CC Pty Ltd T/A Cook Colliery v Construction, Forestry, Mining and Energy Union
[2017] FWCFB 2749
•1 JUNE 2017
| [2017] FWCFB 2749 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604 - Appeal of decisions
v
Construction, Forestry, Mining and Energy Union
(C2017/1586)
VICE PRESIDENT CATANZARITI | SYDNEY, 1 JUNE 2017 |
Appeal against decision [2017] FWC 1447 of Commissioner Spencer at Brisbane on 13 March 2017 in matter number C2016/1848.
[1] On 13 March 2017, Commissioner Spencer issued a Decision, 1 which found that clause 32 of the CC Pty Ltd Enterprise Agreement 2012 (“the Agreement”) empowers the Commission to “exercise any method of dispute resolution permitted” that it considers appropriate to ensure settlement of the dispute. In this regard, the Commissioner held that the clause is not clear on which methods of dispute resolution are permitted, however, noted that the clause does not, on its face, limit the power of the Commission.
[2] On 24 March 2017, CC Pty Ltd T/A Cook Colliery (“the Appellant”) lodged a Notice of Appeal, appealing the Decision of Commissioner Spencer. We heard the appeal on 18 May 2017 and informed the parties the appeal is upheld, the Decision of Commissioner Spencer is quashed and that we would provide reasons for our Decision. 2 At the hearing, Mr C. Murdoch, of Queen’s Counsel, sought permission to appear for the Appellant and Mr R. Reed, of Counsel, sought permission to appear for the Construction, Forestry, Mining and Energy Union (“the Respondent”). Given the complexity of the matter and having regard to section 596 of the Act, permission was granted to both parties to be represented.
The Decision at First Instance
[3] The Commissioner found that clause 32 of the Agreement provides a procedure for dealing with disputes and is a term referred to in sections 186(6) and 738 of the Act. As such, the Commissioner found that the Commission was expressly authorised to “deal with a dispute” by the term itself and section 739 of the Act.
[4] The Commissioner noted that the issue in dispute was whether clause 32 limited the exercise of the Commission’s powers and, if not, had the parties agreed that the Commission may arbitrate the dispute in accordance with the term. In this regard, the Commissioner outlined that the relevant sections of the procedure are contained in provisions relating to “Step 4”, “Process” and “Power of FWA”. The Commissioner noted that Step 4, on its plain meaning, applies where the prior steps have not resolved the dispute. Following this, Step 4 requires the parties to endeavour to resolve the dispute in a timely manner and “refer the dispute to FWA”. The Commissioner outlined that the next provision provides for “Process”, which stipulates that the parties “may” agree on the process to be utilised by the Commission, which includes mediation, conciliation and arbitration. The Commissioner held that this clause, on its face, does not limit the powers to be exercised by the Commission, but is rather an inclusive description of the “process” that the parties may agree is to be utilised by the Commission. The Commissioner noted that it is of importance that this clause relates to “process” in the Commission, rather than the “power” of the Commission. In this regard, the Commissioner outlined that the drafters created a separate provision to do with the “Power of FWA”. This provision provides that “where the matter in dispute remains unresolved”, the Commission “may” exercise “any method of dispute resolution permitted”. This is limited to any method that the Commission “considers appropriate” to ensure settlement of the dispute.
[5] The Commissioner noted that the Respondent contended that the use of the word “permitted” is limited to that process to be utilised by the Commission that has been agreed in the process stage of the procedure. The Commissioner held that the context of the provision read as a whole, the Agreement and the Act does not tend in favour of this construction. Rather, the applicable construction is that if a dispute remains unresolved at “Step 4”, then the parties can refer the dispute to the Commission. In so referring, the parties “may” agree on the process (as distinct from the power) to be utilised by the Commission. That process may include mediation, conciliation or arbitration. However, the parties have gone further in their Agreement and have created a clause outlining the “Power of FWA”. That provision provides that the Commission is empowered to “exercise any method of dispute resolution permitted” that it considers appropriate to ensure settlement of the dispute. The Commissioner held the clause is not clear on which methods of dispute resolution are permitted.
[6] As such, the Commissioner held that the clause does not, on its face, limit the power of the Commission.
The Appeal
[7] At the heart of the appeal is whether the Commissioner correctly applied and construed clause 32 of the Agreement.
Appellant’s Submissions
[8] The Appellant referred to the eight grounds of appeal stipulated in its Notice of Appeal, however, noted six errors in relation to the Commissioner’s Decision, which we summarise as follows.
[9] Firstly, the Appellant contended that the Commissioner erred by failing to correctly apply the premise that it was not empowered to arbitrate, unless the parties had agreed in accordance with clause 32 that it could do so.
[10] Secondly, the Appellant submitted that the Commissioner erred by failing to correctly apply sections 595 and 739 of the Act. If correctly applied, the Commissioner ought to have found that it had the power to mediate or conciliate under clause 32 irrespective of the consent of the parties, but only had the power to arbitrate with the consent of the parties.
[11] Thirdly, the Appellant asserted that the Commissioner erred by failing to apply the prior Full Bench authority in Woolworths Ltd T/A Produce and Recycling Distribution Centre 3 (hereafter “Woolworths”),despite being addressed on its application.
[12] Fourthly, the Appellant posited that the Commissioner erred by interpreting the “process” subclause and the word “permitted” in the “Power of FWA” subclause in clause 32 in a manner which rendered them otiose.
[13] Fifthly, the Appellant contended the Commissioner erred by apparently taking into account the evidence of Mr Power, contrary to the principles expressed in the decisions in Codelfa Construction Pty Ltd v State Rail Authority of NSW, 4 Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd & Ors5and Australasian Meat Industry Employees Union v Golden Cockerel.6
[14] Sixthly, the Appellant submitted the Commissioner erred in finding that, by clause 32, the parties had agreed (expressly or otherwise) to arbitration.
[15] For the above reasons, the Appellant contended the appeal should be allowed, the Decision of Commissioner Spencer should be quashed and the jurisdictional objection should be upheld.
Respondent’s Submissions
[16] The Respondent outlined four main grounds of appeal, which we summarise as follows.
[17] Firstly, the Respondent contended that the Commissioner’s Decision was consistent with a proper construction of clause 32 of the Agreement. In particular, the Respondent submitted that the construction of clause 32 contended for by the Appellant would allow one party to prevent the Commission from dealing with the dispute by refusing to agree at the “Process” stage to a process for resolution. In this regard, the Respondent contended that such a construction could not be accepted consistently with the requirements of section 186(6) of the Act. The Respondent asserted that, properly construed, clause 32 of the Agreement provides that, in the absence of agreement between the parties as to the method of dispute resolution, the Commission may exercise any available dispute resolution power that it considers appropriate to ensure the settlement of dispute. Further, that the Act allows for dispute resolution by way of conciliation, mediation or arbitration. Moreover, the Appellant posited that, in accordance with section 739(4) of the Act, clause 32 represents an agreement between the parties that the Commission may arbitrate the dispute, and that section 739(4), in turn, provides the express authorisation required by section 595(3) of the Act.
[18] Secondly, the Respondent contended that, whilst the decision in Woolworths is instructive, it is not determinative of the present appeal. In particular, the Respondent submitted that the decision in Woolworths concentrated on whether the scheme of the Act required an enterprise agreement to provide for compulsory access to arbitration, as the Commissioner at first instance had apparently found. Further, that this contention has not been made by the Respondent in this case and neither was such a proposition relied upon by the Commissioner below. Moreover, the Respondent asserted that the relevant dispute procedures in clause 32 of the Agreement are less precise than the procedures in Woolworths and the resolution of the jurisdictional issue in this case fell to be decided on a proper construction of clause 32.
[19] Thirdly, the Respondent submitted that the Appellant’s construction of clause 32 of the Agreement would mean that the “Process”provision would allow for one party to the agreement to refuse to agree on any process for resolution of the dispute and that such a construction would be inconsistent with the scheme of the Act, in particular section 186(6). The Respondent noted that, as paragraph 2290 of the Explanatory Memorandum regarding the Fair Work Bill 2008 makes clear, the general provisions concerning dispute resolution in section 595 of the Act yield to the particular provisions of the Act that govern the content and operation of dispute resolution provisions in enterprise agreements. The Respondent asserted that this position is consistent with the principles of construction set out in Project Blue Sky v Australian Broadcasting Authority, 7 where the plurality in the High Court stated that:
“The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute. The meaning of the provision must be determined ‘by reference to the language of the instrument viewed as a whole’…
A legislative instrument must be construed on the prima facie basis that its provisions are intended to give effect to harmonious goals.”
[20] Fourthly, the Respondent contended that, to accept the construction of clause 32 of the Agreement proposed by the Appellant would produce an illogical result. The Respondent asserted the Appellant proposes that a failure to agree on resolution methods at the “Process” stage would carry over into the stage reserved for the “Power of FWA” because, despite the discretion reposed in the Commission at the latter stage, that discretion is fettered by any veto exercised in the “Process” stage because only those matters agreed in the “Process” stage or, alternatively, available under section 595 of the Act, would be “permitted”. Under that scenario, where the dispute remained “unresolved” following unsuccessful attempts at conciliation or mediation, the Respondent submitted that the only further matters which the Commission could choose to exercise at the “Power of FWA” stage would be processes of a type that had already been unsuccessful. In this regard, the Respondent posited that such a construction lacks logic and would fail to give full force and effect to the discretion reposed in the Commission to exercise any method of dispute resolution that “it considers appropriate to ensure the settlement of the dispute”.
[21] For the above reasons, the Respondent contended the appeal should be dismissed.
Consideration – Permission to Appeal
[22] The Commission will grant permission to appeal if it is in the public interest to do so. 8 The test of assessing whether a matter is in the public interest is discretionary and involves a broad value judgement.9 In GlaxoSmithKline Australia Pty Ltd v Colin Makin,10 the Full Bench summarised the test for determining the public interest as follows:
“[26] Appeals have lain on the ground that it is in the public interest that leave should be granted in the predecessors to the Act for decades. It has not been considered useful or appropriate to define the concept in other than the most general terms and we do not intend to do so. The expression ‘in the public interest’, when used in a statute, classically imports a discretionary value judgment to be made by reference to undefined factual matters, confined only by the objects of the legislation in question. [Comalco v O’Connor (1995) 131 AR 657 at p.681 per Wilcox CJ & Keely J, citing O’Sullivan v Farrer (1989) 168 CLR 210]
[27] Although the public interest might be attracted where a matter raises issues of importance and general application, or where there is a diversity of decisions at first instance so that guidance from an appellate court is required, or where the decision at first instance manifests an injustice, or the result is counter intuitive, or that the legal principles applied appear disharmonious when compared with other recent decisions dealing with similar matters, it seems to us that none of those elements is present in this case.”
[23] Alternately, the second ground for granting permission to appeal is that the decision is attended with sufficient doubt to warrant its reconsideration or that substantial injustice may result if leave is refused. 11
[24] In determining whether permission to appeal should be granted, we have reviewed and considered all material filed by the parties including all submissions, correspondence and relevant authorities.
[25] We find that permission to appeal should be granted in this matter. We are of the view that the appeal raises important questions concerning the construction and application of clause 32 of the Agreement in circumstances where the Commissioner determined that clause 32 did not limit the power of the Commission. We consider this to be an important matter regarding the Commissioner’s approach in making such a determination and, therefore, the dispute arising in this case is a matter of public interest. It is on this basis that permission to appeal is granted.
Consideration – The Appeal
[26] We note, for the purposes of determining this appeal, the Decision of Commissioner Spencer was not discretionary in nature. Rather, the task before Commissioner Spencer was to construe clause 32 of the Agreement. As such, it is our role as an appeal bench to determine whether the Commissioner erred in her construction of clause 32 of the Agreement.
[27] Clause 32 of the Agreement stipulates as follows.
32. Grievance Procedure
The Grievance Procedure to be followed is:
Overview | Cook Colliery and employees are responsible for attempting to resolve workplace issues as quickly as possible. Supervisors are responsible for making themselves aware of any unresolved workplace and or potential issues and should also seek to resolve them quickly. Cook Colliery or employee/s may appoint another person, organisation or association to accompany and/or represent them for the purposes of this clause. |
Step 1 | In the event of a dispute, in the first instance the parties must attempt to resolve the matter at the workplace by discussions between the employee/s concerned and the relevant immediate Supervisor. |
Step 2 | If these discussions do not resolve the dispute, the parties will endeavour to resolve the dispute in a timely manner by discussions between the employee/s concerned and the Shift Co-ordinator. |
Step 3 | If these discussions do not resolve the dispute, the parties will endeavour to resolve the dispute in a timely manner by discussions between the employee/s concerned and the Site Senior Executive. |
Step 4 | If such discussions do not resolve the dispute, the parties will endeavour to resolve the dispute in a timely manner and refer the dispute to FWA. |
Process | The parties may agree on the process to be utilised by FWA including mediation, conciliation and arbitration. |
Power of FWA | Where the matter in dispute remains unresolved, FWA may exercise any method of dispute resolution permitted that it considers appropriate to ensure the settlement of the dispute. |
Obligations | While the dispute resolution procedure is being conducted, work must continue in accordance with this Agreement and the Act. Subject to applicable occupational health and safety legislation, an employee must not unreasonably fail to comply with a reasonable direction by Cook Colliery to perform work, whether at the same or another workplace, provided that it is safe and appropriate for the employee to perform. |
[28] Section 595 of the Act states:
“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.”
[29] Section 739 of the Act states:
“Disputes dealt with by the FWC
(1) This section applies if a term referred to in section 738 requires or allows the FWC to deal with a dispute.
(2) The FWC must not deal with a dispute to the extent that the dispute is about whether an employer had reasonable business grounds under subsection 65(5) or 76(4), unless:
(a) the parties have agreed in a contract of employment, enterprise agreement or other written agreement to the FWC dealing with the matter; or
(b) a determination under the Public Service Act 1999 authorises the FWC to deal with the matter.
Note: This does not prevent the FWC from dealing with a dispute relating to a term of an enterprise agreement that has the same (or substantially the same) effect as subsection 65(5) or 76(4) (see also subsection 55(5)).
(3) In dealing with a dispute, the FWC must not exercise any powers limited by the term.
(4) If, in accordance with the term, the parties have agreed that the FWC may arbitrate (however described) the dispute, the FWC may do so.
Note: The FWC may also deal with a dispute by mediation or conciliation, or by making a recommendation or expressing an opinion (see subsection 595(2)).
(5) Despite subsection (4), the FWC must not make a decision that is inconsistent with this Act, or a fair work instrument that applies to the parties.
(6) The FWC may deal with a dispute only on application by a party to the dispute.”
[30] We note the following extract from transcript dated 18 May 2017 at PN132-147:
“COMMISSIONER JOHNS: So you say the word ‘permitted’ means permitted by the parties?
MR REED: No, I say it means permitted under the Act. Permitted by the parties is, as I understand it, the appellant’s submission because it says the permission that is talked about in the power stage is only a permission given by an agreement reached in the previous stage, that is, the process stage. If there’s no agreement there, as I understand the appellant’s submissions, it says there’s nothing permitted to be done in that latter stage. Certainly - - -
COMMISSIONER JOHNS: But if you say it’s permitted by the Act, how do you get arbitration?
MR REED: Arbitration is something available to the Commission. It’s one of the things - - -
COMMISSIONER JOHNS: No, no, take me to the section of the Act that you’re relying upon that says that the Commission has this power of arbitration permitted by the Act. Take me to the section, please, right now.
…
MR REED: Section 739(4) says - - -
COMMISSIONER JOHNS: Is that the one you rely upon?
MR REED: ‘If, in accordance with the term, the parties have agreed that the FWC may arbitrate (however described) the FWC may do so.’
What the parties, by their agreement, have reposed in the Commission, in my submission, under clause 32 is the capacity in the case of a failure of agreement, that is a breakdown in the process stage, has reposed in the Commission the power to exercise any method of dispute resolution permitted, we say under the Act, that it considers appropriate to ensure the settlement of the dispute.
Arbitration is clearly a tool in the dispute resolution kit that’s available to the Commission.”
[31] We note the “Process” provision within clause 32 of the Agreement outlines that the parties may agree on the dispute resolution process to be utilised by the Commission including mediation, conciliation and arbitration. However, the “Power of FWA” provision stipulates that, where the matter in dispute remains unresolved, the Commission may exercise any method of dispute resolution “permitted” that it considers appropriate to ensure the settlement of the dispute.
[32] During the hearing, the representatives for the Appellant and the Respondent conceded that the word “permitted” stipulated in the “Power of FWA” provision refers to any method of dispute resolution permitted by the Act to ensure the settlement of the dispute. 12 In this regard, as noted from the above extract, the Respondent relied upon section 739(4) in asserting that the Commission has power to arbitrate the dispute. Section 739(4) of the Act requires there to be agreement between the parties in order for the Commission to arbitrate a dispute. At paragraph 18 of its submissions, the Respondent contended that:
“In accordance with s. 739(4), cl. 32 represents an agreement between the parties that the Commission may arbitrate the dispute.”
[33] However, clause 32 of the Agreement does not expressly state that such an agreement has been reached between the parties. The only reference to “agreement” between the parties in respect of arbitration in clause 32 is within the “Process” provision, which states the parties may agree on the process to be utilised by the Commission, including mediation, conciliation and arbitration. The term “may” confers the parties with discretion to agree upon the process the Commission may utilise, however, no such agreement was expressed by the parties. The notion that parties must reach an agreement before the Commission can arbitrate a dispute was considered in Woolworths, in which the Full Bench held:
“Section 739(4) sets out the circumstances in which Fair Work Australia may arbitrate a dispute, providing that if the parties have agreed that Fair Work Australia may arbitrate, Fair Work Australia may do so. It appears to us that s 739(4) strongly implies the negative stipulation that if the parties have not agreed, Fair Work Australia has no power to arbitrate.” 13
[34] In this regard, the Commission can only arbitrate a dispute with express agreement of the parties to that dispute. Thus, as clause 32 does not represent an agreement between the parties and there has been no other express agreement, clause 32 of the Agreement cannot be construed so as to allow the Commission to arbitrate the dispute.
[35] As there was no agreement, section 739(4) is not enlivened and, therefore, the Commission is not expressly authorised to deal with the dispute pursuant to section 595(3) of the Act.
[36] In Award Modernisation, 14 the Full Bench, in reference to the Black Coal Mining Industry Award, found that the dispute resolution clause in contemplation did not provide for compulsory arbitration.15
[37] Relevantly, Clause 9.4 of the Black Coal Mining Industry Award 2010 states:
“Where the matter in dispute remains unresolved, the Commission may exercise any method of dispute resolution permitted by the Act that it considers appropriate to ensure the settlement of dispute.”
[38] Moreover, we note the “Power of FWA” provision within clause 32 states:
“Where the matter in dispute remains unresolved, FWA may exercise any method of dispute resolution permitted that it considers appropriate to ensure the settlement of the dispute.”
[39] As both the Appellant and the Respondent made the concession that the term “permitted” in the “Power of FWA” provision refers to any method of dispute resolution permitted by the Act, we are of the view that these clauses are synonymous in nature.
[40] Noting the similarities between clause 9.4 of the Black Coal Mining Industry Award and clause 32 of the Agreement outlined above, and as clause 9.4 was considered not to provide for compulsory arbitration, we are not satisfied that the Full Bench in Award Modernisation erred in its construction. Accordingly, clause 32 of this Agreement, consistent with the construction in Award Modernisation, should not be construed so as to empower the Commission to arbitrate the dispute without the agreement of the parties.
[41] For the above reasons, we are satisfied that the Commission did not have jurisdiction to arbitrate the dispute in accordance with clause 32 of the Agreement as there was no express agreement between the parties for such to take place.
[42] Accordingly, we are of the view the appeal must be upheld and the Decision of Commissioner Spencer must be quashed.
Conclusion
[43] Permission to appeal is granted.
[44] The appeal is upheld.
[45] The Decision of Commissioner Spencer is quashed.
VICE PRESIDENT
Appearances:
C. Murdoch, of Queen’s Counsel, for the Appellant.
R. Reed, of Counsel, for the Respondent.
Hearing details:
2017
Melbourne:
18 May.
1 [2017] FWC 1447.
2 Transcript dated 18 May 2017, PN189.
3 (2010) 192 IR 124.
4 (1982) 149 CLR 337.
5 (2004) 219 CLR 165.
6 [2014] FWCFB 7447.
7 (1998) 194 CLR 355, 381-2 [69]-[70].
8 Fair Work Act 2009 (Cth) s 604(2).
9 Esso Australia Pty Ltd v AMWU; CEPU; AWU[2015] FWCFB 210, [6].
10 [2010] FWAFB 5343, [27].
11 Esso Australia Pty Ltd v AMWU; CEPU; AWU[2015] FWCFB 210, [7].
12 Transcript dated 18 May 2017, PN44-5 and PN132-3.
13 (2010) 192 IR 124, 131 [21].
14 [2008] AIRCFB 1000.
15 Ibid [43].
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