“Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers' Union (AMWU) v Simplot Australia Pty Ltd

[2014] FWC 8538

[2014] FWC 8538

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739—Dispute resolution

“Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU)
v
Simplot Australia Pty Ltd
(C2014/1312)

DEPUTY PRESIDENT LAWRENCE SYDNEY, 8 DECEMBER 2014

Application to deal with a dispute in accordance with the Dispute Settlement Procedure in an agreement as required by s.186(6).

Introduction

[1] This is an application for the Fair Work Commission (the Commission) to deal with a dispute in accordance with the Dispute Settlement Procedure in an agreement lodged pursuant to s.739 of the Fair Work 2009 Act (the Act).

[2] The application by the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) was lodged on 21 July 2014.

[3] The respondent employer is Simplot Australia Pty Ltd (Simplot). The dispute relates to its Bathurst NSW food processing plant.

[4] The relevant enterprise agreement is the AMWU and Simplot Australia Pty Limited National Collective Agreement 2011-2014 (the Agreement). This agreement applies to a number of sites in NSW and Tasmania.

[5] However, the application relates to one AMWU member Rohan Gleeson who was employed at the Bathurst site. The AMWU submits Mr Gleeson was one of the employees made redundant earlier in 2014. He was scheduled to terminate his employment in October 2014.

[6] The AMWU submits that Simplot made a commitment that employees who had been made redundant but who found other work before their proposed finish up time could leave early to start their other job but they would still receive their redundancy pay. Mr Gleeson found other work but, the application asserted, Simplot refused to release him. At the time of the application, he was on approved leave but scheduled to return to work on Monday 28 July 2014.

[7] Given Mr Gleeson’s immediate return to work requirement I listed the matter for an urgent telephone conference on Friday 25 July 2014. I should note that the parties were in 3 different locations. It was agreed that the status quo would be maintained until the parties could consider their positions.

[8] A further teleconference was held on 31 July. No settlement was reached. Mr Gleeson had another job and therefore did not return to work at Simplot. Simplot then took steps to “terminate” his employment. As will be seen the exact nature of what occurred is in dispute. Simplot treated him as terminated through his own actions.

[9] The AMWU then requested that the matter be set down for arbitration.

[10] A programming phone hook up took place on 8 August 2014.

[11] The matter was set for hearing of the jurisdictional objection by Simplot on 17 September 2014 in Sydney. Directions for the filing of submissions and witness statements were made.

[12] Simplot was represented by Ms J Ansell of the AI Group and Ms S King. The AMWU was represented by Ms L Saunders.

[13] The matter could not be concluded on 17 September and submissions were made at a further hearing on 2 October.

Relevant Agreement Clauses

[14] The Agreement was approved by Commissioner Raffaelli on 1 September 2011. Its nominal expiry date is 28 February 2014. The AMWU, Construction Forestry Mining and Energy Union and Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia are covered by the Agreement. The Agreement contains site specific appendices.

[15] It is convenient to set out the relevant clauses in relation to this dispute.

“13. INTRODUCTION OF CHANGE

13.1 Employer’s Duty to Notify

a) Where the Company has made a definite decision to introduce major changes in production, program, organisation, structure or technology that are likely to have significant effect on employees, the Company shall notify the employees who may be affected by the proposed changes and their Union(s).

b) “Significant effects” include termination of employment, major changes in the composition, operation or size of the Company’s workforce or in the skills required, the elimination or diminution of job opportunities, promotion opportunities or job tenure; the alteration of hours of work; the need for retraining or transfer of employees to other work or locations; and the restructuring of jobs. Provided that where the relevant Awards make provision for alteration of any of the matters referred to herein an alteration shall be deemed not to have significant effect.

13.2 Employer’s Duty to Discuss Change

a) The Company shall discuss with the employees affected and their Union(s) on, inter alia, the introduction of the changes referred to in Clause 13.1, the effects the changes are likely to have on employees and measures to avert or mitigate the adverse effects of such changes on employees and shall give prompt consideration to matters raised by the employees and/or their Union(s) in relation to the changes.

b) The discussions shall commence as early as practicable after the Company has made a definite decision regarding the introduction of major changes referred to in Clause 13.1.

c) For the purposes of such discussion, the Company shall provide in writing to the employees concerned and their Union(s), all relevant information about the changes including the nature of the changes proposed, the expected effects of the changes on employees and any other matters likely to affect employees provided that the Company shall not be required to disclose confidential information, the disclosure of which would be inimical to the Company’s interests.

…

17. REDUNDANCY

17.1 Definitions

All purpose rate of pay refers to the relevant Award rate of pay (i.e. the applicable base wage and supplementary payment) together with any overaward payments or special allowances which normally apply for all purposes. This specifically excludes shift penalties and allowances which are not paid for all purposes.

Ordinary rate of pay refers to the normal wages an employee received in respect of ordinary time worked including normal shift penalties, but excluding amounts in respect of overtime worked, and excluding allowances not paid for all purposes.

Redundancy refers to a declaration by the Company that a permanent award-covered employee’s contract of employment is to be terminated, not on account of any personal act or default of the employee, but because, as a result of Company restructuring, the job of the employee is no longer required to be done, by anyone.

Retrenchment refers to a termination of the contract of employment of a permanent award-covered employee by the Company for reasons of redundancy.

17.2 Notification

a) Each employee involved shall be provided with a minimum of four weeks notice of termination except as provided for in Clause 17.2(e).

b) Should, for any reason, the required period of notice not be provided to an employee by the Company, payment instead of notice will be made by the Company to the employee to the extent that the notice period is not provided.

c) An employee may elect not to serve out all or any of the four weeks of the required notice period, in which case payment instead of notice will not be made to the extent of the period of notice not served.

d) In cases where payment instead of notice is to be made, such payment will be based on the employee’s ordinary rate of pay as defined in Clause 16.1, inclusive of shift penalties and all purpose allowances.

e) Where there is to be a total plant closure in a regional area, each employee shall be provided with a minimum of 12 weeks notice. This notice period may be worked, paid out instead of the Company giving the required amount of notice or a combination of both as determined by the Company.

17.3 Redundancy Payments and Conditions

a) Redundant employees shall receive:

i. a severance payment of four weeks; and

ii. a service payment of four weeks for each completed 12 months service or pro rata part thereof.

b) In no circumstances shall the maximum service payment exceed the amount an employee would have received if they had continued in employment to their normal retirement age.

c) Severance and service payments will be based on the employee’s “all purpose rate” as defined in Clause 17.1, exclusive of shift allowances.

17.4 Persons Engaged on a Non-Permanent Basis

Where employees are terminated and are not re-employed within a two-month period and who are covered by the following criteria, the provisions of Clause 17 – Redundancy will operate with effect from March 1, 2000:

a) Where in a 12-month period, a non-permanent employee has completed more than 10 months continuous service, the employee will be deemed for the purpose of redundancy to have pro rata redundancy entitlements equivalent to a permanent employee.

b) Only time worked shall be counted when calculating service. The method of calculation would be to determine those employees who were employed for more than 10 months continuously in a 12-month period. Their employment history will be traced back to the most recent break of two months or more. That will be determined to be the time at which the continuity of employment was broken.

17.5 Pro rata Long Service Leave

Pro rata long service leave payments will apply to employees with one year or more service, based on completed months of service and must paid at the employee’s “ordinary rate of pay” as defined in Clause 17.1.

17.6 Annual Leave and Annual Leave Loading

All annual leave entitlements will be paid out based either on the employees ordinary rate of pay, or all purpose rate of pay together with annual leave loading of 17.5%, whichever is greater. In situations where annual leave loading had been paid out in advance, no further entitlements to leave loading shall exist.

17.7 Personal/Carer’s Leave

The Company shall pay out all accumulated personal/carer’s leave benefits in accordance with arrangements already reached at each individual premise prior to the date of this Agreement.

17.8 Transfers and Reclassification

a) Where an alternative position exists within the Company at its remaining premises within the employee’s normal field of work and either offering similar conditions of employment or offering materially different conditions of employment, in appropriate circumstances an employee may be offered to transfer to that position.

b) Where an employee elects to transfer into the alternative position, the option of retrenchment will remain open for a period of three months from the date of election, provided that the Company will be deemed to have met all commitments in respect of notification under Clause 17.2.

c) Should an employee accept a transfer into a position offering a reduced all purpose rate of pay, a period of three months will be provided in which the employee’s wage will be adjusted to the level of the new position. Adjustment will take the form of roughly equivalent wage reductions in each of the three months involved.

d) Employees who transfer onto a different shift cycle will be paid in accordance with the new shift roster upon commencement.

17.9 Technology Change

Any employee who cannot adjust to a new work situation arising from the introduction of new technology or a requirement for new skills shall be able to access the redundancy package if they so nominate within three months of commencing the duties of the new job.

17.10 Alternative Employment and Other Support

a) The Company will provide an employee with a maximum of one paid day off from work per week from the date of the notice period of their redundancy until the contract of employment is terminated, for the purpose of attending interviews or other legitimate job search activities. Employees shall provide Management at each relevant Company sites with reasonable advance notice of an intention to access this benefit. Management shall not refuse access to this benefit unreasonably.

b) In addition, the Company will provide all reasonable advice, guidance and assistance to employees facing retrenchment to ensure they are able to maximise opportunities available to them. Such assistance will include:

i. Notification of impending retrenchments to the local Centrelink.
ii.General financial counselling via a registered financial/investment consultant, provided that any individual counselling is obtained privately by each employee at their own cost.
iii.Guidelines relating to job interviewing, preparation of resumes and job search techniques.

c) A Certificate of Service will be provided to each employee on the day of the termination stating the employee’s length of service, most recent position with the Company and reason for their termination.

17.11 Access to Special Training for Employees

The Company will work together with the Unions to identify appropriate providers of additional training and skills development who may be able to assist employees.

17.12 Payment practices

a) 48 hours prior to the final day of employment, redundant employees will receive an itemised statement of termination, severance and service payments made in accordance with this Agreement
b) With the exception of superannuation payments, redundant employees will receive all termination payments by way of cheque or EFT payment on the employee’s final day of employment.

17.13 Offsetting

Based on the acceptance of the arrangements contained in this document, the Company undertakes not to offset any of the redundancy payments received by employees against final superannuation benefits received.

[16] The Dispute Settlement Procedure is contained in Clause 46 of the Agreement and it relevantly provides:

“46. DISPUTE RESOLUTION

46.1 Procedure

Issues in dispute regarding the application of this Agreement; matters pertaining between the employee and the Company; and matters pertaining between the Union(s) covered by this Agreement and the Company will be resolved between the party or parties and their nominated representatives (which for employee(s) can include a nominated union delegate or official) in accordance with the following procedures:

Site-specific disputes

a) Where the dispute between the parties concern a matter(s) specific to a particular site, the party or parties with the grievance must, in the first instance, raise the matter with the relevant site management in a timely manner at the Company’s premises at which the employee works or where the dispute arises. If the matter is not resolved at site level in a timely manner, then the matter:

i. must then be raised with the relevant national management if applicable; or

ii. may be referred to FWA for conciliation and/or arbitration.

b) Where a matter that has progressed to the national level in accordance with 46.1(a)(i) is not resolved at that level, the matter may then be referred to FWA for conciliation and/or arbitration.

National disputes

Where the dispute between the party or parties concern national issues, the party or parties with the grievance must, in the first instance, raise the matter with the relevant national management. If the matter is not resolved at national level, then the matter may then be referred to FWA for conciliation and/or arbitration.”

[17] When the Agreement was endorsed by the Commission a number of undertakings were made by Simplot about the operation of clause 13. They were:

“In relation to Clause 13.1(a), the Employer provides an undertaking that it shall notify employees who may be affected by proposed changes, the employees’ Union(s) and/or the employees’ nominated representative(s).

In relation to Clause 13.2(a), the Employer provides an undertaking that it shall discuss with the employees affected, the employees’ Union(s) and/or the employees’ nominated representative(s).

In relation to Clause 13.2(a), the Employer also provides an undertaking that it shall give prompt consideration to matters raised by the employees, the employees’ Union(s) and/or the employees’ nominated representative(s).

In relation to Clause 13.2(c), the Employer provides an undertaking that it shall provide all relevant information about the changes to the employees, the employees’ Union(s) and/or the employees’ nominated representative(s).”

[18] The undertakings emphasise the need for consultation with the unions and delegates. I note that there is no detail in the Agreement about the selection of employees for redundancy including the calling for volunteers as the first step.

Conduct of the Case

[19] Because this matter was dealt with in conference twice before the formal hearing I was well aware of the AMWU’s claim. Put broadly, the claim is that Mr Gleeson is entitled to a redundancy payment, having volunteered for redundancy and been accepted, even though he took and commenced another job, during the notice period. There is a contest about some of the factual issues which I need to summarise so that the overall issues can be understood. However, this decision relates to the jurisdictional objection taken by Simplot to the hearing of the claim.

[20] Mr Gleeson and Mr Silvio Tenci, Simplot’s NSW General Manager provided witness statements (exhibits S4 and A1 respectively) and were cross examined.

[21] Simplot and the AMWU provided written submissions prior to the hearings at which oral submissions were made.

Simplot’s Case

[22] Simplot submits that the Commission does not have power to deal with the dispute because Mr Gleeson is no longer employed by Simplot. They say he voluntarily ceased his employment when he accepted the other job. They say that he is no longer covered by the Agreement or entitled to any benefit under it.

[23] Simplot relies on s.51 and s.52 of the Act which are as follows:

“51 The significance of an enterprise agreement applying to a person

(1) An enterprise agreement does not impose obligations on a person, and a person does not contravene a term of an enterprise agreement, unless the agreement applies to the person.
(2) An enterprise agreement does not give a person an entitlement unless the agreement applies to the person.

52 When an enterprise agreement applies to an employer, employee or employee organisation

When an enterprise agreement applies to an employee, employer or organisation
(1) An enterprise agreement applies to an employee, employer or employee organisation if:

(a) the agreement is in operation; and
(b) the agreement covers the employee, employer or organisation; and
(c) no other provision of this Act provides, or has the effect, that the agreement does not apply to the employee, employer or organisation.

Enterprise agreements apply to employees in relation to particular employment
(2) A reference in this Act to an enterprise agreement applying to an employee is a reference to the agreement applying to the employee in relation to particular employment.”

[24] On 24 October 2013 Simplot announced that there would be a reduction of employees at the Bathurst site to take place in stages from mid 2014 to early 2015. Employees were invited to submit an expression of interest form. Options including volunteering for redundancy or redeployment. The final decision rested with Simplot.

[25] Mr Gleeson ultimately chose voluntary redundancy on 14 March 2014. Discussions then took place and he was offered a new Team Leader tole. He commenced that role on 9 June 2014. However, Mr Gleeson advised Simplot on 16 June 2014 that he had accepted a job with Nestle. Mr Tenci tried to persuade Mr Gleeson to stay. Simplot says that he was offered his old position back until the end of October 2014 at which time he would be retrenched and the redundancy payment made. Mr Gleeson was on leave from 10 to 28 July. During this time the dispute was notified to the Commission (21 July) and Mr Gleeson started with Nestle. He did not return to work on 28 July. A letter was sent to Mr Gleeson on 1 August. It stated:

“We understand that you have commenced employment with Nestle and will not be returning to your role with Simplot Australia. Accordingly, as a result of this we consider that your employment with Simplot Australia has terminated at your own initiative.”

[26] Simplot submits that Mr Gleeson’s refusal to return to work following his leave took him outside the Agreement. It was not a unilateral termination by the employer as dealt by Senior Deputy Drake in Jajoo v ING Administration Pty Ltd (2006) AIRC 483 (Jajoo) but rather a voluntary cessation.

[27] Simplot accepts that clause 46 of the Agreement quoted above, provides for arbitration. Section 738 and s.739 of the Act therefore apply and I can arbitrate consistent with those sections. However, it submits that Mr Gleeson’s voluntary cessation means that the Agreement no longer “applies” to him or ‘covers” him in accordance with ss.51, 52 and 53. He therefore has no entitlement to have the dispute arbitrated in accordance with the Dispute Settlement Procedure.

[28] Mr Tenci confirms that he offered Mr Gleeson that if he remained in the maintenance department until the end of October he would receive redundancy pay. Mr Gleeson made no contact to advise him whether he had accepted that offer or to explain why he hadn’t returned to work. The only advice about accepting the Nestle offer was at the 25 July, FWC conference.

The AMWU’s Case

[29] The AMWU proceeds on the basis that if Mr Gleeson had remained employed clause 46 would have, undoubtedly, provided the Commission with jurisdiction to hear the dispute.

[30] The AMWU makes no admissions as to the facts set out by Simplot, it is emphasized that Mr Gleeson always maintained his employment with Simplot was still on foot. He applied for Long Service Leave from the end of his annual leave but this was refused. He requested that his unpaid leave be extended until the dispute could be resolved. Instead Simplot sent the letter of 1 August. Mr Gleeson offered to continue to perform work for Simplot outside his ordinary hours.

[31] In any event, it is submitted that Mr Gleeson was employed by Simplot when the dispute was notified to the Commission. At no stage did he resign. He was terminated following the 1 August letter. It is accepted that the Agreement no longer applies to him.

[32] The test, it is submitted, is that stated by Senior Deputy President Drake in Jajoo:

“[15] I believe the test is whether the applicant was an employee at the time the dispute arose and the dispute resolution process was commenced. The dispute resolution process is intended to apply to disputes which arise in the course of employment between parties to the Agreement. Those pre conditions have been met in this case. Once those criteria are met the entitlement to access the process has arisen and continues limited to the matter in dispute and not affected by the subsequent termination of an employee’s employment by the employer for that matter or any other matter. Of course, the Commission must be satisfied that Mr Jajoo was engaged in the DRP before his employment was terminated.”

[33] This approach was upheld on appeal and in subsequent cases.

[34] It is denied that Mr Gleeson resigned or terminated his employment by his own action. In any event, this would not prevent him from utilising the dispute settlement procedure. The effect of the 1 August letter was to terminate Mr Gleeson at the initiative of the employer.

[35] The AMWU acted promptly to bring the matter to the Commission, certainly before Mr Gleeson was terminated.

[36] Finally, the AMWU submits that the dispute between it and Simplot provides a jurisdictional basis for the Commission in dealing with the matter. There is an ongoing dispute about the application of clauses 13 and 17 of the Agreement.

[37] Mr Gleeson (Exhibit S4) concedes that he accepted the role of Team Leader but says he did so on the basis that he could take redundancy within the next three months if he decided to. At paragraph 10 he states: “I was then told by Simplot that I had to stay until the end of October 2014, or I would not be paid my redundancy.” Exhibit S1 is Mr Gleeson’s letter of 20 June in which he formally applies for voluntary redundancy and seeks “an early departure from the company as I have gained employment within the local area.”

What was the nature of Mr Gleeson’s termination?

[38] On the submission of the AMWU it is not necessary for the Commission to decide the timing of Mr Gleeson’s termination and at whose initiative it took place. The timing is the crucial question in Ms Saunders’ submission (see PN799). In my view the two issues are inextricably intertwined and need to be determined.

[39] Usually the nature of a termination is dealt within the context of an unfair dismissal proceeding where it is necessary to establish that an employee has been dismissed pursuant to s.386 of the Act. Similar overall considerations apply in this case however.

[40] Cases such as Mohazab v Dick Smith Electronics Pty Ltd (No. 2) (1995) 62 IR 200 (Mohazab) and O’Meara v Stanley Works Pty Ltd[2006] AIRC 496 (O’Meara) deal with s.386(1)(a). A termination is at the employer’s initiative when its action “directly and consequentially” results in the termination of employment, and the employee would have still been employed but for that action. An analysis of all the circumstances is required. The Full Bench states in O’Meara:

“[23] In our view the full statement of reasons in Mohazab which we have set out together with the further explanation by Moore J in Rheinberger and the decisions of Full Benches of this Commission in Pawel and ABB Engineering require that there to be some action on the part of the employer which is either intended to bring the employment to an end or has the probable result of bringing the employment relationship to an end. It is not simply a question of whether “the act of the employer [resulted] directly or consequentially in the termination of the employment.” Decisions which adopt the shorter formulation of the reasons for decision should be treated with some caution as they may not give full weight to the decision in Mohazab. In determining whether a termination was at the initiative of the employer an objective analysis of the employer’s conduct is required to determine whether it was of such a nature that resignation was the probable result or that the appellant had no effective or real choice but to resign.”

[41] Where an Applicant claims they were forced to resign they must show they had no real choice, Mohazab. The onus is on the employee to prove that they did not resign voluntarily and that the employer forced them to do it, Australian Hearing v Peary (2009) 185 IR 359. An employer is generally able to treat a clear and unambiguous resignation as such, Ngo v Link Printing Pty Ltd (1999) 94 IR 375.

[42] There is no suggestion from Simplot that Mr Gleeson resigned. Rather they say that when he commenced employment with Nestle, which Mr Gleeson at (PN548) and Mr Tenci at (PN154) agreed in their oral evidence was 14 July, he abandoned his employment.

[43] The following chronology emerges from the evidence:

● 24 October 2013 - Simplot seeks expressions of interest for voluntary redundancy/redeployment.

● 14 March 2014 - Mr Gleeson chooses voluntary redundancy but discussions then take place designed to keep him with Simplot.

● 9 June - Mr Gleeson commences a new Team Leader role.

● Between 16 and 20 June - Mr Gleeson accepts the Nestle job and tells Simplot. Further discussions take place.

● 20 June - Mr Gleeson applies for redundancy and seeks payment relying on clause 17.8 of the Agreement.

● 10 July - Mr Gleeson commences approved leave.

● 14 July - Mr Gleeson starts work at Nestle.

● 21 July - AMWU application to FWC lodged.

● 25 July - FWC telephone conference.

● 28 July - Mr Gleeson is due to return form leave but does not.

● 31 July - further FWC telephone conference.

● 1 August - Simplot sends letter which says he ‘has terminated at your own initiative.”

[44] A dispute remains as to where the discussions between Simplot and Mr Gleeson ended up. In my view, they were not concluded. Certainly, there was no clear agreement or instruction by Simplot before the 1 August letter. Mr Tenci says that the payment of redundancy to Mr Gleeson was dependent on him remaining at Simplot till October. Mr Gleeson says that he was entitled to redundancy because of the application of clause 17.8 of the Agreement and the expectations he was given by Simplot staff.

[45] I find that Mr Gleeson was terminated by Simplot’s 1 August letter. The above chronology shows that until that act by Simplot he remained in employment. He was on approved leave from 10 July. At the Commission’s proceedings on 25 and 31 July Simplot treated him as still employed whilst various options were discussed to resolve the dispute. The fact that he commenced a job with Nestle was not necessarily inconsistent with his employment with Simplot. It may have proved to be the case ultimately but this was not clear when he commenced the job. Mr Gleeson continued to offer for work with Simplot. The fact that this was at times which were not practical or, ultimately not acceptable to Simplot, is beside the point. Even Mr Tenci conceded, in cross examination, that Mr Gleeson had not “frustrated his contract” until 31 July (see PN363 - PN366).

Is Mr Gleeson Covered by the Agreement?

[46] It is common ground that the Agreement provides for arbitration and therefore s.738 and s.739 provide the Commission with jurisdiction to arbitrate the dispute if the Agreement applies to Mr Gleeson in accordance with s.51 and s.52.

[47] In my view, the correct approach is that taken by Senior Deputy President Drake in Jajoo as set out in [32] above. The Senior Deputy President also stated at paragraph [14]:

“[14] With respect to the views of Commissioners Deegan and Cribb I believe that Mr Jajoo does continue to have the benefit of the DRP of the Agreement, for the resolution of the matter that was in dispute at the time of his termination of employment, but only if it was already being dealt with in accordance with that clause. If Mr Jajoo was engaged in the process of settling a disputed matter in accordance with the DRP then he is entitled to continue to access the processes of the clause to its end position in relation to that matter, notwithstanding that the employer has terminated him for an unrelated matter. The disputed matter, as indicated in the notice, was “…… whether or not the position of Mr Jajoo with INGA had become redundant as a result of a restructure such that INGA is obligated to pay him severance moneys pursuant to the terms of the Agreement; ……”. In relation to the unrelated matter for which his employment was terminated, Mr Jajoo may have access to the unlawful or unfair termination processes of the Act, or what ever other remedy might be available to him.”

[48] Her further statement at [16] was relied on by Simplot:

“[16] I am not persuaded that, once an entitlement to access the DRP arises, that it can be unilaterally terminated by the termination of the relevant employees’ employment. I accept that the resignation of an employee may, in some circumstances, bring that access to an end.”

However, there was no resignation in this case.

[49] The Full Bench in ING Administration v Jajoo (PR974301) upheld Senior Deputy President Drake’s decision. The Full Bench reviewed a number of cases. Of course, these related to pre Fair Work Act provisions. The majority stated:

“[34] For present purposes, we are concerned with the question of whether the terms of s 170LW, which enables parties to empower the Commission to settle disputes over the application of an agreement, limit the power able to be conferred by the parties to disputes between a current employee and an employer. In other words, is there a limitation in s 170LW such as would deprive an ex-employee of the ability to initiate, or progress, a dispute after the termination of his or her employment? We will return to arguments relating to the terms of the Agreement later in this decision.

[35]While it is undoubtedly true that parties to a certified agreement cannot confer powers on the Commission to deal with disputes which are not “over the application of the agreement,” the question is whether there is a further limitation on the nature of powers that can be conferred on the Commission, to the effect that the parties to a certified agreement are unable to confer powers on the Commission to settle disputes over the application of the agreement, when an employee has ceased to be employed by the relevant employer.

[36]In this respect, the argument of ING depends upon reading the words “preventing and settling disputes between the employer and employees whose employment will be subject to the agreement” in s 170LW as words of limitation, and that former employees are not included within the relevant description. It is argued that immediately when termination of employment occurs, any ongoing dispute is no longer one between an employer and an employee. The reference to “employees whose employment will be subject to the agreement” is a reference to the class of employees whose employment will be covered by the agreement following the certification and commencement of the agreement. The description is obviously intended to include within the class of employees both existing employees employed at the time of certification, and those who are subsequently employed while the agreement remains in operation. The question here is whether a limitation with respect to former employees is to be read into the terms of s 170LW.

[37]The Explanatory Memorandum issued in relation to the predecessor of s 170LW (s 170MH) does not address this matter expressly. It states that the section complements the predecessor to s 170LT (s 170MC(1)(c)) and that the Commission will have a discretion as to whether it will allow the inclusion of these terms in an agreement. Section 170MC(1)(c) was expressed in slightly different terms. It read:

“(c)the agreement includes procedures for preventing and settling disputes between employers and employees covered by the agreement about matters arising under the agreement.”

The Explanatory Memorandum for this provision simply states –
“An agreement must be certified if the Commission is satisfied that:
…
the agreement contains dispute settling procedures – paragraph (1)(c)”

The change of wording to that later contained in s 170LT appears to be related to concurrent amendments restricting the availability of multi-employer agreements. In our view, this material is more suggestive of a legislative intent that there be a requirement that the parties agree upon a procedure that they propose for their agreement, and that this must be approved by the Commission, rather than a provision which contains inherent limitations on what can be agreed and approved.

[38]We accept that a single person dispute which arises for the first time after the termination of employment is not a dispute between an employer and an employee. However, many disputes will arise while employment exists and continue after the termination of employment. In such a case, when the dispute arises, it is a dispute between an employee and an employer. If the dispute is progressed to the point of seeking the assistance of the Commission, the ING interpretation would require the employee to remain in employment. If it was intended to incorporate a limitation in s 170LW of the nature contended for by ING, we would expect there to be a clear express reference to that effect.

[39]The ING interpretation involves construing the provision as disqualifying employees from any process the parties may agree to confer on the Commission once they cease to be employed by their employer. Further, it requires s 170LW to be construed as depriving the parties to agreements of the ability to have a dispute continue to be resolved under an agreed procedure after termination of employment. Such a consequence would arise with respect to any dispute over any aspect of the agreement, even claims such as the non-payment of a meal allowance. It would also operate to deprive the Commission of jurisdiction at any time during the process. If termination arises after a decision is reserved, the jurisdiction to hand down the decision would not exist.

[40]As a matter of interpretation, a court or tribunal should not read a limitation into a source of power unless the words clearly bear such a meaning. Further, we do not believe that concepts of legal and industrial disputes provide any assistance in resolving the matter. Nor do we believe that it matters how the termination of employment occurred. We do not believe that s 170LW should be interpreted as including a limitation on the rights of parties to agreements in this way. If a dispute arises when the employment relationship exists, we are of the view that it is a dispute between the employer and an employee. We believe that a limitation of the nature contended for by ING should not be inferred from the words of s 170LW.

[41]In the circumstances of this matter, Mr Jajoo sought to progress a dispute under the relevant dispute settlement procedure while still employed. It was unresolved when his employment was terminated. We do not believe that there is a sound basis for construing the terms of s 170LW in a way which would deprive him of the right to progress his dispute to other levels of the procedure, including to the Commission, after the termination of his employment.

[50] I note that Senior Deputy President Acton, who dissented, decided that the relevant cut off point for an employee to attract the Commission’s jurisdiction under the Dispute Settlement clause was when the dispute was notified to the Commission. Mr Gleeson would also qualify under that test.

[51] Jajoo was followed by the Full Bench in Telstra Corporation Limited v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia [2007] AIRCFB 374 and Deakin University v S Rametta [2010] FWAFB 4387. The latter case was decided under the Fair Work Act.

[52] In Australian Workers’ Union vBarminco[2014] FWC 1954 Commissioner Lee stated, after quoting the Jajoo decisions:

“[73] What the Full Bench makes clear in the above passage is that a determination of whether or not a dispute procedure is limited to dealing with only current employees or not depends on the terms of that clause. The reference by the Respondent to part of the decision of Senior Deputy President Drake at first instance that “I am not persuaded that, once an entitlement to access the DRP arises, that it can be unilaterally terminated by the termination of the relevant employees employment. I accept that the resignation of an employee may, in some circumstances, bring that to an end” (emphasis added) is not authority for a general position that employees once terminated are unable to proceed to have disputes resolved by arbitration. Rather, the decision of Her Honour and the subsequent appeal provide authority for the proposition that whether or not former employees can continue to have their dispute determined pursuant to a dispute settlement procedure turns on the wording of that the particular dispute procedure in question as well as the timing of the termination of the employees and its relationship to any requirement to take particular steps under the terms of the dispute settlement procedure prior to arbitral power being exercised. In the circumstances of ING Administration Pty Ltd v Jajoo, the majority of the Full Bench found that former employees could access the dispute settlement procedure.

[74]The correct approach then is to consider the particular circumstances of this matter, in particular the timing of the dispute as it pertains to these employees and its relationship to this particular dispute settling procedure. In this respect, the Respondent concedes that “...this argument really comes down to when the matter was raised.”

[75] The relevant facts in this matter are as follows. The dispute was notified to the Commission on 25 June 2013. In the dispute notice, the Applicant stated, “The union has and the company have held discussion (sic) regarding the Loss of Contract at Rosebery and its consequence for employees on 3 occasions those being Tuesday 11June 2013, Thursday 20 June 2013, Tuesday 25 June 2013”. A conference was convened by Commissioner Deegan on 28 June 2013. The Respondent asserts that the employee’s employment was terminated “... in accordance with the terms of letters from Barminco dated 9 July 2013”. For the purposes of this jurisdictional decision only I have assumed that claim to be factually correct.”

[53] I find therefore that Mr Gleeson activated the Disputes Procedure, as evidenced by his email to a number of Simplot staff (Exhibit S1) on 20 June 2014. As well, the dispute was notified to the Commission on 21 July, well before Mr Gleeson’s termination date of 1 August.

[54] It follows therefore that Mr Gleeson was covered by the Agreement at the relevant time and that the Agreement applies to him in accordance with s.51 and s.52 of the Act.

Conclusion

[55] I find that the Commission does have jurisdiction to deal with the dispute relating to Mr Gleeson’s redundancy. He had activated the Dispute Settlement clause and lodged the application in the Commission well before he was terminated by Simplot on 1 August 2014. The authorities quoted above, the terms of the Dispute Settlement clause and the combined effect of ss.51, 52, 738 and 739 are, in my view, determinative of jurisdiction.

[56] Although it is not necessary for my conclusion, I would have also held that the Commission has jurisdiction to determine the matter pursuant to a dispute between the AMWU and Simplot because of the broad terms of the Dispute Settlement clause.

[57] I direct the parties to confer with a view to settlement of the merits of the dispute. In the absence of settlement the matter will be listed for programming of the claim at the request of the AMWU.

DEPUTY PRESIDENT

Appearances:

L Saunders for the AMWU

J Ansell of the AI Group and S King for Simplot Australia Pty Ltd

Hearing details:

2014

Telephone programming conference

August 8

Sydney

September 17

October 2

Printed by authority of the Commonwealth Government Printer

<Price code C, PR558330>