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

[2021] FWC 978

[2021] FWC 978

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
Transdev Melbourne Pty Ltd
(C2020/6552)

DEPUTY PRESIDENT MILLHOUSE MELBOURNE, 12 MARCH 2021

Jurisdiction to deal with a dispute under a dispute settlement procedure in an enterprise agreement.

[1] This decision concerns an application made by the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) pursuant to s 739 of the Fair Work Act 2009 (Cth) (Act).

[2] The substantive dispute relates to the payment of superannuation contributions on annual leave loading under the Transdev Melbourne Pty Ltd Workshop Enterprise Agreement 2018-2022 (Agreement).

[3] Transdev Melbourne Pty Ltd (Transdev) submits that the Commission does not have jurisdiction to deal with the application. Transdev’s position is that the dispute does not fall within the dispute settlement provision at clause 7.1 of the Agreement, because it does not relate to a matter arising under the Agreement or a matter pertaining to the relationship between Transdev and its employees. Further, Transdev contends that the AMWU has not complied with the procedural requirements contained in clauses 7.3 and 7.4 of the Agreement.

[4] For the reasons that follow, I am satisfied that the Commission has jurisdiction to deal with the dispute.

The Agreement

[5] There is no dispute, and I am satisfied that:

(a) the Agreement covers and applies to Transdev and its employees employed in a classification covered by the Agreement, engaged in workshop operations; 1 and

(b) the AMWU is covered by the Agreement in accordance with s 201(2) of the Act. 2

[6] Clause 7 of the Agreement contains the dispute settlement procedure. Clause 7.1 provides as follows:

“7.1 If a dispute relates to:

a) a matter arising under the Agreement; or

b) the National Employment Standards; or

c) a matter pertaining to the relationship between Transdev and employee/s;

this term sets out the procedures to settle the dispute.”

[7] Clause 7.3 prescribes how a dispute will be dealt with in the first instance. The parties are to endeavour to resolve the dispute at the workplace level, by discussions between employees and relevant supervisors/management. If that process is “exhausted” and the dispute remains unresolved, clause 7.4 provides that the parties may jointly or individually refer the matter to the Commission “for mediation and/or conciliation or arbitration.”

[8] Clause 26 of the Agreement concerns superannuation. It provides:

“26. Superannuation

26.1 Transdev shall pay superannuation contributions to any complying fund.

26.2 Within any given total remuneration package, the amount of the contributions will be no less than the statutory minimum. Employees may elect at a frequency of not more than twice yearly, to contribute a higher percentage to superannuation, from within their total remuneration package.

26.3 Employer superannuation contributions paid to an employee's eligible superannuation fund will be that as legislated in the Superannuation Guarantee (Administration) Act 1992. Employer Superannuation contributions are paid in accordance with the aforementioned Act and are payable on an Employee's ordinary time earnings.

26.4 Employees can elect only one superannuation fund for contributions and may change their choice of fund once per annum.

26.5 Employees may elect to make additional contributions towards superannuation, which may be made at a fixed amount, as a salary sacrifice.

26.6 Employees shall advise Transdev of their nominated superannuation fund in accordance with the choice of fund provisions contained in the Superannuation Guarantee (Administration) Act 1992. The default fund for superannuation contributions,should the Employee not nominate a fund within one month of commencement, shall be the Australian Super Pty Ltd.”

[9] Clause 29 of the Agreement deals with annual leave. The obligation to pay leave loading is addressed at clause 29.4 which provides as follows:

“29.4 Payment for Period of Leave

Annual leave will be paid at the ordinary rate, plus an additional 17.5% loading or the shift premium an employee would normally have received, whichever is greater for all leave accrued under this Agreement. If a rate change occurs whilst an employee is on annual leave, the annual leave pay will be adjusted accordingly.”

Context

[10] The AMWU says that the substantive dispute before the Commission relates to the interpretation and application of the superannuation provision of the Agreement at clause 26. 3 By way of its Form F10 application,4 the AMWU ultimately seeks a determination that:

(a) annual leave loading is ordinary time earnings; and

(b) employees receive superannuation contributions on annual leave loading that has been paid under the Agreement.

[11] In support of its application, the AMWU relies upon:

(a) the Australian Taxation Office (ATO) Superannuation Guarantee Ruling 2009/2 (SGR 2009/2) which provides that “annual leave loading that is payable under some awards and industrial agreements is not OTE if it is demonstrably referable to a notional loss of opportunity to work overtime;” 5 and

(b) a guidance note published by the ATO on 6 June 2019 entitled “Ordinary time earnings – annual leave loading” (ATO Guidance Note). The ATO Guidance Note provides the ATO’s view that “…we would be satisfied that the entitlement is ‘demonstrably referable’ to a lost opportunity to work overtime, if there is written evidence related to the entitlement. Relying on historical opinions of the initial purpose of annual leave loading generally won’t be enough to demonstrate that a specific annual leave loading entitlement relates to a lost opportunity to work overtime.” 6

[12] The AMWU says that the annual leave loading provision in the Agreement does not state that the payment of the loading is referable to the loss of opportunity to work overtime. 7 It therefore contends that an entitlement to the payment of superannuation contributions on annual leave loading exists under the Agreement.8

The jurisdictional objection

[13] Transdev contends that the Commission does not have the jurisdiction to deal with the dispute for the following reasons. First, the dispute does not relate to a “matter arising under the Agreement” for the purposes of clause 7.1(a) of the Agreement. Transdev considers that the AMWU’s characterisation of the dispute as relating to clause 26 of the Agreement is disingenuous. 9 Rather, Transdev says that the dispute centres on the interpretation and application of the ATO Guidance Note (which considers SGR 2009/2 as it relates to the application of the Superannuation Guarantee (Administration) Act 1992 (SGAA)). However, Transdev says that if the Commission does not accept that the dispute is about the ATO Guidance Note, the Commission should find that the dispute is properly characterised as arising under the SGAA.

[14] Secondly, Transdev says that the dispute is not a “matter pertaining to the relationship between Transdev and employee/s” for the purposes of clause 7.1(c) of the Agreement. In support of this position, Transdev relies upon the High Court decision in Re The Manufacturing Grocers' Employees Federation of Australia and Another; Ex Parte The Australian Chamber of Manufactures and Another. 10The High Court considered the words “pertaining to” in an industrial context and said that:

“…a matter must be connected with the relationship between an employer in his capacity as an employer and an employee in his capacity as an employee in a way which is direct and not merely consequential for it to be an industrial matter capable of being the subject of an industrial dispute.” 11

[15] Transdev submits that the dispute cannot be regarded as relating directly to the employment relationship under the Agreement.

[16] In the alternative, Transdev submits that the AMWU has recharacterised the dispute before the Commission to solely concern the interpretation of “ordinary time earnings” in clause 26 of the Agreement (when previously the dispute concerned the interpretation of the ATO Guidance Note and SGR 2009/2). In so doing, Transdev contends that there has not been compliance with the steps required by the dispute settlement procedure at clause 7 of the Agreement. 12

[17] The AMWU submits that the Commission has the jurisdiction to determine whether the payment of annual leave loading forms part of ordinary time earnings for the purposes of interpreting and applying clause 26 of the Agreement. 13 It says that the obligation to pay superannuation contributions under clause 26 and the calculation of such contributions is “a matter arising under the Agreement.”14 The AMWU submits that employees covered by the Agreement must have clarity as to the proper application of this provision.15 It is further said that the dispute pertains to the employment relationship between Transdev and its employees.16 The AMWU rejects the contention that it has departed from the initial characterisation of the dispute. It says that from the outset, the issue related to the interpretation and application of clause 26 of the Agreement.17

The jurisdictional issue – question to be determined

[18] For the purposes of determining the jurisdictional objection, the following question for arbitration was posed by the AMWU:

“Is the determination of whether payment of annual leave loading is ordinary time earnings for the purpose of clause 26.3, a matter that can be arbitrated by the Fair Work Commission in accordance with clause 7 of the Agreement?”

[19] The AMWU submits that the answer to this question is “yes.” 18 Transdev’s position in light of its submissions is that the answer must be “no.”

Consideration

[20] The Commission may deal with a dispute if the dispute settlement procedure “requires or allows” it to do so. 19 The terms of the dispute settlement procedure must be considered, understood in light of its industrial context and purpose.20 The scope of the dispute settlement procedure should not be narrowly construed as “to do so would be contrary to the notion that certified agreements are intended to facilitate the harmonious working relationship of the parties during the operation of the agreement.21

[21] In the assessment of the Commission’s power, there is a need to characterise the dispute and determine whether that characterisation has a nexus or sufficient nexus to the provisions of the Agreement. 22 In doing so, the Commission is not confined to the terms of the dispute application. The entire factual background is relevant and may be ascertained from the submissions advanced by the parties on the question of jurisdiction.23 Further, an industrial dispute is not necessarily fixed and definite, and it may evolve during proceedings in the Commission.24

[22] In dealing with a dispute under s 739 of the Act, the Commission must not exercise any powers limited by the Agreement’s dispute settlement term. 25 Further, the Commission must not make a decision that is inconsistent with either the Act or the Agreement.26

[23] Clause 7.1 of the Agreement confers jurisdiction upon the Commission in relation to a wide range of circumstances; relevantly, if the dispute relates to “a matter arising under the Agreement” (clause 7.1(a)) or “a matter pertaining to the relationship between Transdev and employee(s)” (clause 7.1(c)). 27 The dispute settlement procedure does not otherwise limit the Commission’s powers.

[24] Transdev’s jurisdictional objection arises from its view that the dispute centres on the interpretation and application of the ATO Guidance Note, which considers SGR 2009/2. Transdev submits that while the ATO Guidance Note and SGR 2009/2 “may affect the quantum of the amounts” under clause 26, such obligations are not expressly dealt with by the Agreement. 28 It says that there is an insufficient nexus between this material and the Agreement. Accordingly, it is said that clause 7.1 of the Agreement does not apply.29 However, I do not consider this to be the true character of the “matter” to which the dispute relates.

[25] In my view, the dispute is properly characterised as a dispute about whether annual leave loading payable under clause 29.4 of the Agreement forms part of an employee’s ordinary time earnings, as that term is used in clause 26.3 of the Agreement. This involves the interpretation and application of the term “ordinary time earnings” in clause 26.3.

Does the dispute, so characterised, fall within the scope of clause 7.1 of the Agreement?

[26] The dispute, so characterised, has a sufficient nexus to the terms of the Agreement. The dispute falls within the scope of clause 7.1 of the Agreement in the following way:

a) The dispute relates to a matter arising under the Agreement within the meaning of clause 7.1(a). Clause 26.3 creates an obligation under the Agreement to pay superannuation contributions on an employee’s “ordinary time earnings.” The “matter” relates to the interpretation and application of clause 26.3 of the Agreement.

b) The dispute relates to “a matter pertaining to the relationship between Transdev and employee(s)” for the purposes of clause 7.1(c) of the Agreement. A matter will pertain to the relationship between employers and employees if it directly affects employee conditions. This includes all the elements that constitute the necessary requisites, attributes, qualifications, environment or other circumstances affecting the employment. 30 The interpretation and application of the term “ordinary time earnings” as it is used in clause 26.3 of the Agreement directly affects Transdev and its employees in their relations and the conditions of the employment relationship.31

[27] In reaching this conclusion I do not consider that in the circumstances of this application, the Commission’s task would be confined to interpreting an obligation found solely in external materials such as the ATO Guidance Note and SGR 2009/2 as contended. 32 The Agreement contains an obligation to pay superannuation contributions in accordance with the SGAA and these “are payable on an Employee’s ordinary time earnings.”33 The Commission’s task involves the interpretation and application of this provision and the annual leave loading clause34 of the Agreement. Further, Transdev contends that the ATO Guidance Note is irrelevant to this exercise because it was not in existence at the time the Agreement was approved on 2 July 2018, and prior to its issuance the ATO accepted that annual leave loading does not form part of ordinary time earnings.35 However, the relevance of the Guidance Note and SGR 2009/2 are matters that may bear upon the determination of the substantive dispute. They do not, in my view, weigh upon the question of whether the Commission has jurisdiction to arbitrate it.

Compliance with clause 7 of the Agreement

[28] As I have concluded that the dispute attracts the operation of clause 7.1 of the Agreement, the steps stipulated by clause 7 must be observed. Transdev submits that the AMWU has not complied with clauses 7.3 and 7.4 of the dispute settlement procedure because it has reframed the dispute to solely concern the interpretation of clause 26. In the result, Transdev says that the Commission does not have jurisdiction to arbitrate the matter. 36

[29] Transdev says that there has only been a limited exchange of correspondence between the parties in respect of clause 26, and the application before the Commission is premature. 37 However, the AMWU says that the payment of superannuation contributions on annual leave loading was discussed between the parties as early as May 2020.38 Further, Mr Gardner (Industrial Officer for the AMWU) gave uncontested evidence that discussions took place with Transdev in March and April 2020 in advance of an earlier application to the Commission in respect of this issue (which was subsequently discontinued following a conference before the Commission on 25 May 2020).39

[30] Clause 7.3 of the dispute settlement procedure requires the parties in the first instance to “try to resolve the dispute at the workplace level, by discussions between the employee or employees and relevant supervisors and/or management.” If that process is “exhausted without the dispute being resolved,” clause 7.4 of the Agreement provides that “the parties may jointly or individually refer the matter to the Fair Work Commission for mediation and/or conciliation or arbitration.”

[31] In correspondence to Transdev dated 23 July 2020, the AMWU’s position was that clause 26 of the Agreement requires Transdev to make superannuation contributions in respect of annual leave loading on the basis that it falls within the meaning of ordinary time earnings. 40 The AMWU sought a meeting by videoconference with the relevant supervisor and/or manager to discuss a resolution.

[32] On 13 August 2020, Transdev confirmed a time to meet and stated that in its view, it had outlined its position regarding superannuation on annual leave loading. 41

[33] In correspondence to Transdev on 14 August 2020, the AMWU noted that Transdev had expressed the view that the parties had not “exhausted” attempts to resolve the dispute prior to the earlier dispute application to the Commission. The correspondence advised that the AMWU “understood this to be an indication that the company was willing to discuss a resolution to the dispute and was not merely an opportunity to delay the dispute resolution process.” 42 The correspondence concluded by confirming that the AMWU remained open to resolving the dispute without referral to the Commission and the purpose of the meeting was to discuss options for resolution.

[34] The parties subsequently attended a videoconference on 17 August 2020 in respect of the ongoing dispute. 43 The AMWU submits that a mutually acceptable resolution could not be achieved, and it made the application in the Commission. Mr Gardner gave uncontested evidence that he expressed the view at the conclusion of the videoconference that attempts to resolve the dispute had been exhausted and Transdev agreed.44

[35] Having regard to the AMWU’s correspondence of 23 July 2020 to Transdev, I do not accept Transdev’s contention that the AMWU has recharacterised the dispute from a matter concerning the interpretation of the ATO Guidance Note and SGR 2009/2 to a dispute solely concerning the interpretation of “ordinary time earnings” in clause 26 of the Agreement. The 23 July 2020 correspondence was not framed by the AMWU as relating to the interpretation and application of the ATO Guidance Note and SGR 2009/2. Rather, the correspondence specifically referred to clause 26 of the Agreement and stated the AMWU’s belief that “the requirement in clause 26 of the Agreement for Transdev to make superannuation contributions on an employee’s ‘ordinary time earnings’ includes making contributions with respect to the payment of annual leave loading…” 45 I find this correspondence to be consistent with the Form F10 application in which it is said that the dispute relates to clause 26 of the Agreement.46

[36] Further, I consider that the procedural requirements required by the dispute settlement provision in clause 7 of the Agreement have been observed. I accept the AMWU’s submission that the “workplace” level of the process has only a single stage. 47 This is confined by clause 7.3 of the Agreement to the parties trying to resolve the dispute at the workplace. It is apparent that there has been an attempt to resolve the dispute concerning the interpretation of clause 26 of the Agreement through discussions, as required. This is borne out by the material before the Commission which discloses that:

(a) Transdev’s Group Manager Employee Relations & Legal Support, Mr Bower, corresponded with the AMWU by email on 22 April 2020 in response to “the issue of whether super is payable on AL loading.” 48

(b) The AMWU’s 23 July 2020 correspondence acknowledged the existence of earlier discussions: “As you have previously advised, the company disagrees and says that contributions are not payable on those amounts.” 49

(c) Transdev communicated to the AMWU in writing on 13 August 2020 that it had already “clearly outlined” its position regarding superannuation on annual leave loading. 50

(d) The parties met by video conference on 17 August 2020 at which a resolution could not be reached. 51

[37] The “dispute resolution process” contemplated by clause 7.4 of the Agreement can only be a reference to the workplace level discussions that are required by clause 7.3. In the absence of a resolution of the dispute at or following the 17 August 2020 videoconference, I am satisfied that it was open to the AMWU to conclude that the dispute resolution process was “exhausted” pursuant to clause 7.4 of the Agreement.

[38] In light of these matters, I am of the view that the procedural requirements contained in clauses 7.3 and 7.4 of the Agreement were satisfied. Whether the parties had met on only one occasion before the AMWU formed the view that the process was exhausted does not alter my finding, having regard to the circumstances described and the terms of clause 7.

Conclusion

[39] For the above reasons and in light of the conclusions reached, I am satisfied that the Commission has jurisdiction to deal with the dispute.

[40] It follows that the answer to the question posed by the AMWU is “yes:” the determination of whether payment of annual leave loading is ordinary time earnings for the purpose of clause 26.3, a matter that can be arbitrated by the Fair Work Commission in accordance with clause 7 of the Agreement.

DEPUTY PRESIDENT

Appearances:

J. Gardner for the Applicant.
A. Agostino for the Respondent.

Hearing details:

2021.
Melbourne, by video:
February 24.

Printed by authority of the Commonwealth Government Printer

<PR727223>

 1   Clauses 3.1 and 3.2 of the Agreement

 2   [2018] FWCA 3907 at [5]; see also Clause 3.3 of the Agreement

 3   “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) submissions on jurisdiction filed on 14 October 2020 (AMWU submissions) at [2]

 4   Form F10 application for the Commission to deal with a dispute dated 4 May 2020 (Form F10) at 3.1

 5   Australian Taxation Office Superannuation Guarantee Ruling 2009/2 at [238], see Form F10, 2.1 at [3]

 6   Ordinary time earnings – annual leave loading, published by the Australian Taxation Office on 6 June 2019, p.2; Attachment A to the Form F10

 7   See clause 29.4 of the Agreement

 8   Form F10, 2.1 at [4] and [5]

 9   Transdev Melbourne Pty Ltd outline of submissions dated 28 October 2020 (Transdev submissions) at [3]-[6] and [16]

 10 (1986) 160 CLR 341

 11 (1986) 160 CLR 341 at p.353

 12   Transdev submissions at [7], [18] and [32]-[38]

 13   AMWU submissions at [22] and [23]

 14   Ibid at [18]; clause 7.1(a) of the Agreement

 15   AMWU submissions at [21]

 16   Clause 7.1(c) of the Agreement

 17   “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) reply submissions filed on 8 December 2020 (AMWU reply submissions) at [6], [8] and [17]

 18   AMWU reply submissions at [3] and [4]

 19 Section 739(1) of the Act; see also s 595 of the Act

 20   Construction, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Thiess Pty Ltd [2011] FCA 1020 at [42], [44] and [47]

 21   Shop, Distributive and Allied Employees Association v Big W Discount Department Stores, PR924554 at [23]

 22   Seven Network v CPSU (2003) 122 IR 98 at [32]; See also Australian Nursing and Midwifery Federation v Alfred Health [2015] FWCFB 3045 at [38] and Construction, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Thiess Pty Ltd [2011] FCA 1020 at [47]

 23   Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Holden Limited, PR940366 at [47]

 24   United Firefighters’ Union of Australia v Metropolitan Fire and Emergency Services Board, PR973884 at [14]-[15]; R v Bain; Ex parte Cadbury Schweppes Australia Ltd (1984) 159 CLR 163 at p.168; Re PKIU; Ex parte Vista Paper Products Pty Ltd [1993] HCA 81; (1993) 113 ALR 421 at [45]

 25 Section 739(3) of the Act

 26 Section 739(5) of the Act

 27   By clause 7.1(b), the Agreement confers jurisdiction upon the Commission in respect of disputes relating to the National Employment Standards, although this provision is not presently relevant

 28   Transdev submissions at [28]

 29   see Transdev submissions at [17] and [23]-[25]; Construction, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Thiess Pty Ltd [2011] FCA 1020 at [42] to [48]; “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) v Thiess Degremont Joint Venture [2012] FWA 8420 at [21], [22] and [27]

 30   United Firefighters' Union of Australia v Metropolitan Fire and Emergency Services Board[2016] FWCFB 2894 at [26]; Re Cram; Ex parte NSW Colliery Proprietors’ Association Limited [1987] HCA 28; (1987) 163 CLR 117; see also paragraph 672 of the Explanatory Memorandum for the Fair Work Bill 2008 (Cth)

 31   Re The Manufacturing Grocers' Employees Federation of Australia and Another; Ex parte The Australian Chamber of Manufactures and Another

 32   See Transdev submissions at [30] and [31]

 33   Clause 26.3 of the Agreement

 34   Clause 29.4 of the Agreement

 35   Transdev submissions at [20]

 36   Ibid at [38] and [40]

 37   Ibid at [35] and [38]

 38   AMWU reply submissions at [27]

 39   Exhibit 1 at [4] to [7]

 40   Annexure JG1 to Exhibit 1

 41   AMWU reply submissions at [29]; Attachment JG1 to Exhibit 1

 42   Annexure JG1 to Exhibit 1

 43   AMWU reply submissions at [9] and [30]

 44   Exhibit 1 at [13]

 45   Annexure JG1 to Exhibit 1

 46   Form F10, 1.4; see also Form F10, 2.1 at [2]

 47   AMWU reply submissions at [25]

 48   Exhibit 5

 49   Annexure JG1 to Exhibit 1

 50   Ibid

 51   AMWU reply submissions at [30]