Darren Vercoe v Atlas Drilling Co Pty Ltd T/A Atlas Drilling
[2015] FWC 1775
•19 MARCH 2015
| [2015] FWC 1775 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.739—Dispute resolution
Darren Vercoe
v
Atlas Drilling Co Pty Ltd T/A Atlas Drilling
(C2014/1559)
COMMISSIONER CRIBB | MELBOURNE, 19 MARCH 2015 |
Alleged dispute about redundancy - jurisdictional objection.
[1] Mr Darren Vercoe (the Applicant) has lodged an application for the Fair Work Commission (FWC, the Commission) to deal with a dispute with his employer, Atlas Drilling Company Pty Ltd t/a Atlas Drilling (Atlas Drilling, the company, the respondent), under section 739 of the Fair Work Act 2009 (the Act). The dispute concerns a claim by Mr Vercoe for redundancy pay under section 119 of the Act. Mr Vercoe’s employment was terminated by Atlas Drilling, effective 11 September 2014, with his final work day 27 August 2014. Mr Vercoe lodged his application on 26 August 2014.
[2] Atlas Drilling disputes that Mr Vercoe is entitled to receive redundancy pay. Further, the company raised a number of jurisdictional objections to the Commission dealing with the dispute.
[3] A conciliation conference was held on 22 September 2014 but the dispute was not resolved. Mr Vercoe requested that the FWC arbitrate the dispute. The company’s jurisdictional objections were set down for hearing on 3 February 2015. The parties complied with Directions to file and exchange submissions and witness statements. It was then agreed that the company’s jurisdictional objection would be determined on the papers and the hearing was vacated.
[4] This decision, therefore, deals solely with Atlas Drilling’s jurisdictional objections.
1. Jurisdictional questions to be determined
[5] In both parties’ initial outline of submissions, it was stated that the first question to be determined is:
- Whether 2.20(d) of Mr Vercoe’s contract of employment provides a procedure for dealing with disputes (in relation to the NES) pursuant to s.738(c) of the Act. 1
[6] The respondent submitted that, if the answer to the question above is ‘Yes’, then a second question arose:
- In relation to 2.20(d), have the parties agreed that the FWC may arbitrate the dispute, pursuant to s.739 of the Act. 2
[7] Following the exchange of submissions between the parties, Atlas Drilling in its supplementary outline of submissions stated that it was not contested that Mr Vercoe’s contract of employment, dated 12 March 2012, refers to the Atlas Drilling Company Pty Ltd Onshore Drilling Salaried Employees Conditions of Employment (Conditions of Employment). 3 It was submitted by the company that the dispute is now, generally, whether the FWC has jurisdiction to deal with the issue by arbitration.4 The Applicant, in the supplementary submissions made on his behalf, was in agreement with the company in relation to the remaining issues in dispute.5
2. Jurisdictional objections
(a) Atlas Drilling
[8] It was submitted, on behalf of Atlas Drilling, that the Commission does not have jurisdiction to deal with Mr Vercoe’s application. The three grounds for this contention were outlined as follows:
- The parties have not followed the dispute resolution procedure, set out in the Conditions of Employment. 6
- If the FWC finds that the parties have followed the dispute resolution procedure, Mr Vercoe is no longer an employee and is therefore not entitled to make an application to the FWC to deal with a dispute. Mr Vercoe’s last shift was on 27 August 2014. 7
- Further, or in the alternative, section 739(4) sets out the circumstances in which the FWC may arbitrate a dispute. If the parties have not agreed that the FWC may arbitrate the dispute, the FWC has no power to arbitrate. 8
[9] Therefore, Atlas Drilling argued that, for all of these reasons, the application should be dismissed by the Commission, for want of jurisdiction.
[10] It was Mr Schefe’s evidence that:
- Mr Vercoe was sent a letter by the company advising him that his employment was to be terminated. The letter stated that Mr Vercoe was being provided with four weeks’ notice, with his termination being effective on 11 September 2014. Mr Vercoe’s last work day was to be 27 August 2014. 9
- He received an email from Mr Gallagher (Operations Manager), on 25 August 2014, advising that Mr Vercoe had telephoned and had suggested that he was entitled to a redundancy. Mr Gallagher had asked him to look into it and to provide Mr Vercoe with an update by tomorrow. The email also stated that Mr Vercoe had mentioned that he was also writing to Mr Sturgess (Managing Director) about his claim for a redundancy payment. 10
- On the same day, Mr Vercoe sent an email to the Managing Director stating that he believed he was entitled to a redundancy payment under the National Employment Standards (NES). The email also stated that he had followed the dispute resolution procedure and had discussed his grievance with the Field Superintendent and Operations Manager. It went on to say that, as he was unable to resolve the matter with them, he was formally advising Mr Sturgess of his grievance. Mr Vercoe also requested written details of his redundancy payment within 24 hours. 11
- On 26 August 2014, he had received an email from Mr Sturgess which contained several emails sent by Ms Hardiman and Mr Vercoe to others on 25 August 2014. The emails offered an action plan and template letter to be sent to Mr Sturgess in relation to the redundancy pay claim and taking action in the FWC. 12
- On 27 August 2014, the company received an email from the FWC advising that Mr Vercoe had filed an application for the FWC to deal with a dispute. 13
- On 27 August 2014, the company emailed Mr Vercoe, acknowledging receipt of the grievance, and indicated that it needed seven days to provide a considered response. 14
- A further email was sent by the company, on the same day, acknowledging that Mr Vercoe had made an application to the FWC. The company agreed to withdraw the notice of termination, pending resolution of Mr Vercoe’s grievance. 15
- As Mr Vercoe’s grievance had not been resolved as of 4 September 2014, he had tried to call Mr Vercoe and had then sent him an email informing him that he was required to work a further roster commencing on 10 September 2014. 16
- Mr Vercoe was sent a flight itinerary and a further email regarding the crew change. 17
- The Company received an email from Mr Vercoe, on 8 September 2014, indicating that, amongst other things, he would not be returning to work on 10 September 2014. 18
- Mr Vercoe failed or refused to attend work on 10 September 2014. 19
(b) Vercoe
[11] On behalf of Mr Vercoe, it was submitted that:
- Section 739(4) of the Act expressly authorises the FWC to deal with a dispute by arbitration. 20
- Section 739(4) does not explicitly require express agreement between the parties for the FWC to arbitrate the dispute. 21
- Clause 2.20(d) of the Dispute Resolution Procedure in the Conditions of Employment is silent on what steps can be taken by the Commission. 22
- By not addressing the issue, it should be concluded that the parties contemplated that the FWC would take such steps as it considered necessary, within its powers, to resolve the dispute. This includes, but is not limited to, arbitration. 23
- The terms of a contractual dispute resolution procedure should not be subjected to the same rigour of analysis as enterprise agreements. This is because these sort of terms in enterprise agreements are negotiated between skilled representatives whereas employers offer common law contracts to employees who have little knowledge of employment law. It may be inferred that most employees would assume that a dispute resolution procedure in an employment contract would give the FWC considerable discretion in deciding how best to resolve the dispute. 24
- It was open to the employer to include a specific provision denying the FWC jurisdiction to arbitrate. As one does not exist, it is open to the FWC to exercise its available powers to resolve the dispute, including by arbitration. 25
- If the FWC considers that it does not have jurisdiction to arbitrate, the FWC should proceed to deal with the dispute by another method e.g. expressing an opinion or making a recommendation. 26
- In the alternative, the FWC has general powers, under s.590 of the Act, to inform itself as it sees fit. This includes the power to require parties to attend a conference etc. 27
- Mr Vercoe’s email, dated 8 September, was not a refusal or failure to attend at work. 28
- It was not open to the employer to unilaterally withdraw its notice of termination. It was, therefore, reasonable for Mr Vercoe to have responded in the manner he did. 29
- Given Mr Vercoe’s impending dismissal, the time allowed for the Managing Director to respond was reasonable, in the circumstances. It was open to the Managing Director to take steps to resolve the dispute, notwithstanding the notification to the FWC. However, it was stated that he did not do so. 30
- The dispute was notified to the FWC on Mr Vercoe’s last working day with the company. As the dispute was lodged whilst Mr Vercoe was still an employee, the Commission has jurisdiction to deal with the matter. 31
[12] Mr Vercoe’s evidence was that:
- On 14 August 2014, he was advised by Mr Gallagher that his position was being terminated with four weeks’ notice and that he was required to work out his last hitch. 32
- He received an email from Mr Schefe, on 15 August 2014, confirming the discussions regarding the termination of his employment. 33
- He replied to Mr Schefe, on the same day, advising that he thought that he was owed an extra weeks’ notice due to his age. 34
- This was confirmed by Mr Schefe on 15 August 2014. 35
- A new letter of termination was received on 18 August 2014 advising of a new effective date of termination of 18 September 2014. 36
- On 25 August 2014, he spoke with Mr Lynch (Field Superintendent) and advised that he believed he was entitled to a redundancy payment. Mr Lynch said that he should contact Mr Gallagher, the Operations Manager, to discuss it further. He was also recalled to have said that it was “out of his hands” to make that decision. 37
- On 25 August 2014, he telephoned Mr Gallagher and advised him that he believed he was entitled to a redundancy payment and that he was going to put this in writing to Mr Sturgess. Mr Gallagher was said to have responded that writing to Mr Sturgess was not necessary as there was no entitlement. 38
- On 25 August 2014, he emailed Mr Sturgess advising him of his grievance in relation to his entitlement to receive a redundancy payment. 39
- As he had not received a response to his email neither from Mr Sturgess nor from any other company representative by close of business on 26 August 2014, he had lodged a dispute with the FWC. 40
- He received a response from the company on 27 August 2014. 41
3. Considerations and conclusions
[13] Before determining the various jurisdictional objections raised by Atlas Drilling, it is useful to set out the relevant legislative framework together with clause 2.20 of the Conditions of Employment.
(a) Legislative framework
[14] The relevant sections of the Act are as follows:
“595 FWC’s power to deal with disputes
(1) The FWC may deal with a dispute only if the FWC is expresslyauthorised 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 expresslyauthorised 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)).
…..”
“738 Application of this Division
This Division applies if:
……..
(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;
……”
“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.
………
(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.”
[15] The Conditions of Employment contains the following Dispute Resolution Procedure:
“2.20 Dispute Resolution Procedure
In the event of a grievance arising in the workplace about any matters arising the procedure to be followed to resolve the matter will be as follows:
a) The matter will be discussed directly between the employee and the employees’ Supervisor or with the Rig Manager. In the case of a driller with the rig manager and in the case of a rig manager with the field super.
b) If not settled the matter will be formally submitted by the employee to the
Company in writing to the Managing Director.
c) The Company reserves its rights to submit a dispute to the employees.
d) If the Company and employee, continue to disagree, the matter will be referred to Fair Work Australia.”
(b) Jurisdictional objections
[16] As can be seen from paragraph above, the company has raised three jurisdictional objections. I will deal with each of them in turn.
(i) Has the dispute resolution procedure been followed?
[17] It was submitted by Atlas Drilling that the parties have not followed the dispute resolution procedure set out in the Conditions of Employment. Therefore, the company argued that Mr Vercoe was unable to make a valid application to the FWC. It was Mr Schefe’s evidence that Mr Vercoe wrote to the Managing Director on 25 August 2014 in relation to his grievance. Prior to writing to the Managing Director, Mr Vercoe had had a conversation with him (Mr Schefe). The company wrote back to Mr Vercoe, on 27 August 2014, indicating that it would need seven days to provide a considered response. It was argued that the steps in the dispute resolution procedure, prior to the referral to the FWC step, had not been followed.
[18] Mr Vercoe’s contention was that the steps in the dispute resolution procedure had been followed. He stated that he had raised his grievance with the Field Superintendent who referred him to the Operations Manager. Based on his view of the outcome of his conversation with Mr Gallagher, he had written to the Managing Director, requesting a response to his grievance within 24 hours (approximately) on 26 August 2014.
[19] A Full Bench, in the appeal by Charles Sturt University in relation to a dispute with the National Tertiary Education Union 42 (Charles Sturt case), found that the Commission had no jurisdiction under their dispute settling procedure because the requirements of the procedure had not been followed. The Full Bench stated that:
“Nevertheless, on any view, neither the procedure in clause 58.1 nor the procedure in clause 58.2 had been followed before the matter was referred to the Commission.
It follows that the Commission has no jurisdiction under clause 58.5 unless that condition precedent to referral has been satisfied. Given our finding that the procedure in clause 58.2 had not been followed, the Senior Deputy President had no jurisdiction to conduct a private arbitration pursuant to clause 58.5 in relation to the dispute.” 43
[20] It appears from the material before me that Mr Vercoe discussed the issue of redundancy pay with the Field Superintendent. Mr Vercoe was referred to the Operations Manager and so he discussed his claim with him also. It seems that, at this point in time, the matter was not settled. This is consistent with the requirements of the first step of the procedure.
[21] The second step in the dispute resolution procedure requires the matter to be formally submitted, in writing, by the employee, to the Managing Director. This Mr Vercoe did, on 25 August 2014. He gave the Managing Director 24 hours to respond to him and to agree to make a redundancy payment. The company did not respond to Mr Vercoe within the specified time but did do so the following day.
[22] The condition precedent for the matter to then be referred to the FWC is that the company and the employee continue to disagree. As Mr Vercoe did not receive a response from the company prior to the close of business on 26 August 2014, and in the absence of an agreement having been reached with his employer, Mr Vercoe was able to move to the third step of the dispute resolution procedure. The procedure does not contain any time limits for each of the steps. On the basis of the evidence before me, I am satisfied that Mr Vercoe has followed the dispute resolution procedure contained in the Conditions of Employment. Therefore, I find that the Commission has jurisdiction to deal with the application.
(ii) No longer an employee
[23] Atlas Drilling has also objected to the FWC dealing with Mr Vercoe’s application on the basis that Mr Vercoe is no longer an employee. It was common ground that Mr Vercoe’s last working day was 27 August 2014. Mr Vercoe lodged his application with the FWC on 26 August 2014. Therefore, Mr Vercoe was an employee of Atlas Drilling at the time he made the application.
[24] In relation to this issue, both parties referred me to the decision in Seiffert and Ors v Patrick Projects Pty Ltd 44 (Seiffert). It is my view that this matter can be distinguished from the decision in Seiffert on the basis that, in Seiffert, the dispute notification was made after the employees had been made redundant. In this case, the application was made by Mr Vercoe when he was still an employee.
[25] Secondly, the question of whether the FWC has jurisdiction to deal with disputes between an employer and former employees has been dealt with by a Full Bench in ING Administration v Jajoo 45 (ING). This case concerned a situation where the Applicant had raised issues regarding the payment of severance prior to the termination of his employment. The legislative context for the decision was section 170LW of the Workplace Relations Act 1996. The majority, in its decision, reviewed the previous single member decisions and believed itself to be the first Full Bench to deal with the question of whether the FWC has jurisdiction in this particular area.46
[26] The majority came to the following view:
“We accept that a single person dispute which arises for the first time after the termination of employment is not a dispute between an employer and an employee. However, many disputes will arise while employment exists and continue after the termination of employment. In such a case, when the dispute arises, it is a dispute between an employee and an employer.” 47
[27] The legislative framework does not appear to have changed to such a degree as to dislodge the findings of the majority in ING. It does not appear to be contested that Mr Vercoe raised his grievance whilst he was still an employee and that he also notified the FWC of a dispute before his employment came to an end. Therefore, I am satisfied that the FWC has jurisdiction to deal with Mr Vercoe’s application.
(iii) Does the dispute resolution procedure give the FWC the power to arbitrate?
[28] The third jurisdictional objection by Atlas Drilling was that the dispute resolution procedure does not give the FWC the power to arbitrate. The basis of the objection is that the procedure only provides that “the matter will be referred to Fair Work Australia.” This was said to not reflect the requirements of section 739(4) of the Act which states that the FWC may only arbitrate where the parties have agreed to that being a term of the dispute settlement procedure. Therefore, the FWC is unable to arbitrate the dispute between Mr Vercoe and the company.
[29] On behalf of Mr Vercoe, it was contended that, as clause 2.20 is silent on what steps can be taken by the Commission, it should be concluded that the parties contemplated that the FWC would take such steps as are considered necessary, within its powers, to resolve the dispute, including arbitration. It was argued that it was open to the employer to include a specific provision denying the Fair Work Commission the power to arbitrate. As such a provision is not contained in the procedure, it was submitted that it is open to the FWC to exercise its available powers to resolve the dispute, including by arbitration.
[30] There is no evidence before me of the genesis of the Conditions of Employment document or the particular intentions of the party (parties) in relation to clause 2.20. The question of what is meant when a matter is “referred” to the Commission has been dealt with previously by Full Benches of the Commission. These decisions were in the legislative context of section 170LW of the Workplace Relations Act 1996 but they established the applicable principles which are still relevant in terms of the current scheme of the Act.
[31] A Full Bench in the appeal by the Australian and International Pilots Association in relation to its dispute with Qantas Airways Limited (Qantas case) 48, dealt with this question. The dispute settlement procedure, in this case, provided that “If the matter is not settled, either party may notify the existence of an industrial dispute to the Commission, in accordance with the Act.”49. The Full Bench did not disturb the decision at first instance and quoted VP Watson’s discussion of the relevant authorities:
“[10] Where a dispute settlement procedure does nothing more than provide that if a matter is not settled it may be referred to the Commission, it is fair to assume that the parties intended that the referral be for a purpose, but in the absence of clear words implying more, that role is confined to conciliation. [ABC v Media Entertainment and Arts Alliance Print M3463; Warkworth Mining v CFMEU [PR916526]] If the parties confer a power on the Commission “for determination” then this is to be interpreted as conferring a power to arbitrate. [SDA v Big W Discount Stores [PR924554]; CEPU v Telstra (2003) 125 IR 88]” 50
[32] The dispute settlement clause in question in this matter does not contain the additional words “for determination”. As can be seen seen from the quote in the paragraph above, these additional words are necessary in order for the procedure to confer the power of arbitration on the Commission. Therefore, in accordance with decisions in ABC v Media Entertainment and Arts Alliance and Warkworth Mining v CFMEU, I find that the dispute resolution procedure in the Conditions of Employment does not confer the power of arbitration on the FWC. Rather, the procedure does confirm the power to attempt to settle any unresolved matter referred to it, by conciliation. This finding is made on the basis that the dispute settlement procedures in both of these cases are very similar to the dispute resolution procedure in this matter. That is, none of the procedures provide referral to the Commission ‘for arbitration’. Therefore, the Commission has not been provided with the ability to arbitrate the dispute between Mr Vercoe and the company by the terms of the dispute resolution procedure. The Commission is empowered to try and resolve the dispute through conciliation.
[33] Accordingly, Mr Vercoe’s application remains on foot. The extent of the Commission’s power, under the dispute resolution procedure contained in the Conditions of Employment, is the exercise of conciliation to assist the parties resolve the dispute.
1 Respondent’s outline of submissions, dated 5 December 2014, at paragraph 9(a) and Applicant’s outline of submissions, dated 31 December 2015, at paragraph 11
2 Ibid at paragraph 9(b)
3 Respondent’s supplementary outline of submissions, dated 16 January 2015, at paragraph 15
4 Ibid at paragraph 16
5 Applicant’s supplementary submissions, dated 26 January 2015
6 Respondent’s outline of submissions, dated 5 December 2014, at paragraph 15 and Respondent’s supplementary outline of submissions, dated 16 January 2015, at paragraph 22
7 Ibid at paragraph 17 and ibid at paragraphs 23 - 25
8 Ibid at paragraph 16 and ibid at paragraph 26
9 Witness statement of Mr Troy Schefe, dated 4 December 2014, at paragraph 14 and Attachment TS-3
10 Ibid at paragraph 15 and Attachment TS-4
11 Ibid at paragraph 16 and Attachment TS-5
12 Ibid at paragraph 17 and Attachment TS-6
13 Supplementary witness statement of Mr Troy Schefe, dated 16 January 2015, at paragraph 16 and Attachment TS-1
14 Ibid at paragraph 17 and Attachment TS-2
15 Ibid at paragraph 18 and Attachment TS-3
16 Ibid at paragraph 19 and Attachment TS-4
17 Ibid at paragraphs 20 - 22 and Attachment TS-5 to TS-7
18 Ibid at paragraph 23 and Attachment TS-8
19 Ibid at paragraph 24 and Respondent’s supplementary outline of submissions, dated 16 January 2015, at paragraph 24
20 Applicant’s supplementary submissions, dated 26 January 2015, at paragraph 3
21 Ibid at paragraph 4
22 Ibid
23 Ibid at paragraph 5
24 Ibid at paragraph 6
25 Ibid at paragraph 7
26 Ibid at paragraph 9
27 Ibid at paragraph 8
28 Ibid at paragraph 10
29 Ibid
30 Ibid at paragraph 11
31 Ibid
32 Witness statement of Mr Darren Vercoe, dated 24 December 2014, at paragraphs 11 - 12
33 Ibid at paragraph 13 and Attachments EM-12 and L-1
34 Ibid at paragraph 14 and Attachment EM-13
35 Ibid at paragraph 15 and Attachment EM-14
36 Ibid at paragraph 16 and Attachments EM-15 and L-2
37 Ibid at paragraph 17
38 Ibid at paragraph 18
39 Ibid at paragraph 19 and Attachment EM-17
40 Ibid at paragraph 20
41 Ibid at paragraph 22 and Attachment EM-18
42 PR963494
43 Ibid at paragraphs 14-15
44 [2014] FWC 7019
45 PR974301
46 Ibid at [19] - [33]
47 Ibid at [38]
48 [2008] AIRCFB 739
49 Ibid at paragraph 6
50 Ibid at paragraph 6
Printed by authority of the Commonwealth Government Printer
<Price code C, PR562023>
0
2
0