Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Australian Postal Corporation

[2018] FWC 1108

[2018] FWC 1108

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
Australian Postal Corporation
(C2017/6869)

DEPUTY PRESIDENT COLMAN MELBOURNE, 22 FEBRUARY 2018

Application to deal with a dispute – jurisdictional objection – which disputes procedure is relevant - employees’ employment ceased before application made – requirements of disputes procedures not met - jurisdictional objection upheld

[1] This decision concerns an application by the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) under s.739 of the Fair Work Act 2009 (Act) for the Commission to deal with a dispute in accordance with a dispute settlement procedure in the Australia Post Enterprise Agreement 2017 (2017 Agreement).

[2] The application concerns two members of the CEPU, Mr Adam Shiel and Ms Pushpa Velyavettil, whose employment with Australian Postal Corporation (Australia Post) terminated for reason of redundancy on 11 December 2017. Their positions had been declared surplus to requirements in 2015. They were provided with temporary work for over two years while permanent redeployment options were considered, however in November 2017 Australia Post determined that there was no prospect of their redeployment.

[3] The employment of the employees was covered by the 2017 Agreement. According to the CEPU, this is only the second instance of involuntary redundancies to be declared under the 2017 Agreement or its predecessors.

[4] The union contends that Australia Post failed to comply with its obligations under the Redundancy, Redeployment and Retraining Agreement (RRR Agreement), an agreement originally made under the Industrial Relations Act 1988, which is set out in Attachment K to the 2017 Agreement. The RRR Agreement mandates a process whereby Australia Post will endeavour to permanently redeploy employees whose positions are declared redundant. The union contends that Australia Post did not afford the two employees priority for permanent vacancies at their respective levels, and that they were retrenched at a time when there were available positions at the employees’ level. Alternatively, the union submits that by being provided with work for over two years, the two employees were in fact successfully redeployed and should not have been retrenched. Australia Post’s position is that it complied with and went beyond its obligations under the RRR Agreement.

[5] The relief sought by the union through its application to the Commission is the reinstatement of the two employees, together with a ‘three month job search’.

[6] The union’s application under s.739 invokes a dispute resolution procedure found in clause 19 of the RRR Agreement. This states that ‘any disputes or problems over the application or interpretation of the Agreement [the RRR Agreement] shall be resolved in accordance with the ‘Joint Statement of Understanding’; and that ultimately ‘the parties agree to refer the matter to the Australian Industrial Relations Commission and will abide by any recommendation made by the AIRC in settlement of the dispute.’ Alternatively, the union contends that the Commission can deal with the dispute under the general dispute resolution provision in clause 42 of the 2017 Agreement.

[7] Australia Post objected to the Commission dealing with the CEPU’s application, and resisted the Commission listing the matter for conciliation. It contends that there is no dispute over the application of the 2017 Agreement, and no role for the Commission to play, because the employment of the two employees with Australia Post ceased before the union’s application was filed. It contends that clause 19 of the RRR Agreement has no application at all, and that clause 42 applies to all disputes arising under the 2017 Agreement, subject to limited exceptions that are not presently relevant. It further submits that the Commission has no jurisdiction to deal with the present application under clause 42 because the requirements of that provision have not been met.

[8] I listed the matter for a telephone mention on 21 December 2017, as a result of which directions were issued for the filing and service of submissions and materials in relation to the jurisdictional objection. The parties complied with these directions. It was common ground that I should determine Australia Post’s jurisdictional objection on the papers, and I consider it appropriate to do so.

Redundancy and the RRR Agreement

[9] It is convenient first to summarise the relevant provisions of the RRR Agreement, as they are the key reference point for the substantive dispute. These provisions also frame the factual background to this matter, which I address further below.

[10] Under the RRR Agreement, the process leading to involuntary redundancy includes the following elements:

•  Australia Post must provide notice of a surplus position to the union and the employee (clause 6.1);

•  A two week consultation period follows (clause 6.2 to 6.4);

•  Australia Post may then advise the employee that he or she may elect to take voluntary redundancy. If the employee accepts it, the voluntary redundancy takes effect after 4 weeks (clause 6.5);

•  If the employee does not accept voluntary redundancy, Australia Post will take all available steps to secure redeployment or retraining of the employee (clause 6.6);

•  In cases where ‘it has not been possible to identify suitable redeployment after a three month investigation and no prospect of such redeployment is identifiable’ the employee may be retrenched involuntarily after a period of two weeks following advice to the employee and any relevant union (clause 8.2);

•  Employees who are involuntarily retrenched may have the retrenchment decision reviewed by an internal board of reference (clause 8.6);

•  The board of reference must resolve any such application having regard to ‘whether the action was harsh unjust or unreasonable’ (clause 8.7), and recommends either confirmation or revocation of the retrenchment decision (clause 8.8);

•  If an application is made to the board of reference, the decision to effectuate an involuntary retrenchment is stayed, pending the outcome of the board’s review (clause 8.9).

Factual background

[11] The following aspects of the factual background to the present matter are uncontested.

[12] Mr Stiel had been employed as an AO2 in the accounts payable area and worked for Australia Post for some 30 years. His position was declared surplus on 8 April 2015. He was then assigned work back-filling other AO2 positions in various different areas. The only formal offer of redeployment he received concerned a temporary role as an anti-money laundering officer, which he accepted. This role ended in March 2016. On 14 November 2017 he was advised that he would be retrenched on 28 November 2017.

[13] Ms Velyavettil was employed as an AO2 in the accounts payable section and was employed by Australia Post for approximately 20 years. Her position was declared surplus on 29 May 2015. She was assigned to back-fill a number of AO2 and AO3 positions and worked in a number of different areas. In early 2017 she received an offer of permanent redeployment, but declined it on the advice of her doctor. Like Mr Stiel, she was advised on 14 November 2017 that she would be retrenched on 28 November 2017.

[14] Australia Post informed the two employees of its decision to retrench them in writing and in person. Representatives of the CEPU were present during the relevant meeting, and were advised of the retrenchments in writing.

[15] On 24 November 2017, the CEPU lodged an application with the board of reference on behalf of the two employees, seeking a review of the decision to retrench them. The retrenchment decisions were stayed pursuant to the RRR Agreement. On 11 December 2017, the board of reference confirmed Australia Post’s decision to retrench the employees, and advised the parties accordingly. The effect of this was that the retrenchments became effective as of 11 December 2017.

[16] Several elements of the factual background are contested by the parties. The contest partly reflects their different interpretation or characterisation of certain events.

[17] First, Australia Post contends that at no stage did either of the two employees, or the CEPU, formally raise a dispute under clause 19 of the RRR Agreement or clause 42 of the 2017 Agreement; rather, they challenged the retrenchment decision through the board of reference process. The union’s position is that it represented its members in relation to their concerns about their retrenchment, both in the meeting of 14 November 2017 and also at a meeting ‘at the national level’ (apparently involving senior Australia Post managers) on 20 November 2017, although in the latter regard it is not clear exactly what occurred at the meeting or how the union framed the matter at issue. I understand the union position to be that it had raised a dispute concerning the two employees by November 2017; although clause 19 of the RRR Agreement and clause 42 might not have been specifically invoked, the substance of its concern was put in issue, and this was sufficient to raise a dispute under either procedure.

[18] Secondly, Australia Post contends that it far exceeded its obligations with respect to considering redeployment of the two employees under the RRR Agreement. Instead of proceeding with retrenchment after 3 months of looking for permanent redeployment, it persisted with its endeavours for nearly 3 years before finally concluding that there was no prospect of redeployment.

[19] The union perspective is that for nearly three years the two employees were provided with other duties and that, at the time they were retrenched, there were in fact readily available positions at the employees’ level to which they could have been permanently redeployed. It contended that Australia Post did not afford the employees priority for permanent vacancies at their level. The witness statement of Ms Joan Doyle provides further details of the union’s claims in this regard. In its written submissions, the union further argued, alternatively, that the employees were in fact successfully redeployed for nearly three years, and that as a result the process provided for in clause 8.2 of the RRR Agreement was ‘spent’.

Jurisdictional objection

[20] Australia Post contends that the Commission has no jurisdiction to deal with the CEPU’s application because it was made after the employment of the two employees ceased. There is no dispute that the employees’ employment ended on 11 December 2017, when the stay of the retrenchment decision was lifted and the decision of the board of reference confirming their retrenchment was delivered. The CEPU’s application was filed in the Commission the following day. Of course, when a dispute was filed in the Commission and when it was raised for the purposes of a disputes procedure are separate questions.
[21] Australia Post relied on the decision in King & Ors v Patrick Projects Pty Ltd, where the Full Bench observed:

‘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.’ 1

[22] The question of whether the Commission has jurisdiction to deal with a dispute under a disputes procedure in an enterprise agreement requires analysis of the terms of the procedure and other relevant clauses in the agreement. In CFMEU v North Goonyella Coal Mines Pty Ltd, a Full Bench of the Commission considered a dispute that had arisen following the dismissal of certain employees. It found that there had been no attempt by the union or the employees to engage the disputes procedure at a time when any of the employees in question were actually employed under the agreement. It considered that the terms of the disputes procedure had no application and that there was no power for the Commission to deal with the matter under s.739 of the Act.

[23] This conclusion followed an analysis of the terms of the disputes procedure, which had established that references to ‘employees’ meant current employees and not former employees. 2 There were several reasons for this conclusion: the disputes clause referred only to ‘employees’ and there was nothing to suggest that this extended to former employees; the agreement was on its terms only binding on current, not former employees; and the requirement under the disputes procedure for work to continue as normal while the dispute was being dealt with could only be complied with by current employees. Such considerations may be relevant in the context of many other agreements.

[24] Australia Post made submissions substantially the same as the three points referred to in North Goonyella. The 2017 Agreement is expressed to cover ‘all employees of Australia Post employed in classifications set out in Attachment A’; 3 no reference is made in the disputes procedures or otherwise to former employees; and clause 42 contains a provision requiring employees to continue to work while disputes are being resolved. These provisions are all compatible with disputes arising under the 2017 Agreement being confined to matters relating to current employees. But they are not determinative of the matter.

[25] In each case that comes to the Commission under s.739, the terms of the disputes procedure must be considered in order to identify its scope and application. This is a question of construction. It is then necessary to characterise the dispute to ascertain whether it falls within the scope of the provision, and to establish whether relevant conditions that qualify the role of the Commission have been complied with. These are questions of fact.

The two disputes procedures

[26] The union’s primary argument is that the relevant disputes procedure is clause 19 of the RRR Agreement, set out in Attachment K. 4 This is the provision which it invokes in its s.739 application to the Commission. Clause 19 of Attachment K provides as follows:

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 on matters 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.

[27] The union contends that clause 19 of the RRR Agreement applies on its terms: any disputes or problems over the application or interpretation of the RRR Agreement are to be resolved in accordance with the Joint Statement of Understanding, with recourse to the Commission if the matter is not resolved.

[28] The CEPU submits that clause 19 is a specific procedure that applies in relation to disputes concerning the RRR Agreement, and that it applies to the exclusion of the general disputes procedure in clause 42. In this regard, the union invokes the principle of interpretation that where there is a conflict between a general and a specific provision, the specific provision prevails. 5 However, clause 42 is not just a general provision; as discussed below, it contains very specific exclusions. Further, principles of construction are only an aid to interpretation, and the task remains to identify the objective meaning of the words used in the relevant provisions, read in context.

[29] Australia Post contends that clause 42 (set out in the attachment to this decision) applies to all disputes under the 2017 Agreement, except for those provided in clause 42.2.2, and that clause 42 applies to the exclusion of clause 19 of the RRR Agreement.

[30] Clause 42.1 contains various acknowledgements and principles that will apply in relation to dispute resolution. Clause 42.2 is entitled ‘dispute resolution procedure’ and provides as follows:

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.

[31] The first step in the ‘escalation process’ is for the employee concerned to discuss the matter with their immediate supervisor (clause 42.3). The subsequent steps involve conciliation in the Commission (clause 42.4), independent mediation (clause 42.5) and arbitration in the Commission, subject to various conditions (clause 42.6).

[32] A matter ‘arising under the Agreement’ for the purposes of clause 42.2.1 would clearly include a matter arising under Attachment K. The question is whether clause 42.2.1 applies exclusively to all disputes arising under the Agreement, and overrides clause 19 of the RRR Agreement, as contended by Australia Post; or whether clause 19 of the RRR Agreement continues to apply to disputes concerning the RRR Agreement.

[33] Clause 42 and clause 19 of Attachment K were considered by Commissioner Hampton in a previous case involving the present parties. 6 He concluded that clause 42 applied to disputes concerning individual employees arising under the RRR Agreement, but considered that clause 19 of the RRR Agreement could be relevant to some other disputes:

[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.

[34] I agree with the Commissioner’s conclusion that the disputes procedure in clause 42 applies on its terms to all disputes arising under the agreement, including disputes relating to the RRR Agreement. Although clause 42 is of general application, clause 42.2 specifically excludes certain matters from its scope, namely disputes in relation to clauses where the parties have committed to negotiating a new policy or agreement. Disputes concerning the RRR Agreement are not excluded from the scope of clause 42. Had it been intended to provide for an exclusive dispute resolution mechanism for disputes concerning the RRR Agreement, one would expect this to have been provided for through clause 42.2.2.

[35] As to whether clause 19 operates as a disputes procedure concurrently with clause 42, it is relevant to note that clause 34.2 of the 2017 Agreement makes explicit reference to the RRR Agreement, and states that Australia Post is ‘committed to continuing the principles and benefits’ found in the RRR Agreement. Such benefits might include access to the disputes procedure in clause 19. Further, clause 34.2 confirms that the RRR Agreement forms part of this Agreement.

[36] I have some reservations about whether clause 19 in the RRR Agreement survives as an independent disputes procedure alongside clause 42. The RRR Agreement provides a specific avenue for employees to challenge a decision to effectuate their retrenchment. This is the mechanism provided for in clause 8.6 to 8.9, and which was utilised by the two employees and the union on their behalf in the setting of the current dispute. It is questionable whether the 2017 Agreement contemplates clause 19 of the RRR Agreement as yet another dispute mechanism, in addition to the board of reference process, and the general disputes resolution provision in clause 42. It is clear to me that whatever the potential scope of clause 19 of the RRR Agreement might be, it does not operate in a way that duplicates the board of reference procedure. However, on balance, and having regarding to clause 34.2, I accept that clause 19 could, subject to the requirements of that clause being satisfied, operate as an independent disputes procedure concerning broader questions of the application of the RRR Agreement.

[37] Accordingly, I agree with Commissioner Hampton that in principle, a ‘broad’ or collective dispute about the application of the RRR Agreement might be dealt with through clause 19 of the RRR Agreement. At paragraph 52, the Commissioner contemplates a broad dispute being one that goes beyond a single employee; I do not read this as a suggestion that a dispute concerning two employees would qualify. Rather, the potential application of clause 19 would concern matters going beyond individual or particular employees, entailing questions of principle or the general application of the RRR Agreement.

[38] To the extent that a dispute concerns the circumstances of particular employees, it would be consistent with the ordinary meaning and apparent intention of clause 42 that those disputes be brought under that procedure (or, where relevant, the RRR Agreement board of reference process). Clause 42 contains a process that specifically contemplates an employee raising concerns. Clause 19 of the RRR Agreement is not framed by reference to individual disputes. Of course, in a particular case it might be possible to characterise a dispute as relating both to the individual circumstances of particular employees and a point of broader principle or application of the RRR Agreement.

[39] In summary of the analysis to this point, I interpret clause 42 of the 2017 Agreement as applying to all disputes over the application of the agreement, subject to the requirements of that provision. Clause 19 in the RRR Agreement could apply in relation to disputes concerning questions of principle or general application of the RRR Agreement, subject to that clause’s own requirements.

The current dispute

[40] The union contends that the present matter is a dispute falling within clause 19 of the RRR Agreement. In the alternative, it submits that the dispute is capable of falling within clause 42.

[41] The dispute in the present case was brought before the Commission as one concerning the application of the RRR Agreement to the circumstances of Mr Shiel and Ms Velyavettil. Although the union’s application invokes clause 19, it does not seek to establish the correctness of a particular proposition, or confirm the way in which the RRR Agreement should, or does operate. Rather, in its s.739 application the union seeks the reinstatement of the two employees with a ‘three month job search’.

[42] Nevertheless, the union contends that, despite its concern for the two individuals, there is still a broader dispute over the application of clause 8 of the RRR Agreement. In its written submissions, the union states that it has identified what it considers to be a serious problem with the interpretation of the RRR Agreement by Australia Post that is connected to the lapse of time between the notice of redundancy (a position being surplus to requirements) and the final decision to retrench an employee. Although the union is presently focused on the plight of two of its members, that does not preclude the concurrent existence of a dispute over a point of principle, or a ‘broader’ dispute.

Have the requirements of clause 19 been met?

[43] In my view, the union has raised what can be characterised as a ‘broad dispute’ transcending the interests of the two employees. It has done so now, through its written submissions to the Commission. Although the union submits that it raised the broader issue at a meeting on 20 November 2017, and through its application on behalf of its members challenging the retrenchment decision, it does not appear to me that the dispute travelled beyond the circumstances of the two employees prior to the union lodging its application under s.739 in the Commission.

[44] In the context of clause 19 of the RRR Agreement, it does not appear to matter that the ‘broad’ dispute was not raised until after the termination of employment of the relevant employees. A dispute concerning the operation of clause 8.2, or other provisions of the RRR Agreement, can seemingly be made at any time.

[45] However, it is necessary to consider what conditions or limitations are placed on the role of the Commission under clause 19 and whether these have been complied with.

[46] First, clause 19.1 deals with the scope and purpose of the procedure. It states that any dispute or problem over the application of the RRR Agreement ‘shall be resolved in accordance with the Joint Statement of Understanding’. What does this entail?

[47] This Joint Statement is set out at the end of the RRR Agreement in Attachment K. It is an agreement between Australia Post and the ACTU. It contains five introductory paragraphs. The first concerns the importance of Australia Post’s viability. The second records that Australia Post and the ACTU have committed to identifying areas where interpersonal relations and industrial relations and their effect on staff moral are unsatisfactory, and to implement appropriate remedial action. The third concerns avoidance of pre-emptive industrial action, and raising unresolved issues at higher levels. The fourth states that management should not implement contentious decisions without adequate consultation, and relevant issues should be referred to higher levels for consultation. The fifth is that agreements negotiated at the national level are not to be re-negotiated at state or local level. Then, in order to ‘achieve these goals’, the parties agree to six ‘principles and processes of participative management’. These concern:

•  implementation of effective local consultation arrangements;

•  effective two-way communication with staff;

•  adequate training for management;

•  the need for the reasons for workplace change to be clearly explained and discussed prior to implementation;

•  contentious decisions or implementation difficulties arising out of national agreements being referred to higher levels before implementation for consultation;

•  the role and functions of management and union representatives being documented and respected.

[48] I return to clause 19.1 of the RRR Agreement and the requirement that any disputes or problems over the application or interpretation of the Agreement be resolved ‘in accordance with the Joint Statement’. This is the first step in the disputes procedure under clause 19. Efforts must be made to resolve the problem or disputes through the Joint Statement.

[49] Clause 19.2 then provides that if the ‘consultative processes’ in the Joint Statement fails to settle a dispute on matters arising from the implementation of the RRR Agreement, the parties will refer the matter to the AIRC.

[50] The union contends that the Joint Statement of Understanding ‘sets out a number of structures and associated principles to be implemented,’ that ‘no positive action is needed should any dispute arise’ and that ‘arbitration is the next step’. 7 On their argument, clause 19 is a ‘fast track to arbitration of RRR disputes’.8 The union appears to contend that the Joint Statement of Understanding is no longer relevant and need not be complied with. If that proposition were correct, it would incline me to the view that clause 19 no longer has any work to do as a disputes procedure, and that it is an irrelevant vestige of 25 years past.

[51] I have concluded that clause 19 has some work to do. But if I am correct in that conclusion, the processes in clauses 19.1 and 19.2, however obscure, must in my view carry some meaning and cannot simply be ignored.

[52] It is not evident to me how the union has sought to have its dispute resolved in accordance with the Joint Statement of Understanding. Similarly, it is not apparent to me that the ‘consultative processes’ contained in the Joint Statement ‘failed’ to resolve the dispute. Perhaps some or all of these processes have been subsumed within the consultation provision in clause 33 of the 2017 Agreement. In any event, whilst the union and Australia Post may disagree over certain matters concerning the application of the RRR Agreement, and various meetings have occurred, this of itself does not satisfy the requirements of clause 19.1 and 19.2 of the RRR Agreement.

[53] Next, there is a question about how the unresolved dispute makes its way to the Commission, and what happens upon its arrival. The clause states that the parties ‘agree to refer’ the matter to the Australian Industrial Relations Commission. 9 This would in my view permit one party to refer the matter to the Commission, agreement having been provided through clause 19. What role the Commission is then to play is not spelt out. All that is said is that the parties ‘will abide by any recommendation made by the Commission in settlement of the dispute’. It is clear enough that the Commission is authorised under the provision to make a recommendation. However, it does not appear that the Commission is required to make any recommendation, or what the reference point would be for such a recommendation, other than the words of the 2017 Agreement and their proper interpretation.10

[54] In this last connection, I have some reservations as to whether an agreement to abide by a recommendation of the Commission is tantamount to a conferral on the Commission of a power to arbitrate. I note the conclusion of Commissioner Hampton that a process leading to a binding recommendation would constitute arbitration for the purposes of s.739(4). I agree that the effect of a recommendation might be similar to arbitration for the purposes of this section, in the sense that it would be authorised by the parties and compatible with s.739. My concern is rather that a ‘recommendation’ connotes a statement to the effect that a particular course ought to be followed; that something should occur. As noted above, clause 19 is not to be read as duplicating the board of reference process in the RRR Agreement; accordingly, a recommendation could not in my view be sought from the Commission as to whether a retrenched employee should be reinstated, which is what the union seeks in its s.739 application.

[55] Clause 19 is concerned with broader disputes about the RRR Agreement, which is likely to include differences of opinion about its interpretation. However, in my view the term ‘recommendation’ sits uncomfortably with a dispute that is in the nature of an interpretative controversy, which would ordinarily require a determination as to what is the correct construction of a provision. For example, if the dispute is whether, under clause 8 of the RRR Agreement, a long term allocation of ad hoc duties becomes ‘redeployment’, I would consider this a question of interpretation that should be answered by identifying the correct construction, rather than a matter to be resolved by a recommendation. As a matter of ordinary language, one does not make a ‘recommendation’ about what a term means.

[56] The use of the term ‘recommendation’ in clause 19 appears to me to suggest that the disputes that are referred to the Commission are intended to be ones requiring a merit-related proposal; perhaps, in the example given, that the parties confer with a view to reaching a common understanding of when long term allocation of ad hoc duties might be considered ‘redeployment’. However, any recommendation would need to be compatible with the terms of the Agreement. In any event, it is not necessary to decide these questions in the present matter.

[57] In my view the processes contemplated by clause 19 of the RRR Agreement that precede the Commission’s involvement in the disputes procedure have not been undertaken. I am not satisfied that the preconditions have been met for the Commission considering a possible recommendation under clause 19.2.

Have the requirements of clause 42 been met?

[58] As regards the potential application of clause 42 to the present matter, I consider that, when they were still employed, the two employees or the union on their behalf could have raised concerns about their individual circumstance under that clause. I doubt that a dispute over the decision to retrench them could have been progressed under clause 42, as the board of reference procedure in clause 8.6-8.9 of the RRR Agreement appears to be an exclusive process to deal with such disputes. But other matters could potentially have been raised under clause 42.

[59] The difficulty for the union is that it did not raise a dispute under clause 42 prior to the retrenchment of the two employees, with the result that the steps in clause 42, which require the involvement of the employees, cannot now be complied with.

[60] The CEPU contends that, although there is ample Full Bench authority that the steps in a dispute resolution clause must be complied with, there are exceptions. They rely on the decision of Commissioner Roe in CEPU v Telstra Corporation, 11 which concerned a dispute that involved a question of national policy. Commissioner Roe considered that the step in the disputes procedure involving local management, who had no authority to resolve the matter, did not have to be complied with. The Commissioner considered that, where it is clear that the grievance was incapable of being resolved or advanced through a particular step, the step concerned could be regarded as having been complied with and the parties could proceed to the next step.12 The union suggested that I should adopt a similar approach in the present case, as the current dispute is one where the decision in dispute was made at the national level, and local managers (whose involvement is contemplated by the initial steps under clause 42) have no authority to resolve the matters.

[61] I do not consider that the decision of Commissioner Roe assists the union’s argument in the present matter. First, to the extent that the decision suggests there is any general principle that steps in a disputes procedure can be ignored if they are of no practical utility, I do not agree with it. 13 In AWU v MC Labour Services, the Full Bench stated that s.739 ‘makes clear that the Commission’s function (if any) in dealing with a dispute referred to it under an enterprise agreement depends on the terms of that agreement, and that the parties to the agreement may structure or limit the role of the Commission (or other person).’¹⁴

[62] Where a party seeks recourse to the Commission under a disputes procedure, any relevant preconditions in the procedure must be satisfied. Compliance with those preconditions is not optional, unless the disputes procedure so provides. It may be that a particular disputes procedure, properly construed, might not require compliance with certain steps if it would be of no utility. Such a conclusion was available to the Commissioner in the Telstra case, as the disputes procedure provided that the parties ‘may’ take certain steps pursuant to the process.

[63] In the present case, the steps required by clause 42 of the 2017 Agreement are clear and sequential. Clause 42.3 provides that ‘the employee will discuss the matter with their immediate supervisor’. An exception applies where the matter relates to the behaviour of that supervisor. Next, ‘if the matter is not resolved at that level within a reasonable timeframe’, it moves to the next step under clause 42.3.2. Where the issue involves more than one employee (as appears to have been the case here), the employees or union may raise the issue at the level the parties consider appropriate. Next, ‘if the internal negotiations do not resolve the dispute’, conciliation in the Commission follows (clause 42.4). After this, the procedure involves independent mediation (clause 42.5). Lastly, if mediation has been unsuccessful, the FWC may determine the matter by arbitration, but only if (among other things) ‘the escalation process in this clause 42 has been followed’ (clause 42.6.2).

[64] The CEPU relies on clause 42.3.3. This step, to recap, states:

42.3.3 If the issue involves more than one employee, the employees involved, the Union or the management may raise the issue at the level the parties consider appropriate.

[65] The union submits that where clause 42.3.3 applies, then clauses 42.3.1 and 42.3.2 are bypassed. It contends that clause 42.3.3 ‘applied and was satisfied’ through a meeting held between the CEPU and Australia Post on 14 November 2017. It further contends that the matter ‘was conciliated without result’, and that the next step in progressing its dispute through clause 42 is mediation under clause 42.5. I do not accept this argument.

[66] I am not persuaded that, where clause 42.3.3 applies, clauses 42.3.1 and 42.3.2 are not relevant. The provision does not say this. In any event, clause 42.3.3 allows a matter involving more than one employee to be raised ‘at the level the parties consider appropriate’. It is not just the view of one party that is relevant. All parties must consider the relevant level appropriate.

[67] For its part, Australia Post contends that at no stage did either employee or the CEPU formally place the matter in dispute under clause 19 of the RRR Agreement or clause 42 of the 2017 Agreement. It contends that instead, the CEPU lodged internal appeals to the Australia Post board of reference, pursuant to clause 8.6 of the RRR Agreement. This is a different process under the RRR Agreement.

[68] Even if it is accepted that the CEPU raised the dispute under (or for the purposes of) clause 42.3.3 at a meeting on 14 November or on 20 November 2017, there is no evidence that the parties agreed that this or some other level was appropriate and that the preceding steps in the process could be dispensed with. Further, I note that there has not been any conciliation in the Commission for the purposes of clause 42.4; Australia Post resisted the Commission listing the matter for conciliation and pressed its jurisdictional objection.

[69] I return to the fact that the union’s application under s.739 was filed the day after the two employees’ employment with Australia Post ceased. I am not satisfied that the employees, or the union on their behalf, raised the dispute under clause 42 of the 2017 Agreement prior to this time. The two individuals are no longer employed by Australia Post. They cannot now undertake the steps in clauses 42.3.1 and 42.3.2 of the disputes procedure. As for clause 43.3.3, it cannot be said now that ‘the issue involves more than one employee’. It involves former employees. The present matter cannot be progressed through clause 42 of the 2017 Agreement, and the Commission has no role to play under that clause.

Conclusion

[70] For the reasons set out above, I have concluded that the Commission does not have jurisdiction under clause 42 or clause 19 of the RRR Agreement to deal with the present application. It is not authorised to do so under the 2017 Agreement.

[71] Accordingly, Australia Post’s jurisdictional objection is upheld.

[72] The CEPU’s application under s.739 is dismissed.

DEPUTY PRESIDENT

<PR600589>

 1   [2015] FWCFB 6323 at [43]

 2   At [37]

 3   See clause 2.1. I note that the temporal aspect of the scope clause reflects the workings of the Act. An enterprise agreement cannot cover or apply to a person who is not an employee of the relevant employer. See sections 52 and 53 of the Act

 4   In the alternative, it submits that it is capable of falling within clause 42.

 5   Construction, Forestry, Mining and Energy Union v Hadgkiss [2009] FCAFC 17 at 77; Thomson Australian Holdings Pty Ltd v Trade Practices Commission [1981] HCA 48; 148 CLR 150. Pearce and Geddes (Statutory Interpretation in Australia 6th Edition at 4.32)

 6   CEPU v Australian Postal Corporation, [2016] FWC 9260: note that the Commission was there considering the terms of the Australia Post Enterprise Agreement 2013, however the relevant clauses in that agreement were in the same terms as those in the 2017 Agreement.

 7   Paragraphs 60-61, Submissions of the applicant relating to jurisdiction

 8   Paragraph 46, Submissions of the applicant relating to jurisdiction

 9   It can be accepted that this includes the AIRC’s successor body, the Fair Work Commission

 10   By contrast, the reference point for the board of reference in considering its own ‘recommendation’ is whether the retrenchment decision is ‘harsh, unjust or unreasonable.’

 11   [2011] FWA 1991

 12   At [43]

 13   I do not necessarily accept that Commissioner Roe’s decision stands for this proposition.

14 [2017] FWCFB 5032 at [25]

Printed by authority of the Commonwealth Government Printer

Attachment

Clause 42 of the 2017 Agreement

42 Dispute resolution

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 circumstances and subject to Part 5. Division 6 – Right to Cease or 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 challenges facing Australia Post and that workplace changes are necessary. The Union are 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 the 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 term of this 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 may 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 the management may raise the issue at the level the parties consider appropriate.

42.4 FWC Conciliation

42.4.1 If the internal negotiations do not resolve the dispute, a party to the dispute may refer the matter to the FWC for conciliation.

42.4.2 The party notifying the dispute will do so by filing with the FWC 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 the FWC 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 Resolution Institute 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 the FWC is appropriate on the basis that it raises a genuine question about the interpretation of the Agreement or the National Employment Standards; or

(b) arbitration by the FWC is not appropriate.

42.5.3 The independent mediator may make nonbinding 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 the FWC.

42.6.2 The FWC 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) the FWC 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 the FWC.

42.6.3 In arbitrating the dispute the FWC 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 the FWC 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 the FWC for a protected action ballot in accordance with the FW Act.