[2017] FWC 1735

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739—Dispute resolution

Construction, Forestry, Mining and Energy Union
v
WorkPac Pty Ltd
(C2016/4554)

Coal industry
DEPUTY PRESIDENT ASBURY	BRISBANE, 29 MARCH 2017

Alleged dispute about any matters arising under the enterprise agreement and the NES - Jurisdictional objection by employer to the Commission arbitrating the dispute – Finding that dispute settlement procedure validly engaged notwithstanding that employees in dispute were not identified – Finding that employer agreed to bypass initial steps in any event as provided for in dispute settlement procedure – Finding that CFMEU is not a party principal to the dispute settlement procedure and cannot make application under s. 739 in its own right – Finding that s. 586 is a source of power to amend application so that application is taken to be made by employees – Discretion will not be exercised to amend application unless CFMEU names applicants – Finding that dispute is within scope of the dispute settlement procedure and that the Commission has jurisdiction to arbitrate to determine the dispute – Lack of agreement on question for arbitration does not impact jurisdiction of the Commission to determine the dispute – Not necessary that agreement specifically provide for acceptance of arbitrated outcome for determination of the Commission to be binding – Jurisdictional objection dismissed – Dispute to be arbitrated.

BACKGROUND

[1] The Construction, Forestry, Mining and Energy Union (the CFMEU) applies to the Fair Work Commission (the Commission) to deal with a dispute pursuant to s.739 of the Fair Work Act 2009 (the Act) under the Disputes Settlement Procedure in clause 7 of the WorkPac Pty Ltd Mining (Coal) Industry Enterprise Agreement 2012 (the Agreement). In summary, the dispute as notified relates to whether Field Team Member (FTMs) employed by Workpac Pty Ltd (WorkPac) as Flat Rate employees under the Agreement are entitled to be paid afternoon and night shift rates for all hours worked in circumstances where they work under what is described by the CFMEU as a “rotating roster”.

[2] ClarkKann Laywers on behalf of WorkPac corresponded with the Commission advising that it did not agree with the CFMEU’s contention that employees are entitled to be paid afternoon and night shift rates for all hours worked in circumstances where they are employed as day work FTMs. It was also contended that despite requests from WorkPac the CFMEU had not been able to advise of a concern about a particular employee and in the absence of a concern about a particular employee, the Commission did not have jurisdiction to deal with the dispute.

[3] A conciliation conference was conducted on 21 August 2016. The dispute was not resolved. On 21 September, a number of persons corresponded with the Commission stating that they are members of the CFMEU and support the application made by the CFMEU but have concerns about their identities being revealed to WorkPac. On 4 October 2016 the CFMEU advised that it wished the matter to proceed to arbitration and asked that it be listed for that purpose. The question for arbitration initially proposed by the CFMEU was as follows:

“Whether a FTM that works to a rotating roster is entitled to be paid the relevant afternoon and night shift rate as per the relevant Schedule of the Agreement for each shift that is worked.”

[4] WorkPac maintained its jurisdictional objection to the Commission dealing with the dispute. A mention was held at which a timetable for the filing of written submissions and witness statements in relation to the jurisdictional objection was set. The hearing was conducted on 25 November 2016. The CFMEU was represented by its national legal officer Mr Walkaden and WorkPac was represented by Mr Procter of ClarkKann Lawyers. Permission was granted for WorkPac to be legally represented on the basis that no issues of fairness arose and the complexity of the matter would enable it to be dealt with more efficiently.

[5] During the hearing on 25 November, I requested that the CFMEU provide declarations from the members that the CFMEU are representing in this dispute confirming representation. On 1 December 2016, the CFMEU provided declarations but maintained that it does not wish to reveal the identities of the employees to WorkPac, pending the determination of the jurisdictional objections. In the event that the Commission found that the CFMEU did not have standing under the Dispute Settlement Procedure to make an application under s. 739 of the Act in its own right, the CFMEU also sought to amend its application pursuant to s. 586 of the Act so that it would be the representative of members rather than the applicant and to amend the relief sought in the application.

AGREEMENT PROVISIONS

[6] By virtue of clause 1.2 of the Agreement, the parties to the Agreement are WorkPac Pty Ltd; Workpac Pty Ltd Field Team Members (FTMs) and CFMEU Mining and Energy Division (National).

[7] The Dispute Settlement Procedure in the Agreement is in the following terms:

“7 DISPUTES SETTLEMENT PROCEDURE

It is the intention of the parties that all disputes arising out of the interpretation or application of this Agreement and in relation to the NES or in the course of employment shall be dealt with at the local level to the maximum extent possible

7.1 Procedure

7.1.1 In the event of any grievance the parties to the dispute will consult to reach settlement without loss of wages or production, provided always that work shall continue in the usual manner without bans or limitations on the performance of work, unless the FTM has a reasonable concern about an imminent risk to health and safety.

7.1.2 The parties to the dispute agree to comply with the words and intent of the Company’s dispute settlement procedure outlined below:

Stage 1

Any question or dispute arising in relation to the terms and conditions of this Agreement, in the first instance, will be raised with the FTM’s Company representative.

The Company representative will provide a response to the FTM within 48 hours or such other timeframe as agreed between the FTM and the Company representative.

Where the FTM is dissatisfied with the response or the response is not received within 48 hours (or agreed timeframe), the FTM may progress to stage 2 of the process.

Stage 2

In the event that a matter remains unresolved following Stage 1, the FTM may refer the matter to the Manager of the office which issued the most recent notice of offer.

The Manager will respond to the FTM within 48 hours or such other timeframe as is agreed between the FTM and the Manager.

Where the FTM is dissatisfied with the response from the Manager, or the response is not received within 48 hours (or agreed timeframe), the FTM may progress to Stage 3 of this process.

Stage 3

In the event that a matter remains unresolved following Stage 2, the FTM may request that the matter be referred to the appropriate Company Regional Manager.

The Company Regional Manager shall respond within seven (7) working days or such other timeframe as is agreed between the FTM and the Regional Manager.

Where the FTM is dissatisfied with the response from the Company Regional Manager, or the response is not received within seven (7) working days (or agreed timeframe), the FTM may progress to Stage 4 of this process.

Stage 4

In the event that a matter remains unresolved following Stage 3, the FTM may request that the matter be referred to the Company’s Industrial Relations Department or CEO.

The Company’s Industrial Relations Department or CEO shall respond within 14 working days or such other timeframe as is agreed between the FTM and the Regional Manager.

Where the FTM is dissatisfied with the response from the Company’s Industrial Relations Department or CEO, or the response is not received within fourteen (14) working days (or agreed timeframe), the FTM may progress to Stage 5 of this process.

Stage 5

In the event that a matte remains unresolved following Stage 4, the FTM or the Company may refer the matter to Fair Work Australia (FWA) for conciliation and/or arbitration.

FWA are not authorised to deal with a dispute to the extent that the dispute is about whether the Company had reasonable business grounds in relation to requests from the FTM for flexible working arrangements or an extension of their parental leave of up to 12 months in addition to the available parental leave period.

FWA is not permitted to arbitrate unless each of the proceeding stages have been completed or where there is agreement between the parties to bypass stages a dispute that is referred to it under this clause, unless it specifically relates to the NES or the interpretation and/or application of this Agreement.

7.1.3 At all stages of the dispute settlement procedure, and except where there is an immediate and significant threat to health and safety, work will continue and consideration of the needs of the business will remain a priority.

7.1.4 At any stage of this Disputes Settlement Procedure, the FTM may appoint a representative, including another FTM or any other person, to act as the FTM’s representative in an attempt to achieve resolution.”

STATUTORY FRAMEWORK

[8] The jurisdiction of the Commission to deal with disputes pursuant to dispute settlement procedures in enterprise agreements is provided for in ss.738 and 739 of the Act as follows:

“738 Application of this Division

This Division applies if:

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

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

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

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

“739 Disputes dealt with by the FWC

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

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

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

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

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

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

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

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

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

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

[9] 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 1: 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)).

SUBMISSIONS AND EVIDENCE

WorkPac

[10] In written submissions WorkPac contends that the question for arbitration posed by the CFMEU in the application under s. 739 of the Act is not properly the subject of that section on the basis that:

The application does not relate to a dispute raised by a FTM;

The question as framed is contrary to s. 739(4) of the Act because the CFMEU is asking the Commission to give an opinion on a question of law (which is not agreed) rather than seeking the arbitration of a dispute about the correct interpretation of the Agreement as to the correct entitlement of a particular FTM to payment in respect of work performed; or

The question as framed would require a decision that is inconsistent with the enterprise agreement which is a “fair work instrument” and contrary to s. 739(5) of the Act because there is no concept of a rotating roster under the Agreement.

[11] At the hearing in relation to the jurisdictional objections, WorkPac also contended that if the Commission arbitrated the dispute, any decision that the Commission made would not be binding on the parties, on the basis that the Dispute Settlement Procedure does not specifically state that a determination following arbitration is binding on the parties.

[12] Evidence on behalf of WorkPac was given by Ms Ashlee Miller, Solicitor ClarkKann Lawyers. The purpose of Ms Miller’s evidence was to tender a range of correspondence between the CFMEU and WorkPac in relation to the dispute. The correspondence evidences that on 14 April 2016, the CFMEU corresponded with WorkPac asserting that it notified the Company of a dispute in accordance with Stage 1 of the Dispute Settlement Procedure in clause 7 of the Agreement. The dispute was described in that correspondence as a misapplication by the Company of provisions of the Agreement in relation to whether employees were shift workers or day workers and asserted that WorkPac was required to either pay shift work rates for all time worked or overtime rates where the employees worked afternoon or night shifts. 2

[13] In a letter to the CFMEU dated 18 April 2016, the General Manager Operations and Support Services of WorkPac stated the Company’s understanding that the CFMEU had bypassed required sequential steps in the Dispute Settlement Procedure and had not raised the matter with the FTM’s Company Representative or with their Manager and it was WorkPac’s position that “this would fall into Stage 3 of the Dispute Settlement Procedure”. The letter went on to state that notwithstanding this, WorkPac would provide a formal response to the CFMEU’s correspondence within 14 days and would be happy to meet with the Union to discuss the matter. 3

[14] On 29 April 2016 WorkPac wrote to the CFMEU and advised that the Union’s interpretation of the Agreement was not accepted by WorkPac and that WorkPac was meeting its obligations under the Agreement. That letter concluded with a statement that if there were further issues or specific examples where the Union believed the Agreement had been incorrectly applied, WorkPac would investigate and was happy to consider all requests prior to the initiation of formal disputes. 4 On 30 May 2016, the CFMEU responded with a letter reiterating its interpretation of the Agreement and maintaining that WorkPac had misapplied the Agreement by paying flat rate workers the “Day” rates of pay for shifts worked that are not afternoon or night shifts. The CFMEU’s letter concludes with a statement that as WorkPac’s response of 29 April 2016 was provided in accordance with Step 3 of the Disputes Settlement Procedure, then in accordance with that Step the dispute remains unresolved and the CFMEU wishes to refer it to Step 4. The CFMEU requested that its correspondence be forwarded to the relevant contact person from WorkPac for this purpose. The letter went on to state that if WorkPac agreed, the CFMEU’s preference is to bypass Step 4 and go to Step 5 by filing an application in the Commission.5

[15] On 1 June 2016 a Senior IR Advisor for WorkPac responded to the CFMEU advising that the dispute had been escalated to the National Employee Relations Manager who would be available shortly thereafter to meet and address the CFMEU’s concerns. The letter concludes with the statement that WorkPac seeks to exhaust all steps of the Dispute Settlement Procedure prior to this matter proceeding to the Commission. 6

[16] On 5 July 2016, WorkPac’s National Employee Relations Manager wrote to the CFMEU stating that:

• WorkPac disagrees with the CFMEU’s interpretation of the Agreement and asserts that it is paying in accordance with the Agreement;

• The Disputes Settlement Procedure refers to a dispute by a particular employee and the CFMEU has not provided WorkPac with any details or examples of a particular FTM so that WorkPac can appropriately address any issues despite requests that this information be provided;

• Any application to the Commission to arbitrate the “dispute” is premature and without jurisdictional basis; and

• The relevant forum for any complaint by the CFMEU over an interpretation of the Agreement is a Court of competent jurisdiction. 7

[17] In response, the CFMEU maintained in an email dated 4 October 2016 that there are no jurisdictional issues with the application or the question for arbitration and that the Commission will be exercising a power of private arbitration, which does not require a dispute initiated by an individual employee. This is said to be apparent from clause 7 of the Agreement which provides that the dispute can be initiated by a party. The CFMEU is a party to the Agreement by virtue of clause 1.2.1. The email concludes with a statement that the Union will contact the Commission and seek that the dispute be listed for arbitration. 8 There are further emails tendered by Ms Miller in which the Company and the Union maintain their respective positions.

[18] In written submissions on behalf of WorkPac it is asserted that s. 739 of the Act is only available to the parties to a dispute referred to in s. 738 of the Act and it follows that s. 739 of the Act is only available to the parties to a dispute under the terms of the Agreement. Notwithstanding that the CFMEU is covered by and named as a party to the Agreement, it does not meant that the Union can be a party to a dispute in its own right with standing to invoke s. 739 of the Act, unless the relevant terms of the Agreement permit the CFMEU to do so. It is contended that clause 7 of the Agreement does not contemplate a dispute between WorkPac and the CFMEU and deals exclusively with the parties being WorkPac and the FTM. The terms of clause 1.2.1 of the Agreement do not elevate the CFMEU to being a party to the dispute.

[19] In support of this submission, WorkPac points to the Decision of Commissioner Lewin in CFMEU v North Goonyella Coal Mines Pty Ltd 9upheld by a Full Bench of the Commission on appeal.10 WorkPac contends that the dispute resolution term considered in those cases is substantially the same as the term in the present case, and the CFMEU cannot pursue a dispute in its own right under the term. WorkPac further submits that this is not a case such as that in AMWU v Southcorp Wines11where the Disputes Settlement Procedure expressly allowed the Union to initiate a dispute with the employer and to notify the Commission of such a dispute in its own right. In the present case, while the initial correspondence from the CFMEU vaguely mentions ‘some employees’, the correspondence leaves WorkPac in no doubt that it is the CFMEU who is ‘in dispute’.

[20] Further, or in the alternative, it is submitted that the question as framed is not one that the parties have agreed and therefore s. 739(4) of the Act has not been satisfied and the application is beyond the power of the Commission. In this regard it is submitted that the question is not a matter WorkPac has agreed the Commission may deal with because it is asking the Commission to give an opinion on a question of law (which is not agreed), rather than seeking the arbitration of a dispute about the interpretation of the Agreement as to the correct entitlement of a particular FTM to payment in respect of work performed.

[21] In relation to this submission, WorkPac referred to the Decision of the Full Court of the Federal Court in Construction, Forestry, Mining and Energy Union v Wagstaff Piling Pty Ltd 12(Wagstaff) where the Court held that the parties to an agreement could not make it a condition of the valid participation of the Commission in a dispute settling mechanism, that any opinion reached or stated be a legally correct opinion. Moreover, because the agreement in that case identified the contribution of the Commission as conciliation and arbitration, the Commission could not make a binding declaration on any legal issue13 or a legally binding determination of the correct meaning to be ascribed to a clause.14 Reference in this regard was also made to the Decision of a Full Bench of the Commission in Metropolitan Fire and Emergency Services Board v United Firefighters Union of Australia; Garth Duggan.15

[22] WorkPac submits that unlike the circumstances in Wagstaff, the present application seeks final relief in the nature of an Order as to the proper application of the Agreement. Such an exercise would be beyond the power of the Commission given to it by clause 7 of the Agreement. Because WorkPac does not agree with the question put by the CFMEU to the Commission, there is no power of private arbitration, because the question is not agreed and s. 739(4) of the Act is not satisfied.

[23] Thirdly, WorkPac contends that the question as framed would require a decision that is inconsistent with the enterprise agreement, which is a ‘fair work instrument’ and contrary to s.739(5) of the Act because there is no concept of a ‘rotating roster’ under the Agreement. The CFMEU seeks an answer from the Commission in relation to a FTM who is “on rotating roster”. Framed this way, this question has no meaning under the Agreement. That is, there is no meaningful category of FTM under the Agreement “on a rotating roster”. The question should be framed in a way that is consistent with the Agreement, and WorkPac submits that it is not for the Company to reframe the question.

[24] In oral submissions WorkPac further contended that the Agreement does not confer power on the Commission to make a determination that is binding on the parties, because unlike clause 5(b)(ii) of the Model Term For Dealing with Disputes for Enterprise Agreements in Schedule 6.1 of the Fair Work Regulations 2009, the Disputes Settlement Procedure in clause 7 of the Agreement does not state that an arbitrated outcome can result in such a determination. In this regard, the Model Term provides as follows at clause 5(b):

“…if the Fair Work Commission is unable to resolve the dispute at the first stage, the Fair Work Commission may then:

(i) arbitrate the dispute; and

(ii) make a determination that is binding on the parties.

[25] WorkPac also opposed the CFMEU application that the Commission exercise powers under s. 586(a) of the Act to amend the application so that the CFMEU is not named as the applicant, citing the Decision of the Full Bench of the Commission in Djula v Centurion Transport Company Pty Ltd 16as authority for the proposition that this section of the Act could not be used to amend an application in a way that would result in the application being fundamentally different.

[26] In response to a question from the Commission as to whether WorkPac had agreed to bypass certain stages in the Dispute Settlement Procedure, the legal representative for WorkPac contended that a jurisdictional impediment to the Commission arbitrating the dispute could not be overcome by the fact that WorkPac may have agreed to the dispute progressing to a further stage of the Dispute Settlement Procedure. This is said to be because the characterisation of the dispute makes it apparent that the CFMEU is seeking to act as a party principal and is seeking an exercise of judicial power from the Commission in circumstances where the Commission does not have jurisdiction to exercise such power.

CFMEU

[27] In response to the first jurisdictional objection, the CFMEU contends that parties to the dispute are FTMs covered by the Agreement. The role of the CFMEU is that of representative of those FTMs. That role and the conduct of the CFMEU in relation to this dispute is, and has been, entirely consistent with clause 7.1.4 of the Agreement, which provides that an FTM can appoint a representative at any stage of the Dispute Settlement Procedure.

[28] The CFMEU contends that on the plain and ordinary words in clause 7.1.4 of the Agreement the actions that can be taken by a representative include acting on behalf of the relevant FTMs at each and every stage of the Disputes Settlement Procedure. This includes raising the dispute at Step 1 with WorkPac. The CFMEU contends that it was clear from the very first occasion that the dispute was being raised by the CFMEU as a representative of the relevant members, and that there was no suggestion that the CFMEU was purporting to be a party to the dispute in its own right.

[29] The CFMEU also contends the WorkPac has been clearly advised that the dispute concerned CFMEU members at the Hail Creek Mine. While acknowledging WorkPac’s issue with the exact identity of the relevant FTM’s not being identified, the CFMEU contends that there is no express provision in clause 7 or in any relevant instrument that an appointed representative must disclose the identity of the FTM they are representing, and that the initial notification of the dispute could be completed by a properly appointed representative on behalf of the FTM’s. The CFMEU contends that it can overcome the first jurisdictional objection on the basis that the Commission should be satisfied that the Union was appointed as a representative of the FTMs in dispute, consistent with clause 7.1.4 of the Agreement. In this regard, the CFMEU relies on the witness statement of Mr Brodsky. 17

[30] Mr Brodsky’s uncontested evidence is that there are a number of CFMEU members employed as FTM’s by WorkPac at the Hail Creek Mine, that have been advised that their hourly rate of pay is to be reduced. According to Mr Brodsky those members have contacted the CFMEU to request assistance in retaining their hourly rate. The relevant CFMEU members have been advised by the Union that it would notify WorkPac of a dispute about the rate reduction on their behalf. The relevant members have been kept updated about the progress of the dispute and have endorsed its progression through the dispute settlement procedure in the Agreement. The relevant members (and the majority of employees) of WorkPac at the Hail Creek mine work the same roster as described in paragraph 12 of Mr Brodsky’s witness statement as follows:

“WorkPac employees at the Hail Creek Mine work to a roster that alternates between day and night shifts in that the employees work 5 consecutive day shifts followed by 5 days off then 4 consecutive night shifts followed by 5 days off then 5 consecutive day shifts followed by 4 days off then 5 consecutive night shifts followed by 5 days off then 4 consecutive day shifts followed by 5 days off then 5 consecutive night shifts followed by 4 days off. The cycle repeats itself.”

[31] According to Mr Brodsky, prior to January 2016, employees working this roster were paid an hourly rate of pay that was equivalent to the “Afternoon & Night shift rate” specified in the relevant Schedule of the Agreement for each shift worked, irrespective of whether the shift was a day shift or an afternoon/night shift. In about January 2016, WorkPac reduced the hourly rate of pay for FTMs and the present dispute concerns whether the reduction in pay is consistent with the terms of the Agreement. Mr Brodsky also states that the relevant CFMEU members have asked that their identity not be disclosed, on the basis that most of WorkPac’s FTMs are employed on a casual basis and they are concerned that their employment will be terminated as a result of participation in the dispute. The members are prepared for their identity to be disclosed to the Commission on a confidential basis. Further, Mr Brodsky states that at a meeting held on 23 June 2016, attended by Mr Brodsky and Mr Smyth of the CFMEU and Mr Powell, Ms Keating and Mr Weygood on behalf of WorkPac, he explained the Union’s position in relation to the interpretation of the Agreement and that the position was put on behalf of its members.

[32] The CFMEU also asserts that there are numerous cases where the Commission at first instance and on appeal has allowed an amendment to an application to change the name of a respondent and by extension the same power can be exercised to change the name of an applicant. In response to the second jurisdictional objection the CFMEU contends that the Dispute Settlement Procedure in the Agreement confers on the Commission the ability to exercise a power of private arbitration. The CFMEU relies upon the High Court decision in CFMEU v Australian Industrial Relations Commission 18 (the Private Arbitration Case) as establishing the Commission’s ability to exercise private arbitration power where it has been conferred under an agreed Disputes Settlement Procedure.

[33] The CFMEU contends that the Disputes Settlement Procedure in the Agreement is an agreed procedure so that the Commission can exercise powers of private arbitration in settling disputes over the application of the Agreement, including making decisions as to the legal rights and liabilities of the parties. The CFMEU submits that in the Private Arbitration Case, the High Court distinguished between arbitrated and agreed dispute settlement procedures and the reference to limitations of the Commission’s power relied on by WorkPac relates to an arbitrated procedure. This distinction was also considered in Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Telstra Corporation Limited. 19

[34] The CFMEU disputes WorkPac’s contention that the application seeks a legally binding determination. The CFMEU contends the determination of the application will not be binding of its own force, and therefore by invoking private arbitration the CFMEU is not seeking a legally binding determination.

[35] In response to the third jurisdictional objection the CFMEU contends that the effect of s.739(5) of the Act is that putting a question for determination that would result in a decision that is inconsistent with the Act or the Agreement does not mean the Commission does not have jurisdiction to determine the application. The CFMEU submits that there is nothing preventing the Commission from determining the application by answering another question or accepting an amendment to that question provided that s.739(5) of the Act is complied with.

[36] The CFMEU does not concede that the proposed question for arbitration poses any difficulty. However, for the abundance of clarity, the Union proposes an amended question for determination in the following terms:

“Whether a FTM at the Hail Creek Mine that works to the roster described at paragraph 12 of the Witness Statement of Christopher Iain Brodsky dated 9 November 2016 is entitled to be paid the relevant Afternoon & Night shift rate as per the relevant Schedule of the WorkPac Pty Ltd Mining (Coal) Industry Enterprise Agreement 2012 for each shift that is worked?”

[37] The CFMEU contends that the amended question disposes of the third jurisdictional objection and that the Commission should dismiss each of the three objections raised by the WorkPac and proceed to set the application down for substantive hearing.

CONSIDERATION

Can the Dispute Settlement Procedure be engaged by the CFMEU without identifying individual FTMs?

[38] The first objection advanced by WorkPac centres on whether the Dispute Settlement Procedure in clause 7 of the Agreement has been properly engaged by the CFMEU in circumstances where the individual FTM/s said to be in dispute have not been identified. As previously noted, the Commission’s power to deal with a dispute in accordance with a dispute settlement procedure in an enterprise agreement derives from the terms of the Agreement. The Agreement in the present case provides that the Commission is not permitted to arbitrate a dispute unless each of the preceding stages of the Dispute Settlement Procedure have been completed or where there is agreement between the parties to bypass stages.

[39] It is therefore necessary to construe the terms of the Agreement including the Dispute Settlement Procedure in clause 7, to determine whether in circumstances where an individual FTM or FTMs have not been identified at any stage, the Commission can arbitrate the dispute.

[40] The approach to construing provisions of an enterprise agreement was set out in a Decision of a Full Bench of the Commission in AMIEU v Golden Cockerel Pty Limited (Golden Cockerel). 20 The principals established in the cases referred to in that decision are:

• Construction of an enterprise agreement begins with a consideration of the ordinary meaning of its words; 21

• The agreement must be read as a whole 22 and regard must be had to the context and purpose of the provision being construed;23

• Context extends to the entire agreement, other associated documents or the ideas that gave rise to an expression in a document; 24

• The words used in an enterprise agreement should not be interpreted in a strict technical fashion, because those who framed the industrial instrument are often non-lawyers with a practical frame of mind, drafting words in the context of custom and practice in an industry or particular enterprise; 25

• The process of construction is an objective task and it is not appropriate to have regard to the subjective beliefs or expectations held by one party. The task is to identify the common intention of the parties as they have expressed it in the terms of their agreement; 26

• Search for evident purpose is permissible and meanings which avoid inconvenience or injustice may be reasonably strained for, however the task remains one of interpreting a document produced by others and not giving effect to some anteriorly derived notion of what would be fair or just, regardless of what has been written into the agreement; 27
• Regard may be had to evidence of the surrounding circumstances before the existence of ambiguity in an agreement is identified as an aide to interpreting the agreement for the purposes of determining whether an ambiguity exists, but cannot be used to contradict the language of the instrument;
• If ambiguity is identified extrinsic material may be used as contextual material to aide in the interpretation of the instrument. 28

[41] In my view the answer to the question posed by this objection is straightforward when the ordinary meaning of the words in clause 7 of the Agreement is considered. It is true that each Stage refers to “the FTM” who is in dispute taking a particular step. However, by virtue of clause 7.4 of the Dispute Settlement Procedure the FTM may appoint a representative including another FTM or any other person to represent the FTM at any stage of the Procedure. The ordinary meaning of the term “representative” includes one who is an agent of a person, a delegate or a substitute. Once appointed, the representative can act for the FTM who has the dispute. There is no formal appointment process stipulated in the Agreement.

[42] There is nothing in the plain words of clause 7 of the Agreement that requires a representative to identify the FTM/s in dispute. The CFMEU is defined in clause 1.2.2 as a party to the Agreement. The preamble to the Dispute Settlement Procedure sets out the intention of the parties that all disputes arising out of the interpretation or application of the Agreement and in relation to the NES or in the course of employment, will be dealt with at the local level to the maximum extent possible. The CFMEU has complied with this provision and has attempted to deal with the dispute locally to no avail and has only lodged the dispute with the Commission when it was not resolved in accordance with the earlier stages of the Procedure. The CFMEU has also evidenced attempts to comply with the commitment in clause 7.1.1 of the Agreement that “the parties to the dispute” will consult to reach settlement.

[43] In the circumstances of this case, I am satisfied on the basis of Mr Brodsky’s unchallenged evidence that there are employees of WorkPac employed as FTMs at the Hail Creek Mine who take issue with a reduction in their earnings as a result of a change in the manner that WorkPac is applying or interpreting the terms of the Agreement. I am also satisfied on the basis of Mr Brodsky’s evidence that there are employees (at least at the time the issue was first articulated to WorkPac by the CFMEU) who requested that the CFMEU represent them in questioning or disputing the terms of the Agreement.

[44] The CFMEU is acknowledged in the Agreement as a party as are FTMs covered by it. WorkPac is also a party to the Agreement. It is not inconsistent with the terms of the Agreement that the CFMEU through Mr Brodsky would be representing FTMs in a dispute of the kind articulated in the correspondence from the CFMEU to WorkPac. I also find it improbable that the CFMEU is at large in Queensland seeking to raise disputes in circumstances where the Union is not representing its members.

[45] It is also the case that at Stage 5 of the procedure which provides for arbitration, the Commission may not arbitrate the dispute unless each of the preceding stages of the dispute settlement procedure have been completed or where there is agreement between the parties to bypass stages. In the present case, on 18 April 2016, the General Manager Operations and Support Services of WorkPac acquiesced with the bypassing of earlier stages and accepted that the dispute had now reached Stage 3 of the Procedure. Thereafter, the CFMEU sought to escalate the dispute to Stage 4 and on 1 June 2016, the Senior Industrial Relations Advisor for WorkPac advised in response to that request that the dispute had been escalated to the National Employee Relations Advisor.

[46] While I accept that in earlier correspondence to the CFMEU that WorkPac had complained about lack of particulars or details of which FTMs were in dispute, it was not until WorkPac had accepted the escalation of the matter to Stage 4 that the jurisdictional matters now pressed in these proceedings, were articulated. The letter from the National Employee Relations Manager of WorkPac dated 5 July 2016 cannot retrospectively overcome the fact that persons with ostensible authority to do so, have agreed in writing to bypass earlier stages of the Dispute Settlement Procedure. In response to a written request from the CFMEU seeking that the matter be escalated to stage 4, a Senior IR Advisor for WorkPac informed the CFMEU in writing that the matter has been referred to the National Employee Relations Manager and escalated to stage 4 of the Dispute Settlement Procedure.

[47] For the reasons set out above, I do not accept that the failure of the CFMEU to identify a particular FTM or FTMs who were in dispute, was a jurisdictional impediment to the dispute proceeding under the Dispute Settlement Procedure to Stage 4. If I am wrong on this point, I am also of the view that WorkPac has agreed to bypass earlier stages notwithstanding the failure of the CFMEU to identify individual FTM/s in dispute. Any non-compliance by the CFMEU by virtue of not disclosing the names of individual FTMs who are represented by the Union in the dispute, is not a jurisdictional impediment to the Commission arbitrating the dispute.

Does the CFMEU have standing to make an application under s. 739 of the Act?

[48] By virtue of s. 739(6) of the Act the Commission may deal with a dispute only on application by a party to the dispute. A Union party to an enterprise agreement may have standing to make an application under s. 739 of the Act if the dispute settlement procedure in the agreement contemplates that the Union is a party principal with respect to a dispute. 29 An ancillary question arising from WorkPac’s jurisdictional objections to the Commission dealing with this matter under the Dispute Settlement Procedure in the Agreement is related to the standing of the CFMEU to make an application to the Commission under s. 739 of the Act.

[49] The Form F10 filed by the CFMEU states that the CFMEU is the applicant rather than a representative of employees covered by the Agreement. It is therefore necessary to consider whether on a proper construction of the Agreement including the Dispute Settlement Procedure, the CFMEU may be a party to the dispute – in the sense that it is a party principal to the dispute – for the purposes of making an application under s. 739 of the Act.

[50] Clause 7 of the Agreement does not specifically identify who may be a party to a dispute of the kind identified in clause 7. However, there are indications in the language of the clause that make it clear that what is contemplated is a dispute between an employee or employees covered by the Agreement and the employer. At every stage of the procedure the reference is to a question, dispute or matter involving a FTM.

[51] While the CFMEU is a party to the Agreement the reference to parties in the Dispute Settlement Procedure is not in the context that the CFMEU is a party to the dispute in its own right. Rather, the CFMEU is a party on the basis that it is a party to the Agreement and commits to the intent of the clause. The CFMEU may represent a FTM who is in dispute. However, the clause does not contemplate that the CFMEU is a party to the dispute in its own right, as a party principal so that the CFMEU can make an application under s. 739 in circumstances where it does not represent an employee or employees covered by the Agreement and there is no dispute involving employees.

[52] Accordingly, by virtue of s. 739(6) of the Act the CFMEU cannot make an application for the Commission to deal with a dispute under the Dispute Settlement Procedure in the Agreement in its own right.

Does s. 586 of the Act empower the Commission to amend the application so that it is taken to have been made on behalf of employees of WorkPac?

[53] In the event that the Commission finds that the CFMEU cannot be a party principal to the application under s. 739 of the Act, the CFMEU seeks to amend the application so that it is taken to have been made by employees of WorkPac who are members of the CFMEU. At the hearing I canvassed with the parties the possibility of the CFMEU providing a list of members who have authorised the Union to represent them in the dispute and WorkPac providing a list of FTMs employed by WorkPac at Hail Creek, in an attempt to resolve the issue of non-identification of the employees who are in dispute.

[54] On 1 December 2016, the CFMEU forwarded notices signed by six persons who are said to be employees of WorkPac at Hail Creek Mine. Each notice states that the signatory is a member of the CFMEU who has been adversely affected by a rate reduction at Hail Creek Mine and that the CFMEU is authorised to represent the signatory in “the dispute before Deputy President Asbury.” The CFMEU provided the declarations on a confidential basis and on the basis that they will not be provided to WorkPac. Workpac has not provided a list of employees at Hail Creek.

[55] WorkPac contends that the non-identification of employees who are in dispute is a jurisdictional barrier to the Commission dealing with the dispute that cannot be cured by an amendment to the application pursuant to s. 586 of the Act. WorkPac contends that s. 586 of the Act is not a source of power to amend the application on the basis that such an amendment would fundamentally change the nature of the application. In support of that proposition, WorkPac refers to a number of Full Bench Decisions which have considered the scope of the power under s. 586 of the Act and previous iterations of this power.

[56] I do not accept that submission. The decisions referred to by WorkPac relevantly establish that s. 586 of the Act provides a power to correct or amend an application but does not empower the Commission create a new application. 30 This is not a case where the amendment sought by the CFMEU would create a new application. It is well established that the Commission can amend an application using the power in s. 586 of the Act by changing the identity of the respondent to an application without creating a new application. I can see no reason why, in the circumstances of the present case, the power in s. 586 cannot be used to change the identity of the applicant.

[57] In the present case, an amendment to the effect that the application is made on behalf of members of the CFMEU rather than the CFMEU as party principal to the dispute, will not alter the fundamental nature of the application. The application seeks that the Commission deal with a dispute arising under an enterprise agreement in accordance with a dispute settlement procedure in the Agreement. The dispute is in relation to an interpretation of the Agreement adopted by WorkPac which it asserted is wrong and has resulted in a reduction in the income of employees of WorkPac employed at Hail Creek Mine as FTMs under the Agreement. The same issue will be in dispute regardless of whether the applicant is the CFMEU or an employee or employees of WorkPac represented by the CFMEU.

[58] For the reasons set out above, I accept that at all times there are members of the CFMEU who are employed by WorkPac as FTMs at Hail Creek, and who are covered by the Agreement, who are in dispute with WorkPac in relation to this matter. I also accept that the CFMEU has represented those employees from the point the dispute was articulated by the CFMEU. The nature or character of the dispute will not be affected by an amendment to the effect that the application will be taken to be made by employees who are represented by the CFMEU and not the CFMEU as party principal.

[59] I am also of the view that the power to amend should not be exercised unless the employees who will be the applicants are identified. I accept that employees in the initial stages of the dispute may have been reluctant to be identified. I have found that Stages 1 to 4 of the Dispute Settlement Procedure in the circumstances of this dispute – where the issue is common to FTMs on the site – do not require the identification of the employees in dispute. I may have a different view in circumstances where a dispute related to employees having specific characteristics or where the issue giving rise to the dispute did not have broad relevance.

[60] However, at the point an application is made to the Commission (assuming that an application that does not identify an applicant is valid) then it is in my view, not appropriate that the identity of the applicant or applicants is concealed unless there is a valid reason to do so. In the present case it is not necessary to decide whether an application that does not identify the applicant or applicants is valid or whether the Commission has the power to suppress the identity of an applicant before an application is made. This is because there is no valid reason why the employees who are in dispute cannot be identified.

[61] The persons who will be the applicants if the present application is amended, are members of the CFMEU, an organisation which would probably vigorously defend members alleged to have been unfairly or unlawfully treated because they have made an application to the Commission. WorkPac is a large employer with a dedicated human resource management team and would probably not unfairly or unlawfully deal with an employee who exercised a right to make an application to the Commission. There is no evidence that WorkPac has ever dealt with employees in this way and there is no reason to believe that it would do so in the present case. The assertion that employees are concerned that they will be dismissed because they are in dispute about the matter does not provide a valid reason for their non-identification in such circumstances.

[62] For the reasons set out above, the CFMEU is not and cannot be a party principal to the dispute and unless amended, the application will not be validly made by virtue of s. 739(6). I will exercise the power in s. 586 of the Act conditional upon the CFMEU agreeing that the employees it represents in the present dispute are identified as applicants in the amended application.

What is the extent of the Commission’s power to deal with the dispute?

[63] WorkPac asserts that as the question for arbitration posed by the CFMEU is not agreed, s. 739(4) of the Act is not satisfied and the application is beyond the jurisdiction of the Commission. WorkPac further asserts that the question as framed asks the Commission to give an opinion on a question of law and the legal effect of a term of the Agreement and as such is beyond the jurisdiction of the Commission. In my view, these assertions and the submission on which they proceed are erroneous.

[64] By s. 739 of the Act the Commission is empowered to deal with a dispute if a term of an enterprise agreement requires or allows the Commission to do so. In dealing with a dispute the Commission must not exercise any powers limited by the term and may arbitrate the dispute. As the powers of the Commission are limited to disputes of the kind set out in the relevant Disputes Settlement Procedure, it is necessary for the Commission in each case where it is asked to deal with a matter under a Disputes Settlement Procedure in an agreement, to ascertain the character of the dispute and whether it is a dispute of the kind referred to in the procedure. 31

[65] The legal principles concerning the characterisation of a dispute were summarised by Commissioner Saunders in Construction, Forestry, Mining and Energy Union v Mt Arthur Coal 32as follows:

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

[7] The scope of a dispute settlement procedure in an enterprise agreement should not be narrowly construed; “to do so would be contrary to the notion that certified agreements are intended to facilitate the harmonious working relationship of the parties during the operation of the agreement.”

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

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

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

[66] In the present case, the parties have agreed that the Disputes Settlement Procedure in clause 7 applies to disputes arising out of the interpretation or application of the Agreement and in relation to the NES or in the course of employment. The parties have further agreed that the Commission may arbitrate certain kinds of disputes as set out in clause 7.1.2 in the last paragraph under the heading “Stage 5”. As previously noted that paragraph is in the following terms:

“FWA is not permitted to arbitrate unless each of the proceeding stages have been completed or where there is agreement between the parties to bypass stages a dispute that is referred to under this clause, unless it specifically relates to the NES or the interpretation and/or application of this Agreement.”

[67] The drafting of this provision leaves much to be desired. However, it is reasonably clear that the effect of the provision is that the Commission is not permitted to arbitrate a dispute referred to it under the clause:

• unless each of the proceeding Stages of the Dispute Settlement Procedure have been completed; or

• where there is agreement between the parties to bypass stages; and

• unless the dispute relates to the NES or the interpretation or application of the Agreement.

[68] In the Form F10 Application, the CFMEU states that the dispute is about the following matters:

“(a) Members of the Applicant who are employees of the Respondent who are ‘Flat Rate’ employees pursuant to clause 9 of the EA are being paid the ‘Day’ rate when they do not work an afternoon or night shift as defined in sub-clause 15.4 of the EA and are paid the ‘Afternoon & Night’ rate when they work an afternoon or night shift as defined in sub-clause 15.4 of the EA (those rates being found in the relevant schedules to the EA).

(b) The Applicant contends that the Respondent is misapplying the terms of the EA in respect of the above as (with additions and emphasis added):

i. sub-clause 14.3 of the EA requires the Respondent to classify an employee as either a day worker or shift worker;

ii. sub-clause 14.6 of the EA states that employees are to be paid at the rate (singular) in the relevant schedule, irrespective of when the hours are worked; and

iii. sub-clause 14.9 of the EA states that those employees are not entitled to any additional payment for shift penalties.

(c) The Applicant contends that ‘Flat Rate’ employees who are rostered to work afternoon and/or night shifts (as defined by sub-clause 15.4 of the EA) are to be classified as ‘Flat rate FTM shift workers’ (a classification of employee recognised by sub-clause 14.8 of the EA). That is, the Respondent has elected to classify the employee as a shift worker and not a day worker. It is submitted by the Applicant that the classifications operate to the exclusion of each other.

(d) Consequentially, those employees are entitled to be paid the ‘Afternoon & Night’ rate for all hours worked.

(e) The Respondent has a different view to the Applicant and appears to contend that, as they may roster employees to work hours determined by it according to its operational needs, they do not have to classify an employee as a day worker or shift worker – instead pay the rate applicable to the shift worked. In effect the Respondent argues that the EA permits employees to be classified on a “per shift” basis rather than holistically.

(f) The Applicant contends that the words of sub-clause 14.3 are to be contrasted with words such as “A Flat Rate FTM shall be rostered by the Company to meet operational needs on a day, afternoon or night shift and be paid at the rate applicable to the shift worked”.

(g) The Applicant contends that, properly construed, the right of the Respondent to roster the hours of work to meet its operational needs is a right to direct employees to work additional hours or a different work pattern.”

[69] Further information about the dispute is found in the witness statement of Mr Brodsky. The alternative question for arbitration posed by the CFMEU is directed squarely at the issue in dispute. The relief sought in respect of the dispute as set out in the Form F10 application is as follows:

“An Order that, on the proper application of the [Agreement] the Respondent must classify an employee as either a ‘Flat Rate FTM shift worker’ or ‘Flat Rate FTM day worker’ and pay them the corresponding ‘Day’ or ‘Afternoon & Night’ rate irrespective or (sic) when they work.”

[70] The CFMEU has indicated that it is prepared to reframe the relief sought so that it seeks a determination of the dispute. It is clear from the Form F10 application, the submissions of the CFMEU, the witness statement of Mr Brodsky and each of the questions for determination posed by the CFMEU that the proper characterisation of the dispute is as a dispute about the application and interpretation of terms of the Agreement. Such a dispute is one that falls within the scope of the Disputes Settlement Procedure in clause 7 of the Agreement and the Commission is required or allowed to deal with the dispute in accordance with that Procedure.

[71] The Disputes Settlement Procedure in clause 7 of the Agreement does not require that the issue in dispute is articulated in final form at the outset or throughout the various Stages. The Dispute Settlement Procedure in the present case can be contrasted with the procedure considered by Deputy President Sams in Australian Rail, Tram and Bus Industry Union – New South Wales Branch v Asciano Services Pty Ltd t/as Pacific National 33which requires that a dispute must be lodged in writing in the form set out in the agreement. As previously noted a dispute can evolve over time and still be within the scope of a Disputes Settlement Procedure in an enterprise agreement.

[72] The Disputes Settlement Procedure in the present case does not require that the parties agree on a question for arbitration before the Commission can arbitrate the dispute. The question for arbitration may evolve throughout the course of a dispute as it progresses through the stages set out in the Procedure. The lack of agreement about the question for determination is not a jurisdictional barrier to the arbitration of the dispute. It is inconsistent with the broad scope of the Procedure to imply any such limitation to the power of the Commission to arbitrate. Further, such a limitation would effectively render the provision nugatory as either party could avoid the operation of the procedure by simply refusing to agree on the question for determination.

[73] I do not accept that s. 739(4) of the Act operates so that the Commission is not empowered to arbitrate a dispute unless the parties agree on the terms of a question for arbitration. Section 739(4) is simply a source of power for the Commission to arbitrate a dispute if the parties have agreed that it can do so. The only source of such a limitation on the power of the Commission to arbitrate a dispute could be the terms of the Dispute Settlement Procedure in the Agreement. There is nothing in those terms that restricts the power of the Commission to arbitrate a dispute in circumstances where the question for arbitration is not agreed.

[74] S. 739(5) of the Act provides that the Commission must not make a decision that is inconsistent with the Act or a fair work instrument. The Agreement is a fair work instrument. I do not accept that infelicity in in the way a dispute is articulated or a question for arbitration is framed, is a jurisdictional barrier to the Commission dealing with the dispute. Where relief sought is inconsistent with the Act or the Agreement the question for arbitration or the relief can be amended with the involvement of the Commission. The terms of an application under s. 739 of the Act for the Commission to deal with a dispute in accordance with a dispute settlement procedure are not carved in stone like the Ten Commandments. Neither is a question for arbitration or the relief sought. It is the nature of a dispute that it can evolve.

[75] The fact that the proposed question as initially posed referred to a rotating roster, does not present a jurisdictional impediment to arbitration on the basis that there is no reference to such a roster in the Agreement. The reference to a rotating roster was simply an attempt by the framer of the proposed question to describe the roster that is currently in place at Hail Creek. The CFMEU has amended the question to remove the reference to a rotating roster out of an abundance of caution. The description of the roster in the question for arbitration is not determinative of whether the Commission has jurisdiction to arbitrate the dispute. WorkPac cannot avoid arbitration by simply refusing to participate in the framing of a question for determination in circumstances where there is a dispute that is within the scope of the Disputes Settlement Procedure in clause 7 of the Agreement. If the parties are unable to agree on the question for arbitration, it is open to the Commission to determine that matter as part of the arbitration of the dispute.

[76] I turn now to the arguments advanced on behalf of WorkPac in relation to the power that the Commission would exercise in determining the dispute. The role of the Commission in dealing with disputes in accordance with dispute resolution provisions of agreements was clarified by the High Court in the Private Arbitration Case. 34In summary the High Court held that:

• It is incidental to the Constitutional power with respect to conciliation and arbitration that the Parliament give legal effect to agreed procedures for maintaining a settlement of matters in issue between parties to an industrial situation and to authorise the Commission to participate in those procedures; 35

• There is a significant difference between arbitrated and agreed dispute settlement procedures and the Commission cannot by arbitrated award require parties to submit to binding procedures for the determination of legal rights and liabilities under an award, because Chapter III of the Constitution commits power to make determinations of that kind exclusively to the courts; 36

• Where parties to an agreement agree to submit their dispute to a third party for decision, the decision maker does not exercise judicial power, but a power of private arbitration based on the agreement of the parties whereby the effect if any of the outcome, depends on the law which operates with respect to it rather than on the basis that the outcome is a judgement or an order that is binding of its own force; 37

• To the extent that the then legislative provision empowering the Commission to conciliate or arbitrate to prevent or settle disputes operated in conjunction with an agreed Disputes Settlement Procedure authorising the Commission to make decisions as to the legal rights and responsibilities of the parties, it merely authorises the Commission to exercise a power of private arbitration; 38 and

• Procedures for resolution of disputes over the application of an agreement made by parties to an industrial situation, to prevent that situation from developing into an industrial dispute, are procedures for maintaining the agreement which Parliament may authorise the Commission to participate in through legislation. 39

[77] The High Court decision in the Private Arbitration case applies to the current legislative provisions and to the power of the Commission to deal with disputes in accordance with dispute settlement procedures in enterprise agreements. The decision of the Full Court of the Federal Court in Wagstaff is entirely consistent with the High Court decision in the Private Arbitration Case and does not support the argument advanced by WorkPac in the present case. In Wagstaff the issue in dispute was whether an agreement prevented the Company from requiring an employee to submit to a random drug and alcohol test. At first instance a member of the Commission found that the relevant agreement did prevent the Company from implementing such a requirement and on appeal a Full Bench of the Commission found to the contrary. The dispute settlement procedure in the agreement provided that the Commission could “review” a decision of the Victorian Building Industry Disputes Panel and “exercise its conciliation and/or arbitration powers in such a review.”

[78] In relation to the decision of the Commission at first instance, the majority of the Full Court of the Federal Court (Buchanan and Katzman JJ) said that in holding that the agreement did not authorise or permit random drug or alcohol testing because it made no reference to such testing, the Commissioner who dealt with the matter had expressed an opinion about the legal operation and effect of the agreement that arguably did not involve the exercise of any power of conciliation or arbitration. The majority observed that had the Commissioner used his own opinion about the legal effect of the agreement to suggest that mandatory drug and alcohol testing stop, he would not have exceeded his jurisdiction, even though in the Court’s view his opinion was incorrect. 40 The majority also observed that in contrast, the Full Bench in holding that the Commissioner’s conclusion was without proper foundation and disagreeing with the recommendation and conclusion of the Panel, had exercised a conciliation or arbitration power by taking a step to deal with the industrial merits of the dispute.41

[79] The majority of the Court went on to confirm that although the Commission cannot exercise judicial power, the Commission may legitimately form and act upon opinions about legal rights and obligations as a step in the exercise of its own functions and powers. 42 Justice Flick also held that in expressing a view as to the proper interpretation of the agreement the Full Bench of the Commission did not intrude into what may otherwise be regarded as a judicial function.43

[80] Consistent with the Decision of the High Court in the Private Arbitration Case the decision of the Full Court of the Federal Court in Wagstaff does no more than reiterate that the Commission, when arbitrating a dispute, cannot make a binding declaration or an order about the legal meaning and effect of an agreement that has effect of its own force. However, the Commission can, where authorised by a Disputes Settlement Procedure, make a determination about the proper construction or interpretation of an enterprise agreement to resolve a dispute that relates to the construction or interpretation of the agreement.

[81] The Full Bench decision in Metropolitan Fire and Emergency Services Board v United Firefighters’ Union of Australia; Garth Duggan 44restates the entirely unremarkable propositions that in dealing with a dispute in accordance with the dispute settlement procedure in an enterprise agreement the Commission cannot determine the unfairness of a dismissal and cannot make an order pursuant to a dispute settlement procedure that is binding by its own force.45 As the Full Bench in that case stated, consistent with the decision of the High Court in the Private Arbitration Case the power to arbitrate is created by the parties’ agreement and is enforceable as a matter of contract.46

[82] In the present case, the dispute relates to whether WorkPac is properly applying the terms of the Agreement with respect to day work and afternoon and night work and the CFMEU seeks a determination as to the proper construction of the Agreement in order to resolve the dispute. Such a determination does not involve the exercise of judicial power and is within the jurisdiction of the Commission.

[83] The submission of WorkPac to the effect that an arbitrated outcome in the form of a determination will not be binding because the Disputes Settlement Procedure does not require WorkPac to accept the Decision can be dealt with in short compass. The term “arbitrate” means that the Commission is empowered to make a binding determination to resolve a dispute. Where the parties have agreed that the Commission can arbitrate a dispute either following a series of steps culminating in either party having the right to seek arbitration, or where as a final step the parties are required to agree to arbitration on a case by case basis and have agreed that a particular dispute can be arbitrated, the parties have agreed that they will accept the arbitrated outcome, subject only to rights of appeal. To find otherwise would render a dispute settlement procedure providing for arbitration, nugatory.

[84] Absent a clear statement in a dispute settlement procedure that a determination by way of arbitration is only binding where the parties agree to accept the determination after is made, I do not accept that the plain and long standing meaning of the term “arbitrate” or “arbitration” as it appears on clause 7 of the Agreement requires the additional wording found in clause 5(b)(ii) of the Model Term For Dealing with Disputes for Enterprise Agreements in Schedule 6.1 of the Fair Work Regulations 2009, in order for the Commission to be empowered to make a binding determination in relation to a dispute that is within the scope of a disputes settlement procedure in an enterprise agreement, subject to rights of appeal. The Dispute Settlement Procedure in the present case contains no such statement.

CONCLUSION

[85] In summary and for the reasons set out above, my conclusions are as follows:

1. The Disputes Settlement Procedure in the Agreement was validly engaged in the present case notwithstanding that the CFMEU did not identify employees it was representing.
2. If I am wrong on that point, then WorkPac has agreed in accordance with the Disputes Settlement Procedure to bypass Stages 1 – 3 of the Procedure so that it was escalated to Stage 4.
3. There are FTMs employed by WorkPac at the Hail Creek Mine who are in dispute with WorkPac in relation to the application or interpretation of the Agreement.
4. The CFMEU is a representative of employees who are in dispute with WorkPac in relation to this matter and has acted at all times in this capacity.
5. The CFMEU does not have standing under the Disputes Settlement Procedure in the Agreement to make an application under s. 739 of the Act in its own right and such an application can only be made by employees who may choose to be represented for this purpose by the CFMEU.
6. Section 586 of the Act is a source of power for the Commission to amend the application so that it is taken to be made by employees of WorkPac who are in dispute.
7. The Commission will exercise the power to amend the application in the circumstances of the present case, but as a matter of discretion will not do so unless the individual employees who make the application are identified.

8. The dispute as articulated by the CFMEU on behalf of affected members is within the scope of the Disputes Settlement Procedure in clause 7 of the Agreement.

9. The Commission has power to determine the dispute given to the Commission with the agreement of the parties in accordance with the Disputes Settlement Procedure by answering the amended question posed by the CFMEU.

[86] If the CFMEU wishes to proceed with the arbitration of the dispute, I provide the Union with seven days to file and serve on WorkPac an amended application naming the employees in dispute. Should WorkPac wish to take issue with the standing of any named employees to make the application, the Company should advise of this within seven days of the amended application being filed. Absent such advice I will exercise the power under s. 586 of the Act to amend the application.

[87] Should WorkPac reconsider its position of non-participation in the framing of the question for arbitration, the Company may submit a proposed question to the CFMEU and the Commission within seven days of the filing of the amended application and hold discussions with the CFMEU in order to attempt to agree on a question for arbitration. I will convene a further conference of the parties if there is no agreement on the question for arbitration and will if necessary determine that question and issue Directions for the arbitration of the dispute. In the absence of advice to the contrary from WorkPac, the question for arbitration will be the amended version proposed by the CFMEU, subject to the Commission amending the question after further discussion with the parties.

[88] I dismiss the jurisdictional objections to the application.

DEPUTY PRESIDENT

Appearances:

Mr A. Walkaden of the CFMEU on behalf of the Applicant.

Mr M. Procter of ClarkeKann Lawyers for the Respondent.

Hearing details:

Brisbane

25 November

2017.

1 [2015] FWCFB 5619.

2 Exhibit 1 – Witness Statement of Ashlee Miller Annexure AM-1.

3 Exhibit 1 – Witness Statement of Ashlee Miller Annexure AM-2.

4 Exhibit 1 – Witness Statement of Ashlee Miller Annexure AM-3.

5 Exhibit 1 – Witness Statement of Ashlee Miller Annexure AM-4.

6 Exhibit 1 – Witness Statement of Ashlee Miller Annexure AM-5.

7 Exhibit 1 – Witness Statement of Ashlee Miller Annexure AM-6.

8 Exhibit 1 – Witness Statement of Ashlee Miller Annexure AM-7.

9 [2015] FWC 1138.

10 [2015] FWCFB 5619.

11 [2016] FWC 586.

12 [2012] FCAFC 87 (unreported).

13 Ibid at [31] per Buchanan and Katzman Jj.

14 Ibid at [62] – [63] per Flick J.

15 [2016] FWCFB 8120.

16 [2015] FWCFB 2371.

17 Exhibit 2 – Witness Statement of Christopher Iain Brodsky.

18 [2001] HCA 16; 203 CLR 645

19 AIRC PR950569 18 November 2003.

20 [2014] FWCFB 7447.

21 City of Wanneroo v Australian Administrative Clerical and Services Union (2006) 153 IR 426.

22 Amcor Limited v CFMEU and Ors [2005] HCA 10.

23 Short v Hercus (1993) 40 FCR 511 at 518.

24 Ibid.

25 Bond & Co Ltd (in liquidation) v McKenzie (1929) 28 AR 499.

26 Toll FGCT Pty Limited v Alphapham Pty Ltd (2004) 219 CLR 165 (at 179).

27 (1996) 66 IR 182.

28 [2014] FWCFB 7447 at [30].

29 Construction, Forestry, Mining and Energy Union v North Goonyella Coal Mines Pty Ltd [2015] FWCFB 5619 at [39]; “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMSU) v Southcorp Wines Pty Ltd [2016] FWC 586.

30 Djula v Centurion Transport Co. Pty Ltd [2015] FWCFB 2371; Narayan v MW Engineers Pty Ltd [2013] FWCFB 2530.

31 Metropolitan Fire and Emergency Services Board v United Firefighters Union of Australia; Garth Duggan [2016] FWCFB 8120 at [34] citing the Decision of Lacy SDP in Maritime Union of Australia v Australian Plant Services Pty Ltd PR908236.

32 [2016] FWC 2959.

33 [2017] FWC [27].

34 Construction, Forestry, Mining and Energy Union v the Australian Industrial Relations Commission (2000) 203 CLR 645.

35 Ibid at 657 paragraph 29.

36 Ibid at 657-658 paragraph 30.

37 Ibid at 658 paragraph 31.

38 Ibid at 658 paragraph 32.

39 Ibid at 658 paragraph 32.

40 Ibid at [33].

41 Ibid at [19].

42 [2012] FCAFC 87 at [21] – [22].

43 Ibid at [65].

44 [2016] FWCFB 8120.

45 Ibid at [57] and [60].

46 Ibid at [61].

Printed by authority of the Commonwealth Government Printer

Construction, Forestry, Mining and Energy Union v WorkPac Pty Ltd

[2017] FWC 1735

29 MARCH 2017

DECISION

BACKGROUND

AGREEMENT PROVISIONS

CONSIDERATION