Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Zinfra Group

[2015] FWC 5025

[2015] FWC 5025

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
Zinfra Group
(C2015/2889)

VICE PRESIDENT WATSON MELBOURNE, 27 JULY 2015

Dispute concerning disciplinary action - Provisions of ZNX Gas Enterprise Agreement 2012 - Whether Commission has jurisdiction to arbitrate matter - Fair Work Act 2009, s.739.

Introduction

[1] This decision concerns an application for the Fair Work Commission (the Commission) to deal with a dispute. The application is made by the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (the CEPU) under s.739 of the Fair Work Act 2009 (the Act) and concerns employees employed by the Zinfra Group (Zinfra). The CEPU’s application states that the matters in dispute concern the application of the following provisions of the ZNX Gas Enterprise Agreement 2012 (the Agreement):

• Clause 15.18 – Fares and Travelling; and



• Clause 8 – Terms and Conditions of Employment.

[2] The matter was listed for a conference on 3 June 2015 but the parties were unable to reach a resolution and requested that the matter be listed for arbitration. At the hearing of the matter on 22 July 2015, Mr P. Coffey appeared for the CEPU and Mr I. Carter appeared for Zinfra.

[3] Zinfra accepts that the dispute in respect of fares and travelling is able to be dealt with by the Commission in accordance with the dispute settlement procedure as it is a matter subject to the application of clause 15.18. Submissions were filed by the parties in relation to this issue. However, at the hearing of the matter, the parties requested that the arbitration be adjourned to enable further discussions between the parties.

[4] With regard to the second issue in dispute, Zinfra raises a jurisdictional objection. It submits that the taking of disciplinary action by the employer is not a matter that can be the subject of a dispute under the dispute resolution procedure. It is therefore necessary for this threshold issue to be determined before any hearing on the merits of the matter.

Background

[5] The disciplinary dispute in this matter arises from an incident on 27 March 2015 where two employees were assigned to a job that had been previously completed. The CEPU contends that it was known by both the supervisor and the employees that this job had been completed. The two employees went to the job location knowing that there was no work to perform there. They booked four hours of work in relation to this already completed work. The CEPU submits that, in the past, it had been common practice to book time for already completed jobs where work was slow.

[6] On 7 May 2015, the employees were asked to attend a meeting with representatives of Zinfra. At the meeting the employees were advised that the company considered their behaviour unacceptable as the employees did not call their supervisor to ask for further work and a risk assessment was not signed off by the employees for that job. On 12 May 2015, the two employees were given final warning letters in relation to the incident.

Jurisdiction

[7] The jurisdiction of the Commission to deal with a dispute under s.739 of the Act arises when a term of a workplace instrument requires or allows the Commission to deal with a dispute. Section 739 provides that:

“739 Disputes dealt with by the FWC

(1) This section applies if a term referred to in section 738 requires or allows the FWC to deal with a dispute.

(2) The FWC must not deal with a dispute to the extent that the dispute is about whether an employer had reasonable business grounds under subsection 65(5) or 76(4), unless:

(a) the parties have agreed in a contract of employment, enterprise agreement or other written agreement to the FWC dealing with the matter; or

(b) a determination under the Public Service Act 1999 authorises the FWC to deal with the matter.

Note: This does not prevent the FWC from dealing with a dispute relating to a term of an enterprise agreement that has the same (or substantially the same) effect as subsection 65(5) or 76(4) (see also subsection 55(5)).

(3) In dealing with a dispute, the FWC must not exercise any powers limited by the term.

(4) If, in accordance with the term, the parties have agreed that the FWC may arbitrate (however described) the dispute, the FWC may do so.

Note: The FWC may also deal with a dispute by mediation or conciliation, or by making a recommendation or expressing an opinion (see subsection 595(2)).

(5) Despite subsection (4), the FWC must not make a decision that is inconsistent with this Act, or a fair work instrument that applies to the parties.

(6) The FWC may deal with a dispute only on application by a party to the dispute.”

[8] This section reflects the High Court’s decision in the Private Arbitration Case. 1 In that case the validity of a predecessor provision was upheld. The High Court made clear that the power of arbitration under a dispute settlement clause is a power conferred by the parties under their agreement. The Commission's jurisdiction is therefore derived from the dispute resolution term in the relevant workplace instrument, and qualified by any limitation in the agreement. In this matter, the dispute settlement procedure is Clause 18 of the Agreement. This provision relevantly provides:

“DISPUTE RESOLUTION PROCEDURE

18.1 General
Except where another clause in the Agreement expressly provides for the resolution of a particular dispute the provision in this clause shall prevail.

18.2 In all other cases of disputes arising over the application of the Agreement, or the National Employment Standards, the procedure below will be followed. An employee will be entitled to have a representative present at any stage of the procedure.

Step 1:	Any dispute will, in the first instance, be discussed between the Employee(s) concerned and the Crew Leader/ supervisor involved. The Crew Leader/ supervisor must make a genuine attempt to resolve the matter speedily.
Step 2:	If the matter cannot be resolved in Step 1, the matter will be referred to the appropriate Line Manager who will attempt to resolve the matter speedily. The Line Manager shall first consult with the affected employees and then, if requested by the employee, consult with the relevant employee representative(s) when endeavouring to resolve the matter. Where agreed between the employee or their representative and the Employer, steps 1 and 2 can be disregarded in the interest of relevance and from step 3 onwards pursued.
Step 3:	If not resolved in Step 2, the matter shall be referred to the relevant Operations/Department Manager. The Operations/Department Manager will consult with the affected employee and the relevant employee representative(s) in an attempt to resolve the matter.
Step 4:	If not resolved in Step 3, the matter shall be immediately referred, for discussion, jointly to a manager with industrial relations responsibility and the employee, who shall be informed that they are allowed to have a representative of their choice at such discussions.
Step 5:	If not resolved in Step 4, the matter shall be referred to FWA for conciliation, and if the parties agree and the matter remains unresolved, by arbitration.

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

18.4 Any decision under this clause must be consistent with the requirements of the national code of practice for the construction industry as varied from time to time and the associated implementation guidelines for the national code of practice for the construction industry.”

[9] Zinfra Group submits that Clause 18.2 of the Agreement limits the procedure to “...disputes arising over the application of the Agreement, or National Employment Standards…” It further submits that the Agreement does not contain a term which relates to disciplinary action or performance management and so the dispute over the warning given to the employees is not a dispute over the application of the Agreement. The CEPU identified Clause 8 which deals with the terms and conditions of employment and Clause 9 which deals with redundancy as relevant to this dispute.

The characterisation of the dispute

[10] In Maritime Union of Australia v Australian Plant Services Pty Ltd, Lacy SDP expressed the importance of characterising a dispute in this way: 2

“Parliament has authorised the Commission to exercise powers under the agreement to settle disputes over the application of the agreement and, accordingly, its powers are limited to disputes of that kind. Therefore it is necessary for the Commission, in each case where it is asked to deal with the matter arising under the disputes settling procedure in an agreement, to ascertain the character of the dispute before it in order to determine whether the matter is a dispute over the application of the agreement, and, importantly, the character of the dispute is distinguishable from the order that may be made in settlement of the dispute.”

(references omitted)

[11] These observations have been approved by Full Bench decisions of the Commission including Goodman Fielder Consumer Foods Limited v CEPU, 3 Seven Network (Operations) Limited v CPSU,4and United Firefighters’ Union v Metropolitan Fire and Emergency Services Board.5 It is therefore necessary to have regard to the nature of a dispute said to arise under the terms of the agreement having regard to the original notification and the relevant factual circumstances as they evolve through the process of conciliation and arbitration of the dispute. Such a broad approach was endorsed by a Full Bench of the Australian Industrial Relations Commission in the case of Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Holden Limited where the following is stated:

“[45] A dispute referred to the Commission must be properly characterised before powers conferred by a dispute settlement provision in a certified agreement are exercised. This is necessary in order to determine whether the dispute is ‘over the application of the agreement’ within the meaning of s.170LW of the WR Act. As noted by a majority of the Full Bench in Automated Reading Services (AMRS) v ASU, this expression has not been judicially considered. The majority went on to observe that:

“A relationship between the provisions of the relevant agreement and the subject matters in dispute would appear to be an essential element in the identification of any dispute over the application of the agreement. ...”

[46] We adopt these observations. Further, in our view the expression should not be narrowly construed. In this context we agree with the observation of the Full Bench in Shop, Distributive and Allied Employees Association v Big W Discount Department Stores that:

“...what comprises a dispute over the application of the 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.”

[47] In characterising the nature of the dispute in this matter the Commission is not confined to the dispute notification document. The entire factual background is relevant, including matters such as the submissions advanced. In this context we note that in TWU v Mayne Nickless Ltd the Full Court of the Federal Court held that in determining whether an application calls on the Commission to exercise judicial, as opposed to arbitral, power ‘a court should review the entire factual background to properly characterise the claim and the power sought to be invoked’” 6

(references omitted)

[12] Zinfra contends that Clause 8 provides for: details in respect of employee obligations and probationary arrangements, as well as definitions of full time employee, part time employee, casual employee and continuous service. Clause 9 contains a reference to dismissal without notice for serious misconduct. Zinfra submits that the dispute in regard to the disciplinary action taken against the two employees has nothing to do with the application of the above provisions and that, as a result, the Commission does not have jurisdiction to arbitrate the matter.

[13] The CEPU contends that these provisions are sufficient but did not put detailed submissions on this question.

Conclusions

[14] In my view, the dispute is about warning letters being issued to two employees. The CEPU challenges the basis on which they were issued and seeks their withdrawal. No term of the Agreement deals with the basis for issuing a warning or the procedure for issuing a warning. I am unable to discern any connection between the dispute and the Agreement other than the fact that the Agreement applies to the employees who have been given warnings. There is no basis for finding that this is a dispute over the application of the Agreement.

[15] It follows that the Commission does not have jurisdiction to arbitrate this dispute. In view of this conclusion, it is not necessary that I consider the further argument raised by Zinfra that Step 5 of the Agreement’s dispute settlement procedure requires agreement for arbitration on a particular matter. It is only necessary to consider the impact of this provision and whether it is a further limitation on arbitration if the dispute settlement procedure applies to the dispute in question.

[16] For these reasons the Commission will not proceed to arbitrate the matter.

VICE PRESIDENT

Appearances:

Mr P. Coffey, with Mr A. Gell for the CEPU.

Mr I. Carter, with Ms J. Gray, for Zinfra.

Hearing details:

2015.

Melbourne.

22 July.

Final written submissions:

The CEPU on 1 July 2015.

Zinfra on 15 July 2015.

 1   Construction Forestry Mining and Energy Union v Australian Industrial Relations Commission [2001] HCA 16; 203 CLR 645; 75 ALJR 670; 178 ALR 61.

 2   PR908236.

 3   PR921688.

 4   PR933766.

 5   PR973884.

 6   PR940366.

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