Construction, Forestry, Maritime, Mining and Energy Union-Mining and Energy Division Queensland District Branch v Oaky Creek Coal Pty Ltd

[2018] FWC 7238

[2018] FWC 7238

FAIR WORK COMMISSION

DECISION

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

Construction, Forestry, Maritime, Mining and Energy Union-Mining and Energy Division Queensland District Branch
v
Oaky Creek Coal Pty Ltd
(C2018/2977 & C2018/2981)

DEPUTY PRESIDENT ASBURY BRISBANE, 29 NOVEMBER 2018

Alleged dispute about any matters arising under the enterprise agreement and the NES;[s186(6)] – Jurisdiction – Whether dispute settlement term authorises Commission to arbitrate dispute in absence of agreement from all parties to dispute

OVERVIEW

[1] This Decision concerns applications made on 1 June 2018 under s. 739 of the Fair Work Act 2009 (the Act) by the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) for the Fair Work Commission to deal with disputes said to arise under the Oaky Creek North Enterprise Agreement 2018 (the 2018 Agreement) in relation to warnings issued to members Mr Dennis Jeffs 1 and Mr Stuart Hore.2 The applications are met with a jurisdictional objection by the Respondent, Oaky Creek Coal Pty Ltd (OCCPL) on the grounds that the dispute resolution procedure in the Agreement does not authorise the Commission to deal with the dispute on the basis that the Agreement was not operative when the dispute arose.

[2] Initially four applications were made involving similar circumstances. Two of those applications have been discontinued. The 2018 Agreement was approved by the Commission on 13 April 2018 by Decision issued on that date and operated from 20 April 2018. 3 The background to the disputes can be briefly stated.

[3] Correspondence appended to the Form F10 Application filed by the CFMMEU in relation to the dispute involving Mr Jeffs indicates that on 14 February 2018, OCCPL sent correspondence to Mr Jeffs setting out allegations of misconduct said to have been engaged in by Mr Jeffs while he was participating in a protest on 2 February 2018 associated with negotiations for the 2018 Agreement. Correspondence appended to the Form F10 Application filed by the CFMMEU in relation to the dispute involving Mr Hore indicates that the allegations concerning Mr Hore were set out in a letter to him dated 24 November 2017 and relate to conduct in a mess hall at Tieri said to have occurred on 17 November 2017. Thereafter there was a series of correspondence between the CFMMEU and OCCPL in which the CFMMEU disputed the substance of the allegations and the appropriateness of disciplinary action being taken in the context that both employees were engaging in industrial action in connection with negotiations for an enterprise agreement. OCCPL issued a warning to Mr Hore by letter sent on 8 February 2018 (incorrectly dated 8 January 2018) and to Mr Jeffs by letter dated 13 April 2018. On 3 May 2018 the CFMMEU wrote to OCCPL notifying under clause 33 of the 2018 Agreement of disputes in respect of the warnings.

[4] OCCPL responded to that correspondence advising its view that neither employee was entitled to bring a dispute under clause 33 of the 2018 Agreement on the basis that it had not commenced operation when the warnings were issued and that the only disciplinary matters that can be subject of a dispute under clause 33 are those matters in which disciplinary action is taken after 20 April when the Agreement commenced operation.

[5] Conciliation conferences were held in relation to the dispute and when OCCPL indicated that it wished to press the jurisdictional objections, Directions were issued for the filing of written submissions. A hearing was held on 10 August 2018 to give the parties an opportunity make oral submissions in support of their respective arguments. The issue in dispute is whether on a proper construction of the 2018 Agreement, the Dispute Resolution Procedure in clause 33 of that Agreement authorises the Commission to arbitrate the disputes subject of the applications made by the CFMMEU on behalf of Mr Jeffs and Mr Hore.

THE DISPUTE RESOLUTION PROCEDURE

[6] Clause 33 of the Agreement provides as follows:

“33 Grievance and dispute resolution procedure

In the event of any grievance or dispute arising under the Agreement or in relation to the NES, or in relation to disciplinary matters, it shall be dealt with in accordance with the following procedure without recourse to industrial action.

Whilst the procedure is being followed work shall proceed, without prejudice to the rights of the parties, in accordance with the reasonable direction of the Company, the employees’ recognised skills, competence, training and safe working practices.

The employee(s) and the Company may choose to be represented at any of the stages of this procedure.

Step 1 When a grievance arises the matter shall in the first instance be discussed between the employee(s) and their immediate supervisor. Step 2 If the matter remains unresolved after step 1, it shall be referred in writing on the appropriate Dispute Resolution Form by the employee(s) raising the grievance for discussion between the employee(s) and the appropriate Company Representative. The supervisor may participate in these discussions.

Step 3 If the matter remains unresolved after step 2, it shall be referred for discussion between the employee(s) and the Operations Manager or their representative. The employee(s) may invite District Officials of the union or another employee of the Company at the mine to be involved in the discussions.

Step 4 If the matter remains unresolved, it may be referred by either or both parties to FWC for conciliation, or if the parties further agree, for arbitration.

Provided that where disputes in relation to disciplinary matters have led to the issuing of a final warning to the Employee, or the processes in relation to forced redundancies set out in sub-clauses (a) to (c) in clause 30 (Severance and Retrenchment) are not resolved by conciliation, the Fair Work Commission is empowered to arbitrate such disputes, subject to the rights of the parties to appeal any Decision to a Full Bench. The parties agree the Company is not, and will not be, restricted or prevented from implementing the matter subject to the dispute pending the outcome of any arbitration.

All of the above steps shall proceed in a timely fashion. In the event that a party to the dispute is not proceeding within a reasonable timeframe, the other party may proceed to the next step of the procedure after giving reasonable notice of their intention.

By agreement between the parties, any or all of the Steps 1, 2, or 3 may be bypassed in the interests of speedy resolution of the matter.”

THE APPROACH TO AGREEMENT CONSTRUCTION

[7] The approach to the construction of industrial instruments such as enterprise agreements was most recently summarised in a Decision of a Full Bench of the Commission in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) v Berri Pty Ltd 4 as follows:

“1. The construction of an enterprise agreement, like that of a statute or contract, begins with a consideration of the ordinary meaning of the relevant words. The resolution of a disputed construction of an agreement will turn on the language of the agreement having regard to its context and purpose. Context might appear from:

(i) the text of the agreement viewed as a whole;

(ii) the disputed provision’s place and arrangement in the agreement;

(iii) the legislative context under which the agreement was made and in which it operates.

2. The task of interpreting an agreement does not involve rewriting the agreement to achieve what might be regarded as a fair or just outcome. The task is always one of interpreting the agreement produced by parties.

3. The common intention of the parties is sought to be identified objectively, that is by reference to that which a reasonable person would understand by the language the parties have used to express their agreement, without regard to the subjective intentions or expectations of the parties.

4. The fact that the instrument being construed is an enterprise agreement made pursuant to Part 2-4 of the FW Act is itself an important contextual consideration. It may be inferred that such agreements are intended to establish binding obligations.

5. The FW Act does not speak in terms of the ‘parties’ to enterprise agreements made pursuant to Part 2-4 agreements, rather it refers to the persons and organisations who are ‘covered by’ such agreements. Relevantly s.172(2)(a) provides that an employer may make an enterprise agreement ‘with the employees who are employed at the time the agreement is made and who will be covered by the agreement’. Section 182(1) provides that an agreement is ‘made’ if the employees to be covered by the agreement ‘have been asked to approve the agreement and a majority of those employees who cast a valid vote approve the agreement’. This is so because an enterprise agreement is ‘made’ when a majority of the employees asked to approve the agreement cast a valid vote to approve the agreement.

6. Enterprise agreements are not instruments to which the Acts Interpretation Act 1901 (Cth) applies, however the modes of textual analysis developed in the general law may assist in the interpretation of enterprise agreements. An overly technical approach to interpretation should be avoided and consequently some general principles of statutory construction may have less force in the context of construing an enterprise agreement.

7. In construing an enterprise agreement it is first necessary to determine whether an agreement has a plain meaning or it is ambiguous or susceptible of more than one meaning.

8. Regard may be had to evidence of surrounding circumstances to assist in determining whether an ambiguity exists.

9. If the agreement has a plain meaning, evidence of the surrounding circumstances will not be admitted to contradict the plain language of the agreement.

10. If the language of the agreement is ambiguous or susceptible of more than one meaning then evidence of the surrounding circumstance will be admissible to aide the interpretation of the agreement.

11. The admissibility of evidence of the surrounding circumstances is limited to evidence tending to establish objective background facts which were known to both parties which inform the subject matter of the agreement. Evidence of such objective facts is to be distinguished from evidence of the subjective intentions of the parties, such as statements and actions of the parties which are reflective of their actual intentions and expectations.

12. Evidence of objective background facts will include:

(i) evidence of prior negotiations to the extent that the negotiations tend to establish objective background facts known to all parties and the subject matter of the agreement;

(ii) notorious facts of which knowledge is to be presumed; and

(iii) evidence of matters in common contemplation and constituting a common assumption.

13. The diversity of interests involved in the negotiation and making of enterprise agreements (see point 4 above) warrants the adoption of a cautious approach to the admission and reliance upon the evidence of prior negotiations and the positions advanced during the negotiation process. Evidence as to what the employees covered by the agreement were told (either during the course of the negotiations or pursuant to s.180(5) of the FW Act) may be of more assistance than evidence of the bargaining positions taken by the employer or a bargaining representative during the negotiation of the agreement.

14. Admissible extrinsic material may be used to aid the interpretation of a provision in an enterprise agreement with a disputed meaning, but it cannot be used to disregard or rewrite the provision in order to give effect to an externally derived conception of what the parties’ intention or purpose was.

15. In the industrial context it has been accepted that, in some circumstances, subsequent conduct may be relevant to the interpretation of an industrial instrument. But such post-agreement conduct must be such as to show that there has been a meeting of minds, a consensus. Post-agreement conduct which amounts to little more than the absence of a complaint or common inadvertence is insufficient to establish a common understanding.”

[8] In CFMEU v Endeavour Coal Pty Ltd T/A Appin Min 5 the Full Bench of the Commission held that the context of an agreement provision is significant. In this regard, the Full Bench set out the explanation of this point by the NSW Court of Appeal in Mainteck Services Pty Ltd v Stein Heurtey SA6 emphasising the following matters:

•  Until a word or phrase is understood in the light of the surrounding circumstances, it is rarely possible to know what it means 7 and there is always some context to any statement;8

•  Language considered in its context will often have a clear meaning and context will often not displace that meaning – “but not always”; 9

•  To state that a legal text is clear reflects the outcome of an interpretation process and means that there is nothing in the context that detracts from the ordinary literal meaning and cannot mean that context can be put to one side; 10

•  The phrase used by Mason J in Codelfa “if the language is ambiguous or susceptible of more than one meaning” does not mean that the susceptibility of the language to more than one meaning must be assessed without reference to the surrounding circumstances and in order to determine whether more than one meaning is available it may be necessary to turn to context; 11 and

•  Context has also been described as surrounding circumstances and the meaning of terms normally requires consideration not only of the text, but of the surrounding circumstances known to the parties and the purpose and object of the transaction 12

[9] The case law in relation to the approach to the construction of enterprise agreements makes it clear that context and purpose are relevant to the construction of provisions in an enterprise agreement and must be considered even where the words of the provision being construed appear, on their face, to have a clear and unambiguous meaning. The following observations of Madgwick J in Kucks v CSR are also apposite in the present case:

“It is trite that narrow or pedantic approaches to the interpretation of an award are misplaced. The search is for the meaning intended by the framer(s) of the document, bearing in mind that such framer(s) were likely of a practical bent of mind: they may well have been more concerned with expressing an intention in ways likely to have been understood in the context of the relevant industry and industrial relations environment than with legal niceties or jargon. Thus, for example, it is justifiable to read the award to give effect to its evident purposes, having regard to such context, despite mere inconsistencies or infelicities of expression which might tend to some other reading. And meanings which avoid inconvenience or injustice may reasonably be strained for. For reasons such as these, expressions which have been held in the case of other instruments to have been used to mean particular things may sensibly and properly be held to mean something else in the document at hand.

But the task remains one of interpreting a document produced by another or others. A court is not free to give effect to some anteriorly derived notion of what would be fair or just, regardless of what has been written into the award. Deciding what an existing award means is a process quite different from deciding, as an arbitral body does, what might fairly be put into an award. So, for example, ordinary or well-understood words are in general to be accorded their ordinary or usual meaning.” 13

LEGISLATIVE PROVISIONS

[10] The Legislative provisions in relation to the jurisdiction of the Commission to deal with a dispute pursuant to dispute settlement procedures in enterprise agreements are s. 595 and s. 739 of the Act. Section 595 states:

“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.

The FWC may deal with a dispute (other than by arbitration) as it considers appropriate, including in the following (a) by mediation or conciliation(b) by making a recommendation or expressing an opinion.

(2) 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)).

(3) In dealing with a dispute, the FWC may exercise any powers it has under this Subdivision.

Example: The FWC could direct a person to attend a conference under section 592.

(5) To avoid doubt, the FWC must not exercise the power referred to in subsection (3) in relation to a matter before the FWC except as authorised by this section.”

[11] Section 739 states:

“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.”

[12] The Commission’s powers to deal with disputes derive, in the case of an enterprise agreement, from the terms of the disputes settlement procedure contained in the enterprise agreement. As a Full Bench of the Commission concisely observed in CFMEU v North Goonyella Coal Mines Pty Ltd: 14 the Commission may deal with a dispute only on application of a party to the dispute (s.739(6)); is prohibited from exercising any powers limited by the dispute settlement procedure (s.739(3)); may arbitrate only if the agreed dispute settlement procedure permits it to do so (s.739(4)); and must not make a decision that is inconsistent with the Act, the enterprise agreement and any other applicable Fair Work instrument (s.739(5)).

THE JURISDICTIONAL OBJECTIONS

[13] The written submissions in relation to the jurisdictional objections made by OCCPL can be summarised as follows. Section 595 of the Act provides that the Commission may deal with a dispute only if expressly authorised to do so. Pursuant to sections 595, 738 and 739 of the Act the Commission can deal with a dispute consistent with the dispute resolution term in an agreement. In order to determine the matters in respect of which the Commission has jurisdiction to arbitrate, in accordance with clause 33 of the 2018 Agreement, it is necessary to consider the precise terms and scope of the clause. Before doing so it is necessary to note that the 2018 Agreement commenced operation on 20 April 2018.

[14] OCCPL contends that properly construed, the 2018 Agreement only applies to disciplinary matters that arise after the 2018 Agreement commenced operation. The disciplinary action taken against Mr Jeffs and Mr Hore was taken on 12 April 2018 and 8 February 2018 respectively – before the 2018 Agreement commenced operation. The disciplinary action taken against both Mr Jeffs and Mr Hore was in the form of the issuing of a written warning. OCCPL submits that its construction of the 2018 Agreement is supported by:

(a) The fact that the 2018 Agreement does not operate retrospectively;

(b) The terms of clause 33, specifically the words:

i. “in the event” and “arising” which must be given work to do and which support a construction that clause 33 only applies to certain matters that arise after the commencement of the Agreement; and

ii. “have led to the issuing”, which also supports a construction that clause 33 only applies to certain matters that arise after the commencement of the 2018 Agreement, ie those where the issuing of a final written warning has occurred once the Agreement commenced operation.

[15] OCCPL further submits that the agreement purports to regulate terms and conditions of employment for employees and creates legal duties that are intended to arise from the date the Agreement commences operation. OCCPL contends that to permit a construction of the Agreement that allows the Commission to arbitrate historical disciplinary matters would be contrary to the intended purpose of the Agreement. OCCPL further contends that to alter legal instruments retrospectively would be contrary to the principle laid down by the High Court in Maxwell v Murphy. 15 If some of the Applicants had disciplinary matters arise prior to the operation of the Agreement that is unfortunate but it does not permit the retrospective conferral of jurisdiction on the Commission to deal with matters arising prior to the operation of Clause 33.

[16] OCCPL submits that its construction is also consistent with the use of the phrase: “All of the above steps shall proceed in a timely fashion,” in clause 33 and that to permit the Commission to arbitrate on disciplinary matters arising prior to the commencement of the agreement would not be consistent with this requirement. The construction advanced by OCCPL is also said to be consistent with the reasoning in CFMEU v North Goonyella Coal Mines Pty Ltd 16 to the effect that if it was the intention of the parties to allow historical disciplinary matters to be brought to the Commission under the Agreement, then an appropriate savings clause would have been drafted as part of the concluded Agreement. In the absence of such a clause, OCCPL submits that the parties to the Agreement did not intend for historical disciplinary matters to be included within the scope of Clause 33.

[17] According to OCCPL’s submission, the reasoning in CFMEU v North Goonyella Coal Mines further supports the Respondent’s construction of the Agreement as the predecessor – the Oaky Creek North Mine Enterprise Agreement 2012 (the 2012 Agreement) – does not permit the Commission to resolve disputes arising in relation to disciplinary matters. As this was the Agreement in force at the time the disciplinary matters against Mr. Jeffs and Mr Hore arose, the Commission has no jurisdiction under s.595 and s.739 of the Act to resolve the disputes raised by these Applicants. As such the Respondent submits that the applications by Mr. Jeffs and Mr Hore should be dismissed on the basis that the Commission does not have jurisdiction to deal with that dispute.

[18] In oral submissions, OCCPL emphasised that under the Grievance and Dispute Resolution Procedure in the 2018 Agreement, the Commission not only has the capacity to conciliate certain disputes but also has the capacity to arbitrate particular disputes including in relation to certain disciplinary matters involving a final warning. The clause creates a right to arbitrate that did not previously exist. Those submissions also emphasised that the use of and the placement of the word “arising” together with what it described as “temporal qualifiers”. The oral submissions also referred to the decision of the Commission in CFMEU v North Goonyella Coal Mines Pty Ltd 17where it was held that where an enterprise agreement does not contain a savings clause or a dispute settlement term that empowers the Commission to settle a dispute about matters that are not confined to the application or terms of the present agreement, that a dispute about a past matter will be outside the Commission’s jurisdiction. In this regard it was submitted that it is not novel that an employee has capacity to bring a dispute under one agreement and a new agreement does not provide that capacity. There will also be cases such as the present case, where clause 36 of the 2012 Agreement had a far broader scope in respect of disputes than clause 33 of the 2018 Agreement.

[19] OCCPL also submitted that the CFMMEU accepts that the terms “in the event” and “arising” are words of qualification and that where the parties depart is the work that those words do. The “comma based argument” advanced by the CFMMEU that the presence of commas both before and after the words “in relation to disciplinary matters” has a disjunctive effect, results in the words “in the event of any grievance or dispute arising” being applicable to the disciplinary matters. According to OCCPL it is significant that there is no comma after the word “dispute” and the absence of a comma after that word is not consistent with the argument advanced by the CFMMEU.

[20] In relation to the CFMMEU’s contention that the construction advanced by OCCPL would result in an outcome that was not industrially sensible, it was submitted that this could also be said about the CFMMEU’s construction. If the CFMMEU’s construction was accepted, it would allow a “reach back” so that a person who did not have a right to arbitration under the 2012 Agreement would now have one and in respect of conciliation, employees could reach back and bring disputes about warnings given in the past, before the operation of the 2018 Agreement. This outcome is not industrially sensible. OCCPL contended that the fact that employees were locked out at the time a warning was issued did not mean that their rights and those of the employer under the 2018 Agreement were suspended and any employee who wanted to bring a dispute about a disciplinary matter under the Agreement could have done so. The clause needs to be construed on its terms, not in respect of particular idiosyncratic matters.

[21] Further, the construction advanced by OCCPL does not cut across the objects of the Act or s. 186(6) to deprive employees of a dispute resolution clause. There is nothing in the objects of the Act and s.186(6) which deals with disputes over disciplinary matters. The decision of the Commission in Ponczek v Serco 18dealt with the use of the word “including” in the relevant clause and did not consider the words “in the event” and “arising”. OCCPL also submitted that the fact that a right to arbitration has been created under the 2018 Agreement confirms the unlikelihood objectively of there being an ability to resurrect past disciplinary matters and to bestow a right on people that they have never had before.

SUBMISSIONS IN RESPONSE TO THE JURISDICTIONAL OBJECTION

[22] The CFMMEU submits that the principles of construction for industrial agreements relevant to this matter are that:

•  Narrow interpretations of agreements are to be avoided;

•  That intent and practical effect are more important than exact wording;

•  The historical context and stated purpose of the agreement are crucial; and

•  Agreements should be read with the understanding that they are intended to be legally binding and enforceable.

[23] In making these submissions the CFMMEU relies on the principles in Kucks v CSR, 19 Amcor Ltd. v CFMEU20and Short v FW Hercus Pty Ltd.21In particular the CFMMEU submissions refer to the judgement of Justice Kirby in Amcor, specificallywhere his Honour noted:

“The nature of the document, the manner of its expression, the context in which it operated and the industrial purpose it served combine to suggest that the construction to be given to cl 55.1.1 should not be a strict one but one that contributes to a sensible industrial outcome such as should be attributed to the parties who negotiated and executed the Agreement.”

[24] The CFMMEU submits that the disputes to which the jurisdictional objection is raised were not “initiated” until after the commencement of the Agreement. The CFMMEU submits that the date the dispute was initiated, not the date that the disciplinary punishment was imposed, should be the correct date in time for the Commission’s assessment. The CFMMEU’s submission on this point relies on the context of Clause 33 as a dispute resolution procedure.

[25] The CFMMEU further submits that the phrase “arising under the Agreement” in Clause 33 does not qualify the later phrase “or in relation to disciplinary matters” due to the disjunctive effect of the commas before and after that phrase. The CFMMEU asserts that impugned disciplinary action was not taken in accordance with a power granted to OCCPL under the Agreement, but rather was incidental to the employment relationship between the employee concerned and OCCPL. In that context, the CFMMEU submits, Clause 33 of the Agreement was drafted to intentionally remove temporal qualifiers with regards to disciplinary matters. If this was not the parties’ intention, then the phrase “arising during the life of the agreement,” or something similar, would have been included in the wording of the Clause.

[26] The CFMMEU also submits that the Respondent’s jurisdictional argument would lead to an industrially absurd outcome, which it contends is contrary to the High Court’s decision in Amcor and the decision of the Full Bench of the Commission in Berri. This is particularly true in the case of Mr Jeffs, who the CFMMEU submits would only have had 8 days to resolve his disciplinary matter if the OCCPL’s construction of the Agreement was to be accepted. As such a rapid resolution of a disciplinary matter would not have been feasible, to accept OCCPL’s construction of the agreement would be to deny Mr. Jeffs effective means to resolve a dispute in direct contravention of s3(e) of the Act.

[27] In support of its broad construction of the Agreement, the CFMMEU relies on the decision in Ponczek v Serco, 22 where the Commission determined that:

“[40] The surrounding circumstances, including the rest of the 2011 Agreement and the Act were known to the parties at the time clause 45 was finalised and agreed to. If it had been the intent of the parties to limit the reach of the dispute settling procedures of the agreement such that it should only apply to matters arising under the NES or in the Agreement itself it would be expected that the words of the clause would say so. They do not. The words are purposefully broad. There is no basis to read down the clause as sought by the Respondent to exclude the words ‘including disputes’ from the clause.”

[28] The CFMMEU submits that, in accordance with Ponczek,the proper construction of the Agreement should not limit the temporal application of Clause 33 as it was not the intention of the parties when concluding the Agreement. As such the CFMMEU submits that the jurisdictional objection should be dismissed.

[29] In oral submissions the CFMMEU contended that the placement of commas and the word “or” in combination create a disjunctive effect so that the words of qualification in the clause do not apply to disputes in relation to discipline. It was also submitted that even if the words “arising under the Agreement” operate with respect to disciplinary matters, those matters do not arise under the 2012 or the 2018 Agreement, but rather as an incident of the contract of employment. There is also a distinction between disputes arising under the Agreement and disputes arising during the life of the Agreement. The CFMMEU also pointed to the fact that the Model Term for dispute resolution uses the qualifying term “arising under the agreement” only in respect of agreement matters and not NES matters.

[30] Reference was also made to clause 36 of the 2012 Agreement which applied: “In the event of any grievance or dispute” and it was contended that the terms of the 2018 Agreement are relevantly the same. There was no temporal limitation to disciplinary disputes in the 2012 Agreement and there is no such limitation in the 2018 Agreement. The 2018 Agreement does provide for a right to “reach back” as did the 2012 Agreement which did not limit disputes that might be brought under clause 36 in relation to disciplinary matters. What is relevantly different is that where there is a final warning imposed there is now a right of arbitration in respect of such disputes.

[31] The CFMMEU accepted that it is a consequence of the construction advanced by the Union that any employee who had received a final warning prior to the 2018 Agreement commencing operation could seek arbitration. The CFMMEU contended that it was an industrially absurd outcome for OCCPL to give out multiple disciplinary actions on the eve of approval of the 2018 Agreement and then argue that employees did not have recourse to the dispute settlement process in respect of those matters. Further, it was contended that if the construction advanced by OCCPL was accepted, clause 33 of the 2018 Agreement would not meet the description in s. 186(6) of the Act on the basis that the right to raise a dispute in relation to the NES would be qualified. The Agreement should therefore be construed in a manner that is consistent with it meeting the requirements of s. 186(6) of the Act.

CONSIDERATION

[32] The starting point for construction of clause 33 of the Agreement is the words of the provision. It is clear that the first part of the introductory paragraph: “In the event of any grievance or dispute” – applies to all grievances and disputes within the scope of the clause. What is not as clear is whether the term “arising” applies only to disputes “under the Agreement” or whether that term also qualifies grievances and disputes in relation to the NES or disciplinary matters.

[33] After considering the competing constructions advanced by the parties, I am of the view that clause 33 of the Agreement is ambiguous on the basis that it is susceptible of more than one meaning. One possible interpretation is that only a dispute which arises during the period of operation of the 2018 Agreement can be dealt with under the Dispute Resolution Procedure in clause 33 of the Agreement. The other possible interpretation is that the Grievance and Dispute Resolution Procedure applies to:

•  A grievance or dispute arising under the 2018 Agreement which arises while the 2018 is in operation;

•  A grievance or dispute in relation to the NES – which may have crystallised before the 2018 Agreement operated; and

•  A grievance or dispute in relation to disciplinary matters – which may have commenced or been finalised before the Agreement came into operation.

[34] The effect of the construction contended by the CFMMEU is that the commas before and after the phrase: “or in relation to disciplinary matters” has a disjunctive effect so that the term “arising under the agreement” does not operate with respect to disciplinary matters to limit those matters to disciplinary matters arising while the 2018 Agreement is in operation.

[35] The difficulty with the construction advanced by the CFMMEU on the basis of the placement of commas in the first paragraph of the disputed provision is that the term “or” is used a number of times in that paragraph. On the construction advanced by the CFMMEU, those who drafted the Agreement intended to insert the commas in question before and after the phrase “or in relation to disciplinary matters”. This raises the question about the absence of a disjunctive comma before the word “or” in the phrase: “disputes and grievances arising under the Agreement or in relation to the NES” and whether as a result the word “or” in that phrase is conjunctive so that a grievance or dispute in relation to the NES must also arise while the Agreement is in operation.

[36] On the other hand, the construction advanced by OCCPL requires that clause 33 of the 2018 Agreement be construed so that any dispute or grievance which arises – whether under the Agreement, in relation to the NES or in relation to any disciplinary matters – must arise during the operation of the 2018 Agreement in order for the Commission to be empowered to deal with it in any way under clause 33. In oral submissions, Counsel for OCCPL in response to a question from me, conceded that on the construction advanced by the Company a dispute in relation to an NES entitlement which crystallised before the 2018 Agreement operated could not be dealt with under clause 33 of the 2018 Agreement. In relation to this matter, Counsel for OCCPL contended that this should not trouble the Commission because there are other ways which an employee who has an issue with respect to an NES entitlement can pursue that issue. 23

[37] The paragraph of clause 33 upon which the dispute centres commences with the phrase: “In the event of any grievance or dispute arising”. The plain meaning of the phrase “In the event of” is that the provision is triggered if a specified event occurs. The specified event for the purposes of clause 33 of the 2018 Agreement is a grievance or dispute arising. The term “arising” means to begin to exist, originate, result, come to one’s notice or emerge. A “grievance” is a real or fancied cause for complaint. A “dispute” in the context of employment, is a disagreement, debate or controversy.

[38] The distinction in clause 33 of the 2018 Agreement between a dispute and a grievance is apparent from the wording of the various steps which the procedure sets out. Step 1 is reached “When a grievance arises”. Step 1 carries requirements of immediacy with respect to discussion between the relevant employee(s) and their immediate supervisor. There is no reference to a dispute in Step 1. Thereafter, the grievance is referred to as “the matter” and by virtue of Step 2 is required to be referred in writing on “the appropriate Dispute Resolution Form” for discussion between the relevant employee(s) and the appropriate Company Representative. Step 3 involves further discussion about “the matter” between the employee(s) and the Operations Manager or their representative, and provides that the employee(s) may invite District Officials of the Union or another employee at the Mine to be involved in the discussions. Pursuant to Step 4, if “the matter” remains unresolved, it may be referred by either or both parties to the Commission for conciliation, or if the parties agree, arbitration.

[39] The clause goes on to empower the Commission to arbitrate two kinds of disputes, regardless of whether the parties agree to this course. Those disputes are:

•  Disputes in relation to disciplinary matters which have led to the issuing of a final warning; or

•  Disputes about the processes in relation to forced redundancies set out in sub-clauses (a) to (c) of clause 30 of the 2018 Agreement.

[40] Relevantly, clause 33 of the 2018 Agreement provides that all of the above steps shall proceed in a timely fashion. The clause also provides that in the event that a party to a dispute is not proceeding in a reasonable time frame, the other party may proceed to the next step of the procedure after giving reasonable notice of their intention. It is also relevant that the Grievance and Dispute Resolution Procedure set out in clause 33 provides that by agreement between both parties any or all of steps 1, 2 or 3 may be bypassed.

[41] It is not every matter that can be dealt with under the Procedure. Leaving aside the question of whether all of the grievances and disputes with a subject matter that is within the scope of clause 33 are required to arise during the period of operation of the Agreement, it is only matters under the Agreement or related to the NES or disciplinary matters that may be dealt with under the Grievance and Dispute Resolution Procedure.

[42] Further, the only discipline related disputes that the Commission is empowered to arbitrate under clause 33 of the 2018 Agreement are disputes in relation to disciplinary matters which have led to the issuing of a final warning. Grievances which become disputes about disciplinary matters which do not lead to the issuing of a final warning may only be the subject of conciliation by the Commission, unless the parties agree to arbitration.

[43] The construction advanced by OCCPL in the present case, is predicated on acceptance of the proposition that a dispute about an employee being given a warning arises at the point the warning is given. I do not accept that proposition is correct in all circumstances. A grievance or dispute “in relation to disciplinary matters” as described in clause 33 of the 2018 Agreement is not confined to a dispute about a warning. A warning is a particular action related to a disciplinary matter and the term “disciplinary matters” is broader than the actions which occur in the course of disciplinary matters. A grievance in relation to disciplinary matters may arise before any action is taken. For example, at the point the employee is informed of allegations that could lead to a warning if substantiated, the employee may raise a grievance on the basis that the employee disputes the allegations or contends that they are not of sufficient gravity to warrant the initiation of a formal process whereby the employee is required to respond to them. A grievance may not become a dispute if the employee accepts the position put by the employer or decides not to escalate the grievance to the next level of the process. The grievance may evolve so that it becomes a dispute over a related but different matter.

[44] In the present case, it is arguable on the basis of the correspondence appended to the Form F10 Applications that the CFMMEU was articulating issues that can be characterised as grievances on behalf of Mr Jeffs and Mr Hore before the warnings were given. To require a grievance to be couched in a particular form at all stages of the process in clause 33 of the Agreement would involve elevating form over substance in a manner that is not consistent with the process as outlined in clause 33. The matters ceased to be grievances and crystallised into disputes when the CFMMEU notified the Company on 3 May 2018 that it did not accept that the warnings were an appropriate response and that it intended to dispute them. At that point the 2018 Agreement was in operation. At any time prior to the 2018 Agreement commencing to operate the CFMMEU, may have accepted the Company’s position and decided not to escalate the grievances subject of these proceedings.

[45] In my view, on a plain reading of the text of the clause 33 of the 2018 Agreement the CFMMEU was entitled to raise disputes about the warnings issued to Mr Jeffs and Mr Hore notwithstanding that the grievances were first articulated and the warnings were issued before the 2018 Agreement commenced operation. I have reached this conclusion for the following reasons.

[46] The plain meaning of the text of the first paragraph of clause 33 indicates that the following matters are within the scope of the clause:

•  Grievances or disputes arising under the 2018 Agreement which given the required subject matter must relate to the terms of the 2018 Agreement and as a matter of logic can only arise while that Agreement is in operation;

•  Grievances or disputes in relation to the NES regardless of when they arose; and

•  Grievances or disputes in relation to disciplinary matters regardless of when they arose.

[47] I accept that the words “In the event of a grievance or dispute” qualify all of the categories of grievances or disputes. However, the references to NES or disciplinary disputes are preceded by the words “in relation to” and the addition of the term “arising” is not necessary to achieve a grammatically correct reading. Further, unlike the subject matter of disputes arising under the Agreement there is no required connection with the 2018 Agreement with respect to disputes in relation to the NES or disciplinary matters. The words “In the event” are simply introductory words indicating that an event – a grievance or dispute – has occurred to trigger the operation of the procedure. There is no additional requirement inherent in those words to limit all of the grievances or disputes in relation to the NES or disciplinary matters so that they are required to have arisen while the 2018 Agreement is in operation. The use of the term “arises” in Step 1 of the procedure in clause 33 also does not confine the operation of the procedure to grievances arising while the Agreement is in operation.

[48] I am also of the view that the construction advanced by OCCPL constrains the language of the first paragraph of clause 33 of the 2018 Agreement to a greater degree than the construction advanced by the CFMMEU. This is because the construction advanced by OCCPL essentially requires that additional words are inserted after the reference to disciplinary matters to the effect that such matters are limited to disciplinary matters where some action is taken while the 2018 Agreement is in operation or that the disciplinary matters which are the subject of the procedure must arise while the Agreement is in operation.

[49] On the basis that clause 33 of the 2018 Agreement is ambiguous I turn now to consider the context and purpose of the disputed provision to determine whether there are any matters which point to another construction of the provision. Even if my conclusion that the provision is ambiguous is incorrect, it is permissible to consider contextual matters both to explain and to expose an ambiguity. The subject matter of clause 33 is that it provides for a Grievance and Dispute Resolution Procedure. At the risk of stating the obvious and for reasons I have set out above, the Procedure in clause 33 covers both grievances and disputes and a grievance may or may not progress to the stage of being a dispute.

[50] A contextual matter to which I have had regard is s. 186(6) of of the Act which provides that:

“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).”

[51] In short, the Commission cannot approve an enterprise agreement unless it has a term that requires or allows the Commission to settle disputes about any matters arising under the agreement and in relation to the NES. That section prescribes only the minimum requirements in relation to dispute resolution under an enterprise agreement and an agreement cannot be approved if it does not contain a term that meets those requirements. An enterprise agreement which did not contain a provision requiring or allowing the settlement of the dispute (whether by the Commission or another independent party) would not comply with s. 186(6) of the Act. The prescription in the Act of minimum requirements for a dispute resolution procedure in an enterprise agreement, establishes a strong presumption that the 2018 Agreement should be construed in a way which results in the Grievance and Dispute Resolution Procedure operating in a manner that is consistent with those requirements.

[52] In relation to this contextual matter, I note that there is no requirement under s. 186(6) of the Act that a term about settling disputes is to also provide for the settlement or resolution of grievances. It is also significant that s. 186(6) of the Act does not limit the effect of the necessary term to disputes in relation to the NES that arise under the relevant enterprise agreement or while the agreement is in effect. A dispute in relation to the NES may be generated by circumstances which occur before or after an enterprise agreement commences operation. A dispute resolution term that limited its operation to disputes about the NES arising while the enterprise agreement was in operation would in my view be inconsistent with s. 186(6) of the Act. An employee who has an entitlement to a form of leave under the NES which crystallised before an enterprise agreement began to operate could raise a dispute under an enterprise agreement at a subsequent point in relation to that NES entitlement.

[53] Considering the text of the disputed provision and the context in which it was drafted, the inclusion of the term “grievances” within the scope of clause 33 broadens the operation of the procedure in that clause. Further, I see no basis for finding that the use of the term “arising” with respect to disputes under the 2018 Agreement should confine disputes in relation to the NES in a manner which would be inconsistent with the requirements of s. 186(6). If the term “arising” does not confine disputes in relation to the NES then it cannot confine disputes in relation to disciplinary matters. As previously noted, regardless of the presence of the term “arising” a dispute under the 2018 Agreement is self-evidently a dispute about a term of that Agreement and is confined by that scope. This is consistent with the requirements of s. 186(6)(i) of the Act.

[54] Even if the term “arising” does operate with respect to the other categories of disputes which may be dealt with under the procedure in clause 33 of the 2018 Agreement, there is no basis for imposing an additional requirement that a grievance or dispute in relation to the NES or in relation to a disciplinary matter can only be raised at the point the relevant NES entitlement arises (or is denied) or some form of disciplinary action is actually imposed on an employee. A dispute about a matter can arise at the point the employee determines to place that matter into dispute by invoking a dispute resolution procedure. The fact that there is a delay between the action to which the dispute relates and the notification that an employee is dispute about that action, may give rise to discretionary considerations about whether the Commission should deal with the dispute. However, that is not a basis for construing the 2018 Agreement to preclude an employee from raising such a dispute, absent a clear exclusion of such matters as is the case with respect to disputes arising under the Agreement.

[55] This construction I favour is also consistent with the terms of the 2012 Agreement, which provided at clause 36 that any grievance or dispute would be dealt with in accordance with the Disputes Procedure in that clause. The 2012 Agreement had a broader scope with respect to the kinds of grievances or disputes which could be raised, but empowered the Commission to arbitrate disputes only where both parties agreed. The clause in the 2018 Agreement allows for arbitration in limited circumstances while narrowing the range of matters which may be the subject of the Grievance and Dispute Resolution Procedure.

[56] I do not accept that this construction will result in an outcome which is not industrially sensible or that it will create inconvenience or injustice. In relation to Mr Jeffs, a disciplinary matter commenced on 14 February 2018 when he was issued with the letter setting out allegations of misconduct. While I accept that correspondence from the CFMMEU prior to the 2018 Agreement coming into effect did not invoke the Dispute Procedure in the 2012 Agreement which was then in effect, the correspondence did indicate that Mr Jeffs was aggrieved at the conduct of the Company in issuing him with the allegations letter. Further, while the CFMMEU letter contended that the issuing of the allegations letter was not consistent with good faith bargaining requirements and a contravention of s. 346 of the Act, it also reserved all of Mr Jeffs’ rights generally.

[57] Similarly, in relation to Mr Hore, a disciplinary matter commenced on 8 December 2017 when a letter setting out allegations was sent to him and in a series of correspondence the CFMMEU corresponded with OCCPL indicating that it was aggrieved with the treatment of Mr Hore but was not invoking the procedure under clause 36 of the 2012 Agreement. Also by correspondence sent on 3 May 2018 (after the 2018 Agreement commenced operation) the CFMMEU notified a dispute under clause 33 of that Agreement. The notification of the disputes is proximate in time to the grievances and there is no basis for finding that the CFMMEU accepted the Company’s position and did not progress the dispute so that it could be said that there is no dispute to which the procedure in the 2018 Agreement could apply.

[58] Both Mr Jeffs and Mr Hore could have notified a dispute under the 2012 Agreement in relation to these matters. Had they done so, it is arguable that the Commission could have continued to deal with that dispute. This circumstance can be distinguished from those in in CFMEU v North Goonyella cited by OCCPL in support of its case. In CFMEU v North Goonyella the dispute was about whether action taken by the employer to make employees redundant complied with a clause in an enterprise agreement which was not in operation at the time that the Company took the action. The circumstances in that case also included that the enterprise agreement which was in operation at the time the action was taken, did not contain an equivalent clause to that in the 2015 Agreement upon which the dispute centred. Further, the dispute settlement procedure in that case was limited to disputes arising under the Agreement and did not cover employment disputes generally.

[59] Accordingly, I do not accept that there is a capacity for employees to reach back into the mists of time as submitted by OCCPL to attempt to bring disputes over warnings which were not previously the subject of a grievance, or where there has been inactivity such that it could reasonably be inferred that the matter had lapsed.

[60] Neither Mr Hore nor Mr Jeffs received a final warning. The application by the CFMMEU in relation to the employee who received a final warning is not pressed. While it is not necessary to determine the point I intend to indicate my provisional view about whether an employee who received a final warning prior to the operation of the 2018 Agreement could seek arbitration in relation to a dispute about such warning. In my view the terms of clause 33 of the 2018 Agreement do not allow for arbitration in such circumstances. The provisions of clause 33 of the Agreement empowering the Commission to arbitrate in the absence of agreement between the parties to that course are narrow. They encompass only disciplinary matters that have led to the issuing of a final warning or the processes in relation to forced redundancies set out in clause 30 of the 2018 Agreement. Those matters do have a temporal limit. In the case of processes in relation to forced redundancies, the temporal limit is the period of operation of the 2018 Agreement in which the clause setting out those processes is found. In the case of a final warning, the temporal limit is the time at which the warning is given. That is, the power to arbitrate is linked to the issuing of the warning and not to the disciplinary process or disciplinary matters generally. In my provisional view, the wording of the paragraph in clause 33 dealing with arbitration indicates that these matters must have occurred when the 2018 Agreement is in operation.

[61] The context associated with the 2018 Agreement includes the terms of the 2012 Agreement which did not allow for any dispute to be arbitrated unless all parties agreed to that course. The Grievance and Dispute Resolution Procedure in the 2018 Agreement narrowed the range of matters that could be raised under that procedure but provided for default arbitration in limited circumstances where it has not previously been provided for. A construction of the 2018 Agreement which allowed arbitration in relation to final warnings issued before the 2018 Agreement came into effect would be inconsistent with the proper approach to the construction of enterprise agreements.

CONCLUSION

[62] Accordingly, I find that the Commission has jurisdiction to deal with the applications of Mr Jeffs and Mr Hore by conciliation, and at the request of the CFMMEU I will list those applications for this purpose.

DEPUTY PRESIDENT

Appearances:

Mr L Tiley of Hall Payne Lawyers on behalf of the CFMMEU.

Mr CJ Murdoch of Counsel instructed by Mr J Hall of Ashurst on behalf of OCCPL.

Hearing details:

2018.

10 August.

Brisbane.

Printed by authority of the Commonwealth Government Printer

<PR702656>

 1   C2018/2977.

 2   C2018/2981.

 3   [2018] FWCA 2147.

 4   [2017] FWCFB 3005 at [14].

 5   [2017] FWCFB 4487.

 6 [2014] NSWCA 184 at [71] – [85].

 7   Manufacturers’ Mutual Insurance Ltd v Withers (1988) 5 ANZ Ins Cas 60-853 at 75-343.

 8   Kirin-Amgen Inc v Hoechst Marion Roussel Ltd [2004] UKPC 6; [2005] 1 All ER 667 at [64].

 9   Project Blue Sky v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355 at [78].

 10   Charter Reinsurance Co Ltd v Fagan [1997] AC 313 at 391 per Lord Hoffman, approved in Campbell v R [2008] NSWCCA 214; 73 NSWLR 272 at [48] (Spiegelman CJ, Weinberg AJA and Simpson J agreeing)

 11   Franklins Pty Ltd v Metcash Trading Ltd [2009] NSWCA 407; 76 NSWLR 603 at [17] cited in Mainteck Services Pty Ltd v Stein Heurtey SA (2014) 310 ALR at [71] – [85].

 12   Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; 219 CLR 165 at [40].

 13 Kucks v CSR Limited (1996) 66 IR 182 at 184.

 14   [2015] FWCFB 5619.

 15 (1957) 96 CLR 261 (per Dixon CJ, Williams, Kitto and Taylor JJ).

 16   [2016] FWC 8360.

 17   [[2016] FWC 8360.

 18   [2014] FWC 246.

 19 (1996) 66 IR 182.

 20 (2005) 222 CLR 241 at 271 per Kirby J.

 21 (1993) 40 FCR 511 at 517 per Burchett (Drummond J agreeing).

 22   [2014] FWC 246

 23   Transcript of proceedings 10 August 2018 PN37.