Clermont Coal Pty Ltd v Construction, Forestry, Mining and Energy Union
[2015] FWCFB 3332
•22 MAY 2015
| [2015] FWCFB 3332 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604 - Appeal of decisions
v
Construction, Forestry, Mining and Energy Union
(C2015/2587)
VICE PRESIDENT CATANZARITI | SYDNEY, 22 MAY 2015 |
Appeal against decision [2015] FWC 2023 of Commissioner Lewin at Melbourne on 30 March 2015 in matter number C2014/6842.
[1] This is an appeal by Clermont Coal Pty Ltd (the Appellant) against a decision 1 (Decision) of the Commission made in dealing with a dispute arising under the Clermont Coal Enterprise Agreement 20122 (Agreement) pursuant to s.739 of the Fair Work Act 2009 (the Act).
[2] Prior to the hearing of the appeal, Mr Murdoch QC sought permission to appear for the Appellant and Mr Reitano of Counsel sought permission to appear for the Respondent. Given the complexity of the matter, and having regard to s.596 of the Act, permission was granted to both parties to be represented.
Background
[3] The factual details of the dispute are not directly relevant for the purposes of the appeal but in summary, they concerned an employee who requested to finish a shift early in compliance with a fatigue management policy in order to attend a representative meeting. His request was denied in writing but granted verbally by his supervisor. The employee was subsequently issued with a warning for an allegation that he left the worksite without permission. The employee disputed the allegation. 3
[4] The Respondent (the Applicant at first instance) asked the Commission to make a recommendation in aid of settlement of the dispute, that the warning issued to the employee be removed from his disciplinary record. The Appellant objected on the basis that the Commission did not have the jurisdiction or the power to make a recommendation in relation to the dispute. The issue raised was in regards to the Commission’s power to deal with disputes as provided by ss. 595, 738 and 739 of the Act and cl. 4 of the Agreement. It is appropriate to set out the relevant text of the Act and the Agreement.
[5] Clause 4.2 of the Agreement provides as follows:
“4.2 Procedure:-
(a) Where a grievance arises the matter shall in the first instance be discussed between the Employee and Employee’s Leader. If the matter remains unresolved;
(b) It will be referred in writing for discussion between the Employee and the appropriate Superintendent. If the dispute remains unresolved;
(c) It will be referred in writing for discussion between the Employee and the appropriate MRU Manager. If the dispute remains unresolved;
(d) It will be referred in writing for discussion between the Employee and the General Manager;
(e) Where a dispute remains unresolved after step (d) above, the Employee may seek to refer the matter to Fair Work Australia for conciliation;
(f) Where a dispute that is the subject of this Agreement, the National Employment Standards or in relation to employment or other issues remains unresolved after step (e) above, the Employee may seek to refer the dispute to Fair Work Australia for arbitration, if mutually agreed by both the Employee and Clermont Coal.”
[6] It is clear that cl. 4.2(e) of the Agreement provides for the referral of disputes to the Commission for conciliation. The dispute may only be arbitrated by the Commission if the parties agree to arbitration under cl. 4.2(f).
[7] The Commission may deal with a dispute where an enterprise agreement includes a term that provides for a procedure for dealing with disputes accordingly. The relevant provisions are ss. 738 and 739 of Part 6.2, Division 2 of the Act as set out below:
“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) 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.”
[8] Section 595 of the Act sets out the Commission’s power to deal with disputes as follows:
“595 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.”
[9] The relevant section of the Act with respect to appeals is as follows:
“604 Appeal of decisions
(1) A person who is aggrieved by a decision:
(a) made by the FWC (other than a decision of a Full Bench or the Minimum Wage Panel); or
(b) made by the General Manager (including a delegate of the General Manager) under the Registered Organisations Act;
may appeal the decision, with the permission of the FWC.
(2) Without limiting when the FWC may grant permission, the FWC must grant permission if the FWC is satisfied that it is in the public interest to do so.
Note: Subsection (2) does not apply in relation to an application for an unfair dismissal (see section 400).
(3) A person may appeal the decision by applying to the FWC.”
Decision at first instance
[10] The Commissioner found that the Commission could deal with the dispute by conciliation as it considered appropriate and that the making of a recommendation was a function of conciliation. The Commissioner further stated:
“[21] In my view, the makers of the Agreement contemplated that conciliation of disputes by the Commission would be in accordance with a well established historical understanding of the work and function of the Commission and its predecessors. A recommendation is an historical feature of the dispute settlement procedures of Australian tribunals concerned with the settlement of disputes between employees and employers by conciliation. I consider this to be a notorious fact.
[22] A recommendation made by an independent third party is not a determination on the legal rights, duties and obligations of a person. A recommendation is properly characterised as an advisory function where an independent third party sets forth an option which the parties to the dispute may or may not find to be a mutually acceptable settlement of the dispute between them. A recommendation will not be binding in its terms and will depend upon the consent of the parties for its adoption.
[23] Conciliation, in the relevant context in which the Agreement was made, taking its historical flavour and statutory context into account will include both a facilitative and advisory function as referred to above. A recommendation may be properly characterised as an advisory function and as an action which the Commission is authorised to take so as to make suggestions for the resolution of a dispute. It does not include binding legally determinative actions by the Commission.
[24] In my view, the word conciliation as used in the Agreement can be described as a term of the Agreement which is not unlike a term of art, which in the relevant context derives its meaning from the historical antecedents of conciliation practices of the Commission and its predecessors for the resolution of disputes between employees and employers. Likewise, in the field of Alternative Dispute Resolution generally, as described above, conciliation includes the provision of advice for the settlement of a dispute.
[25] In my view, the issue for consideration raised by Clermont’s objection is the meaning of the terms of the dispute settlement procedure of the Agreement intended by the makers of the Agreement. For the reasons stated above, those terms, properly construed, may include the making of a recommendation as a feature of conciliation by the Commission. Section 595 is no barrier to the making of a recommendation by the Commission under a dispute settlement term of an enterprise agreement in the course of conciliation, provided such a recommendation is considered appropriate by the Commission for the settlement of a dispute within the scope of the dispute settlement term of an enterprise agreement.
[26] In my view, to make or not make a recommendation as described above, as a function of conciliation is contemplated by the Agreement and conciliation will only be limited by a term of cl 4.1 of the Agreement. No such express limitation which would preclude the making of a recommendation as contended for by Clermont is evident and none should be inferred in the terms of the Agreement which provide for conciliation of disputes.
[27] Moreover, contrary to Clermont’s submissions, a recommendation is not a surrogate of an arbitral function as it does not determine the legal rights, duties and obligations of either Mr Maw or Clermont, which would be the consequence of an arbitration conducted by the Commission under a dispute settlement term of an agreement. (footnote omitted)
[28] I therefore find that the Commission may make a recommendation in relation to the dispute the subject of this application in the context of conciliation, pursuant to cl 4.2(e) of the Agreement. In light of this decision, I will convene a conference of the parties to enable them to be heard on the terms of any recommendation(s) proposed and the relevant considerations to be taken into account both as to whether any such recommendation should be made and the content of any such recommendation if one is to be made.”
The Appeal
[11] The key issue between the parties on appeal was the proper definition of ‘conciliation’ pursuant to s. 595 of the Act and cl. 4.2(e) of the Agreement and whether the Commission had the power to make recommendations as an incident of conciliation.
[12] Two grounds of appeal were advanced in the Appellant’s written submissions and were further expounded during oral submissions at the hearing.
[13] First, the Appellant submitted that the decision was infected by jurisdictional error when the Commissioner made a material error of law by misconstruing at paragraph [12] of the Decision, the interaction between ss 595(2), 595(5), 738(b) and 739(3) of the Act and cl. 4.2(e) of the Agreement and so misunderstood the nature of the jurisdiction granted to the Commission. 4
[14] At paragraph [12] the Commissioner noted that:
“[12] The interaction of ss 595(5), 738(b) and 739(3) will only combine to limit the Commission’s jurisdiction and power to deal with a dispute “as it considers appropriate” in accordance with an express term of an enterprise agreement which limits what the Commission may do in relation to such a dispute. Any limitations prescribed by a relevant term of an enterprise agreement upon the exercise of the authority of the Commission to deal with a dispute will void any action taken by the Commission in relation to such a dispute which extends beyond such limits.”
[15] The Appellant submitted that it was evident from this passage that the Commissioner inverted the correct order of enquiry to ascertain the scope of the jurisdiction granted to the Commission. The Appellant submitted that the Commissioner wrongly reasoned that for the purposes of ascertaining the scope of its jurisdiction, the starting point was the Commission’s general powers under the Act to deal with a dispute “as it considers appropriate”. The Appellant submitted that the correct starting point is to look at what powers the industrial parties to the enterprise agreement have expressly conferred on the Commission. 5
[16] In the Appellant’s submission, in conformity with the correct approach to ascertaining the scope of its jurisdiction, it was necessary for the Commissioner to consider what was the scope of the power that the parties intended to confer on the Commission when a dispute was referred ‘for conciliation’ under cl. 4.2(e) of the Agreement. The Appellant submitted that an industrial instrument must be given its plain and ordinary meaning and construed in context having regard to the subject matter and text of the instrument as a whole. 6 The Appellant submitted that the Agreement did not in terms confer any specific power on the Commission to issue a recommendation. Rather, the parties agreed that an employee may notify a dispute to the Commission for conciliation (cl. 4.2(e)) and if the dispute remains unresolved, the Commission may arbitrate with the consent of both parties (cl. 4.2(f)).
[17] Moreover, the Appellant submitted that part of the statutory context in which the Agreement was to be construed, was the marked distinction between the different “ways” in which the Commission may deal with a dispute. Section 595(2) of the Act identifies that the Commission may deal with a dispute in a number of “ways”. “Conciliation” and “the making of a recommendation” are indentified as separate and distinct “ways” that the Commission may deal with a dispute. In the Appellant’s submission, the Commissioner failed to attribute any significance to this distinction in considering what the parties intended by the reference in cl. 4.2(e) of the Agreement to ‘conciliate’ and the absence of any reference in cl. 4.2, and in particular cl. 4.2(e), to the ‘making of a recommendation’.
[18] The Appellant further submitted that it was permissible for the Commission to have regard to evidence of the objective background facts that were known to both parties and/or the subject matter of the agreement in order to ascertain the parties presumed intention. 7 The Appellant submitted that the Commissioner took into account a range of matters which were not before the Commission and in respect of which there was no evidence to ascertain what the Commission regarded to be the objective intention of the parties. These matters included:
(a) the ordinary meaning of the word “conciliation”;
(b) the nature of a recommendation of the Commission in the field of workplace and industrial relations; and
(c) information contained on the website of the Attorney-General’s Department which describes certain methods of Alternative Dispute Resolution. 8
[19] In doing so, the Commission found that it was a “notorious fact” that a recommendation was a historical feature of the dispute settlement procedures of Australian tribunals concerned with the settlement of disputes between employees and employers by conciliation. 9 In the Appellant submissions, the Commission conflated what was called a “historical feature” and the express limitations on the Commissioner’s power conferred by the industrial parties. The Appellant submitted that the Commissioner failed to properly consider whether, in light of the prevailing statutory context under which the Agreement was made and approved, the parties to the Agreement intended to confer power on the Commission to deal with a dispute referred in accordance with cl. 4.2(e) of the Agreement by conciliation. In the Appellant’s submission, the conclusion that the Commissioner should have drawn was that the parties did not intend that the exercise of ‘conciliation’ would include the making of a recommendation.
[20] The second ground of appeal advanced by the Appellant was that the Commissioner denied the Appellant natural justice by taking into account matters which were not before the Commission, and in respect of which the Appellant was not provided with an opportunity to be heard. This included the website of the Attorney-General’s Department which describes certain methods of Alternative Dispute Resolution. 10 The Appellant submitted that by denying the Appellant the opportunity to be heard in respect of that material, the Appellant was denied natural justice.11 The Appellant contended that if it had been given such an opportunity, it would have been able to put before the Commissioner that wide matters such as the Alternative Dispute Resolution materials were of no assistance in the matter; and that the practices said to be “notorious” needed to be carefully scrutinised as to the legal framework under which the Commission’s Members were operating at the time and, further, any consent arrangements between the participants in particular conferences. In the Appellant’s submission, in failing to provide natural justice to the Appellant, the Decision was affected by jurisdictional error.
[21] The Appellant contended in its written submissions that it is in the public interest to grant permission to appeal for the following reasons:
(a) the appeal raises issues of importance and general application about the proper interpretation and application of sections 592, 595, 738 and 739 of the Act;
(b) the appeal raises an important issue in relation to the scope of the functions that may be exercised by a member of the Commission when a dispute is referred to the Commission pursuant to a dispute resolution procedure in an enterprise agreement;
(c) the appeal raises important questions about the application of the principles established by the High Court in CFMEU v AIRC and another (2001) 203 CLR 645 (the Private Arbitration Case);
(d) supposing the Decision to be wrong, substantial injustice would result if it is not corrected. 12 It is in the public interest that the issues raised in this case be reviewed and correct; and
(e) for the reasons outlined in the grounds of appeal, the Decision is attended with sufficient doubt to warrant its reconsideration. 13
[22] The Respondent submitted that permission to appeal should be refused as the issues raised by the Appellant are unmeritorious, the Decision was not affected by error and nothing that could be regarded as a denial of procedural fairness could have led to a different result before the Commissioner.
[23] The Respondent submitted that there was no error in the Commissioner’s decision at paragraph [12]. In the Respondent’s submission, the Commissioner correctly found that the effect of ss. 595(5), 738(b) and 739(3) is to limit the Commission’s jurisdiction to deal with a dispute as ‘it considers appropriate’. Once a term of an enterprise agreement limits what the Commission can do pursuant to s. 739(3), s. 595(5) of the Act makes it clear that the Commission’s authority is not to exceed that which is authorised by s. 595 of the Act. The Respondent contended that the order of considerations of these sections hardly mattered in ascertaining the effect of the sections. Further, the Respondent submitted that the dispute resolution procedure contained in cl. 4.2(e) of the Agreement expressly allowed the Commission to engage in conciliation.
[24] Regarding the meaning of ‘conciliation, the Respondent submitted that the word should be understood in its industrial relations context in which it has a longstanding, identifiable, historical and ordinary English meaning. 14 In the Respondent’s submission, the meaning accords with the proposition that ‘recommendations’ are a “common feature of the conciliation process”.15 As such, the Respondent submitted that in sending their dispute to the Commission for conciliation, the parties well knew that it included the prospect that the Commission might make a recommendation as part of that process. The Respondent further submitted that there was no sound reason provided by the Appellant for reading each of the processes or “ways” referred to in s. 595(2) of the Act as being ‘separate and distinct’.
[25] In relation the Appellant’s complaint of being denied natural justice, the Respondent contended that the material identified was not evidence and not treated by the Commissioner as evidence. The Commissioner treated it as illustrative of the point rather than as determinative or compelling a conclusion. The Respondent submitted that it was obvious that the material was not central to anything the Commissioner decided, as his reasoning was based upon the ordinary English meaning of the word ‘conciliation’ as derived from its industrial context and from relevant authority. The Respondent submitted that even if the Appellant could show that there was some denial of procedural fairness in not being heard precisely about this material, the Appellant has not demonstrated that further information would have made any difference to the outcome. 16
Consideration
[26] The Commission must grant permission to appeal if it is satisfied it is in the public interest to do so. 17 The test of assessing whether the public interest is enlivened is discretionary, involving a broad value judgement.18 In GlaxoSmithKline Australia Pty Ltd v Colin Makin,19 a Full Bench summarised the concept of public interest in the following terms:
“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...”
[27] Otherwise, the grounds for granting permission to appeal include that the decision is attended with sufficient doubt to warrant its reconsideration or that substantial injustice may result if leave is refused. 20
[28] We do not consider that the Appellant has demonstrated that it is in the public interest to grant it permission to appeal the Decision.
[29] The meaning that should be ascribed to the word ‘conciliation’ pursuant to ss. 739 and 595 of the Act does not require a convoluted answer. It is to be given its long standing meaning in an industrial context. That meaning accords with the proposition found in Finance Sector Union of Australia and New Zealand Banking Group Limited 21in which the Full Bench of the Commission referred to recommendations as “a common feature of the conciliation process”22 and made the following observations:
“[32] We make it clear that in our view the making of a recommendation is often a useful tool in the conciliator’s armoury and can facilitate the parties reaching agreement. As the President of the South Australian Commission said in Re: Clerks Customs Agent (SA) Award:
“The prime charter course of the Commission is, in any proceedings before it under the statute, to attempt to effect conciliation by mediation between the parties and that is a process well known to all who appear in this jurisdiction. It is, in our view, quite proper, indeed quite normal, in the course of many if not most mediations, for the person attempting the mediation to make positive suggestions to the parties as to what might be a suitable basis for resolving the matter, indeed, if felt appropriate, expressing strong views as to what might be a possible consequence, prima facie, of any arms length arbitration before the Commission. There is nothing improper about that. It happens every day of the week”. 23
[33] We agree with the above observations.” 24
[30] We note that the parties did not expressly limit the conciliation process in the terms of cl. 4.2 of the Agreement. We consider that the parties referred to the Commission, the process of conciliation and in doing so engaged the full range of armoury that was available to the Commission as conciliator, including the making of recommendations.
[31] In any event, a recommendation by its very nature is not legally binding. It cannot create or impose a legal right or obligation. Its adoption and implementation is dependent upon the consent of the parties. It is properly characterised as “an advisory function and as an action which the Commission is authorised to take so as to make suggestions for the resolution of a dispute”. 25
[32] It was also very telling that during oral submissions in reply Counsel for the Appellant said that ‘suggestions’ were permitted as part of the conciliation process whereas ‘recommendations’ were not. 26 This only further highlights the absurdity in the artificial limitation on conciliation the Appellant seeks to impose. We do not accept that there is any such limitation.
[33] With regards to the Appellant’s submission that it was denied natural justice, we do not find that there was a denial of natural justice or procedural fairness. The material in question did not form the basis of the Commissioner’s Decision. Furthermore, the Appellant has not persuaded us that any additional material put before the Commissioner would have led to a different result.
Conclusion
[34] We find that the Commissioner’s Decision was not affected by error, was open to him on the evidence and was consistent with previous decisions of industrial tribunals.
[35] We do not consider that the Appellant has demonstrated it is in the public interest to grant it permission to appeal the Decision.
[36] Permission to appeal is refused.
VICE PRESIDENT
Appearances:
J. E. Murdoch QC instructed by S Meehan for the Appellant.
R. Reitano of Counsel instructed by A Kentish for the Respondent.
Hearing details:
Brisbane
May 5
2015.
1 Construction, Forestry, Mining and Energy Union v Clermont Coal Mine Pty Ltd[2015] FWC 2023.
2 [2012] FWAA 10234
3 Decision at [5].
4 Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194.
5 The Appellant cited two paragraphs in its written submissions from “the Private Arbitration Case” CFMEU v AIRC and another (2001) 203 CLR 645.
6 Amcor Limited v Construction, Forestry, Mining & energy Union[2005] HCA 10; (2005) 222 CLR 241 per Gleeson CJ and McHugh J at [2] and Gummow, Hayne and Heydon JJ at [30].
7 To be admissible, extrinsic evidence must usually go to the objective background facts which are known to the parties at or before the date of the agreement; see Construction, Forestry, Mining and Energy Union v John Holland Pty Ltd [2010] FCAFC 90 at [91]-[92]; Shop, Distributive and Allied Employees Associate (Queensland Branch) Union of Employees v Woolworths Limited T/A Woolworths[2013] FWCFB 2814 at [12]; The Australian Meat Industry Employees Union v Golden Cockerel Pty Limited [2014] FWCFC 7447 at [41].
8 Decision at [17]-[21].
9 Decision at [21].
10 Decision at [17] - [21].
11 Kioa v West (1985) 159 CLR 550 at 620 and 628-629; Re Refugee Review Tribunal; Ex parte Aala (2000) 204 CLR 82.
12 Wan v Australian Industrial Relations Commission (2001) FCR481.
13 Esso Australia Pty Ltd v “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) and others[2015] FWCFB 210 at [7].
14 Kucks v CSR Limited (1996) 66 IR at [184]; Association of Professional Engineers, Scientists and Managers Australia v Dendrobrium Coal Pty Ltd [2015] FCA 11 at [41].
15 Finance Sector Union of Australia and New Zealand Banking Group Limited [2004] AIRC 255 at [48].
16 Stead v State Government Insurance Commission [1986] 161 CLR 141 at 145; grove v Help Enterprises[2014] FWCFB 6288 at [8]-[9].
17 Fair Work Act 2009, s.604(2).
18 Esso Australia Pty Ltd v AMWU; CEPU; AWU[2015] FWCFB 210 at [6].
19 [2010] FWAFB 5343 at [27].
20 Esso Australia Pty Ltd v AMWU; CEPU; AWU[2015] FWCFB 210 at [7].
21 [2004] AIRC 255
22 Ibid at [48]
23 [1993] AILR 346.
24 Finance Sector Union of Australia and New Zealand Banking Group Limited [2004] AIRC 255 at [32]
25 Decision at [23].
26 Transcript at PN126.
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