Australian Municipal, Administrative, Clerical and Services Union v Sydney Trains

[2016] FWC 612

[2016] FWC 612

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739—Dispute resolution

Australian Municipal, Administrative, Clerical and Services Union
v
Sydney Trains
(C2015/6866)

COMMISSIONER ROBERTS SYDNEY, 23 FEBRUARY 2016

Alleged dispute about correct entitlement to salary continuance insurance – jurisdiction – whether alleged dispute is a matter pertaining to the relationship between the Employer and Employees.

[1] This decision concerns an application made on 9 October 2015 by the Australian Municipal, Administrative, Clerical and Services Union (the ASU or the Union) pursuant to s.739 of the Fair Work Act 2009 (the Act).

[2] The referral of the dispute to the Commission arises from the Dispute Settlement Procedure set out in clause 8 of the Sydney Trains Enterprise Agreement 2014 (the Agreement). The Agreement covers the ASU, together with a number of other unions, and Sydney Trains. The Agreement has a nominal expiry date of 30 September 2017.

[3] Clause 8.2 of the Agreement provides:

“8.2. This procedure shall apply to any dispute that arises about the following:

(a) Matters pertaining to the relationship between the Employer and Employees;

(b) Matters pertaining to the relationship between the Employer and the Employee organisation(s), which also pertain to the Agreement and/or the relationship between the Employer and Employees;

(c) Deductions from wages for any purpose authorised by an Employee who will be covered by the Agreement;

(d) The National Employment Standards; and

(e) The operation and application of this Agreement.”

[4] The Agreement provides for the Commission to have an arbitration power at clause 8.4 in the following terms:

“If the dispute remains unresolved any party may refer the matter to the Fair Work Commission for conciliation. If conciliation does not resolve the dispute the matter shall be arbitrated by the Fair Work Commission provided that arbitration is limited to disputes that involve matters listed in sub-clause 8.2 of this procedure.”

[5] The application was the subject of unsuccessful conciliation before me in Sydney on 13 October 2015. The ASU then sought arbitration by the Commission to deal with the dispute. Sydney Trains opposed arbitration on the ground of jurisdiction. A mention and directions hearing was held on 26 October 2015, followed by directions issued for the filing and service of outlines of submissions, witness statements and other materials. Those directions were complied with and the matter proceeded to hearing on 13 November 2015 to deal with Sydney Trains’ jurisdictional objection. At the hearing, the ASU was represented by Mr J Cavanan and Sydney Trains by Mr A Woods.

Background

[6] ASU member Mr Cockerill began employment with RailCorp (now Sydney Trains) in 2000 when his former employer, Rail Access Corporation (RAC), became part of RailCorp. Mr Cockerill retained a Total Remuneration Package (TRP) he received at RAC after transferring to RailCorp. According to the ASU, Mr Cockerill accepted an offer from Railcorp in 2002 to take up Salary Continuance and Death Insurance (the Insurance) in exchange for a 5 day reduction in annual sick leave entitlements. The Insurance provides a payment of 75% of Mr Cockerill’s TRP rate, including base pay and other penalties and loadings.

[7] In 2009 Mr Cockerill was redeployed as an Area Controller. The ASU maintains that it obtained confirmation from Railcorp that the Insurance would continue unaffected. In 2014, Mr Cockerill sustained an injury and needed to utilise the Insurance whilst he was off work. The rate of pay that Mr Cockerill received was 75% of his base salary and did not include his shift penalties. The ASU contends that this resulted in Mr Cockerill being underpaid by approximately $16,500 during the period of his leave.

[8] The ASU seeks a determination that Sydney Trains “has underpaid Mr Cockerill by failing to honour the written commitments made to him about his entitlement to salary continuance insurance.” 1

[9] Sydney Trains asserts that the Commission lacks jurisdiction to deal with the dispute between it and the ASU. Specifically, Sydney Trains claims that the dispute is not one between the employer and an employee but rather, is: “a dispute as to whether or not a proper payment has been made in accordance with that insurance policy is a dispute which involves the Employee and the insurer. The subject of the dispute is not a matter pertaining to the relationship between Sydney Trains and Mr Cockerill.” 2

Submissions

Sydney Trains

[10] Sydney Trains submits that the Commission must not exercise any power limited by the Dispute Settlement Procedure term in the Agreement, pursuant to s.739(3) of the Act. It further submits that the present matter can only fall within clause 8.2(a) of the Agreement being “matters pertaining to the relationship between the Employer and Employees”. The Insurance is provided by a third party insurer and the entitlement to the insurance depends upon the terms of the insurance policy. A dispute as to whether or not a correct payment has been made in accordance with the policy taken up is a dispute which involves the employee and the insurer. As such the subject of the dispute is not a matter pertaining to the relationship between Sydney Trains and Mr Cockerill and therefore falls outside the scope of clause 8.2.

[11] Sydney Trains does not dispute that “… an agreement to take out income protection insurance can be a matter pertaining to the relationship between an Employer and Employee.” 3 Sydney Trains goes on to argue that the current dispute is not about whether insurance is taken out but rather, is about the payments made to Mr Cockerill pursuant to that insurance. Sydney Trains argues that this is a dispute between Mr Cockerill and the insurer alone. Accordingly, the Commission lacks jurisdiction to further deal with the dispute.

The ASU

[12] The ASU submits that the dispute falls within the scope of clause 8.2(a), (b) and (e) of the Agreement.

[13] The ASU further submits that the definition of ‘dispute’ in clause 3 of the Agreement is very broad.

[14] The ASU argues that the offer of the Insurance was made by Sydney Trains directly to its employees and did not name any specific insurer. Employees were able to take up the insurance offer if they were willing to forgo 5 days of sick leave entitlement per annum. Accordingly, the Union submits that the relationship in relation to the Insurance was one between Mr Cockerill and Sydney Trains directly and is therefore pertaining to the employment relationship between the two.

[15] “The Respondent has submitted that because ‘Sydney Trains is not an insurer’, and because ‘the insurance is provided by a third party insurer’, the matter is a dispute between the employee and the insurance company and does not pertain to the relationship between the employer and employee.” 4

[16] “The Respondent’s submissions in this regard are extremely concerning. Sydney Trains is effectively arguing that by outsourcing the payment of an entitlement to a third party, the entitlement ceases to be an industrial matter and the employees need to take civil action against the third party to recover what had been promised by their employer.” 5

Conclusions and Determination

[17] In reaching my conclusions and determination, I have paid close regard to all of the written and oral submissions and the materials and documents tendered by the parties. This also applies to the case law cited by the parties.

[18] My role in this decision is a limited one. It is not to determine the actual claim being made by the ASU against Sydney Trains but rather, to determine whether the notified dispute is one which the Commission has jurisdiction to determine pursuant to clause 8.2 of the Agreement.

[19] Clause 3 (Definitions) of the Agreement relevantly says:

“Dispute means any grievance, claim, problem or issue at work arising between the parties to this Agreement.

Dispute Settlement Procedure (DSP) means the dispute settlement procedure outlined in Clause 8.”

[20] Clause 28.4 of the Agreement provides that sick leave on full pay accrues to employees at the rate of 15 days per calendar year and is cumulative. However, Clause 83 (Sick Leave) of the Agreement relevantly provides:

“83. SICK LEAVE

Employees who are covered by the Rail Access Corporation Enterprise Bargaining Agreement 1997 or the Rail Access Corporation (Argus Telecommunications Office Staff) Enterprise Agreement 1999 and who individually elected as at 29 August 2002 to retain their former conditions of sick leave and insurance under these Agreements:

83.1. are entitled to 10 days sick leave per annum.”

[21] Therefore, although the ‘insurance’ referred to at clause 83 of the Agreement is not defined, it is clearly only available to an employee if he or she sacrifices 5 days of sick leave accrual per annum. Mr Cockerill is such as employee.

[22] In my view, a dispute under the Agreement exists between the ASU/Mr Cockerill and Sydney Trains concerning the application of clause 83 of the Agreement when that clause is read in the context of clause 28.4 of the Agreement. The question of the Insurance does not stand as a matter completely outside the Agreement and therefore between Mr Cockerill and the insurer. The Insurance is referenced in clause 83 and therefore forms part of the Agreement. Any dispute between the ASU/Mr Cockerill concerning the Insurance necessarily involves Sydney Trains in that Sydney Trains has availed itself, with Mr Cockerill’s consent, of the provisions of clause 83. In effect, Mr Cockerill and Sydney Trains reached an agreement whereby Mr Cockerill gave up his right to 15 days sick leave pursuant to s.28.4 of the Agreement and took up a lower sick leave entitlement in return for insurance to be arranged by Sydney Trains. Sydney Trains gained the benefit of a reduction in its contingent liability for the payment of sick leave. Where a person such as Mr Cockerill disputes matters relating to the Insurance, that person has a dispute with Sydney Trains capable of being arbitrated pursuant to clause 8.2 of the Agreement.

[23] Accordingly, I dismiss Sydney Trains’ jurisdictional objection and the file will be referred for allocation for arbitration, unless the parties are able to negotiate a settlement.

COMMISSIONER

Appearances:

J Canavan for the Australian Municipal, Administrative, Clerical and Services Union.

A Woods for Sydney Trains.

Hearing details:

2015.

Sydney:

November 13.

 1   See Form F10 filed by ASU.

 2   See Exhibit Sydney Trains 1.

 3   Ibid. Also see AMOU v Sydney Ferries Corporation [2009] FCAFC 145.

 4   See Exhibit ASU 1.

 5   Ibid.

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