Alex Matschoss v Anglo Coal (Capcoal Management) Pty Ltd
[2023] FWC 596
•13 MARCH 2023
| [2023] FWC 596 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.739—Dispute resolution
Alex Matschoss
v
Anglo Coal (Capcoal Management) Pty Ltd
(C2021/6638)
| DEPUTY PRESIDENT ASBURY | BRISBANE, 13 MARCH 2023 |
Alleged dispute about any matters arising under the enterprise agreement and the NES; [s186(6)]
Background
Mr Alex Matschoss (Applicant) applies under s. 739 of the Fair Work Act 2009 (the FW Act) for the Fair Work Commission (Commission) to deal with a dispute in accordance with a dispute resolution procedure in the Capcoal Surface Operations Trades Enterprise Agreement 2020 (Agreement). The Respondent is Anglo Coal (Capcoal Management) Pty Ltd, the employer covered by the Agreement. The Applicant is an employed by the Respondent at the Lake Lindsay Coal Mine.
The Agreement was approved by the Commission on 7 September 2020 and commenced operation from 14 September 2020. The nominal expiry date for the Agreement is 4 years from the date of approval. The Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers’ Union (AMWU) is covered by the Agreement. The Applicant is a member of the AMWU and is represented by the AMWU in the present application.
The dispute notification was made to the Commission on 1 October 2021. The dispute concerns the construction of clause 3.7 of the Agreement in relation to the Respondent’s treatment of public holidays that fall within periods of long service leave and whether such public holidays are counted as long service leave taken by an employee.
In the Form F2 Application, the Applicant sought that the Commission deal with the dispute by conciliation in accordance with the Disputes Resolution procedure in clause 5.1 of the Agreement. The Applicant further sought that a recommendation be issued by the Commission pursuant to s. 595(2)(b) of the FW Act, to the effect that “in accordance with clause 3.7.6 of the Agreement, the Respondent should not count public holidays falling within a period of long service leave as being part of the long service leave taken by employees”.
The parties attended a Conciliation Conference before the Commission. The matter was not resolved. It is uncontroversial that the dispute resolution procedure in clause 5.1 of the Agreement allows the Commission to resolve the dispute by arbitration only where the parties specifically confer authority on the Commission to do so. The Respondent did not consent to arbitration and opposed the making of a recommendation by the Commission.
Directions were issued for the purposes of dealing with the question of whether the Commission should exercise its discretion under s. 592(2)(b) of the FW Act to make a recommendation. The parties were directed to file and serve outlines of submissions and any witness statement the parties intend to rely on in support of their respective positions.
Issue for determination
Outlines of submissions were filed by the Respondent and the Applicant. In its submissions filed in accordance with the Directions, the Respondent made clear its position that if the Commission decided to make a recommendation, it intended to make further submissions as to the proper construction of the relevant provisions of the Agreement. The Respondent also advised the Commission that it did not seek an oral hearing in relation to whether the Commission should exercise its discretion to make a recommendation and that the matter should be determined based on the material filed by the parties. The Applicant agreed that the matter should be determined on the papers.
Following the filing of material by the parties, there was a delay in the Commission dealing with the matter and the AMWU queried its status. On 6 March 2023, I caused my Associate to email the parties and informed them that I would issue a decision in relation to the question of whether I should exercise discretion to make a recommendation, as soon as possible. The Respondent responded to the email confirming its position that if I determined to exercise discretion to make a recommendation (which the Respondent submitted I should not), it wished to be heard further in relation to the proper construction of the provisions of the Agreement. The AMWU objected to this request asserting that it was inconsistent with the Respondent’s previously indicated position, which was for the matter to be determined on the papers.
I do not accept the AMWU’s contention in this regard. The Directions in relation to the matter clearly indicate that they were issued for the purposes of the parties filing material in relation to whether discretion should be exercised for the Commission to make a recommendation. The Respondent did not request or consent to the substantive dispute being dealt with on the papers if I decided to make a recommendation. Accordingly, this Decision only concerns whether I consider that it is appropriate in the present case to exercise the discretion to make a recommendation.
Agreement provisions
Clause 1.5 of the Agreement deals with parties bound and application, in the following terms:
“1.5 Parties Bound and Application
This Agreement shall be binding upon:
·Anglo Coal (Capcoal Management) Pty Ltd in respect of its employees engaged at its Surface Operations as defined in clause 1.3 and who are covered by the classifications set out in this Agreement; and
·Employees, who are members or who are eligible to be members of the Unions and who are engaged by Capcoal in the classifications contained in Clause 2.5 to work at the Surface Operations.
Capcoal negotiated the Agreement with the Unions, who acted as bargaining representatives on behalf of their members.”
“Unions” is defined in clause 1.3 to mean the AMWU and/or the CEPU. “You” and “your”, are defined to mean an employee covered by the Agreement. Clause 1.8 provides that the Agreement is comprehensive and forms the complete agreement covering all terms and conditions of employment save only for the terms of contracts of employment between Capcoal and employees which are not inconsistent with the Agreement. The clause also provides that the Agreement replaces in its entirety and operates to the exclusion of other agreements or awards. Further, that clause provides that contracts of employment are not incorporated into, and do not form part of, the Agreement. Clause 3.7 of the Agreement deals with long service leave. Relevantly for the purposes of this decision, clause 3.7.1 provides that long service leave will be calculated and administered in accordance with the requirements of the Coal Mining Industry (Long Service Leave) Administration Act 1992 (LSL Act) as amended from time to time. Clause 3.7.6 of the Agreement provides that public holidays falling within periods of long service leave will not be counted as part of the long service leave.
Clause 5.1 sets out a procedure dealing with Disputes Resolution, in the following terms:
“5.1 Disputes Resolution
5.1.1 In the event of any dispute over matters arising under this Agreement or the National Employment Standards, the procedure set out in clause 5.1.3 shall be followed.
5.1.2 While the procedure is being followed, work shall continue in accordance with the reasonable directions of Capcoal, subject to the Coal Mining Safety and Health Act 1999 (Qld).
5.1.3 The procedure is:
Step 1
The matter shall be discussed between you and your immediate Supervisor. You may elect to be represented by a nominated employee representative in these discussions and the Supervisor may be supported by a member of the Human Resources team.Step 2
If the matter remains unresolved, it may be referred to your Superintendent for discussion. You may elect to be represented by a nominated employee representative in these discussions and the Superintendent may be supported by a member of the Human Resources team.Step 3
If the matter remains unresolved, it may be referred to your Department Manager for discussion. You may elect to be represented by a nominated employee representative in these discussions and the Department Manager may be supported by a member of the Human Resources team.Step 4
If the matter remains unresolved, you may elect to refer the matter for discussion between senior management and state officials of your Union. Senior management may be supported by a member of the Human Resources team.Step 5
If the matter remains unresolved, either party may refer the matter to Fair Work Commission for conciliation. Fair Work Commission may exercise the functions and powers normally associated with conciliation.Step 6
If following conciliation in accordance with step 5 the matter remains unresolved, the Affected Employee may request a further meeting with the General Manager and the Human Resources Manager to discuss any matters that have arisen out of the conciliation conference, including a recommendation made by the Fair Work Commission, if any. If such a request is made, it must be made within 14 days of the conciliation conference. The Affected Employee may be accompanied at this meeting by his/her Nominated Employee Representative and a state official of the Affected Employee's union. If a meeting is requested by the Affected Employee the General Manager must, as far as reasonably practicable, ensure that the meeting takes place within 14 days of the request.Step 7
If the dispute remains unresolved after conciliation and Step 6, then by mutual agreement, the dispute may proceed to arbitration by Fair Work Commission. If arbitration is mutually agreed, the Fair Work Commission may exercise the procedural powers in relation to hearing, witnesses, evidence and submissions, which are necessary to make the arbitration effective. The decision of the member will bind the Parties, subject to either Party exercising a right of appeal against the decision to a Full Bench.
5.1.4 If you or Capcoal are of the view that the dispute is not being progressed in a timely manner, either you or Capcoal may escalate the matter to the next step in the procedure by providing reasonable notice. “Timely manner” means 7 days unless the particular circumstances of the dispute require a longer period.
5.1.5 If you are a Nominated Employee Representative you will, subject to approval from your supervisor, be permitted during working hours to represent Employees in accordance with Clause 5.1, where requested by an Employee to do so. Where a representative requested by the Employee cannot be released, the discussions referred to in this Clause will not proceed until such representative is available. A Nominated Employee Representative acting in accordance with this provision is entitled to represent an employee without loss of their normal pay.”
The Agreement was approved with undertakings, which pursuant to s.201(3) of the FW Act, are taken to be a term of the Agreement. Relevantly, the undertakings numbered 1, 4 and 8 provide as follows:
“1. The Agreement will be read and interpreted in conjunction with the National Employment Standards (NES). Where there is an inconsistency between the Agreement and the NES, and the NES provides a greater benefit, the NES provision will apply to the extent of the inconsistency.
…
4. For the avoidance of doubt, a public holiday for the purposes of clause 3.3.1 of the Agreement includes any other day or part day declared or prescribed by or under a law of the State of Queensland to be observed generally within Queensland, or a region of Queensland, as a public holiday.
…8. For the avoidance of doubt, employees are entitled to be represented at all steps of the disputes resolution procedure set out in clause 5.1 of the Agreement.”
Submissions
Respondent
The Respondent submitted that the Commission should not issue a recommendation in relation to this dispute as the Applicant was in effect seeking that the Commission determine the proper construction of the relevant provisions of the Agreement and the substantive merits of the Respondent’s treatment of rostered public holidays falling within periods of long service leave, including by way of a quasi-hearing.
The Respondent also took issue with the proper or correct Applicant in the matter, contending that the present dispute did not relate to a period of long service leave taken or proposed to be taken by the Applicant. The Respondent said that no steps under the dispute resolution procedure in clause 5.1.3 of the Agreement were undertaken, in respect of any period of long service leave concerning the Applicant. The Respondent submitted that, notwithstanding the fact that the dispute had been brought by the Applicant in his own name, the proper Applicant in this dispute should have been the AMWU and that the Commission should exercise its discretion under s. 586(a) of the FW Act to correct or amend the application by substituting the AMWU as the proper Applicant in these proceedings.
In addition, the Respondent stated that based on its understanding, the present dispute relates to the long service leave taken by three other employees of the Respondent for the period between 30 March 2021 and 12 April 2021 which coincided with the Easter public holidays – Good Friday, Easter Saturday, Easter Sunday, and Easter Monday. The Respondent stated that 70 hours of accrued long service leave was deducted from each of the employees, and they took issue with the quantum of the deduction. The Respondent stated that the dispute in respect of the long service leave for the three employees was notified by the AMWU on their behalf on 30 May 2021.
The Respondent does not dispute that the Commission has jurisdiction to make recommendations as part of the conciliation process and accepts that whether the Commission elects to make recommendations is discretionary and is a matter for the Commission. Further, the Respondent submits that if the Commission decides not to make a recommendation in these matters, that decision would be made in the process of the Commission exercising its jurisdiction. As such, the decision would not constitute a refusal or failure to exercise jurisdiction.[1] The Respondent's position is that the Commission should not:
Proceed by way of determining the issue of the proper construction of the relevant clauses of the Agreement, including the substantive merits of the Respondent's treatment of public holidays falling during periods of long service leave, including by way of a quasi-hearing; or
Otherwise make recommendations.
According to the Respondent’s submission, the Agreement provides a platform for the resolution of disputes regarding matters arising under the Agreement or the National Employment Standards (NES). Not satisfied with the steps that have occurred to date, the Applicant now seeks conciliation by embarking upon an inquiry into the extremely complex question of the proper construction of the relevant provisions of the Agreement and the substantive merits of the case, including by way of a quasi-hearing. That is not conciliation as contemplated by the parties to the Agreement or by longstanding authority.
The Respondent does not consent to arbitration by the Commission and does not consent to be bound by or to implement any recommendation issued by the Commission. The Respondent said this is not an attempt by the Respondent to avoid the process that has been agreed for dealing with disputes under the Agreement. The Respondent accepts that the Commission has discretion to issue a recommendation in dealing with the dispute, but it does not consent to be bound by or to implement any recommendation because the subject matter of the dispute has much broader implications beyond the present dispute. In those circumstances, any recommendation will not have any utility or resolve the dispute between the parties.
Firstly, the Respondent points to longstanding recognition in Australian courts and tribunals regarding the distinction between arbitration and conciliation. In this regard, in Re Bain and Others; Ex Parte Cadbury Schweppes Australia Ltd & Or[2], Dean and Brennan JJ of the High Court of Australia (at 468) made the following observations regarding the difference between the Commission's conciliation and arbitration functions:
“...The Commission's conciliation functions involve and are directed to assisting the prevention or settlement of industrial disputes by ‘amicable agreement’ between the prospective or actual parties to the particular dispute. Its arbitration functions are directed to preventing and settling industrial disputes not resolved by amicable agreement and involve the making of binding awards which are not consensual in their nature (see, generally, per Isaacs J, Monard v H M Leggo & Co Ltd (1923) 33 CLR 155 at 164).”[3] [Emphasis added]
Similarly, in Australian Railways Union v Victorian Railways Commissioners[4], Isaacs CJ of the High Court made the following observations (at 358) regarding the distinction between conciliation and arbitration:
“In 1894 a Royal Commission, the report of which has been frequently quoted in this court, endeavoured to define more clearly the terms in common use. ‘Arbitration’ was defined as ‘the settlement by one or more presumably impartial persons of an issue on which the parties have failed to agree.’ The accepted meaning of this will presently be seen. ‘Conciliation’ was defined as ‘the coming together of the parties for the discussion of questions with a view to amicable settlement’.”
Similarly, in Pacific Coal Pty Limited; Ex parte Construction, Forestry, Mining and Energy Union[5], Gaudron J made the following observations:
“Where the processes of conciliation and arbitration are brought to bear on an industrial dispute, they are brought to bear, in the case of conciliation, for the purpose of reaching agreement or, in the case of arbitration, for determining what those rights and liabilities should be.”[6] [emphasis added].
Also, in Ms P Hetherington-Gregory v Harrington Village Motel[7], a Full Bench of the Commission made the following observations:
“[11] As noted by a Full Bench in Wright and Australian Customs Service (in the context of s.170CE of the Workplace Relations Act 1996):
‘The process of conciliation does not, of course, involve a formal hearing and the taking of evidence. Its function is directed towards the resolution of the matter by amicable agreement. During the process, concessions may well be made for the purpose of achieving such a resolution.’
It should be emphasised, however, that, in considering the merits, the Commission has not had the benefit of sworn evidence and is not, therefore, in a position to make findings of fact on contested issues. The fact that the member is involved in conciliation and not arbitration provides a sound reason against the member embarking on a detailed consideration of the substantive case...’.”
Further, in Finance Sector Union v Australia and New Zealand Banking Group Limited[8], Deputy President McCarthy concluded that where an agreement envisaged that the Commission would only be involved in conciliation with the consent of both parties, it created a clear distinction between conciliation and arbitration and indicated that the agreement did not envisage that the Commission do anything other than facilitate the parties themselves reaching an agreement. The Deputy President also considered that expressing an opinion as to what would occur, would take the role of the Commission beyond that envisaged by the parties.[9] While the above decision was ultimately the subject of an appeal, the Full Bench found that those views did not lead to any form of jurisdictional error and merely amounted to views that in the circumstances of that case:
(a)a recommendation would not facilitate the parties reaching agreement; and
(b)the fact that the dispute settlement procedure excluded compulsory arbitration was a relevant consideration in deciding whether or not to exercise discretion.
Reference was also made to the decision of Senior Deputy President O'Callaghan in Finance Sector Union Of Australia v Eds Business Process Administration Pty Ltd[10], who applied the decision of the Full Bench in Finance Sector Union of Australia and Australian and New Zealand Banking Group Limited[11], and was satisfied that a recommendation should not be issued by the Australian Industrial Relations Commission if it took “the form of a de facto arbitration”, unless both parties agreed to that approach.[12] The Respondent noted the views expressed by the Commission in Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Anglo Coal(Grasstree Management) Pty Ltd[13]. The Respondent also accepts that the Commission is empowered by clause 5.1.3 (Step 5) of the Agreement to conciliate the dispute, with all the ancillary mechanisms that conciliation entails. However, the Respondent submits that the Commission would not exercise its discretion to issue a recommendation in this matter.
Secondly, the Respondent submits that arbitration style inquiry is inconsistent with “conciliation” and the Agreement, contending that the applicant is seeking a de facto arbitration by asking the Commission to embark on a detailed consideration of the complex issue of the proper construction of the relevant provisions of the Agreement and the substantive merits of the case. Requiring the Respondent to participate in an arbitration style inquiry into these matters is inconsistent with the very nature of “conciliation” and would be undertaken in circumstances where the Agreement does not confer power on the Commission to arbitrate the dispute, and the Respondent does not agree to arbitration.
While it is accepted that a recommendation technically does not impose any legal rights or obligations on the parties, proceeding to determine the substantive issues as a pre-cursor to making recommendations will elevate the status of any recommendation to that of a finding. It is difficult to see how the Commission giving detailed consideration to the proper construction of the relevant provisions and then expressing a view as to the correct construction and the propriety of the Respondent's payroll practices could realistically be characterised as something other than a finding, which is inconsistent with the very nature of conciliation.
Thirdly, the Respondent submits that absence of consent to the recommendation is a relevant consideration as to whether the discretion to make a recommendation should be exercised. In this regard, the Respondent does not consent to be bound by or to implement any recommendation or opinion expressed by the Commission in this dispute. It has not adopted this position so as to “avoid the process by evincing an intention not to accept an outcome contrary to its position, as and when it wishes”[14] or in an attempt to “remove the right of the other party to access its entitlement to have disputes settled in accordance with a term that has been bargained for”.[15]. It has adopted this position because of the significant and far-reaching consequences of this dispute. While the Respondent accepts that the absence of its consent is not determinative of whether the Commission should exercise its discretion to make a recommendation,[16]
In support of this proposition the Respondent referred to cases where members of the Commission had declined to issue a recommendation in circumstances where the parties had not committed to accept it on the basis that it would be unlikely to resolve a dispute.[17] The Respondent submitted that in the absence of an undertaking by both parties to abide by and/or implement a recommendation, any recommendation made by the Commission will have no practical utility in this dispute and will not assist the parties to resolve this dispute.
Fourthly, the Respondent submitted that the nature and subject matter of the dispute weighs against making a recommendation. In this regard, the Applicant is, in effect, seeking a declaration as to the proper construction of the relevant provisions of the Agreement. This is not a situation where the dispute is the Applicant's only avenue for recourse. The appropriate jurisdiction for the Applicant's dispute is the Federal Court of Australia or the Federal Circuit and Family Court of Australia. In the circumstances of this dispute, only the Court can make a binding declaration as to the proper construction of the relevant provisions of the Agreement.
The resolution of the dispute has implications not only for the employees who raised it, but for other employees covered by the Agreement, other employees of the Respondent and for workers in the black coal mining industry more broadly. The Respondent expects that other employers in the industry also take a similar approach to rostered public holidays falling during long service leave periods for continuous shift workers and that if the Commission issued the recommendation, it would have significant consequences not only for the Respondent, but for other employers in the black coal mining industry. Dealing with the dispute by making a recommendation would in these circumstances impose an unreasonable burden on the Commission. The Respondent contends that these factors weigh heavily against the Commission exercising its discretion to make a recommendation.
Fifthly, the Respondent points to the following additional consequences if a recommendation is made. Any arbitration style inquiry into the substantive issues will be expensive for the parties and an inefficient use of the Commission's resources,[18] especially in circumstances where it is unlikely to assist the parties in resolving the dispute. While the Respondent accepts that “the point of a recommendation or view of the Commission is that it may carry weight and can be used by a successful party to attempt to persuade the other party to accept the Commission’s view or recommendation or to publicise the reasonableness of its position in a dispute”[19], given the nature, subject matter and circumstances of the dispute, the Respondent will not be persuaded to depart from its position absent a binding order. Further, it is foreseeable that if the recommendation sought by the Applicant is made, it could be used to put pressure on other employers in the black coal mining industry. These factors ought to be given significant weight.
In conclusion, the Respondent contends that these matters, individually and collectively, weigh strongly against the issuing of a recommendation. Accordingly, the Commission should refuse to issue any recommendations in this dispute and dismiss the matter.
Applicant
The AMWU on behalf of the Applicant rejects the Respondent’s contention that the Union should be substituted as the proper Applicant on the basis that the dispute does not relate to a period of long service leave that has been taken by the Applicant. The Applicant is entitled to have initiated and pursued this dispute based on a proper construction of the dispute settlement procedure given that it relevantly:
States that the DSP will be followed “in the event of any dispute over matters arising under this Agreement or the National Employment Standards”; and
Makes reference to the phrase “you” throughout the various steps of the dispute settlement procedure with the phrase “you” being defined at clause 1.3 of the Agreement to mean ‘an Employee of Anglo Coal (Capcoal) Pty Ltd employed in one of the classifications in this Agreement’.
The Applicant, who is an employee of the Respondent, has raised a dispute regarding the Respondent’s treatment of public holidays during periods of long service leave, which is evidently a matter arising under clause 3.7 of the Agreement. The fact that the Applicant has not taken long service leave whereas other employees have is an irrelevant consideration. While the Applicant acknowledges that there are other employees who have raised concerns regarding this issue as well, all that is required is that the Applicant (as an employee) raises an issue regarding a matter arising under the Agreement, which is what has occurred in this instance.
The Applicant submits that the Commission should exercise its discretion to make a recommendation on the basis that:
The Commission has the power to make such a recommendation as part of its conciliation powers under the Act and the DSP in the Agreement; and
The ‘discretionary issues’ relevant to the exercise of the discretion in this dispute weigh heavily in favour of the Commission exercising its discretion.
The Applicant referred to the decision of the Commission in CEPU v Anglo Coal (Grasstree Management) Pty Ltd, which considered the powers of the Commission with respect to conciliation. As was noted in that case, the term “conciliation” has an established meaning, including the power to make a recommendation.[20] In the present case, Step 5 of the DSP in the Agreement gives each party the right to refer a matter to the Commission for conciliation, and in doing so, the Commission may exercise the functions and powers normally associated with conciliation. Unlike arbitration in the dispute settlement procedure, the right to refer a matter to the Commission for conciliation does not require mutual agreement of the parties.
The Applicant submits that when properly construed, the dispute settlement procedure within the Agreement places no limitations on the Commission’s powers to conciliate a dispute, including making a recommendation, with or without the consent of both parties. While the Respondent complains that the making of a recommendation in conciliation is “inconsistent with the very nature of conciliation” and is “not conciliation as contemplated by the parties to the Agreement”, the Respondent’s complaints neglect what the Agreement envisages and states. Step 6 of the DSP provides for an opportunity for the parties to meet after any conciliation between the parties with the Commission to “discuss any matters that have arisen out of the conciliation conference, including a recommendation made by the Fair Work Commission, if any”.
If the parties did not contemplate conciliation which included the making of a recommendation as the Respondent asserts, then it is difficult to comprehend why the parties stated at step 6 that a recommendation (if any) flowing from conciliation would be discussed between the parties at the next stage of the dispute settlement procedure. According to the Applicant, the logical conclusion when the DSP is considered as a whole, is that the parties fully intended to empower the Commission to conciliate a matter (as is understood in the industrial context) by engaging ‘the full range of armoury’ available to the Commission, including the making of a recommendation.
In relation to the Respondent’s reference to several authorities regarding the distinction between arbitration and conciliation, the Applicant submits that those authorities go no further than emphasising that the powers of the Commission with respect to conciliation and arbitration depend on what is envisaged in the particular agreement. In the current dispute, the Agreement clearly envisages the Commission being able to exercise its full conciliatory powers (including making a recommendation). For these reasons, the Applicant submits that the Commission should reject the Respondent’s submissions that the making of a recommendation will mean the Commission is conducting a ‘quasi-hearing’ on the merits of the matter.
The Applicant notes the Respondent’s position that it does not consent to be bound by or to implement any recommendation issued by the Commission and that the Respondent qualifies this position by stating that “this is not an attempt by the Respondent to avoid the process that has been agreed for dealing with disputes under this Agreement”. The Applicant submits that the Commission should not accept the Respondent’s argument that simply because it will disregard a recommendation of the Commission, the Commission should not exercise its discretion to make a recommendation. While the Respondent’s lack of consent is a relevant consideration, it is not determinative and in the present circumstances, should carry little (if any) weight.
The Applicant accepts that a recommendation is not legally binding and cannot create or impose a legal right or obligation, a recommendation is an advisory function and an action the Commission is authorised to take so as to make suggestions for the resolution of a dispute. However, as was the case in CEPU v Anglo Coal (Grasstree Management) Pty Ltd, as part of the dispute settlement term in the Agreement, the Respondent has agreed to a process in which disputes will be dealt with by conciliation in the Commission (including the making of a recommendation) without consent. The Respondent should not be permitted by the Commission to avoid the making of a recommendation during conciliation, without their consent, which is expressly envisaged in the Agreement, simply by evincing an intention not to accept any recommendation, even a favourable one, made by the Commission.
If the Commission was to accept the Respondent’s argument, it would allow the Respondent to remove the Applicant’s right to access his entitlement to have disputes conciliated by the Commission using the full conciliatory powers of the Commission, as was bargained for, and envisaged in the Agreement. Moreover, the utility of the making of a recommendation by the Commission has been understated by the Respondent when the dispute settlement procedure is considered as a whole, and that Step 6 allows for discussions between the parties regarding the outcome of any conciliation in the Commission, including a recommendation made, if any.
The Applicant submits that there is cause for optimism (albeit a small amount) that such a recommendation may carry some weight in those discussions and could be used by the successful party (which has not yet been determined) to persuade the other party to accept the Commission’s recommendation in further discussions, as was envisaged in the dispute settlement procedure.
In relation to subject matter and industry considerations, the Applicant submits that the Commission should reject the Respondent’s disingenuous rationale as to why it is not prepared to accept or implement a recommendation of the Commission in this dispute. The gist of the Respondent’s rationale for not accepting (or not wanting) a recommendation to be made by the Commission is that:
The matter is complex and requires detailed consideration;
The Applicant can have the matter dealt with in another jurisdiction;
Other employees of the Respondent will be impacted; and
The Respondent expects (but does not know) that other employers in the black coal mining industry adopt the same approach as the Respondent with respect to public holidays falling during long service leave periods and any recommendation would have ‘significant consequences’ for them.
The Applicant does not accept the Respondent’s assertion that the Commission has been asked to embark on a “de facto style arbitration” into the meaning of clause 3.7 of the Agreement because the subject matter is complex. The Applicant’s position is that the words in clause 3.7 are clear, unambiguous and not susceptible to more than one meaning. Conversely, if the Respondent wishes to pursue an overly complex argument to undermine the plain meaning of clause 3.7, that is a matter for the Respondent. However, the Respondent cannot then assert that the process of making a recommendation is overly complex and a reason for the Commission not to issue a recommendation when the Respondent itself is responsible for creating such complexity.
The Applicant also submits that the dispute settlement procedure in the Agreement provides the Applicant and other employees with the ability to resolve disputes in the Commission pertaining to matters that arise under the Agreement. This was a condition that was bargained for as part of the Agreement and the Applicant fully intends to utilise this condition. The fact that the Respondent would prefer for the Applicant to agitate his dispute in another jurisdiction is immaterial in circumstances where the Applicant has already commenced a dispute under the dispute settlement procedure in the Agreement (as he is entitled to as a condition of employment) and has not taken any steps to commence a claim in similar terms in another jurisdiction. The Respondent’s position in this respect is counterintuitive in that it expresses a desire for the Applicant to pursue his dispute in the Federal Court of Australia or the Federal Circuit and Family Court of Australia, which is likely to be an extremely expensive and prolonged exercise for the parties, but then asserts that conciliation in the Commission will be expensive for the parties.
Dealing with the Respondent’s third concern, the Applicant accepts that other employees covered by the Agreement will be impacted by any recommendation made by the Commission. However, the Applicant’s position is that this weighs heavily in favour of a recommendation being made on the basis that the Respondent’s treatment of long service leave entitlements has been an ongoing and consistent issue which has been of concern to a significant number of employees. Employees of the Respondent covered by the Agreement should have clarity regarding their conditions and entitlements under the Agreement. The Respondent’s arguments that a recommendation sought by the Applicant could be used to put pressure on other unspecified employers in the black coal mining industry with significant consequences (that are also unspecified) is uncompelling and should be rejected by the Commission.
In this regard, the dispute relates to the Respondent’s interpretation and application of clause 3.7 in the Agreement, and not the black coal mining industry as a whole. The Applicant further submits that the practices of other employers in the black coal mining industry are an irrelevant contextual consideration in circumstances where the language in the Agreement, with respect to the treatment of public holidays during periods of long service leave, is so clear that it cannot be susceptible to more than one meaning. Further, the Respondent has provided no evidence in relation to the identity of the employers and the detriment or pressure they will suffer as a result of a recommendation being made in this dispute. In the absence of that information, the Applicant submits that the Commission should give this consideration no weight.
In summary, the Applicant submits that the Commission should exercise its discretion to make a recommendation on the basis that:
The dispute settlement procedure in the Agreement allows the Commission to exercise its full powers of conciliation and expressly contemplates that the Commission may issue a recommendation as part of conciliation;
There will be utility in a recommendation being made as the dispute settlement procedure provides an opportunity for the parties to discuss any recommendation made by the Commission during the next step of the procedure;
The subject matter and nature of the dispute is straightforward;
The Applicant’s position regarding the meaning and application of clause 3.7 in the Agreement is meritorious; and
It is reasonable in all the circumstances for the Commission to make a recommendation in the terms sought by the Applicant.
Consideration
It is common ground that the dispute that is the subject of these proceedings is within the scope of matters covered by the disputes resolution procedure in clause 5.1 of the Agreement. It is also common ground that the clause provides for an unresolved dispute to be referred to the Commission for conciliation and that in dealing with the dispute the Commission may exercise the powers and functions normally associated with conciliation. It is not in dispute that those powers and functions include the discretion to make a recommendation. The issue for determination is whether the Commission should exercise that discretion in the present case.
The procedure in clause 5.1 applies to disputes over matters arising under the Agreement or the National Employment Standards (NES). Clause 5.1 sets out a number of steps which must be taken before either party is able to refer the matter to the Fair Work Commission for conciliation. Step 5 provides that the Commission may exercise the powers and functions normally associated with conciliation. I accept that there is extensive case law establishing the distinction between conciliation and arbitration and that the parties who negotiated the Agreement have chosen to restrict the Commission’s power to settle a dispute by arbitration, to cases where the parties agree to the Commission arbitrating the dispute.
However, I do not accept as a general proposition, that the fact the Agreement restricts the power of the Commission to arbitrate a dispute by requiring agreement from both parties, makes it apparent that the Agreement envisages that the Commission will restrict its conciliation powers to simply facilitating agreement between disputing parties. The terms of the Agreement do not contain such a fetter. Had the parties intended to fetter the discretion of the Commission to exercise all available conciliation mechanisms, they could easily have done so by including a restriction on the capacity of the Commission to make a recommendation, issue a statement or express a view. Instead, the parties went further than simply stating that the dispute may be referred to the Commission for conciliation and made clear that at Step 5 the Commission may exercise the functions and powers normally associated with conciliation.
Even if this additional statement did not appear, the term “conciliation” has a well- established meaning in the context of industrial disputation, including the making by the Commission of a recommendation.[21] The parties who negotiated the Agreement include a large well-resourced employer and Unions in their capacity as bargaining representatives. It can be inferred that the parties intended to take the Commission as they found it, and as a Full Bench of the Commission in Clermont Coal Pty Ltd v Construction, Forestry, Mining and Energy Union[22] put it, “the parties referred to the Commission the process of conciliation and in doing so engaged the full range of armoury that was available to the Commission as conciliator, including the making of recommendations.”
The dispute resolution term in the Agreement must also be considered in the statutory context in which the Agreement was made. Section 172(1) of the FW Act provides that an enterprise agreement can be “about” matters pertaining to the employment relationship. By virtue of s. 186(6), for an enterprise agreement to be approved, the Commission must be satisfied that the agreement includes a term that requires or allows the Commission or another person to settle disputes about any matters arising under the Agreement and in relation to the NES. The procedure must also allow for the representation of employees covered by the Agreement for the purposes of the procedure. The fact that the FW Act mandates such a term, is a powerful indicator of an intention by the legislature that at very least, disputes within the scope of matters described in s. 186(6) are intended to be settled by the Commission – matters pertaining to the employment relationship that the parties have agreed will be to encompass in an enterprise agreement so that they will be matters arising under the agreement, and disputes in relation to the NES.
It is well established that a dispute settlement term that provides for arbitration by the Commission only with the consent of the parties, will comply with the requirement in s. 186(6) and that this provision does not require each party to an enterprise agreement to have independent access to arbitration[23]. The requirements in s. 186(6) in terms of the scope of a dispute settlement term, are minimum requirements. An enterprise agreement may be approved which includes a dispute resolution term that allows or requires the Commission or another person independent of the parties to the agreement, to settle disputes about all matters pertaining to the employment relationship in addition to the matters referred to in s. 186(6).
It is notable that the formulation of the matters in s. 186(6) that must be the subject of a dispute settlement term in an enterprise agreement, is arguably broader than it was under previous iterations of the FW Act which described the scope of a dispute settlement procedure as a procedure empowering the Commission to settle disputes over the application of the agreement. It is arguable – but not necessary to determine in the present case – that a dispute about the application of an agreement has a narrower focus than a dispute arising under an agreement.
In Construction, Forestry, Maritime, Mining and Energy Union and Others v Falcon Mining Pty Ltd[24] a Full Bench of the Commission considered the conferral of power for the Commission to arbitrate disputes, stating:
[62] Therefore, to the extent that a dispute resolution procedure in an enterprise agreement confers, conditions or limits the Commission’s power to arbitrate disputes, that conferral, condition or limitation is not effective by virtue of the operation of the agreement itself. An enterprise agreement is not a law and therefore cannot of its own force delimit the powers of the Commission. Rather (as submitted by the appellants), it is s 739(4) which gives effect to an agreement by parties for the arbitration of a dispute by the Commission pursuant to a dispute resolution term of a type described in s 738, and it is s 739(3) which limits the powers of the Commission to deal with the dispute by reference to any such limitations contained in the relevant dispute resolution term. Therefore, the scope of the authority of the Commission to engage in arbitration of disputes pursuant to a dispute resolution term is ultimately a question of statutory construction although, in a particular case, the application of the statutory provisions will be affected by the terms of the relevant dispute resolution procedure.
[63] The required task of statutory construction starts with s 595, which contains a general prescription as to the powers of the Commission to “deal with disputes”. It is apparent from s 595(2) and (3) that the concept of “dealing” with a dispute encompasses any dispute measures which the Commission considers appropriate to resolve a dispute, and non-exhaustively includes mediation, conciliation, making a recommendation, expressing an opinion, or arbitration. Section 595(1) provides that express authorisation is required under, or in accordance with, another provision of the FW Act for the Commission to deal with a dispute. Section 595(3) provides, to put the matter beyond doubt, that express authorisation is required under another provision of the FW Act in order for the Commission to deal with a dispute by arbitration and, in order to provide further emphasis, s 595(5) prohibits the Commission from exercising the arbitration power in relation to a matter except as authorised by s 595.
[64] The term “arbitration” is not defined anywhere in the FW Act, but s 595 provides two textual indicators as to what may be involved when the Commission engages in arbitration. First, s 595(3) states that dealing with a dispute by arbitration may include the Commission “making any orders it considers appropriate” (underlining added). We shall return to the significance of the power to make orders in the course of arbitration in due course. Second, s 595(4) provides that in dealing with a dispute (which will include by arbitration), the Commission may exercise any powers it has under “this Subdivision” — that is, Subdiv B of Div 3 of Pt 5-1. Subdivision B confers a range of procedural powers upon the Commission including the power to make procedural and interim decisions (s 589), and to inform itself in relation to a matter as it considers appropriate, including by requiring the attendance of a person before the Commission or the production of documents, receiving evidence and submissions and conducting inquiries, conferences and hearings (s 590). Thus, when the Commission engages in “arbitration”, this may encompass the exercise of a range of interlocutory and procedural powers. (Emphasis added)
While the Full Bench in Falcon Mining was considering arbitration in a different context, the observations are apposite to conciliation. Thus, it is also the case that to the extent that a dispute resolution procedure in an enterprise agreement confers, conditions, or limits the Commission’s power to conciliate disputes, that conferral, condition or limitation is not effective by virtue of the operation of the Agreement itself but rather by the provisions of the FW Act. In the present case, unlike the facts in Falcon Mining, the powers of the Commission are delimited by s. 739(3) on the basis that the dispute resolution procedure in the Agreement does not allow the Commission to arbitrate a dispute unless the parties agree to arbitration, and by s. 739(4), because the parties have agreed that the Commission can only arbitrate where mutually agreed, and the Respondent does not agree to arbitration of the present dispute.
Section 595 generally prescribes the powers of the Commission to deal with disputes and is in the following terms:
“595 FWC’s power to deal with disputes
(1) The FWC may deal with a dispute only if the FWC is expressly authorised to do so under or in accordance with another provision of this Act.
(2) The FWC may deal with a dispute (other than by arbitration) as it considers appropriate, including in the following ways:
(a) by mediation or conciliation;
(b) by making a recommendation or expressing an opinion.
(3) The FWC may deal with a dispute by arbitration (including by making any orders it considers appropriate) only if the FWC is expressly authorised to do so under or in accordance with another provision of this Act.
Example: Parties may consent to the FWC arbitrating a bargaining dispute (see subsection 240(4)).
(4) In dealing with a dispute, the FWC may exercise any powers it has under this Subdivision.
Example: The FWC could direct a person to attend a conference under section 592.(5) To avoid doubt, the FWC must not exercise the power referred to in subsection (3) in relation to a matter before the FWC except as authorised by this section”
As previously stated, the Agreement provides that either party may refer an unresolved matter to the Commission for conciliation and that the Commission may exercise the functions and powers normally associated with conciliation. Accordingly, as required by s. 595(1), the Commission is expressly authorised to deal with the dispute in that manner, by s. 739 and may deal with the dispute as it considers appropriate. By virtue of s. 595(4) the Commission may exercise powers under Subdivision B of Division 3, Part 5 – 1 of the FW Act, including by: informing itself in an appropriate manner as provided in s. 590; directing a person to attend a conference as provided in s. 592(1); mediation or conciliation, making a recommendation or expressing an opinion as provided in s. 592(4). All these powers are expressly authorised by s. 739 and the dispute resolution term in the Agreement and it is not necessary that the parties consent to those powers being deployed on each occasion the Commission deals with a dispute. This is confirmed by the decision of a Full Bench of the Commission in Re Woolworths Ltd (t/as Produce and Recycling Distribution Centre)[25] which observed that the text of s. 595 makes clear that the Commission can deploy voluntary methods of dispute resolution without the consent of the parties to the dispute, provided the dispute is one with which it is authorised to deal, but can only arbitrate if it has been specifically empowered to do so.[26]
This is not a case where there is any doubt that the present dispute is within the scope of the dispute resolution procedure in clause 5.1 of the Agreement. The dispute is both a dispute about a matter arising under the Agreement and in relation to the NES. Clause 3.7 of the Agreement deals with long service leave. That clause provides that long service leave will be calculated and administered in accordance with the LSL Act. That Act, at s. 39AE, deals with public holidays and long service leave. Section 39D of the LSL Act provides that:
“39D FWC may deal with disputes relating to long service leave
(1) Despite subsection 595(1) of the Fair Work Act 2009, the FWC may deal with a dispute (an LSL dispute) about matters in relation to long service leave under this Part.
(2) For the purposes of the FWC dealing with an LSL dispute, the Fair Work Act 2009 applies as if:
(a)the dispute were a dispute in relation to the National Employment Standards; and
(b)subsection (1) of this section were a term referred to in section 738 of that Act; and
(c)a reference in subsection 739(5) of that Act to “this Act” were a reference to “the Coal Mining Industry (Long Service Leave) Administration Act 1992”.”
Section 39D of the LSL Act has the effect of:
· amending s.738 of the Act so that a dispute about coal industry long service leave is a dispute in relation to the NES and to include s. 39D(1) as a term; and
· amending the reference to “this Act” in s. 739(5) of the Act such that it is a reference to the CLSL Act.
While the Federal Court or the Federal Circuit and Family Court can make binding declarations as to the proper construction of the provisions of the Agreement, the fact that the LSL Act makes the Commission the first port of call for disputes in relation to long service leave, and for those disputes to be dealt with under dispute resolution terms in the Agreement, is a further reason why the Commission should use all available powers, including making a recommendation, to settle the dispute.
In relation to the other objections advanced by the Respondent to the Commission making a recommendation, I do not accept that the Applicant is seeking a de facto arbitration or that the Commission will be engaging in such an exercise by making a recommendation in relation to the dispute. Nor will the Commission be deciding to make a recommendation require the Respondent to participate in an arbitration style inquiry. The proper construction of the terms of an enterprise agreement and/or legislative provisions, does not require evidence to be called by either party and can be the subject of written submissions, if necessary, supplemented by a short oral hearing. It is not appropriate that the Commission decline to deal with a dispute in a manner provided for in an enterprise agreement, on the basis that the dispute involves a complex question of construction of the agreement. Complexity is a feature of the task of construction of enterprise agreements and the Commission is charged with undertaking that task in a range of matters it deals with.
Further, the Respondent has agreed, by virtue of making the Agreement, to the Commission conciliating disputes arising under the Agreement or in relation to the NES, with all that conciliation entails. The Respondent is therefore compelled to participate, not by the Commission conducting a proceeding, but by its own agreement to a provision in the Agreement that requires or allows disputes about these matters to be settled by conciliation. The Agreement could not have been approved absent a dispute resolution term. In the present case, the employer, employees and the AMWU have agreed that the method of settling disputes will be conciliation, in the knowledge that the settlement cannot involve an order of the Commission. Cases considering the dichotomy between conciliation and arbitration, which were decided prior to the advent of statutory provisions requiring enterprise agreements to contain terms allowing disputes to be settled, are useful to identify the nature of those concepts. The principles established in those cases ensure that the Commission does not cross the line in a manner not permitted by the FW Act and the dispute resolution term in the relevant agreement. However, those cases are not a basis to limit the discretion of the Commission to employ the range of mechanisms the parties have agreed may be employed to resolve disputes.
Whether a party accepts a recommendation or not, is a matter for the party and does not prevent the Commission from making a recommendation. In this regard, I adhere to the views I expressed in CEPU v Anglo Coal (Grasstree Management Pty Ltd)[2021] FWC 4297, as follows:
“[183] As stated above, there are considerations that may inform the exercise of discretion by the Commission as to whether to make a recommendation or express a view, to deal with a dispute. While the utility of a recommendation or expression of a view is a relevant consideration, it is not determinative. In short, I do not accept that a statement made by a party in conciliation, to the effect that it is not bound to accept a recommendation or that a recommendation will not be accepted, is determinative of whether the Commission should decide to make a recommendation. Nor do I accept that a statement by a party that it will not accept a recommendation deprives it of utility.
[184] In circumstances where a party to an enterprise agreement has agreed to a process for dealing with disputes, it cannot avoid the process by evincing an intention not to accept an outcome contrary to its position, as and when it wishes. In the present case, Grasstree does not explicitly state that it would refuse to accept a recommendation of the Commission in terms sought by the Unions. Grasstree has stated that such a recommendation “is unlikely to have any utility” and that “a recommendation technically does not impose any legal rights or obligations on the parties”.
[185] To accept that the Commission should refrain from making a recommendation or expressing a view sought by one party, simply because the other party indicates that it will not accept a recommendation or view, would allow the non-accepting party to remove the right of the other party to access its entitlement to have disputes settled in accordance with a term that has been bargained for. This is not to say that the views of one or other party about utility will not be considered, but rather that those views are not determinative of the Commission deciding to make a recommendation or express a view.
[186] I do not accept the submission made by Grasstree that a recommendation is in effect, a de facto finding. As the Company points out, a recommendation is not binding. The fact that a party who obtains the benefit of a view or recommendation from the Commission, may use that view or recommendation to pressure the other party, is not a basis for the Commission to refuse to exercise the full range of conciliation functions in appropriate cases. The point of a recommendation or view of the Commission is that it may carry weight and can be used by a successful party to attempt to persuade the other party to accept the Commission’s view or recommendation or to publicise the reasonableness of its position in a dispute. Were this not so, the value of conciliation as a dispute resolution function would be reduced.
I do not accept it is relevant to the question of whether I should exercise discretion to make a recommendation, that it may be used to put pressure on other employers in the black coal mining industry. As the Respondent points out, a recommendation is not binding on the parties to the dispute. The Respondent cannot complain that a recommendation will have some impact on persons or organisations that are not parties to the dispute.
To refrain from exercising discretion to employ a significant mechanism the Commission retains in its statutory range of dispute resolution powers, would involve giving insufficient weight to the requirement in s. 186(6) that an enterprise agreement includes a term that requires or allows for the settlement of disputes about matters arising under the Agreement and in relation to the NES. It would also involve me abrogating my duty to use those mechanisms to the extent I consider appropriate, to settle disputes about matters that are required to be the subject of a dispute resolution term in an enterprise agreement, to the extent that without the term providing for the settlement of disputes about those matters, an enterprise agreement could not have been approved.
It is also not to the point that an employee claiming an NES entitlement or an entitlement under a term of the Agreement, may make an application to a Court. The parties to an enterprise agreement have the option of selecting either the Fair Work Commission or another person who is independent, to settle disputes in accordance with the dispute resolution term their agreement is required to include. As Flick J observed in his judgment in the Full Court decision in Energy Australia Yallourn Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union[27] it is desirable that the Commission discharge tasks entrusted to it by an enterprise agreement and the role envisaged, that the Commission is the first port of call to resolve questions as to the interpretation of the Agreement.[28] In the present case the parties have entrusted the dispute settlement role to the Commission and I do not intend to decline to undertake the role because one party has indicated that it will not accept the outcome of the process.
In relation to the correct applicant, the Applicant in this matter is an employee covered by the Agreement who has a right to accrue and take long service leave in accordance with the LSL Act. The fact that the Applicant is not presently exercising the right to take leave or has not applied to do so, does not mean that the Applicant is prevented from bringing a dispute in relation to the Respondent’s practices in relation to payment to employees who take long service leave.
Finally, to refrain from exercising discretion to make a recommendation, would be inconsistent with the Object of the FW Act expressed in s. 3(f) with respect to settling disputes and to ensuring fairness at work by providing accessible and effective procedures to resolve grievances and disputes.
Conclusion
For these reasons, I am of the view that the discretion to make a recommendation in the present dispute is triggered and I intend to do so. The matter will be listed for Mention/Directions, and to program further proceedings. The parties should hold discussions and be in a position to advise the Commission as to how they propose to proceed either jointly (if agreement in relation to process is reached) or separately if agreement on process is not reached.
DEPUTY PRESIDENT
[1] Shop, Distributive and Allied Employees Association v Bunnings Building Supplies Pty Ltd t/as Bunnings Warehouse (PR949303); Re Refugee Review Tribunal; Ex Parte AALA (2000) 176 ALR 219, [263]; see the reasoning of the Full Bench of the Australian Industrial Relations Commission in Finance Sector Union v Australian and New Zealand Banking Group Limited (PR944901) and in particular, [54] – [57].
[2] (1984) 159 CLR 163.
[3] Ibid at 468.
[4] (1930) 44 CLR 319.
[5] [2000] HCA 34
[6] Ibid at [62].
[7] [2012] FWAFB 2104.
[8] (PR937858).
[9] Ibid at [34] – [36].
[10] [2007] AIRC 264.
[11] (PR944901).
[12] Ibid at [28].
[13] [2021] FWC 4297.
[14] CEPU v Anglo Coal (Grasstree Management) Pty Ltd [2021] FWC 4297 at [183].
[15] Ibid at [185].
[16] Ibid at [183].
[17] Australian Liquor, Hospitality and Miscellaneous Workers Union & Ors re: Groote Eylandt Mining Company Award 1986 (Print L9834) per Hancock SDP; Phillip Skein v VIP Electrical Pty Ltd[2014] FWC 830.
[18] Australian Liquor, Hospitality and Miscellaneous Workers Union & Ors re: Groote Eylandt Mining Company Award 1986 (Print L9834).
[19] [19] CEPU v Anglo Coal (Grasstree Management) Pty Ltd [2021] FWC 4297 at [186].
[20] Ibid at [175].
[21] Clermont Coal Pty Ltd v Construction, Forestry, Mining and Energy Union [2015] FWCFB 3332.
[22] Ibid.
[23] Re Woolworths Ltd (t/as Produce and Recycling Distribution Centre) (2010) 192 IR 124; [2010] FWAFB 1464.
[24] [2022] FWCFB 93.
[25] (2010) 192 IR 124; [2010] FWAFB 1464.
[26] Ibid at [19].
[27] [2018] FCAFC 146.
[28] At [130].
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