The Federal Court recently dismissed the Fair Work Ombudsman’s (FWO) case against the maritime division of the Construction, Forestry, Mining, Maritime and Energy Union (CFMMEU) and nine seafarers involved in alleged unlawful industrial action on a decommissioned vessel in late 2015.

The FWO alleged the union and crew members took unlawful industrial action by refusing to sail the MV Portland to Singapore for handover to its new owner and instead engaged in a two-month “sit-in” on the vessel.

The Court dismissed the FWO’s case finding the crew ceased to be covered by the applicable agreement at the time of the alleged unlawful industrial action and therefore had not contravened s 417 of the Fair Work Act 2009 (FW Act).

Background

ASP Ship Management was engaged by Alcoa to operate and crew the maritime vessel, the MV Portland. The vessel had been transporting alumina mined in Western Australia to Alcoa’s Portland smelter for 27 years.

In 2015, Alcoa was granted temporary voyage licences by the Federal Government which authorised it to use foreign labour on vessels transporting alumina between WA and its Victorian smelter.

In late 2015, ASP notified the crew that the MV Portland would be taken out of service and they would sail the vessel to Singapore for handover to its new owners after which their positions would be redundant.

The crew refused to sail the vessel to Singapore which had been docked at Portland for over two months. A Fair Work Commission full bench upheld an earlier decision that the refusal to sail the ship and subsequent “sit-in” constituted unlawful industrial action.

The crew were removed from the vessel by security guards in mid-January 2016 before the ship was sailed to Singapore by a replacement crew.

In April 2017, the FWO launched proceedings seeking penalties against the union and nine crew members, alleging the industrial action was unlawful and contravened s 417 of the FW Act.

S 417 provides that an employee or employee organisation “covered by” an agreement must not organise or engage in industrial action before the nominal expiry date of an in-term agreement.

The basis for the FWO’s case was that the crew and union were “covered by” the 2012 agreement at the time the alleged unlawful industrial action took place.

Final voyage not within agreement scope

The issue before the Court was whether, at the time of the alleged industrial action, the vessel had ceased “to operate in the trade” within the meaning of the agreement and whether the agreement then ceased to cover the employees and the union.

Clause 4 dealt with operation and application of the agreement which it defined by reference to a number of indicia, specifically “whilst the[se] vessel[s] continue to operate in the trade.”

The FWO contended the phrase “operate in the trade” referred to ASP’s business or commercial activities meaning any operations of the vessel whilst under ASP’s management, which it said encapsulated the crew sailing the ship to Singapore to be sold.

Justice Bromberg was not persuaded by the FWO’s construction due to “a number of textual difficulties”.

“To the contrary, the commercial activities of ASP are provided to the vessels and, in that respect, it is ASP’s business activities which operate in the commercial activities of the vessels,” he said.

“On the FWO’s construction of clause 4, the 2012 agreement would regulate the terms and conditions of employment of ASP employees on any journey to anywhere in the world, so long as those employees were employed on a vessel managed by ASP.”

Justice Bromberg found the construction contended by the FWO made little industrial sense given the “working conditions vary as between different vessels and as between vessels plying different routes”.

Further, he said this was evident by “the very existence of schedules to the 2012 agreement and its predecessor, in which different terms and conditions including swing arrangements, are specified for different vessels plying different routes.”

Justice Bromberg preferred the CFMMEU’s construction that limited the agreement to ASP employees “working on a vessel specified in the schedules manned or operated by ASP but with the additional limitation that the vessel on which those employees work is operating the regular trading route of that vessel”.

The FWO further contended that if the union’s construction is accepted, then the agreement continues to cover the crew because their jobs are described in it.

Justice Bromberg found the FWO’s proposition that an enterprise agreement covers an employee if the job performed by the employee is described by the terms of the enterprise agreement was without merit.

“It entails the novel idea that, the only prerequisite to be satisfied for an enterprise agreement to cover an employee is that the enterprise agreement include a job title or job description which accords with the job title or description for the job in which the employee is employed,” he said.

Given his findings and the nature of the answers to the FWO’s case, Justice Bromberg determined that the proceedings should be dismissed.

He gave the FWO a further opportunity to contend for a different outcome before having the matter relisted as to the disposition of the matter.

AMMA comment

Notwithstanding the unusual nature of this dispute, AMMA noted the Federal Court’s decision with disappointment given the impact industrial action (both lawful and unlawful) can have on Australia’s reputation as an attractive place to invest and do business.

AMMA supported in-principle the FWO seeking compensation for the companies affected by the maritime union’s disruptive sit-in, and to disincentivise similar action in the future.

This case also highlights the important work of the FWO as it continues to seek penalties against parties contravening workplace laws, highlighting its important role in upholding compliance.

As part of its priorities for 2020-21, the FWO has also outlined a strong focus on compliance and enforcement of Australia’s industrial relations laws.