No judgment structure available for this case.

[2016] FWC 9260

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739 - Application to deal with a dispute

Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia
v
Australia Post
(C2016/6232)

AUSTRALIA POST ENTERPRISE AGREEMENT 2013 [AE402555]

COMMISSIONER HAMPTON

ADELAIDE, 30 DECEMBER 2016

Enterprise Agreement – dispute about redundancy payments and arrangements – whether Commission has jurisdiction to deal with the matter – two dispute resolution terms – whether in conflict and which applies – whether union as applicant entitled to utilise the procedure and whether it followed the process – status of applicant at time of application – whether impacts upon the status of the application – dispute term within the Enterprise Agreement prevails – power exists to deal with the application subject to the consideration of the status of the employee concerned – jurisdiction connected to substantive dispute – application adjourned to permit parties to follow the procedure – liberty to apply if not then resolved.

1. The background to the dispute

[1] The Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) has made an application under s.739 of the Fair Work Act 2009 (the FW Act) for the Fair Work Commission to deal with a dispute in accordance with a dispute resolution procedure. The dispute arises in the context of a decision made by Australia Post to declare an employee, Mr Pitts, redundant and concerns, in effect, the impact of certified sick leave upon the notice given as part of that process.

[2] The Australia Post Enterprise Agreement 2013 (the EA) applies in the relevant workplace and contains provisions dealing with redundancy, in Attachment K, and a dispute resolution provision in the body of the EA in clause 42.

[3] This matter was subject to a conference conducted by the Commission on 27 October 2016. The Commission noted a jurisdictional objection advanced by Australia Post and all parties agreed to participate in the conference on a without prejudice basis. The matter was not resolved at that point.

[4] On 3 November 2016, the CEPU wrote to the Commission and indicated that the relevant dispute resolution procedure was that set out in Attachment K of the EA, that clause 19.2 of Attachment K contemplated that the Commission (cited as the Australian Industrial Relations Commission (the AIRC)) could, in effect, make a binding recommendation, and that the Commission as now constituted should do so.

[5] On 4 November 2016, Australia Post advised the Commission that the relevant dispute resolution provision was clause 42 of the EA, the Commission had no jurisdiction as Mr Pitts was no longer an employee and had failed to follow the dispute resolution procedure whilst he was an employee, and in effect, that clause 19.2 of Attachment K was not intended under the EA to continue as a separate dispute resolution procedure. Australia Post also advised that should the CEPU wish to proceed with the dispute, the relevant next step would be to refer the matter to a third party mediator as set out in clause 42.5 of the EA.

[6] As a result of a further conference with the parties on 10 November 2016 the following jurisdictional issues were identified for consideration and determination by the Commission:

1. Is clause 19.2 of Attachment K of the EA a source of power for the Commission to deal with this dispute given the provisions of sections 738 and 739 of the FW Act?

This requires consideration of the related issues including the following:

a. Whether the EA intended the detailed provisions of Attachment K to be preserved and operate as additional rights, obligations and powers given clause 34.2 of the EA;

b. If so, what is the relationship (if any) between clause 19.2 of Attachment K and clause 42 of the EA; and

c. Are there any implications of the fact that Mr Pitts is no longer employed in terms of the capacity for the CEPU to raise the particular dispute and for the Commission to make a binding recommendation?

2. If the relevant dispute resolution procedure for the purposes of sections 738 and 739 of the FW Act is clause 42 of the EA, does the Commission have the power the deal with the application?

This requires consideration of related issues including the following:

a. Whether the CEPU has followed the procedure in clause 42 of the EA; and

b. Are there any implications of the fact that Mr Pitts is no longer employed in terms of the capacity for the CEPU to raise the particular dispute and for the Commission to make a determination on the merit of the application?

[7] This decision deals with those jurisdictional issues following consideration of comprehensive written submissions and a subsequent hearing.

2. The statutory framework

[8] Section 595 of the FW Act provides 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 any of the powers referred to in subsection (2) or (3) in relation to a matter before the FWC except as authorised by this section.”

[9] Sections 738 and 739 of the FW Act deal with circumstances where an industrial instrument, including an enterprise agreement, contains a dispute resolution term. They provide as follows:

“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.”

[10] The combination of these provisions means that the Commission’s power to deal with a dispute in a matter such as this must be expressly authorised by the FW Act via a term of an industrial instrument (a modern award, enterprise agreement, contract of employment or written agreement) giving it that function. The Public Service Act 1999 (Cth) is not relevant here.

[11] The EA is a relevant industrial instrument.

[12] Where the Commission is authorised to deal with a dispute through a procedure, it may, subject to the terms of the (agreement) provision, mediate, conciliate or express a view about the matter provided that it does not exercise a power that is limited by that provision. It cannot arbitrate a matter unless it is expressly empowered to do so by the terms of the provision. 1 Any decision must not be inconsistent with the FW Act or the relevant instrument.

[13] Any application must be made by a party to the dispute.

[14] A Full Bench of the Commission in Lend Lease Project Management and Construction (Australia) Pty Limited v Construction, Forestry, Mining and Energy Union 2 considered the limitation on the Commission’s arbitration power under s.739 of the FW Act and stated as follows:

“Arbitration power under the Agreement

[19] It is convenient to commence our consideration of Lend Lease’s appeal by ascertaining the nature and scope of the arbitration power that was exercised by the Deputy President under cl.19 of the Agreement.

[20] Section 595(3) of the FW Act provides that the Commission “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”. One express source of such an arbitration power is contained in Div.2 of Pt.6-2 of the FW Act. Section 738(b) provides (relevantly) that the Division applies if “an enterprise agreement includes a term that provides a procedure for dealing with disputes, including a term referred to in subsection 186(6)”. In relation to such a term, s.739(4) provides: “If, in accordance with the term, the parties have agreed that the FWC may arbitrate (however described) the dispute, the FWC may do so”. However, s.739(5) imposes a limitation upon this power of arbitration by providing: “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”. One effect of the limitation in s.739(5) is that, in arbitrating a dispute in accordance with the disputes resolution procedure in an enterprise agreement, the Commission may not make a decision which is inconsistent with any provision of the enterprise agreement. Further, s.739(3) provides that “In dealing with a dispute, the FWC must not exercise any powers limited by the term”, so that if, for example, any arbitration power in the disputes resolution procedure of an enterprise agreement may be exercised only in relation to certain specified categories of dispute (such as disputes about the application of the agreement or the NES), the Commission is not permitted to arbitrate any dispute falling outside these categories.”

[15] The Commission is, in effect, conducting a private arbitration when utilising any agreed arbitration powers under the terms of an enterprise agreement.³

3. The terms of the Enterprise Agreement

[16] A dispute resolution procedure is provided for in clause 42 of the EA as follows:

“42.1 Dispute Resolution
42.1.1 The Parties to the Agreement recognise that there exists a mutual responsibility to work co-operatively to resolve disputes over workplace matters, as far as is practicable, at the workplace level. Accordingly, in relation to a dispute over the application of the Agreement arising during the life of the Agreement, the Parties commit themselves to:

(a) Promptly addressing the dispute within the procedures set out below;
(b) Discussing the dispute in an open and honest way; and
(c) Seeking to resolve the dispute wherever possible at the local level.

42.1.2 While the parties are attempting to resolve the matter, the employee(s) will continue to work in accordance with the Agreement and their contract of employment, unless the employee(s) has a reasonable concern about an immediate threat to their health or safety. In such circumstanced and subject to Part 5. Division 6 Right to Direct Cessation of Unsafe Work of the WHS Act, the employee(s) must not unreasonably fail to comply with a direction by Australia Post to perform other available work that is appropriate for the employee(s) to perform.
42.1.3 In resolving any dispute, the Parties will have regard to the following principles:

(a) Australia Post is required to run a profitable postal service in an increasingly competitive and global market place. As a result of these circumstances, it is imperative that Australia Post undertake workplace changes. The Union recognise that there are business challenged facing Australia Post and that workplace changes are necessary. The Union is committed to working with Australia Post to ensure that change occurs effectively while ensuring that the best interests of its members are considered and taken into account at all times.
(b) To achieve these objectives, Australia Post must be able to:

(i) operate the business efficiently;
(ii) determine and allocate resources;
(iii) implement both large and small change programs in an efficient, timely and cost effective manner;
(iv) explore means of protecting and expanding its business opportunities; and
(v) provide fair and equitable treatment to its employees and provide safe workplaces that support employee diversity and flexibility.

(c) In order to be successful and ensure the long-term viability of Australia Post, the Parties acknowledge that Australia Post has accountability to:

(i) provide services to the customer in a manner required by the customer and to meet its Community Service Obligations;
(ii) provide a reasonable return on its assets and pay a reasonable dividend to its shareholder; and
(iii) provide fair pay and conditions to its employees in a workplace that values treatment of employees with dignity and respect.

(d) The Parties also acknowledge that the Union have an obligation to their members to:

(i) represent their interests;
(ii) ensure that workplace change occurs in a way that minimises negative impacts on employees wherever possible; and
(iii) protect jobs, wherever possible, and seek fair and equitable terms and conditions of employment for its members.

42.1.4 An employee who is a party to the dispute may appoint a representative of their choice, including a union representative, for the purposes of the procedures in this clause.

42.2 Dispute Resolution Procedure
42.2.1 If a dispute relates to:

(a) a matter arising under this Agreement; or
(b) the National Employment Standards;
This clause 42 sets out the escalation process which must be followed to settle the dispute.

42.2.2 The dispute resolution procedures and escalation process set out in this clause 42 do not apply to clauses in this Agreement in which the Parties commit to negotiating a new policy or agreement during the terms of this Agreement. In particular, this clause 42.2.2 applies to clause 40.1, negotiating a Retail Services Transformation Agreement.

42.3 Internal Negotiations
42.3.1 The employee will discuss the matter with their immediate manager/supervisor. However, in circumstances where the matter may relate to the behaviour or actions of the immediate manager and it would be inappropriate to discuss the matter at that level, the employee may discuss the matter with the next highest level of management.
42.3.2 If the matter is not resolved at that level within a reasonable timeframe, the employee concerned mat arrange further discussions involving more senior levels of management or the Union as appropriate.
42.3.3 If the issue involves more than one employee, the employees involved , the Union or management may raise the issue at the level the parties consider appropriate.

42.4 FWA Conciliation
42.4.1 If the internal negotiations do not resolve the dispute, a party to the dispute may refer the matter to FWA for conciliation.
42.4.2 The party notifying the dispute will do so by filing with FWA and serving on all other relevant parties a dispute notification document that sets out a brief description of the dispute, the material facts the disputing party believes to be relevant to the dispute and the desired remedy.

42.5 Independent Mediation
42.5.1 If the conciliation by FWA has been unsuccessful in resolving the dispute, a party to the dispute may refer the dispute to a third party mediator agreed to by both parties. If the parties are unable to agree on a mediator, the Institute of Arbitrators and Mediators Australia Mediation Rules will apply in relation to the appointment of a mediator.
42.5.2 Having regard to the terms of this Agreement, the National Employment Standards and the principles set out in clause 42.1.3, the independent mediator must assess the merits of the matter and make a non-binding recommendation that:

(a) arbitration by FWA is appropriate on the basis that it raises a genuine question about the interpretation of the Agreement of National Employment Standards; or
(b) arbitration by FWA is not appropriate.

42.5.3 The independent mediator may make non-binding recommendations regarding how the matter may be resolved between the parties prior to arbitration.
42.5.4 The cost of the mediator will be shared equally between the parties and each party will pay its own costs for the mediation.

42.6 Arbitration
42.6.1 If the mediation has been unsuccessful in resolving the dispute, then a party to the dispute may elect to have the matter arbitrated by FWA.
42.6.2 FWA may only determine the matter by arbitration if all the conditions set out in this clause 42.6.2 are satisfied:

(a) the escalation process in this clause 42 has been followed; and
(b) where the party requesting arbitration is either a Union or Australia Post, that party has been authorised to apply for arbitration by its relevant decision-making body in accordance with their rules which, in respect of the CEPU and CPSU, and Australia Post are set out below:

(i) CEPU, Communications Division Divisional Executive (or any successor body);
(ii) CPSU – Executive Council (or any successor body);
(iii) Australia Post – Executive Committee of Australia Post; and

(c) FWA is satisfied that the relevant decision-making body of the party requesting arbitration has considered the independent mediator’s recommendation in relation to whether arbitration is appropriate for the dispute in authorising the application for arbitration by FWA

42.6.3 In arbitrating the dispute FWA may:

(a) make a determination that is binding on the parties; and
(b) use the powers that are available to it under the FW Act.

42.6.4 A decision that FWA makes when arbitrating a dispute is a decision for the purpose of Division 3 of Part 5-1 of the FW Act. Therefore, an appeal may be made against the decision.”

42.7 Application
Clauses 42.5 to 42.6 will only apply until the date on which a Party to the Agreement successfully applies to FWA for a protected action ballot in accordance with the FW Act.”

[17] Attachment K to the EA is the Australia Post Redundancy/Redeployment/Retraining Agreement (the RRR Agreement). The RRR Agreement is referenced in the body of the EA in the following terms:

“34. Employment Security

34.1 The Parties recognise that employment security is dependent on Australia Post’s ability to adapt, grow and change to sustain a viable and profitable business. Where this business imperative could lead to changes that significantly impact employees, the Parties recognise that the provisions in clause 33 – Employee Consultation, provide an employee and their union representative the right to be consulted over these changes.

34.2 Australia Post is committed to continuing the principles and benefits found in the Australia Post Redundancy/Redeployment/Retraining Agreement 1995, which forms part of this Agreement in Attachment K, with its focus on voluntary retrenchments, retraining and deployment. During the life of the Agreement the emphasis shall be on retraining for new skills and redeployment in preference to redundancy following any position occupied by an employee being identified as surplus to requirement, subject to:

(a) employees and Unions co-operating with retraining to facilitate redeployment; and
(b) employees affected by workplace change accepting reasonable offers for retraining and redeployment.”

[18] Mr Pitts was in a position that was identified by Australia Post as a surplus position under clause 6 of the RRR Agreement. Part of the process applying in these circumstances includes the following:

“6.5 Once the consultative phase is completed and there is confirmation that the position is surplus, or where the union has confirmed that there is no need for discussion, Australia Post may proceed immediately to advise the employee that he/she may elect to be retrenched voluntarily following a one week cooling off period from the date of advice. If the employee so elects, retrenchment will be effected at the conclusion of the formal notice period (four weeks after the end of the cooling off period), or at an earlier date by mutual agreement.”

[19] The benefits provided by the RRR Agreement are defined as the “benefits framework” and this includes the following:

“11.2 The proposed benefit framework is:-
(i) four weeks’ pay for each completed year of continuous service up to five years plus a pro-rata payment for each completed month of continuous service since the last completed year of continuous service;
(ii) three weeks’ pay for each completed year of continuous service thereafter, plus a pro-rata payment for each completed month of continuous service since the last completed years of continuous service;
(iii) for employees over fifty years of age, four weeks’ pay for each year of service beyond fifty years of age including pro-rata adjustment for each completed month of continuous service since the last completed year of continuous service:
(iv) the minimum sum payable under these arrangements including payment in lieu of notice (four weeks), is eight weeks’ salary and the maximum including any payment in lieu of notice (four weeks), is eighty-four weeks’ salary; and
(v) the sum payable to an employee under these arrangements shall not exceed the salary that would be payable were the employee to continue employment until the maximum retiring age.”

[20] The substance of the dispute arises from clause 13 of the RRR Agreement and this provides as follows:

“13. Use of Sick Leave
13.1 The formal notice period provided under the arrangements will be extended by any periods of certified sick leave taken during such period.

[21] The RRR Agreement also contains a dispute settlement provision in the following terms:

“19. Dispute Settlement
19.1 During the period of the Agreement any disputes or problems over the application or interpretation of the Agreement shall be resolved in accordance with the Joint Statement of Understanding.
19.2 Where the consultative processes contained in the Joint Statement of Understanding fails to settle a dispute arising from implementation of this Agreement, the parties agree to refer the matter to the Australian Industrial Relations Commission (AIRC) and will abide by any recommendation made by the AIRC in settlement of the dispute.”

[22] The Joint Statement of Understanding within the RRR Agreement provides as follows:

“Australia Post and the APTU agree that the future viability of the enterprise is critically dependent on it enjoying a reputation for reliability and efficiency in providing service to customers.
To enhance its reputation and protect its viability, Australia Post and the APTU have commitment to identifying any areas where interpersonal relations and industrial relation and their effect on staff morale are unsatisfactory and implementing appropriate remedial action.
The parties agree that pre-emptive industrial action must be avoided in favour of a mechanism which allows local unresolved problems to be raised to higher levels for resolution.
Similarly, the parties agree that management should not implement contentious decisions without adequate consultation and where necessary relevant issues should be referred to higher levels for consultation.
Agreements negotiated at the national level are not to be re-negotiated at the State or local level.
To achieve these goals, the parties agree to the following principles and processes of participative management:
1. Effective local consultative arrangements are to be put in place and middle managers, supervisors and staff are to be assisted and encouraged to participate more in the problem-solving and decision-making at their own workplace.
2. Effective, 2-way communication with staff is to take place and first line/middle managers are to be assisted and encouraged to play a greater role.
3. Adequate training is to be given to those management, supervisors and staff involved in participative groups to enable them to talk meaningfully to each other and to identify, analyse and resolve problems.
4. The reasons for changed affecting the workplace are to be clearly explained to and discussed with all staff prior to implementation.
5. Contentious decisions or implementation difficulties arising out of National agreements are to be referred to higher levels before implementation so that consultation can take place at those levels.
6. The roles and functions of various management levels and union representatives need to be clearly documented and respected.
The parties agree that priority needs to be given to putting the above principles into effect and national and State groups will be established to lead and monitor resultant action.”

[23] I note that the RRR Agreement is for all relevant purposes in the same terms as the Australia Post Redundancy/Redeployment/Retraining Agreement 1995 (the RRR Agreement 1995), which was first certified by the AIRC on 2 February 1996 in accordance with s.170MA of the Industrial Relations Act 1998 (Cth).

4. Consideration

4.1 The characterisation of the dispute

[24] In order to deal with the relevant jurisdictional issues that arise, it is appropriate to initially resolve the characterisation of the dispute. In so doing, I have had regard to the approach adopted by Commissioner Saunders in Construction, Forestry, Mining and Energy Union v Mt Arthur Coal Pty Ltd 4 where he summarised the relevant legal principles in the following terms (references omitted):

“Legal principles concerning the proper characterisation of the dispute

[6] The test under s.739 of the FW Act is whether the dispute settlement procedure in the enterprise agreement “requires or allows” the Commission to deal with the dispute. It is therefore necessary to look at the text of the dispute settlement procedure, understood in light of its industrial context and purpose, to determine whether the dispute, properly characterised, falls within it.

[7] The scope of a dispute settlement procedure in an enterprise agreement should not be narrowly construed; “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.”

[8] In characterising the nature of a dispute the Commission is not confined to the application filed to deal with the dispute. The entire factual background is relevant, and may be ascertained from the submissions advanced by the parties on the question of jurisdiction. Further, a dispute may evolve during proceedings in the Commission. It may therefore be necessary in some cases when ascertaining the character of a dispute to have regard to both the nature of the dispute alleged in an originating application and the factual circumstances as they evolve.

[9] It is also important to note that the character of the dispute is distinguishable from any relief which may be sought, or granted, following an arbitration of the dispute. However, the relief sought may cast light on the true nature of the dispute in some cases.

[10] If the Commission has jurisdiction to deal with the dispute, the nature of the relief that the Commission may grant in such circumstances will depend on the limitation in s.739(5) of the FW Act 50 and the agreement of the parties as recorded in their enterprise agreement, provided that such relief is reasonably incidental to the application of the Enterprise Agreement to which the dispute relates.”

[25] The background events leading to the application are as follows:

• In accordance with the RRR Agreement, Mr Pitts was advised in person and by letter on 24 August 2016 that his role was redundant subject to any change arising from impending consultation with both Mr Pitts and relevant union representatives. Mr Pitts was provided with a decision form to indicate whether (in the event that his redundancy was confirmed by Australia Post following the consultation process) he wished to accept a Voluntary Redundancy Package (VRP) or enter into the Redeployment Program with Australia Post.
• Following this meeting of 24 August 2016, Mr Pitts commenced a period of sick leave from 25 August 2016. Despite this, Mr Pitts signed his decision form on 11 September 2016 (which was received by Australia Post on 13 September 2016) stating that he had elected to accept a VRP.
• Between 25 August 2016 and 13 September 2016, Mr Pitts submitted medical certificates indicating that he was unfit to attend work.
• Australia Post formally wrote to Mr Pitts on 15 September 2016, confirming his redundancy, confirming his decision to elect a VRP, and confirming that his last day of employment with the company would be 21 September 2016. These letters are normally hand delivered to employees, however with Mr Pitts being absent, his letter was sent via post. Mr Pitts’ manager, Delivery Manager Mr Trevor Roe, telephoned Mr Pitts on 16 September 2016 to advise him of these details and that he would receive a letter confirming those details in the mail.
• On 21 September 2016, Mr Pitts emailed Mr Roe, claiming that his “5 week formal notice” was still ongoing. Mr Roe replied to Mr Pitts on 23 September 2016, indicating that as part of his final pay from Australia Post, Mr Pitts was being paid 5 weeks’ pay in lieu of notice, and confirming that his last day with the company had been 21 September 2016.
• Subsequently, the Branch President, of the South Australia Branch of the Communications Division of the CEPU contacted Mr Roe to raise the issue of Australia Post's “failure to correctly apply clause 13 of Attachment K”. A meeting was later held between the Branch Secretary of the CEPU and Australia Post management.

[26] The CEPU then lodged this application on 18 October 2016 and stated that the dispute was about the following:

“The union brings this application on behalf of its member James Pitts.

Mr Pitts was on sick leave (with medical evidence). He notified Australia Post yet they proceeded with his redundancy therefore breaching Section 13. Use of Sick Leave 13.2 The formal notice period provided under the arrangements will be extended by any periods of certified sick leave taken during such period.”

[27] The application sought a remedy in the following form:

“For Mr Pitts to receive his sick leave payments whilst covered by sick leave certificates.”

[28] During the course of the proceedings before the Commission it has become evident that there is a dispute between the parties about the operation of clause 13 of the RRR Agreement in the context of Mr Pitts circumstances. This includes whether Australia Post can pay Mr Pitts in lieu of notice and if so, whether clause 13 has any application to extend a notice period. It has also become apparent that the potential impact of clause 13 upon the status of Mr Pitts at the time of bringing the application is also an issue.

[29] As with all such matters, there are potentially broader implications of the issues arising from this dispute. However, the dispute is fundamentally about the circumstances and entitlements of Mr Pitts.

4.2 Which dispute resolution procedure applies to this dispute?

[30] In approaching this question, I allow for the prospect that both dispute resolution procedures might apply. I also leave aside for present purposes the issues associated with the status of the CEPU as an applicant and that of Mr Pitts at the time of lodgement of the application.

[31] It is convenient to commence with a consideration of clause 42 of the EA. Sub-clause 42.2 applies with respect to disputes that include those relating to a matter arising under the EA. Given the terms of clause 34, a dispute about the operation of the RRR Agreement would clearly be a dispute about a matter arising under the EA. Sub-clause 42.2.2 expressly excludes certain matters from the scope of the procedures provided in clause 42 and this does not reference the RRR Agreement.

[32] As a result, it is evident that clause 42 is capable of applying to the present dispute.

[33] An enterprise agreement cannot be approved by the Commission without containing a term (the procedure) to deal with disputes about matters arising under the agreement and in relation to the National Employment Standards (NES). That procedure must require or allow the Commission, or another independent body, to settle such disputes. This is provided by s.186(6) of the FW Act in the following terms:

“186 When the FWC must approve an enterprise agreement—general requirements

… …

Requirement for a term about settling disputes

(6) The FWC must be satisfied that the agreement includes a term:

(a) that provides a procedure that requires or allows the FWC, or another person who is independent of the employers, employees or employee organisations covered by the agreement, to settle disputes:

(i) about any matters arising under the agreement; and

(ii) in relation to the National Employment Standards; and

(b) that allows for the representation of employees covered by the agreement for the purposes of that procedure.

Note 1: The FWC or a person must not settle a dispute about whether an employer had reasonable business grounds under subsection 65(5) or 76(4) (see subsections 739(2) and 740(2)).

Note 2: However, 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).”

[34] It is reasonable to proceed on the basis that clause 42 was included in the EA in order to meet these requirements. However, given the import of s.738(b) of the FW Act, an enterprise agreement may provide a scope of agreed power for the Commission’s dispute resolution role beyond the minimum required for approval of that instrument.⁵

[35] As outlined earlier in this decision, the RRR Agreement also contains a provision in clause 19 purporting to provide for dispute resolution.

[36] The primary position advanced by Australia Post is that clause 19 of the RRR Agreement is not a source of power for the present dispute. It contends that clause 19 refers to the AIRC making recommendations and the Commission does not have any power under ss.595 and 739 to make a binding recommendation. I do not accept that proposition. The AIRC is a predecessor to the Commission and at the time that the RRR Agreement was originally made, the AIRC undertook the relevant dispute resolution role. 6 Further, s.739(4) provides that “If, in accordance with the term, the parties have agreed that the FWC may arbitrate (however described) the dispute, the FWC may do so.” A process leading to a recommendation that is binding upon the parties under the dispute resolution term would, in my view, be an arbitration for present purposes.

[37] In the alternative, Australia Post contends that two inconsistent dispute resolution procedures cannot apply to the same dispute and that this was not objectively intended by the EA. It does so on the following basis:

• The parties did not update the references to the AIRC in the RRR Agreement;
• Clause 42.2.2 sets out an exclusive list of matters to which that provision does not apply and that list does not include the RRR Agreement;
• The Form F17 provided as part of the application for approval of the EA referenced clause 42 as the dispute resolution term; and
• The parties negotiated a detailed and stepped dispute resolution process in clause 42 and it would be implausible that they intended the “impractical consequence of retaining an active clause 19 of the RRR Agreement, whereby a party to the agreement could effectively elect which dispute procedure it wished to use for any given matter.” 7

[38] In the further alternative, Australia Post submits that clause 42 of the EA must prevail over the inconsistent terms of the Joint Statement of Understanding incorporated by reference in clause 19 of the RRR Agreement.

[39] The CEPU contends that the EA preserves the dispute resolution provisions of clause 19 of the RRR Agreement. It submits that this is so on the following basis:

• The RRR Agreement 1995 existed alongside and was fully operative in addition to each Enterprise Agreement of Australia Post, certified under pre-Fair Work legislation since the Australia Post Enterprise Agreement 1999, known as EBA 4 and the subsequent enterprise agreements, known as EBA 5 and EBA 6. Each of these agreements incorporated reference to the RRR Agreement 1995 in some form or another and contained a distinct dispute settlement procedure;
• The only exception to the above statement can be found in Attachment D to EBA 6, where the parties specifically excluded the operation of the disputes procedure in the RRR Agreement 1995 in favour of the disputes procedure in the enterprise agreement Notably, the parties made it clear that this exception would only exist during the term of operation of EBA 6;
• The Australia Post Fair Work Agreement 2010 (EBA 7) was the first Australia Post enterprise agreement certified under the Act. The RRR Agreement 1995 was incorporated unchanged into EBA 7 as Attachment K. Several other pre-reform certified agreements were incorporated into EBA 7 to varying degrees. For example the Interstate Linehaul Agreement 1992 was incorporated as Attachment D with only a handful of its provisions preserved;
• The current Agreement is no different in regards to these Attachments, and
• If Clause 19 were not intended to be an operative provision of the agreement it would not have been preserved, in the same way that the dispute clauses in the Linehaul Agreement were not preserved.

[40] The CEPU also submits that this approach is reinforced by the material provided to employees at the time of the vote to approve the EA and that it was not appropriate to, in effect, permit Australia Post to circumvent the terms of the current EA, particularly given that negotiations for its replacement were underway. In addition, the CEPU referred to a number of decisions of the Commission where the binding recommendation process under what is now clause 19 of the RRR Agreement was applied under an earlier instrument (EBA 7).

[41] In considering this matter I have applied the approach adopted to the interpretation of enterprise agreements set out by the Full Bench in The Australasian Meat Industry Employees Union v Golden Cockerel Pty Limited. 8

[42] I have considered the information supplied to employees in conjunction with the employee approval process leading to the EA. Even if this was taken into account as part of the context or as an indication of common objective intent, it does not advance the issue here. The statements made at the time, in effect, reflect the terms of the EA itself.

[43] In terms of recommendations made by the Commission under the previous enterprise agreement, these are relevant. However, the issue of jurisdiction was not raised and it is evident that the parties proceeded on the assumption that the matters were to be dealt with under the RRR Agreement as appended to that agreement. I note that in a dispute concerning the Port Melbourne Delivery Centre in March 2012, 9 Roe C indicated that “the parties and the (then) Fair Work Australia would act on the basis that the dispute is at step 7.5 of the Australia Post RRR Process and the dispute is at the stage set out in Clause 19.2 of the dispute settlement.”10 I understand that the reference to step 7.5 is the process whereby there are surplus positions which cannot be clearly identified and that clause 19.2 was the dispute resolution clause within the enterprise agreement itself. The Commissioner also indicated that if agreement was not reached, FWA “would issue a recommendation to resolve the dispute”.11 The Commissioner later issued what was described as a binding recommendation12 and stated that this was done under clause 19.2 of Attachment K.13

[44] Roe C also adopted the same approach to another dispute concerning changes at Dandenong in 2012. 14 In that matter, the Commission also did not expressly consider the relationship between the process in the RRR Agreement and the dispute resolution provisions within the body of the relevant EA. The Commissioner did however expressly consider that it was appropriate to proceed to make a recommendation under clause 19.2 of Attachment K.15

[45] Accordingly, it is necessary to ascertain the common objective intention of the EA based upon the language and terms of the instrument, when read as a whole, and considered having regard to its context and purpose.

[46] In approaching this task, I note that clause 34.2 of the EA refers to the commitment of Australia Post to continue “the principles and benefits of the (RRR Agreement)”. Read in isolation, this might be an indication that it was not intended that the RRR Agreement form part of the terms of the EA. However, the same provision also refers to the RRR Agreement “forming part of the agreement.” I also note that unlike the incorporated Interstate Linehual Agreement in Attachment D, which only contains some of the provisions of the original stand-alone instrument, the full terms of the RRR Agreement has been included.

[47] As a result I consider that the RRR Agreement is part of the EA as an incorporated term. This includes the dispute resolution procedure in clause 19 of Attachment K. Accordingly, there are two dispute resolution terms that could apply to a dispute about redundancy arrangements.

[48] The two clauses are, at least in part, in conflict with one another. That is, the procedures for dealing with disputes are directed to the same end; however, there are a series of defined steps and procedures to be followed under clause 42. Further, although the end result is the Commission potentially determining an outcome, clause 42 has additional steps that must be met prior to that point.

[49] In Ford Motor Company of Australia Ltd v Arrowcrest Group Pty Ltd 16 the Federal Court was dealing with an apparent conflict in a commercial contract and observed:

“8. … … Finding an inconsistency is not a novel situation when standard terms are incorporated into an agreement. The proper approach is to disregard those incorporated terms that conflict with the expressly agreed terms. In Modern Buildings Wales Ltd v Limmer & Trinidad Co Ltd [1975] 1 WLR 1281 (at 1289) Buckley LJ said, “if any of the imported terms in any way conflict with the expressly agreed terms, the latter must prevail over what would otherwise be imported”: see also Hamilton and Co v Mackie and Sons (1889) 5 TLR 677; T W Thomas and Company Ltd v Portsea Steamship Co Ltd [1912] AC 1. … …”

[50] Although the context here is different, I consider that this approach is apposite to the interpretation of an enterprise agreement. I must also consider whether the terms of clause 19 in Attachment K should be taken to be the intended specific provision to deal with disputes about redundancy matters rather than the more general dispute resolution provision in clause 42.

[51] When read as a whole and in context, I consider that the intention of the EA is for clause 42 to apply to all disputes about matters arising under the instrument, including those relevant to the RRR Agreement. This is reinforced by the fact that the parties excluded some matters from clause 42 and did not do so in relation to the RRR Agreement. Further, the more recent, detailed and comprehensive provisions should be applied to the extent of direct inconsistency.

[52] I note however, that in circumstances where there is a broad dispute about the application of the RRR Agreement beyond the circumstances of a single employee as raised in this case, it may be possible for the CEPU to use the disputes procedure within Attachment K. This is so, as clause 42 of the EA appears to contemplate an individual employee raising a grievance, as occurred here, whereas, clause 19 of the RRR Agreement is collectively based and the CEPU, amongst others, is treated as a direct party to that provision.

4.3 Does the Commission have jurisdiction to deal with this dispute?

[53] This question ultimately requires a determination of the jurisdictional issues outlined earlier in this decision, along with the related issues. Those issues, stated broadly are:

Is clause 19.2 of Attachment K of the EA a source of power for the Commission to deal with this dispute given the provisions of sections 738 and 739 of the FW Act?

If the relevant dispute resolution procedure for the purposes of sections 738 and 739 of the FW Act is clause 42 of the EA, does the Commission have the power the deal with the application?

[54] These are directly related questions and given my earlier findings, this requires a consideration as to whether:

• The CEPU is entitled to utilise the relevant DRP?
• The CEPU, on behalf of Mr Pitts, has followed the relevant DRP?
• The apparent status of Mr Pitts at the point of bringing the application impacts upon the application?

[55] For reasons outlined earlier in this decision, it is the terms of the EA that must be applied in the context of the statutory parameters.

[56] The CEPU lodged the application on behalf of Mr Pitts. The initial stages of the procedure set out in clause 42.3 contemplate the employee discussing the matter with management. The CEPU is expressly recognised within that sub-clause and the balance of the provision refers either to a party to the dispute or the party notifying the dispute.

[57] The CEPU is a union covered by the EA and whilst this does not necessarily make it a party to any dispute that might arise under the agreement, in this case, it is acting on behalf of its member, Mr Pitts, and expressly lodged the application on his behalf.

[58] The procedure requires, or allows for, three stages prior to a party referring the dispute to the Commission for conciliation. These are:

• The employee is to discuss the matter with their immediate manager/supervisor, except where it involves the behaviour or conduct of that supervisor/manager – clause 42.3.1;
• If not resolved at that level within a reasonable timeframe, the employee concerned may arrange for further discussions with senior levels of management or the union as appropriate – clause 42.3.2; and
• If the issues involve more than one employee, the employee, union or management may raise the issue at the level the parties consider appropriate – clause 42.3.3.

[59] Mr Pitts raised the issue with the Delivery Manager, Mr Roe. I understand that Mr Roe was Mr Pitts’ immediate manager. In any event, the issue arose in the context of a redundancy, where Mr Roe had provided the notice of the redundancy, and Mr Pitts was absent on sick leave. The issue was then escalated by the CEPU on behalf of Mr Pitts prior to this application being lodged. I consider that this meets the requirements of clause 42.3.

[60] The remaining issue concerns the status of Mr Pitts at the time of the application. This arises because Australia Post contends that an application of this nature cannot be made where the employee concerned is no longer employed. In that regard, it relies upon the decision of the Full Bench in King & Ors v Patrick Projects Pty Ltd 17 which stated that:

“[43] An application for the Commission to deal with a dispute in accordance with a dispute settlement procedure of an Enterprise Agreement pursuant to s.739 of the Act can only be heard when the applicants are employed. This is an uncontroversial jurisdictional point supported by manifold authorities and the express provisions of the Act.”

[61] Australia Post also correctly observed that a differently constituted Full Bench considered a similar issue in CFMEU v North Goonyella Coal Mines Pty Ltd. 18 The Full Bench considered whether the Commission had the power to deal with a dispute under s.739 of the FW Act regarding a former employee if the former employee initiated the dispute resolution process while still employed. However, the Full Bench was not required to make a final decision on this point because in that case the dispute resolution process was not initiated while the former employee was employed. In that sense it distinguished the matter from decisions of the Commission19 where in each case the dispute resolution procedure had been initiated by or on behalf of the relevant employee before the employee’s employment had been terminated even though the procedure had not been completed prior to termination. In each of those matters it was determined that arbitration under the relevant disputes resolution procedure could proceed, notwithstanding that the employment of the relevant employee/s had been terminated.20

[62] This application was lodged on 18 October 2016. Mr Pitts had been given notice by Australia Post that his redundancy would proceed and that his last day of employment would be 21 September 2016. This occurred after the expiry of the cooling off period and the ‘election’ by Mr Pitts to accept the redundancy. Mr Pitts disputed the notice period on that last day.

[63] Although Australia Post contends that Mr Pitts did not make a formal indication to invoke the disputes procedure, clause 42 does not require that this be done (clause 42.3.1 as discussed above). On that basis, I am satisfied that Mr Pitts had commenced the first stage of the disputes procedure whilst still an employee.

[64] There is now also a dispute as to whether Mr Pitts’ employment ceased on 21 September 2016. That was the day notified by Australia Post as being the last day of work and Mr Pitts was paid out his entitlements on that basis. However, on the CEPU’s approach to clause 13 of the RRR Agreement, the notice of the redundancy taking effect is extended by the period of certified sick leave. Further, it contends that this has the effect of extending Mr Pitts’ employment, potentially for as long as he had certified sick leave. At first glance, I doubt that this would be the legal effect of that provision given that pay in lieu of notice will in most cases mean that the termination takes effect immediately. 21 However, this may depend upon whether the giving of insufficient notice (based upon the CEPU construction of the provisions) means that the termination of the employment was not effective. Further, it may be that if relevant, clause 13 might, in the circumstances of Mr Pitt, impact on the extent of pay in lieu of notice that should have been applied. However, all of this goes to the substance of the dispute and in particular whether the “formal notice period” referred to in clause 13 of the RRR Agreement is the period required by clause 6.5 or to the more general notion of notice of termination of employment. Further, whether the EA permits pay in lieu of the relevant notice in the case of a redundancy, and if so, whether this means that clause 13 of the RRR Agreement has no application. Australia Post has an arguable position on these elements.

[65] I have not heard full argument on these issues and the Commission is not yet empowered to make a determination on the matter.

5. Conclusion

[66] As a result, I do not consider that it is appropriate at this point to finally determine the jurisdictional issue in this matter. I am satisfied, subject only to the issues that might flow from the status of Mr Pitts at the time of commencing the disputes procedure and making this application, that clause 42 of the EA provides a source of power to deal with this particular application.

[67] The issues associated with the status of Mr Pitts are directly intertwined with the substance of the dispute and should be further considered as part of any determination of the matter more generally.

[68] The dispute was subject to conciliation by the Commission as required by clause 42.4 and was not resolved. In accordance with clause 42.5, the dispute is to be referred to a third party mediator to consider making non-binding recommendations. If it is not resolved, a party may then elect to have the matter arbitrated by the Commission.

[69] The application will be adjourned with liberty to apply.

COMMISSIONER

Appearances:

D Khatab for the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia.

E Henley for Australia Post.

Hearing details:

2016.

Melbourne:

15 December.

Printed by authority of the Commonwealth Government Printer

1 See Woolworths Ltd trading as Produce and Recycling Distribution Centre [2010] FWAFB 1464 at par [19]. See also Cape Australia Holdings Pty Ltd T/A Total Corrosion Control Pty Ltd v Construction, Forestry, Mining and Energy Union[2012] FWAFB 3994 at [15] to [24].

2 [2015] FWCFB 1889.

3 Endeavour Energy v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia [2016] FCAFC 82.

4 [2016] FWC 2959.

5 See generally Woolworths Ltd trading as Produce and Recycling Distribution Centre [2010] FWAFB 1464.

6 See Schedule 3 Item 6 of the Fair Work Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth) - as it stood at the time of the commencement of the FW Act - as an example of the recognition of the Commission as the successor to the AIRC.

7 Australia Post written submissions - 8 December 2016.

8 [2014] FWCFB 7447.

9 Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Australia Post T/A Australia Post[2012] FWA 2413.

10 Ibid at [3].

11 Ibid at [6].

12 Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Australia Post T/A Australia Post[2012] FWA 2772.

13 Ibid at [14].

14 Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Australia Post [2012] FWA 2416.

15 Ibid at [4].

16 [2002] FCA 1156.

17 [2015] FWCFB 6323.

18 [2015] FWCFB 5619.

19 ING Administration Pty Ltd v Jajoo PR974301, Telstra Corporation Limited v CEPU [2007] AIRCFB 374 and Deakin University v Rametta[2010] FWAFB 4387.

20 [2015] FWCFB 5619 at [43].

21 Siagian v Sanel Pty Ltd (1994) 122 ALR 333, 355.