CEPU v Jemena Asset Management Pty Ltd

[2015] FWC 1189

[2015] FWC 1189

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739—Dispute resolution

Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia
v
Jemena Asset Management Pty Ltd
(C2014/5100)

DEPUTY PRESIDENT GOSTENCNIK MELBOURNE, 25 FEBRUARY 2015

Alleged dispute about relocation allowance arising under the enterprise agreement; whether Commission has jurisdiction to deal with dispute under expired agreement; jurisdiction not enlivened under current agreement; application dismissed.

Introduction

[1] The Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) and certain of its members employed by Jemena Asset Management Pty Ltd (Jemena) at its Tullamarine facility are covered by Jemena Asset Management - ETU Victorian Electricity Enterprise Agreement 2013 (Current Agreement). The Current Agreement was approved by me on 12 June 2014 1 and pursuant to s 54 of the Fair Work Act 2009 (Act) commenced to operate on 19 June 2014 with a nominal expiry date of 31 August 2016. Jemena is also covered by the Current Agreement.

[2] By application filed on 25 June 2014 the CEPU applied pursuant to s 739 of the Act for the Fair Work Commission (Commission) to deal with a dispute in accordance with the disputes settlement procedure contained in the Current Agreement.

[3] The dispute is about the calculation of a relocation allowance payable to certain employees of Jemena following their relocation to Jemena’s Tullamarine facility between 5 and 12 May 2014 and is said to raise for resolution the proper construction of Appendix D of the Current Agreement.

[4] For reasons which follow I have decided to dismiss the application because I lack jurisdiction to deal with the dispute.

Background and context

[5] Towards the end of 2011, Jemena announced the construction of a new sub-station and office facilities which were to be located in Tullamarine, Victoria. 2 At that time Jemena operated facilities at Broadmeadows and Sunshine. Approximately 144 of its employees (Affected Employees) who worked at these facilities would, once construction of the Tullamarine facility was completed, be required to relocate to that facility.3

[6] At that time the Affected Employees and Jemena were covered by the Jemena Asset Management - ETU Victorian Electricity Enterprise Agreement 2010 (2010 Agreement). The 2010 Agreement provided for a nominal expiry date of 31 August 2013 and also covered the CEPU. The 2010 Agreement contained an Appendix D dealing with workplace relocation which was in terms the same as Appendix D of the Current Agreement. By operation of s 54(2)(b) and s 58 (2), the 2010 Agreement ceased to operate on 19 June 2014, the date when the Current Agreement commenced operation. From that date the 2010 Agreement ceased to apply to the Affected Employees and Jemena.

[7] There seems no dispute that consultation between Jemena, the Affected Employees and the CEPU about the proposed relocation occurred and continued until shortly before the relocation.

[8] Putting to one side discussions between Jemena and the CEPU about a relocation allowance that occurred during bargaining, which resulted in making the Current Agreement and to which I will later return, the dispute about calculation of and eligibility for payment of a relocation allowance in the context of the proposed relocation to Tullamarine did not become apparent until 29 April 2014. It seems common ground that during a meeting between representatives of Jemena and of the CEPU on 29 April 2014 convened to discuss the impending relocation, Jemena advised the CEPU that it had conducted an assessment of travel times for each Affected Employees from their residence to the Tullamarine facility and had identified the number of Affected Employees who would receive a relocation allowance pursuant to Appendix D of the 2010 Agreement. 4 During the meeting Mr Danny Timmers an official of the CEPU, indicated that the CEPU took a different view about the application of Appendix D of the 2010 Agreement to that taken by Jemena, with the effect that all of the Affected Employees should be paid a relocation allowance once they relocate to the Tullamarine facility.5

[9] Thereafter, Jemena and the CEPU engaged in further discussions and exchanged correspondence about the disputed relocation allowance, which involved 77 of the Affected Employees who did not receive a relocation allowance on moving to the Tullamarine facility. 6 As earlier indicated the Affected Employees relocated to Jemena’s Tullamarine facility between 5 and 12 May 2014.7

[10] The aforementioned discussions and exchanges of correspondence did not resolve the dispute and pursuant to the dispute settling procedure in the 2010 Agreement 8, the CEPU referred the dispute to the Electrical and Communications Industry Disputes Board (Disputes Board) on 23 May 2014.9 The dispute was dealt with by the disputes Board on 5 June 2014 but was not resolved, and as Jemena did not agree to permit the Disputes Board to arbitrate the dispute, the disputes settling procedure under the 2010 Agreement had been exhausted.10 The 2010 Agreement only enable the Commission to deal with a dispute by way of an appeal against a decision of the Disputes Board exercising an arbitration function and on appeal, the Commission was empowered to conciliate and/or to arbitrate the matter.11

[11] Bargaining for a proposed agreement that became the Current Agreement began in or around May 2013. 12 During the course of that bargaining, claims for relocation allowances made by the CEPU were discussed but not agreed. The claims were discussed by reference to the proposed relocation of employees to the Tullamarine facility.13 No change was made to Appendix D as it appears in the Current agreement compared to that which appeared in Appendix D of the 2010 Agreement.

Consideration

[12] The Commission’s power to deal with disputes is not at large and is circumscribed, relevantly by ss 738 and 739 of the Act and by the provisions of the procedure for dealing with disputes contained of an enterprise agreement under which the dispute is being progressed.

[13] Sections 738 and 739 provide:

738 Application of this Division

This Division applies if:

(a) a modern award includes a term that provides a procedure for dealing with disputes, including a term in accordance with section 146; or

(b) an enterprise agreement includes a term that provides a procedure for dealing with disputes, including a term referred to in subsection 186(6); or

(c) a contract of employment or other written agreement includes a term that provides a procedure for dealing with disputes between the employer and the employee, to the extent that the dispute is about any matters in relation to the National Employment Standards or a safety net contractual entitlement; or

(d) a determination under the Public Service Act 1999 includes a term that provides a procedure for dealing with disputes arising under the determination or in relation to the National Employment Standards.

739 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) effectas 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.

[14] The Current Agreement contains a procedure for dealing with disputes at clause 2.1 as follows:

2.1 DISPUTE SETTLING PROCEDURE

2.1.1 Where another clause in the Agreement expressly provides for the resolution of a particular dispute the provision in that clause shall prevail over this clause.

2.1.2 In all other cases of disputes arising over the application of the Agreement and/or the
NES, this clause shall apply.

Step 1: Any dispute will, in the first instance, be discussed between the Employee(s) concerned and the immediate team leader I supervisor involved. The team leader I supervisor must make a genuine attempt to resolve the matter speedily.

Step 2: If the matter cannot be resolved in Step 1, the matter will be referred to the appropriate line manager who will attempt to resolve the matter speedily. The line manager shall first consult with the affected Employee(s) and then, if requested by the Employee(s), consult with the relevant Employee representative(s) when endeavouring to resolve the matter. Where agreed between the Employee(s) or their representative and the Employer, steps 1 and 2 can be disregarded in the interest of relevance and from step 3 onwards pursued.

Step 3: If not resolved in Step 2, the matter shall be immediately referred, for discussion, jointly to a manager with industrial relations responsibility and the Employee, who shall be informed that they are allowed to have a representative of their choice at such discussions.

Step 4: If the matter is still not resolved either party subject to the dispute can refer the matter to FWC for conciliation and, should conciliation fail to resolve the dispute, arbitration. Where a matter does progress to FWC for arbitration, it’s (sic) decision shall be binding on the parties, subject to either party exercising any right of appeal against the decision to a Full Bench. In conciliating or arbitrating a matter under this clause, or conducting an appeal under this clause. FWC may (sic)

2.1.3 Where another clause in the Agreement expressly provides for the resolution of a particular dispute the provision in that clause shall prevail over this clause.

2.1.4 During the entire period of the dispute, from the time when the matter first arises until the time of its resolution (at whatever stage the resolution occurs) normal work shall continue, unless the performance of normal work would place at risk the health or safety of the Employees concerned.

2.1.5 If a dispute arises due to a change in work practices, then for the duration of the settlement period, the Employee(s) will revert to the work practices in place prior to the dispute arising, and the Union will not undertake any industrial action in relation to the dispute.

2.1.6 Any decision of the Board or FWC under this clause must be consistent with the requirements of the National Code of Practice for the Construction Industry and the Implementation Guidelines for the National Code of Practice for the Construction Industry as varied from time to time; and all applicable legislation.

[15] It seems clear having regard to the text of s. 739(3) of the Act and clause 2.1.2 of the Current Agreement that my capacity to deal with the application by the CEPU is limited, relevantly, to resolving “disputes arising over the application of” the Current Agreement.

[16] The CEPU submits that the Commission’s jurisdiction is enlivened because there is a dispute about the proper construction of Appendix D of the Current Agreement and although the factual circumstances which first enlivened the dispute arose whilst the 2010 Agreement was in operation, that dispute was not resolved and continues. As the terms of Appendix D in both agreements are the same, there continues to be a dispute about the proper operation of Appendix D of the Current Agreement, and the unresolved dispute over the entitlement of the 77 Affected Employees to a relocation allowance under Appendix D of the 2010 Agreement may be dealt with under clause 2.1 of the Current Agreement. 14 The CEPU also argued that there was an actual entitlement under the Current Agreement to a relocation allowance arising for the relocation of the Affected Employees that occurred between 5 and 12 May 2014.15

[17] This last submission has no foundation. The Current Agreement had not been approved by me, let alone commenced to operate, when the relocation of the affected employees occurred. The 2010 Agreement was in operation and applied to the Affected Employees during that time. The Current Agreement does not operate retrospectively and Appendix D is not expressed as having any retrospective operation to a relocation that occurred prior to the Current Agreement commencing to operate. Such right to be paid and any obligation to pay a relocation allowance to an Affected Employee as may arise from relocation that occurred between 5 and 12 May 2014 may only be found in the 2010 Agreement.

[18] It also follows that disputes about entitlements under the 2010 Agreement and the proper construction of Appendix D of that agreement, without more, cannot be said to be disputes “arising over the application of” the Current Agreement.

[19] Jemena submitted that properly characterised, the dispute arises over the application of the 2010 Agreement and that the factual matrix underpinning the dispute bears this out. That dispute was dealt with in accordance with the dispute settling procedure under that 2010 Agreement and the Commission’s jurisdiction has not been enlivened pursuant to that procedure. Further, by its application the CEPU was doing no more than seeking to artificially resuscitate a dispute and to clothe the Commission with jurisdiction where none existed under the 2010 Agreement.

[20] Jemena’s submission, is in my view manifestly correct. The CEPU application sets out a description of the dispute in response to the question “What is the dispute about?”:

1. Members of the Applicant have been relocated from a depot in Broadmeadows (the old depot) to a depot in Tullamarine (the new depot).

2. This relocation is a permanent relocation.

3. When the Respondent relocated these employees the terms of Appendix D of the Agreement applied.

4. The respondent has interpreted the application of that Appendix so that an employee will only be paid a relocation allowance if their travel time to the new depot is longer that their travel time was to the old depot. If the travel time for an employee is the same or less to the new depot when compared to the old depot the Respondent will not pay that employee a relocation allowance.

5. The Applicant disputes that Respondent’s application of the clause. The Applicant’s position is that all employees who have relocated are entitled to a minimum relocation allowance equal to ten minutes travel time.

6. In addition to the core issues in dispute the Applicant also disputes the following manner in which the Respondent has applied Appendix D:

a. That the relocation allowance is only for excess travel time. The Applicant’s position being that the relocation allowance is “in compensation for all other relocation factors”.

b. That the respondent is able to measure the travel time by using a google maps estimation of the travel time by the quickest route for the travel in to the depot only. The Applicant’s position is that the Respondent was obliged to reach agreement with each employee and the Applicant about which route is the shortest between that employee’s home and the new depot. Once that was agreed, it was then necessary to reach agreement on the travel time to and from the new depot at the actual times that the employee travels to and from work.

[21] Clearly the dispute is about the proper construction of Appendix D of the 2010 Agreement in its application to the relocation of the Affected Employees to Jemena’s Tullamarine facility between 5 and 12 May 2014.

[22] As to the other arguments advanced by the CEPU and summarised at [16] above, there is nothing in the text of the Current Agreement which suggests that disputes arising over the application of the 2010 Agreement may be dealt with, or that such disputes once commenced under the 2010 Agreement continue to be dealt with, under the dispute settling procedure of the Current Agreement so as to enliven jurisdiction. Nor is there any provision suggesting an entitlement payable under the 2010 Agreement because of events occurring during its operation, become entitlements payable under the Current Agreement, so as to enliven jurisdiction. The decision of the Full Bench of the AIRC in Davies v ATO 16relied upon by the CEPU to make good its proposition that a dispute commenced under a procedure of one agreement can be continued under the next if the dispute is not resolved when the first agreement, ceases to operate is of no assistance. Davies turned on the terms of the agreement which according to the Full Bench, preserved all benefits under previous instruments and made compliance with those previous obligations, an obligation of the agreement under which the dispute was being dealt17. Further, clause 136.4 of the agreement in Davies permitted unresolved disputes “arising out of the application of the previous certified agreement” to be progressed under the disputes settlement procedure of the agreement at issue.18No such preservation provisions or any such unresolved disputes provision is to be found in the Current Agreement.

[23] It seems to me that the decisions referred to in footnote 8 to Jemena’s outline of submissions 19, although decided in relation to agreements made under a different legislative scheme are apposite, having regard to the limitation on power in s. 739(3) and clause 2.1.2 of the current Agreement.

[24] As I have already observed, such rights to be paid and any obligation to pay a relocation allowance to the Affected Employee as may arise from relocation that occurred between 5 and 12 May 2014 may only be found in the 2010 Agreement. Such a dispute is not one within the terms of clause 2.1 of the Current Agreement.

[25] Properly characterised, the dispute arises over the application of the 2010 Agreement, and is consequently not a dispute that falls within the ambit of 2.1.2 of the Current Agreement.

[26] To the extent that it is suggested that there is nevertheless a disagreement between the CEPU and Jemena about the proper construction of Appendix D of the Current Agreement and therefore jurisdiction is enlivened, I would nevertheless conclude that I have no jurisdiction because there is no evidence that the steps set out in steps 1 through 3 of the Current Agreement have been undertaken in relation to that disagreement. The steps earlier taken related to the dispute arising under the 2010 Agreement all took place before the Current Agreement commenced to operate.

[27] If I am wrong in that conclusion then, as a matter of discretion I would decline to express a view about the proper construction of Appendix D of the Current Agreement absent a factual matrix to which that appendix can properly apply, and further because this application bears all the hallmarks of an attempt to clothe the Commission with jurisdiction in relation to an actual dispute which does not arise over the application of the Current Agreement.

Conclusion

[28] The application is dismissed. An order to that effect is issued separately in PR561217.

DEPUTY PRESIDENT

Appearances:

K. Reidy for the CEPU

J.Snaden for Jemena Asset Pty Ltd

Hearing details:

Melbourne.

2014

27 January.

 1   See [2014] FWCA 3982

 2   Exhibit Jemena 1 at [3]

 3   Ibid at [4]

 4   Ibid at [18]; Exhibit CEPU 1 at [9]

 5   Exhibit Jemena 1 at [19] and Exhibit CEPU 1 at [9]

 6   Exhibit CEPU 1 at [11]-[17]; Exhibit Jemena 1 at [19]-[21]

 7   Exhibit Jemena 1 at [26]

 8   2010 Agreement cl 2

 9   Exhibit CEPU 1 at [18]; Exhibit Jemena 1 at [21];

 10   Exhibit CEPU 1 at [19]; Exhibit Jemena 1 at [22]-[23]; 2010 Agreement cl 2.1.2

 11   2010 Agreement clause 2.1.2, Step 5

 12  Exhibit Jemena 1 at [5]

 13   Exhibit Jemena 1 at [8]-[13]; Exhibit CEPU 1 at [7]-[8]

 14   CEPU Outline of Submissions at [15]-[26] and Transcript PN373-PN402; PN447-PN474; PN608-PN648

 15   Transcript PN620-PN621

 16   [2008] AIRCFB 676

 17   Ibid at [18]

 18   Ibid at [19] - [22]

 19   Special Minister of State v Stephenson (PR952743); Pulle v Commonwealth of Australia (2009) 190 IR 365 (at 368); and de Jonge v Australian Broadcasting Corporation (2010) 196 IR 145 (at 148-149)

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