. Hours of work and rosters are matters typically regulated by agreements and are commonly the subject of collective bargaining claims and counter-claims. The Court in Marmara was not hypothesising about a change to policy that is not and has never been, at least between the relevant parties, the subject of collective bargaining.
[126] Moreover, the Court in Marmara approved the observation at first instance, that the notion of “further claims” is: 24
“encompassing a proposal made by a party to the Agreement to materially change the terms and conditions of employees set out in the Agreement other than in a manner already provided for in the Agreement”.
[127] A “claim” is not limited to an assertion of established rights or entitlements, legal or moral. 25 Whilst the subject matter of the rights and obligations of an employee concerning the consumption of alcohol in the workplace or on the employer’s property is capable, in the abstract, of being a “claim”, in the context of this matter I do not so conclude. As the Court said in Marmara, “to deal with the problem at this level of generality would be to ignore context, which is of paramount importance in this area of the law”.26
[128] Santos is seeking to do no more than change an existing policy. Its actions do not have the necessary character of a “claim” for the purposes of the No Extra Claims clause in the Agreement. It does not seek that employees give up something protected by the Agreement or something related to the collective bargaining process by which the Agreement was made. The Agreement itself contemplates the implementation of change. Santos propose no bargain or exchange. It does not seek to strike a new bargain.
[129] For these reasons, Santos is not precluded from advancing its proposal by clause 1.8 of the Agreement. Nor does clause 1.8 provide a discretionary basis upon which the Commission should refrain from arbitrating the merit of the dispute (including the adequacy of consultation).
Consultation
[130] I have earlier in these reasons concluded that Santos had an obligation to comply with all elements of clause 3.2 ‘Management of Change’.
[131] I am satisfied that, considered in context, the proposal is a major change that will be likely to have significant effects on employees, within the meaning of clause 3.2. Whilst not falling within the specific examples of major change referenced in clause 3.2.1, those examples are non-exhaustive. The clause provides an “expansive scope of matters that should be subject to consultation”. 27 The change is to be objectively viewed as a “major change” with “significant effects” when considered in the following context:
• the affected employees are unable to return to their private homes, given they work in a remote location for days on end;
• the employees at all times, and even after having ceased work, reside and remain on facilities operated by the employer and thus carry 24/7 duties to comply with policies of the employer concerning the use of these facilities (including amenities and accommodation);
• the existing policy, as well as the proposed changes, regulate conduct that would be beyond the reasonable post-work regulation of employees were the employees returning to their private homes after work (as employees working at Port Bonython do); and
• employees and contractors in the Cooper Basin commonly and regularly avail themselves after work of the amenity of consuming alcohol provided by Santos and have done so for many years.
[132] The gravamen of the Union’s submission that Santos had not complied with the consultation provisions of the Agreement is that Santos consulted only once it had made a definite decision to implement the proposal, and then only consulted on mitigation measures and not the proposal itself.
[133] The Agreement (clause 3.2.3) requires consultation after a proposal has been developed but prior to a final decision with respect to its form and implementation. The consultation that is required is to address the changes, the basis for the changes and measures to mitigate adverse effects.
[134] Relevantly, clause 3.2.4 requires Santos to “consider matters raised and alternatives submitted by the Employees and their chosen representatives.”
[135] At the time Santos commenced consultation with employees on 7 October 2020 and the Unions on 9 November 2020 it had finalised a proposal to introduce Alcohol Standardisation in the Cooper Basin and had earmarked an implementation date: 15 November 2020.
[136] Did Santos fail to consult as required by clauses 3.2.3 and 3.2.4?
[137] Santos consulted with Employees via the reactivation of the Cooper Basin Camp Committee, an Information Pack, a revised Communication Pack, a collective meeting with employees and contractors and by direct responses to individual employees.
[138] This was a genuine and meaningful process of consultation. That Santos did so after having developed its proposal and having set an intended implementation date is not, in itself remarkable or indicative of a failure to meet its obligations under the Agreement.
[139] The evidence clearly establishes that these consultations involved Santos addressing the changes, the basis for the changes and measures to mitigate adverse effects. With respect to employee consultation, it complied with clause 3.2.3 of the Agreement.
[140] However, there are two respects in which the consultation by Santos fell short of its obligations under the Agreement and what was reasonable.
[141] Firstly, it failed to consult with the Unions until the Unions filed a dispute notification. Whilst the constitution of the Camp Committee was consistent with clause 7.5.5. of the Agreement, it was unreasonable to not establish a consultation structure with Union officials once they requested input (which they did on 9 October). This had the effect of Santos failing to consult with Unions covered by the Agreement for approximately one month on a matter of significance affecting their members.
[142] It was only the notification of the dispute by the Unions on 4 November 2020 and the consequential operation of the status quo provision of the Agreement (pending dispute resolution) that prevented the policy change being implemented on 15 November 2020.
[143] I do not consider the fact that some employees on the Camp Committee were also Union delegates sufficient to overcome this shortcoming. Those employees were understandably feeding information back to their officials but were not representing the collective interest of the Unions as such.
[144] Secondly, and importantly, whilst Santos discussed mitigation measures as required by clause 3.2.3, it failed to consult with either employees or the Unions on aversion measures as required by clause 3.2.4. As recently noted by the Commission in the context of a separate dispute, clause 3.2 “means that consultation is not merely about the impact of the decision and means to mitigate the impact, but about the decision itself”. 28
[145] Santos did not approach the consultations with a willingness to consult on core elements of the change and whether the change or elements of it should be implemented. Its proposal was a standardisation policy. It did not contemplate part-standardisation. By definition, it considered all limbs of the proposed change necessary to achieve its objective.
[146] This is apparent from the following communication with employees:
• the proposal communicated to employees on 7 October 2020 was expressed in absolute terms: 29
“Santos is standardising alcohol provision in operating facilities”; “Full strength beer will no longer be available”; “we are adopting these approaches across all operating assets”
• the proposal communicated to employees on 7 October 2020 defined the next steps in limited terms: 30
“There will be a 4 week period for clarification, education and consultation. Suggestions for varieties of alcoholic beverages complying with the new standard are welcomed from field personnel.”
• the proposal communicated to employees on 7 October 2020 expressly excluded consultation on the core elements (“handrails”): 31
Q: Do I get any say in this outcome? Have all the decisions already been made?
A: The new standard aligns all of Santos locations to the same requirements and took into account public health guidelines, other company policies and effectiveness of previous controls & behaviours. The standard sets handrails. Suggestions are welcomed from employees within those handrails (i.e. variations of beverage).
• on 2 November 2020, and after a month of dealing with employee concerns, Santos continued to prepare its managers for the “commencement of the new policy on 15 November 2020”; “This change will become effective from Sunday 15 November 2020” 32; and
• on 19 November 2020 Mr Rudkin wrote to Santos managers advising: 33
“It is though worth reminding the group that the purpose of this extended consultation is not to discuss the basis and objectives of the proposal but rather what mitigants the working group may propose for Santos to consider in order to reduce the impact of the change.”
[147] This is also apparent from its communications with the Unions:
• at the consultation meeting on 4 December 2020 Mr Rudkin advised the Unions: 34
“If the threshold issue is being able to take alcohol away and consume 6 standard drinks, Santos is not changing its position on that.”
• on 9 November 2020 Mr Radzevicius advised his mangers of discussions earlier that day with the AWU and AMWU (the first consultation meeting with Unions). He advised:
“Our position was made clear in that Santos has met its obligations around consultation through the Cooper Basin Camp Committee, there is nothing stopping the implementation as the change is Safe, Efficient, Legal and Logical, and we regard the matter as resolved, despite their disagreement.”
[148] Despite its unwillingness to countenance changes to the core elements of standardisation, Santos did not by that time entirely close down input or discussion on issues that related to aversion. Aversion suggestions, such as more frequent blood alcohol testing were raised but discounted as viable alternatives. For example Mr Rudkin advised the Unions at a consultation meeting on 20 November 2020: 35
“Can we increase testing, yes is the short answer…It was suggested through consultation if we could breath test every person before every shift, however the company is not looking to do this.”
[149] Mitigation suggestions were in a different category. Santos agreed to make allowance for employees in remote camps to apply the standard in a way that respected the overall limits but reflected this inability to purchase alcohol on a daily basis. Other suggestions relating to the organisation of the wet mess, its designated areas and privacy facilities were taken on board and actively considered. Mr Radzevicius, when meeting the Unions on 4 December 2020, put it this way: 36
“we will look at things to mitigate the impact of the change, whether through amenities or support to people who may struggle with the impact of the change. There are suggestions in here like investing in camp facilities and infrastructure, working with the Camp Committee about having beer with your mate in a semi quiet area. We are more than willing to resolve and help with the EAP assistance from an education perspective.”
[150] Overall, the consultation undertaken by Santos was genuine and structured but too narrowly framed. This resulted in technical non-compliance with clause 3.2.4 of the Agreement. It also resulted in later than reasonable consultation with the Unions.
[151] Santos remediated the late consultation with Unions by virtue of the extensive consultations it had with the AWU and AMWU once the dispute was notified and both prior to and during these proceedings in the Commission.
[152] However, Santos has not altered its willingness to consider mitigation measures but not aversion measures in lieu of implementing standardisation.
Merits
[153] I have noted that a consideration of whether the standardisation proposal is Safe, Efficient, Legal and Logical encompasses all the grounds on which the Unions submit that the proposal imposes an unreasonable and unjust imposition on employees.
[154] Hence, I will deal with the merits by considering these four criteria.
Safe
[155] The standardisation proposal is predicated on minimising the risk of employees (and contactors) consuming alcohol to excess and thereby either engaging in inappropriate conduct whilst on break or turning up to their next rostered shift with blood alcohol beyond a zero level.
[156] The proposal seeks to achieve this in multiple ways – by controlling the amount of alcohol that can be purchased at one time, by limiting the purchase to the person who is to consume the alcohol only, by precluding alcohol from being consumed in private quarters or stored in private quarters, to limit the strength of alcohol content in beer that can be purchased, and to require consumption in a designated wet area only where a greater level of supervision can be undertaken.
[157] The Unions do not call into question the principle that appropriate controls on the consumption of alcohol in the Cooper Basin are justifiable on safety grounds. The existing policy, as well as the standardisation policy, impose controls.
[158] The Union proposition on safety is essentially two-fold – that the additional controls proposed by the standardisation policy are unnecessary, and that they cross a line whereby the mental wellbeing of employees could be compromised.
[159] Given the undisputed proposition that the work environment in the Cooper Basin is a high risk environment, and one where safety breaches can have serious consequences given the nature of equipment and machinery in use, there is a sufficient connection between the measures proposed and the work environment to conclude that the standardisation policy, objectively considered, is likely to contribute to a safer workplace and work environment (in the sense at least of physical safety) for persons rostered and on breaks.
[160] Whether the proposal is necessary, is a matter I consider in assessing whether it is “logical”.
[161] The issue of whether the standardisation policy is unsafe in that it creates a risk to an employee’s mental health is a more vexed issue.
[162] The evidence of the employee witnesses discloses an apprehension that especially the element of the proposal which would prevent alcohol being taken back to private rooms and consumed away from others could be damaging to their peace of mind, ability to relax and thereby mental health. Mr Holt said: 37
“If Santos implements the proposed changes, I will not be able to relax over a few beers privately, which will significantly impact mental health.”
[163] According to Mr Mann: 38
“I will often call my wife and children while I have a couple of beers in my own room. It can be tough on a swing and not able to see my wife and children, and so doing this helps to make FIFO a bit easier.”
[164] These concerns are relevant issues. Mental health, not just physical health, are matters requiring risk mitigation. The consequences of a person working in a poor state of mental health can add risk not just to that individual but also to others.
[165] However, whilst I accept that these concerns are real and capable of leading to a heightened degree of frustration and perceived complication in communicating with friends and family, I am not able to conclude that the standardisation proposal, objectively considered, is unsafe on mental health grounds.
[166] Firstly, the proposal does not inhibit communication with friends and family after a shift. Nor does it inhibit that communication occurring in one’s private room. It simply precludes that communication being accompanied by drinking alcohol in one context – where the communication occurs in a private room (that is outside the designated wet mess). It does not prevent the communication occurring contemporaneously with consuming alcohol where the consumption occurs in the wet mess.
[167] Secondly, there is no evidence before me of whether the apprehended risk to mental health is verifiable on expert grounds. I have not heard from any medical or other professional in the field whether drinking alcohol in solitude or drinking alcohol in a social setting gives rise to materially different risk factors. More particularly in the context of Cooper Basin sites being wet sites, there is no expert evidence as to whether a ban on a FIFO worker drinking alone in one’s private room is likely to be helpful or unhelpful to that person’s mental health, or conversely whether a requirement that alcohol be consumed only in the presence of others in a designated wet area is likely to impact one’s mental health and, if so, how.
[168] Thirdly, the minimisation of risk of physical injury as a consequence of workplace policies regulating the consumption of alcohol may itself impact mental health risks. For example, serious physical injury or near misses may create trauma with mental health impacts for those sustaining injury or witnessing incidents or treating injury. To the extent that mental health issues are potentially relevant to safety (and they are), evidence on those aspects from experts in the filed would also be pertinent. No such evidence is before me.
[169] I conclude that, on the material before me, the standardisation proposal is safe.
Efficient
[170] The standardisation proposal is advanced as being efficient on two grounds – minimisation of risk of injury is likely to aid work being conducted productively, and standardisation brings about a national approach which makes the movement of persons between locations more efficient and simplifies the enforcement of policy.
[171] The evidence of Mr Rudkin, and more particularly Mr Radzevicious, is a sufficient basis to conclude what is largely uncontested – lower risk of safety breaches and fewer unsafe practices support efficiency and productivity. Clearly time lost from workplace injury, and time spent investigating breaches (or alleged breaches) of workplace safety, add cost and lessen productivity of injured workers and those investigating and attending to such matters.
[172] The evidence of the standardisation policy aiding efficiency by reference to its uniform character is less clear-cut. In the abstract, uniform policies applying to companies operating multiple locations (as in the case of Santos) may be easier to administer and minimise confusion for those persons who work across multiple locations. However, whilst there is some evidence that persons from time-to-time move between the Cooper Basin locations and the other wet site locations in Western Australia 39, the evidence does not deal extensively with incidence or frequency.
[173] Further, even if the standardisation policy is implemented, Santos will not have a uniform policy in all locations – some locations are dry sites and persons moving from wet sites to dry sites will still need to be separately advised of the different policies and obligations.
[174] I conclude that, on the material before me, the standardisation proposal is efficient, but the extent to which it enhances efficiency is limited and should not be overstated.
Legal
[175] Santos contend that the standardisation policy is lawful. The Unions contend that is unlawful on the grounds that it has not been proposed in a manner consistent with Santos’s legal obligations under the Agreement.
[176] I have concluded that the policy is not a breach of clause 1.8 No Extra Claims of the Agreement.
[177] I have concluded that the manner of its consultation, to date, has in two respects fallen short of the obligations held by Santos under the consultation provisions of the Agreement.
[178] That Santos has failed to comply with aspects of its consultation obligations in the course of seeking to implement the policy change does not make the standardisation policy, as a policy, unlawful.
[179] The proposed policy, as a policy with its constituent elements, gives no rise to illegality. As with the existing policy, the proposed policy is not unlawful. There is no evidence that the policy stipulations concerning the service of alcohol would breach any licensing obligations required by State licensing authorities.
[180] The Unions submit that the proposed policy could result in invasions of privacy. Whilst drinking in a designated wet mess area is a less private space to drink than in a private room, there is no basis to find that this proposed requirement would give rise to a privacy breach in a legal sense.
[181] The case for illegality on privacy or other grounds is not made out.
[182] The proposal, as distinct from the opinion I have formed about aspects of the consultation on the proposal, is lawful.
Logical
[183] The most substantive issue to consider in assessing the standardisation proposal against the SELL principle is whether it is logical. I interpret the phrase “logical” for current purposes broadly. Not just logical in the sense of having some inherent rationale, but whether it is logical in the sense of being reasonable and workable.
[184] Does the proposal have inherent rationale?
[185] For the same reasons that I have concluded the proposal is safe and likely to contribute to a safer workplace and work environment by introducing greater controls on the out of hours consumption of alcohol in high risk and remote workplace settings, it has in a broad sense inherent rationale.
[186] However, the Unions submit that certain elements of the proposal are not logical. In particular, the Unions submit that the proposed restrictions on the quantity of alcohol able to be consumed on the one day is not soundly based.
[187] Santos propose to impose that a maximum of four beers or one bottle of wine can be purchased per worker per day, down from the current maximum of six beers or one bottle of wine per day.
[188] Santos submit that this setting has regard to and is compliant with Australian government guidelines concerning the safe consumption of alcohol. The Unions submit that the policy wrongly applies government guidelines which were not intended to set a standard for the workforce profile of the Cooper Basin.
[189] The Australian Government guidelines referred to by Santos are those released by the National Health and Medical Research Council (NHMRC). 40 The guidelines provide:41
“NHMRC has guidelines to reduce health risks from drinking alcohol. The guidelines provide health professionals, policy makers and the Australian community with evidence-based advice on the health effects of drinking alcohol. They also help people make informed decisions about how much alcohol they drink, if any.”
[190] Relevantly, guideline 1 ‘Reducing the risk of alcohol-related harm for adults’ provides: 42
“To reduce the risk of harm form alcohol-related disease or injury, healthy men and women should drink no more than 10 standard drinks a week and no more than 4 standard drinks on any one day.”
[191] The guidelines define a ‘standard drink’ to mean 10 grams of alcohol.
[192] The Unions correctly point to the fact that the guideline is a guideline only, and to the fact that the guideline appears to be based on a profile of men and women, whereas the profile of the Santos workforce in the Cooper Basin is not of equal gender (it has a preponderance of males).
[193] Whilst these are relevant considerations, they do not make the proposal illogical. In seeking to reduce the maximum number of beers that can be purchased by workers in the Cooper Basin on one day from six to four, Santos has not acted slavishly to a specification. It has been informed by a contemporary standard from a reputable independent agency. It has not done so capriciously or solely for this reason. It also had regard to the fact that the maximum of four drinks per day was and remains the operative standard at its other wet sites, prior to the standardisation proposal. 43
[194] Whilst it cannot be concluded that the existing policy (maximum of six beers per day) in the context of a gender-skewed male workforce is necessarily inconsistent with the guideline or unsafe, consistency of the proposed policy with the NHMRC guideline supports a conclusion of logicality, not illogicality.
[195] Is the proposal reasonable and workable?
[196] Whilst the proposal has inherent rationale, it is proposed to be introduced in a specific workplace context – that context being sites in the Cooper Basin where an existing and more flexible (but not unregulated) policy has applied for many years.
[197] The reasonableness of the proposal is challenged by the Unions on a number of grounds, and in particular:
• it is unnecessary;
• it is harsh;
• it is discriminatory; and
• it is unworkable.
[198] I now deal with each of these issues.
[199] Considerable focus was attached by the Unions as to whether there was an evidentiary basis for the proposal.
[200] Santos submit that there have been recent incidents of alcohol abuse in the Cooper Basin, and that the nature of incidents in the Cooper Basin are more frequent and serious than those in other wet sites.
[201] The Unions submit that the evidence in support of change is weak, particularly having regard to the almost complete lack of evidence about alcohol abuse or incidents involving employees in the Cooper Basin. It is said that most of the alleged incidents, as few as they are, have involved contractors not employees, and persons not covered by the Agreement.
[202] There is force in the Union submission. Santos have only been able to produce limited evidence of a handful of incidents involving alcohol abuse in the Cooper Basin. The preponderance involve contractors and not employees under the Agreement.
[203] The incidents involve at least two separate occasions of unruly (and potentially seriously abusive and invasive behaviour towards women) by two persons intoxicated whilst not on shift (one of which arose from excessive drinking in a private room, the other from drinking in the wet mess), and one instance of urination and defecation by two contractors in a private room. 44
[204] In terms of blood alcohol testing whilst working on shift, in the 2019 and 2020 years some eleven instances of a blood alcohol reading of above zero were recorded. 45 Four concerned salaried employees (not working under the Agreement). The other seven were contractors. No employee under the Agreement recorded a positive blood alcohol reading in 2019 or 2020.
[205] I accept the evidence of Mr Radzevicius 46 that these handful of incidents in the Cooper Basin nonetheless present a comparatively more concerning picture than that in the wet sites in Western Australia; that the wet site work environments are broadly comparable; and that Santos is required by law to be equally concerned with safety risks created by contractors as it is to safety risks created by employees.
[206] However, these considerations only go so far. The effect of the evidence overall is that in and of itself it does not prove the need for policy change. This explains why the policy change has not been well received by some employees or the Unions.
[207] However, this does not render the policy change unreasonable in the sense of it being without reason or illogical. The SELL principle is not to be applied in a way that requires a civil standard of proof to be made out by Santos in order for the employer to alter policy settings in a manner that is logical. Whilst the case for the change is weak by reference to the narrow consideration of whether incidents of alcohol misuse in the Cooper Basin require a change to policy, the change is not simply predicated on evidence of misuse. Santos seek to manage risk, indeed minimise risk. Given the other considerations relevant to logicality, there is nothing illogical in the company managing risk in the manner proposed irrespective of the incidence of alcohol abuse by persons under the Agreement or working under the influence. Duties Santos owes under health and safety legislation require active risk management to avoid an unsafe workplace or unsafe systems of work. It does not meet those duties by applying an approach of risk management that is reactive only to incidents once they have occurred.
[208] The submission that the proposal is harsh (in the sense of being unjust) is largely (but not solely) directed to the element that precludes alcohol being consumed in private rooms.
[209] Leaving aside the undetermined question as to whether it is in the abstract safer to drink alcohol in the presence of others or in solitude, the employee evidence is sufficient to establish that, at least with the current structure of wet areas in Cooper Basin sites, there is utility for employees being able to undertake private activity (communication with distant family or friends, or study) in private rooms (or balconies), and the utility of such occasions is enhanced by doing so in conjunction with a drink after a shift (swing).
[210] For those employees who find utility and satisfaction in being able to do so or engage one-to-one with a colleague in a private discussion over a drink, the removal of that option has a consequence. It will force a choice to be made – either communicate or study in the privacy of a room without an alcoholic drink or do so in the designated wet mess with an alcoholic drink.
[211] Given the longstanding practice of being able to do so and not forced into this choice, it can be concluded that some employees will feel this policy change carries a harsh consequence.
[212] However, harshness (to the extent it is relevant to logicality) must at least be considered objectively. An act can have a harsh consequence but not objectively be harsh if it is rational and workable in the circumstances.
[213] Given that the policy change is a change to how alcohol is to be consumed in Cooper Basin sites and not whether alcohol is to be consumed, and given that there is a rational basis for the policy, the standardisation proposal is not objectively harsh even though for some it carries a harsh consequence or requires an unwelcome adjustment or choice.
[214] The Unions submit that the policy is discriminatory on the ground that other employees under the Agreement (those employed at Port Bonython) and other employees of Santos (including managers and executives based in major centres and capital cities) can consume an unlimited quantity of alcohol in an unregulated manner after work and, so long as they record a zero blood alcohol when next working, no restrictions or unwelcome choices are imposed on them.
[215] This submission is unconvincing. It establishes a straw man. The standardisation policy regulates conduct in wet sites only, as it is only wet sites where Santos bring in alcohol for employee consumption and where employees and contractors undertake their down time and recreation. Employees at Port Bonython and in capital cities return to private residences off-site for recreation, socialising and rest. These are entirely different circumstances, and the standardisation policy speaks to one of them only. Should any worker, managerial, salaried or other come to work on a wet site, then the standardisation policy would equally apply to them.
[216] The proposal is not discriminatory. Differential circumstances are a consequence of different working arrangements, not discriminatory application of the policy.
[217] Is the proposal workable?
[218] For a change to be logical it must objectively be workable.
[219] That the standardisation proposal is and has been operating in the two Western Australian wet sites without adverse consequence points somewhat to it being a workable policy.
[220] However, objective workability is not just a comparative exercise. The proposed policy is to be applied in real time and in different work sites (and remote camps) where on a longstanding basis a more flexible set of rules has applied.
[221] I am satisfied that the elements of the proposal other than the ban on take-aways are workable as they simply involve implementation of and adaptation to a different rule that otherwise meets the SELL principle.
[222] However, I am not satisfied that the ban on take-aways is currently workable. I have noted that this limb of the proposal will force employees who wish to consume alcohol whilst communicating privately with family, friends or colleagues, or undertaking private study, to do so in the wet mess.
[223] Whilst the evidence before me does not provide insight to the design of each of the five affected wet mess sites, the employee evidence is that at least at the Moomba and Jackson sites the infrastructure of the wet mess is noisy and inimical to private communication or endeavour.
[224] Given that it is a legitimate desire for employees to have a drink of alcohol whilst engaging in some level of private or semi-private activity, the consequence of wet mess infrastructure that does not facilitate that outcome, is that the choice required to be made by employees would currently be compromised – a Hobson’s choice.
[225] A compromised choice which forces employees to drink in the existing wet mess where in practice private communication or endeavour cannot be reasonably conducted, sufficiently taints the proposal such that I conclude that this aspect is not currently workable.
[226] That being so, this aspect is logical only if and when sufficient adjustment is made by Santos to wet mess infrastructure or designated wet mess areas in the Cooper Basin that provide workable private spaces for employees who would otherwise be communicating or studying privately with a drink in their private rooms..
[227] For these reasons, and with this one qualification, the standardisation proposal is safe, efficient, legal and logical. It meets the SELL principle as stipulated in clause 3.2.4 of the Agreement.
[228] On merit, and with this one qualification, the standardisation proposal is reasonable.
Conclusion
[229] In principle, there is no reason why not to apply clause 3.2.4 of the Agreement as the basis for determination of this dispute. Compliance with the SELL principle provides a proper basis for Santos to apply the standardisation policy without impediment, notwithstanding there being disagreement.
[230] However two impediments arise from this decision which, objectively considered, impact its implementation. The first is the failure of consultation to have adequately considered aversion measures. The second is the current unworkability of the proposal to ban take-aways.
[231] Accordingly I determine the dispute on the basis that the Santos Alcohol Standardisation Policy, with one qualification, is safe, efficient, legal and logical.
Implementation
[232] I have determined an implementation proposal to accompany this decision.
[233] In order to dispose of this matter in a manner consistent with the industrial relations context applying in the Cooper Basin where effective and respectful relations between Santos, the Unions and its employees exist, I consider it appropriate, at this stage, to make a Recommendation concerning implementation rather than formalise the implementation proposal as a direction or order. This will enable some continuing capacity for Santos, the Unions and its employees, in light of this decision, to shape the implementation proposal by agreement should they see the need to do so.
[234] I make this Recommendation in the expectation that the Recommendation will in whole or in substantial measure be adopted by the parties, and on the basis that either Santos or the Unions have rights reserved to request the Commission to translate the Recommendation into a direction or order should the need arise.
Recommendation
1. The Santos Alcohol Standardisation Policy (‘the Policy’) should not be implemented until further discussions occur between Santos and the Unions and its employees (through the Camp Committee) on any proposals advanced by the Unions or the Camp Committee to avert the need to introduce the Policy or certain limbs of the Policy.
2. Those discussions should occur in circumstances where the Unions and the Camp Committee, if so minded, present specific proposals for aversion, and Santos then gives genuine consideration to such proposals and provides a considered response to the Unions and Camp Committee.
3. That process of consultation over aversion should commence within one month of this decision and not extend beyond two months from this decision, unless agreed by Santos, the Unions and the Camp Committee.
4. If agreement on aversion measures is not reached then Santos is entitled, if so minded, to move to implementation of the Policy. This includes implementation of the following four intended measures:
i. A maximum of four beers or one bottle of wine can be purchased per worker per day;
ii. A limit of two alcoholic drinks per transaction will apply in addition to the Responsible Service of Alcohol guidelines imposed on Santos by licensing authorities;
iii. When alcohol is purchased, purchaser identification will be required and recorded (that is, alcohol cannot be purchased for other persons); and
iv. Only mid and light strength beer (not full strength) will be available for purchase.
5. However, Santos should not, without agreement of the Unions and the Camp Committee, implement the following three intended policy measures (related to the prohibition on the consumption of alcohol in private rooms and to compel consumption only in designated wet areas) until it has audited the wet mess infrastructure of each wet site in the Cooper Basin and taken reasonable steps to establish infrastructure that provides adequate capacity for employees to undertake private communication or one-on-one discussions in the designated wet mess area. The three intended measures with deferred implementation are:
i. All alcohol must be purchased and consumed at the wet mess bar. No alcohol will be permitted to be taken by a worker to their private room or consumed or stored in a private room;
ii. A requirement will exist that alcohol purchased must be consumed in designated areas only (that is, in the wet mess bar and its environs, as designated); and
iii. Alcohol purchased at the wet mess bar must be purchased opened.
6. Santos should consult with the Unions and Camp Committee on the results of its audit and on proposals to upgrade wet mess area infrastructure. Consultation requires genuine discussion, active listening and responsiveness, but does not compel agreement.
7. The four measures capable of implementation following consultation on aversion, should not be implemented earlier than 15 May 2021, that is, six months after the date of implementation originally intended by Santos.
8. Unless otherwise agreed, implementation of the three deferred measures should not occur in a particular wet site in the Cooper Basin earlier than 1 July 2021 and should occur only once Santos has taken reasonable steps to establish infrastructure that provides adequate capacity for employees to undertake private communication or one-on-one discussions in the designated wet mess area.
9. Santos may elect to implement the standardisation policy as a whole rather than in stages. In that circumstance, Santos should not implement the Policy until all elements are capable of being implemented in accordance with this Recommendation.
10. Nothing in this Recommendation precludes further consultation between Santos, the Unions and the Camp Committee on mitigation measures.
DEPUTY PRESIDENT
Appearances:
P. Dean, with permission, for the AWU and AMWU
J. Lovell, with permission, for Santos Limited
Hearing details:
2021.
Adelaide; by video.
3 February.
Printed by authority of the Commonwealth Government Printer
<PR726886>
1 Email Chambers – Anderson DP 18 November 2020
2 Statement of Mr Barnes, as amended, was admitted by consent
3 AWU Letter 2 February 2021
4 Clause 1.10 ‘Renegotiation’
5 Constituted by Clause 7.5.5 of the Agreement
6 R1 paragraphs 19 – 23 and 27 - 28
7 TR19
8 TR22
9 TR24
10 F10 2.1 paragraph 7
11 Submissions 20 January 2021 paragraph 41
12 Written submissions 20.01.2021 paragraph 40
13 Berri at [114]; AMIEU v Golden Cockerel Pty Ltd [2014] FWCFB 7447; Kucks v CSR Limited (1996) 66 IR 182; Short v Hercus (1993) 40 FCR 511; Qantas Airways Ltd v Australian Licensed Aircraft Engineers Association (No 3) [2020] FCA 1428
14 Kucks v CSR Ltd 66 IR 182 at 184; see also Amcor Ltd v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241 at 270 per Kirby J
15 James Cook University v Ridd [2020] FCAFC 123 at [65] (vii) citing City of Wanneroo v Holmes (1989) 30 IR 362 at 378-379 and WorkPac v Skene (2018) 280 IR 191 at [197]; see also Australian rail Tram and Bus Industry Union v Qube Logistics (Rail) Pty Ltd [2020] FCA 1520 at 11
16 Berri at [114] principles 10, 11 and 12; Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640 at [35]
17 James Cook University v Ridd [2020] FCAFC 123 at [65] (v) citing Short v FW Hercus Pty Ltd (1993) 46 IR 128 at 135
18 Berri at [44]
19 Amcor Limited v CFMEU (2005) 222 CLR 241 at 270 per Kirby J
20 Berri at [114] principle 2
21 Endeavour Energy v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia [2016] FCAFC 82 at [33]
22 Australian Federated Union of Locomotive Enginemen and State Rail Authority of NSW (1984) 295 CAR 188 at 191 (‘XPT Case’)
23 Toyota Motor Corporation Australia limited v Marmara [2014] FCAFC 84 at [61]
24 Ibid [37]
25 Ibid [56]
26 Ibid [37]
27 AWU and AMWU v Santos Limited Statement and Recommendation Hampton C [2021] FWC 792 at [15]
28 Ibid [16]
29 Information Kit TR1 pages 1 and 2
30 Information Kit TR1 page 3
31 Information Kit TR1 page 5
32 TR12 Email 2 November 2020 1.08pm and attached communications pack page 2
33 TR15 Email 19 November 2020 8.46pm
34 GH10 page 3
35 GH6 page 3
36 GH10 page 3
37 JA3 paragraph 8
38 JA4 paragraph 12
39 Mr Radzevicius audio 03.02.2021 3.25pm
40 JA6
41 Ibid page 1/5
42 Ibid page 2/5
43 Mr Radzevicius audio 03.02.2021 2.41pm and 3.03pm
44 Mr Radzevicius audio 03.02.2021 3.07pm
45 JA7
46 audio 03.02.2021 2.57pm; 3.07pm; 3.13pm and 3.30pm