Stevedore work at the Port of Sydney Harbour, variable
A stevedore worked for a port operator at Sydney Harbour. He was 60 years old and he had been employed as a stevedore for 11 years. The stevedore was classified as a variable salary employee. He was not placed on rosters and was only irregularly engaged to work but was paid a minimum fortnightly guaranteed payment of $2, 790.57. If work was available and cruise ships were berthed at Sydney Harbour, he was paid not the guaranteed sum but his actual earnings.
His work varied from week to week and from season to season depending on the cruise ship timetables. However, before the pandemic, passenger ships docked in Sydney Harbour and he worked four days of the week.
Covid-19 restrictions
With the Covid-19 pandemic and the restrictions imposed by the government, cruise ships were prohibited from entering Sydney Harbour. The port operator had no jobs to provide for its stevedores and the stevedore stopped receiving work in March 2020 when all cruise ships were banned from entering Australia. However, the port operator still paid him his minimum guaranteed payment.
Enterprise agreement and “negative circumstances”
In April 2020, the port operator informed its employees that it was activating the ‘Negative Circumstances’ provisions in subclause 13.2 of the Agreement. The port operator considered the ban on cruise ships arriving in Sydney Harbour as a ‘negative circumstance’ that impacts the work of stevedores. This clause of the agreement provides that the operator will not be able to provide minimum guaranteed hours (and the guaranteed pay).
Stevedoring work subject to economic upswings and downturns
Port operators and the stevedores have agreed to this because stevedoring is a type of work that is greatly impacted by economic upswings and downturns, and of loss of major operating contracts. There were 4 steps to be taken by the port operator to minimise the economic impact of the loss of work hours.
Step 2 to mitigate shortfall of work hours, leave entitlements
The stevedore took a leave for six days total in April while other stevedores took their accrued annual leave and long service leave entitlements. In May 2020, was stood down.
Stood down and received Jobkeeper payments
The stand down order was under the JobKeeper provisions. The port operator provided JobKeeper payments to the stevedore. In September 2020 the port operator informed the stevedore that the JobKeeper payments will cease. Then, the port operator began paying the stevedore the minimum fortnightly guaranteed payment.
To mitigate shortfall of work hours, stevedore offered alternative employment
In October, the port operator began discussing with the stevedore’s union an offer of employment at the Port of Port Kembla. Port Kembla was 95 kilometres away from Sydney Harbour where the stevedore was based. Although the stevedore’s job contract provided that he may be assigned to work at another port, the stevedore has always worked at Sydney Harbour. He had worked for a few months at another port but only because there was an emergency situation at that other port.
Declined offer of alternative employment for family reasons
The stevedore declined the offer of employment at Port Kembla because working far from home would disrupt his family life. His wife worked full time and his children were in school. The time table of cruise ships meant that every cruise ship left Sydney Harbour at 4pm, which meant that the stevedore could collect his children from school, drive them to and attend their sporting events, supervise their homework and prepare dinner for them.
Declined offer of alternative employment for financial reasons
Transferring to Port Kembla would cause him financial detriment as the port operator would not pay him a travel allowance or a meal allowance. The transfer would fatigue him so much as he would need to travel 3 hours and work 12-hour shifts. At Sydney Harbour, he worked day shifts from 4-12 hours but at Port Kembla, the operation was 24 hours and all stevedores worked 12-hour shifts. If he were to work at Port Kembla, his work and travel time would take up 15 hours each day, making him work a 60-hour week.
Stevedore gone on leave without pay, owed port operator $14,000
The stevedore filed a leave without pay because the port operator had been making guaranteed payments to him and his debt to the port operator was over $14, 000.00. He had been stood down from May 2020 until he lodged this application in December 2020.
Stevedore requested voluntary redundancy
The union then requested the port operator to offer the stevedore a voluntary redundancy. The union was of the view that the enterprise agreement required the port operator to offer the stevedore redundancy and because there was no work available at Sydney Harbour and there was no projection as to when work would be available, then the stevedore’s position has already become redundant. In fact, for all intents and purposes, all operations of the port operator involving cruise ships at the Sydney Harbour had ceased.
Port operator refused request for voluntary redundancy
The port operator refused saying that if it made the offer to the stevedore, it would have to offer the same voluntary redundancy to all other variable salaried employees when there would be work available as soon as cruise ships returned to Sydney Harbour. More importantly, the goal of the port operator was to avoid redundancies and promote full-time employment with stable and secure jobs.
Application questioning the stand down and the refusal of the redundancy request
The question that the union submitted to the Fair Work Commission was whether the port operator’s stand down order against the stevedore was valid and whether the stevedore had already become redundant.
Overall objective of the 5 Steps was to minimise redundancies
The Fair Work Commission held that while the purpose of the “negative circumstances” clause was for the port operator to minimise redundancies, it is a reality that the work of stevedoring is subject to economic highs and lows as well as subject to the port operator’s ability to provide minimum guaranteed hours of work for all employees.
Steps are mandatory, not discretionary
The enterprise agreement details four steps to be taken by the port operator: Step 1 is to notify all the employees about the cessation of operations due to the negative circumstance; Step 2 is allowing all employees to take their leave entitlements and offering alternative work; Step 3 is to downgrade the employees, reduce work hours and downgrading categories of employment; and Step 4 is to allow employees to volunteer to be made redundant; and Step 5 is making a compulsory redundancy.
The steps to be taken to mitigate the impact on employees are not discretionary. This means that when the port operator had taken Steps 2 and 3 but the mitigation efforts had not been effective, this triggers Step 4. This means that Steps 1-3 must be completed and after that, Step 4 must be commenced. These are mandatory provisions and are not within the discretion of the port operator to implement them.
No employer is compelled to make employees redundant where the employer no longer needs the employee’s job to be performed because of the changes in operational requirements. However, the words of the enterprise agreement are mandatory.
Steps 2 and 3 did not work for the stevedore
Under Step 4, employees may express an interest in volunteering for redundancy, as the stevedore had done and the port operator under the enterprise agreement cannot unreasonably refuse. While it is true that the port operator still holds a contract to provide stevedoring services to cruise ships in Sydney Harbour and it fully intends to fulfil is contractual obligations, it has failed to conduct any business at Sydney Harbour for 21 months.
It is clear that the stevedore’s position at Sydney Harbour has become redundant. The mitigation steps 1-3 had not mitigated the hours’ shortfall for the stevedore. He had not been working but he has been receiving his minimum guaranteed payment. He does not know when or if ever he will be given the opportunity to work off the guaranteed payments he had received. There is no work to be performed at Sydney Harbour for the stevedore and it is unknown and unclear when there will be work available for him. And while the position of stevedoring is not redundant because as soon as cruise ships berth at Sydney Harbour, there will be work again.
Stevedore had a right under the enterprise agreement to ask for redundancy
However, under the enterprise agreement, the stevedore had already asked to be voluntarily made redundant and the port operator cannot unreasonably refuse. The port operator cannot refuse the stevedore because work may be available at some future date or that allowing him to be made redundant will open the floodgates to other employees who will ask to be made redundant.
The port operator was ordered to declare the stevedore’s position at the Sydney Harbour redundant and offer him voluntary redundancy.
Source:
Construction, Forestry, Maritime, Mining and Energy Union v Qube Ports Pty Ltd T/A Qube Ports & Bulk [2022] FWC 78 (19 January 2022)
https://www.fwc.gov.au/documents/decisionssigned/html/2022fwc78.htm
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