Construction, Forestry, Mining and Energy Union v Clermont Coal Mine Pty Ltd

[2015] FWC 2023

[2015] FWC 2023 [Note: An appeal pursuant to s.604 (C2015/2587) was lodged against this decision - refer to Full Bench decision dated 22 May 2015 [[2015] FWCFB 3332] for result of appeal.]

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739—Dispute resolution

Construction, Forestry, Mining and Energy Union
v
Clermont Coal Mine Pty Ltd
(C2014/6842)

COMMISSIONER LEWIN MELBOURNE, 30 MARCH 2015

Alleged dispute about matters arising under an enterprise agreement - dispute resolution procedure - jurisdiction - conciliation - recommendation.

Introduction

[1] This decision concerns an application made under s 739 of the Fair Work Act 2009 (Cth) (Act) for the Fair Work Commission (Commission) to deal with a dispute said to arise under the terms of an enterprise agreement made and approved by the Commission pursuant to s 185 of the Act.

[2] The application is made by the Construction, Forestry, Mining and Energy Union (CFMEU). The enterprise agreement is the Clermont Coal Enterprise Agreement (Agreement).  1

[3] The Commission may deal with a dispute where an enterprise agreement includes a term that provides for a procedure for dealing with disputes accordingly.  2 The relevant statutory provisions are ss 738 and 739 of Part 6.2, Division 2 of the Act as set out below:

“738 Application of this Division

This Division applies if:

(a) a modern award includes a term that provides a procedure for dealing with disputes, including a term in accordance with section 146; or

(b) an enterprise agreement includes a term that provides a procedure for dealing with disputes, including a term referred to in subsection 186(6); or

(c) a contract of employment or other written agreement includes a term that provides a procedure for dealing with disputes between the employer and the employee, to the extent that the dispute is about any matters in relation to the National Employment Standards or a safety net contractual entitlement; or

(d) a determination under the Public Service Act 1999 includes a term that provides a procedure for dealing with disputes arising under the determination or in relation to the National Employment Standards.”

“739 Disputes dealt with by the FWC

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

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

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

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

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

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

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

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

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

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

[4] The Agreement contains the following term:

“4 Dispute Resolution

4.1 It is the intent of The Company and the Employee to resolve any grievances directly. In the event of a dispute which relates to a matter arising under this Agreement, the National Employment Standards, employment or other issues. Whether specific to Clermont Coal Mine or Industry generally, there shall not be any stoppage of work by the Employee. If a dispute is not settled it shall be processed in accordance with this clause.

4.2 Procedure:-

(a) When a grievance arises the matter shall in the first instance be discussed between the Employee and the Employee’s Leader. If the matter remains unresolved;

(b) It will be referred in writing for discussion between the Employee and the appropriate Superintendent. If the dispute remains unresolved;

(c) It will be referred in writing for discussion between the Employee and the appropriate MRU Manager. If the dispute remains unresolved;

(d) It will be referred in writing for discussion between the Employee and the General Manager;

(e) Where a dispute remains unresolved after step (d) above, the Employee may seek to refer the matter to Fair Work Australia for conciliation.

(f) Where a dispute that is the subject of this Agreement, the National Employment Standards or in relation to employment or other issues remains unresolved after step (e) above, the Employee may seek to refer the dispute to Fair Work Australia for arbitration, if mutually agreed by both the Employee and Clermont Coal.”

Background

[5] In the application in response to question 4 of Form F10, the prescribed form for the application, the CFMEU describe what the dispute is about as follows:

1. In the early evening, whilst on shift, on 2 December 2013 Mr Joe Maw, member of the applicant, was requested by another employee, Mr Tai Johnson, to represent him in a meeting scheduled for the next day at 3pm.

2. In order to ensure that he was at the meeting and to comply with the 10 hour fatigue management policy, Mr Maw approached his supervisor, Mr Dan Lockyer, with a request to finish his rostered shift at 5am instead of 6:30am.

3. Mr Lockyer requested that Mr Maw put the request in writing. The applicant complied with this request, cc'ing Mr Rhys Evans and Jason Meuleman into the request.

4. Mr Maw received a response to this request from Mr Lockyer stating:

"It is required you attend shift as per normal work times, the representative meeting if you must attend may be scheduled at your crib times or any time outside of your work hours."

5. Mr Maw was unsure of what this direction meant as the issue related not to the attendance of the meeting during work hours, as the meeting was to be held outside of his work hours, but his ability to leave work early for fatigue management issues.

6. Mr Maw responded requesting clarification but at the time of his final crib break received no response.

7. He then spoke to Rhys Evans, supervisor, about the issue and Rhys told him "no worries I'll have Craig Davidson waiting to swap you out at 5:00am at the Go Line."

8. Mr Maw was swapped out as directed and then left site at 5:00am to attend the meeting that afternoon.

9. Mr Maw was then subsequently issued a warning for an allegation that he left site without permission.

10. Mr Maw and the applicant dispute this allegation. Mr Maw was given clear permission to leave site from Rhys Evans and all his supervisors were aware of the request for him to attend the meeting the following day as a representative.

[6] It will have been observed that the dispute resolution procedure provided by cl 4 of the Agreement provides various steps to be taken in relation to a dispute to which it applies. Where steps (a) to (d) do not lead to the dispute being resolved the dispute may be referred to Fair Work Australia for conciliation. It is not necessary to explain why, however, for present purposes, the reference to Fair Work Australia therein is taken to be a reference to the Commission for the purposes of the Act and this decision.  3

Jurisdictional Objection

[7] The CFMEU asks that the Commission make a recommendation in aid of settlement of the dispute. Clermont has objected to the Commission making a recommendation in relation to the dispute. Clermont submits that the Commission does not have the jurisdiction or the power to make a recommendation in relation to the dispute. The issue raised by Clermont concerns the provisions of the Act in relation to the Commission’s power to deal with disputes, as provided by ss 595, 738 and 739 and the terms of cl 4 of the Agreement.

[8] It is appropriate to set out the text of s 595 of the Act:

“595 FWC's power to deal with disputes

(1)  The FWC may deal with a dispute only if the FWC is expressly authorised to do so under or in accordance with another provision of this Act.

(2) The FWC may deal with a dispute (other than by arbitration) as it considers appropriate, including in the following ways:

(a)  by mediation or conciliation;

(b)  by making a recommendation or expressing an opinion.

(3) The FWC may deal with a dispute by arbitration (including by making any orders it considers appropriate) only if the FWC is expressly authorised to do so under or in accordance with another provision of this Act.

Example:    Parties may consent to the FWC arbitrating a bargaining dispute (see subsection 240(4)).

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

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

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

[9] Clermont submits as follows:

4. Section 595 of the FW Act distinguishes between conciliation and other ways of dealing with a dispute such as the making of a recommendation. Conciliation cannot be construed in such a way to include the making of a recommendation, given that the section clearly distinguishes between the two ways of dealing with a dispute.

5. In the present case, the Commission is expressly authorised to deal with the dispute by way of conciliation and conciliation only. It is not expressly authorised to deal with the dispute by issuing a recommendation.

Consideration

[10] A number of observations may be made about the provisions of the Act above. Having regard to the provisions of cl 4 of the Agreement, the Commission is authorised to deal with the dispute the subject of the application by s 738(b) of the Act. The issue for determination here does not concern arbitration.

[11] Where the Commission is dealing with a dispute (other than by arbitration) it may deal with a dispute “as it considers appropriate”, “including” by conciliation and by making a recommendation.  4 Therefore, the Commission may deal with a dispute under a dispute settlement term of an enterprise agreement by conciliation, by making a recommendation or expressing an opinion as it considers appropriate. However, the Commission is only able to deal with a dispute in accordance with a term of an enterprise agreement prescribing a dispute settlement procedure, as provided for by s 738(b) of the Act.

[12] The interaction of ss 595(5), 738(b) and 739(3) will only combine to limit the Commission’s jurisdiction and power to deal with a dispute “as it considers appropriate” in accordance with an express term of an enterprise agreement which limits what the Commission may do in relation to such a dispute. Any limitations prescribed by a relevant term of an enterprise agreement upon the exercise of the authority of the Commission to deal with a dispute will void any action taken by the Commission in relation to such a dispute which extends beyond such limits. (emphasis added)

[13] There is no basis upon which to treat the use of the words “conciliation” and “making of a recommendation” in s 595 as mutually exclusive. The word “including” in s 595(2) should be construed as meaning any and all of the ways of dealing with a dispute set out in s 595 and not exclusive of any other means of dealing with a dispute the Commission considers appropriate.

[14] Clermont submit that the terms of cl 4.1 of the Agreement relevantly limits the Commission to dealing with the dispute to conciliation. It is submitted by Clermont that making a recommendation is not conciliation. This, so the submission goes, is because s 595 distinguishes conciliation from the making of a recommendation. Therefore, the Commission may not make a recommendation in relation to the subject matter of the dispute.

[15] Clermont also submit that to issue a recommendation in relation to the dispute would be a surrogate for arbitration of the dispute without Clermont’s agreement. This would not, Clermont submits, be performance of arbitration prescribed by cl 4.1(f) of the Agreement, as Clermont does not and will not agree to arbitration of the dispute by the Commission.

Decision

[16] I conclude that the Commission has jurisdiction to deal with the subject matter of the dispute in accordance with the provisions of cl 4.1 of the Agreement. The scope and subject matter of the dispute may be characterised as a dispute to which the relevant terms of the Agreement for the settlement of disputes applies. The Commission may deal with the dispute by conciliation as it considers appropriate. I consider that the making of a recommendation is a function of conciliation.

[17] Conciliation is not a word which is defined by the provisions of Part 1-2 definitions of the Act. The ordinary meaning of the word conciliation as defined as follows:

1. The act of conciliating; 2. A procedure for the resolution of a dispute; 3. A system of resolving industrial disputes between employees and employers by official talks in the presence of a government appointed third-party.  5

[18] Notwithstanding the ordinary meaning of the word it would be unrealistic to ignore both the statutory and historical contexts in which the parties have made the term of the Agreement, which provides for the Commission to conciliate a dispute to which the terms of cl 4 apply. Moreover, the nature of a recommendation of the Commission is highly contextualised in the field of workplace and industrial relations as a system of resolving industrial disputes between employees and employers which will form part of the of the “act of conciliating”, as has been the case throughout the history of the operation of industrial tribunals in Australia.

[19] Moreover, the word conciliation has a well defined meaning in the field of Alternative Dispute Resolution more broadly. The National Alternative Dispute Resolution Advisory Council (NADRAC) (Commonwealth) has paid close attention to dispute resolution processes which it has broadly grouped under the following headings: Facilitative, Advisory and Determinative.  6

[20] The website of the Attorney-General’s Department conveniently describes the above as follows:

Facilitative
This process is where a dispute resolution practitioner assists the parties to a dispute to identify the disputed issues, develop options, consider alternatives and try to reach an agreement about some issues or the whole dispute.
Examples of facilitative processes include mediation, conciliation, facilitation and facilitated negotiation.

Advisory
This process is where a dispute resolution practitioner considers and appraises the dispute and provides advice as to the facts of the dispute, the law, and, in some cases, possible or desirable outcomes and how these may be achieved.
Examples of advisory processes include: case appraisal, conciliation (where advice is offered or used) and (early) neutral evaluation. (emphasis added)

Determinative
This process is where a dispute resolution practitioner evaluates the dispute (which may include the hearing of formal evidence from the parties) and makes a determination.
Examples of determinative processes include: arbitration, expert determination and private judging.  7

[21] In my view, the makers of the Agreement contemplated that conciliation of disputes by the Commission would be in accordance with a well established historical understanding of the work and function of the Commission and its predecessors. A recommendation is an historical feature of the dispute settlement procedures of Australian tribunals concerned with the settlement of disputes between employees and employers by conciliation. I consider this to be a notorious fact.

[22] A recommendation made by an independent third party is not a determination on the legal rights, duties and obligations of a person. A recommendation is properly characterised as an advisory function where an independent third party sets forth an option which the parties to the dispute may or may not find to be a mutually acceptable settlement of the dispute between them. A recommendation will not be binding in its terms and will depend upon the consent of the parties for its adoption.

[23] Conciliation, in the relevant context in which the Agreement was made, taking its historical flavour and statutory context into account  8 will include both a facilitative and advisory function as referred to above. A recommendation may be properly characterised as an advisory function and as an action which the Commission is authorised to take so as to make suggestions for the resolution of a dispute. It does not include binding legally determinative actions by the Commission.

[24] In my view, the word conciliation as used in the Agreement can be described as a term of the Agreement which is not unlike a term of art, which in the relevant context derives its meaning from the historical antecedents of conciliation practices of the Commission and its predecessors for the resolution of disputes between employees and employers. Likewise, in the field of Alternative Dispute Resolution generally, as described above, conciliation includes the provision of advice for the settlement of a dispute.

[25] In my view, the issue for consideration raised by Clermont’s objection is the meaning of the terms of the dispute settlement procedure of the Agreement intended by the makers of the Agreement. For the reasons stated above, those terms, properly construed, may include the making of a recommendation as a feature of conciliation by the Commission. Section 595 is no barrier to the making of a recommendation by the Commission under a dispute settlement term of an enterprise agreement in the course of conciliation, provided such a recommendation is considered appropriate by the Commission for the settlement of a dispute within the scope of the dispute settlement term of an enterprise agreement.

[26] In my view, to make or not make a recommendation as described above, as a function of conciliation is contemplated by the Agreement and conciliation will only be limited by a term of cl 4.1 of the Agreement. No such express limitation which would preclude the making of a recommendation as contended for by Clermont is evident and none should be inferred in the terms of the Agreement which provide for conciliation of disputes.

[27] Moreover, contrary to Clermont’s submissions, a recommendation is not a surrogate of an arbitral function as it does not determine the legal rights, duties and obligations of either Mr Maw or Clermont, which would be the consequence of an arbitration conducted by the Commission under a dispute settlement term of an agreement.  9

[28] I therefore find that the Commission may make a recommendation in relation to the dispute the subject of this application in the context of conciliation, pursuant to cl 4.2(e) of the Agreement. In light of this decision, I will convene a conference of the parties to enable them to be heard on the terms of any recommendation(s) proposed and the relevant considerations to be taken into account both as to whether any such recommendation should be made and the content of any such recommendation if one is to be made.

COMMISSIONER

Final written submissions:

27 February 2015 from Construction, Forestry, Mining and Energy Union

5 March 2015 from Clermont Coal Mine Pty Ltd

 1   [2012] FWAA 10234

 2   Fair Work Act 2009 (Cth), s 738(b).

 3   Fair Work Amendment Act 2012 (Cth), s 3.

 4   Fair Work Act 2009 (Cth), s 595(1), (2)(a)-(b).

 5   The Macquarie Concise Dictionary (The Macquarie Library Pty Ltd, 2nd ed, 1988)

 6   Attorney-General’s Department, Alternative Dispute Resolution <   Ibid.

 8   Association of Professional Engineers, Scientists and Managers, Australia v Dendrobium Coal Pty Ltd [2015] FCA 11, [41]; Transport Workers’ Union of Australia v Linfox Australia Pty Ltd [2014] FCA 829, [29] - [42].

 9   Construction, Forestry, Mining and Energy Union v The Australian Industrial Relations Commission (2001) 203 CLR 645

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