Entire Mechanical Services Pty Ltd and Entire Fire Protection Pty Ltd v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia

[2016] FWC 8817

[2016] FWC 8817

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739—Dispute resolution

Entire Mechanical Services Pty Ltd and Entire Fire Protection Pty Ltd
v
Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia
(C2016/6193)

DEPUTY PRESIDENT GOOLEY MELBOURNE, 9 DECEMBER 2016

Alleged dispute about any matters arising under the enterprise agreement and the NES;[s186(6)].

[1] Entire Mechanical Services Pty Ltd and Entire Fire Protection Pty Ltd and the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia are in dispute about the payment of employees at the Ravenhall Prison Project, Deer Park for the period of a work stoppage between 4 and 12 August 2016.

[2] Two enterprise agreements applied to the work, namely the Entire Mechanical Services Pty Ltd and CEPU - Plumbing Division Victorian Branch Enterprise Agreement 2015-2019 (the Mechanical Services Agreement) and the Entire Fire Protection Pty Ltd and CEPU - Plumbing Division (Vic) Fire Protection Agreement 2015-2019 (the Fire Protection Agreement).

[3] The dispute was referred to the Victorian Building Industry Disputes Panel which handed down a decision on 7 October 2016.

[4] The dispute resolution procedure in both agreements provides as follows:

“Either party may, within fourteen (14) days of a decision of the Panel, refer that decision to the FWC for review. The FWC may exercise its conciliation and/or arbitration powers in such review.”

[5] Entire Mechanical and Entire Fire Protection referred the decision for review under section 739 of the Fair Work Act 2009. The parties are in dispute over the scope of the review to be conducted by the Commission.

[6] I granted permission for Entire Mechanical and Entire Fire Protection to be represented by a lawyer as I considered the matter involved some complexity and it would enable the matter to be dealt with more efficiently. The CEPU opposed permission being granted but subsequently sought permission to be represented after permission had been given to Entire Mechanical and Entire Fire Protection.

[7] Entire Mechanical and Entire Fire Protection submitted that the review to be undertaken by the Commission is by way of a hearing de novo. 1 The CEPU submitted that the review is in the nature of an appeal either stricto sensu that is where the issue is whether the judgement below was right on the material before the trial court or by the hearing on the evidence before the VBIDP.2

Submissions of Entire Mechanical and Entire Fire Protection

[8] Entire Mechanical and Entire Fire Protection submitted that the review in the Agreements is not an “appeal.” They submitted there is nothing in the Agreements that limit the review to cases where appealable error is shown. 3 They submitted that the use of the term “review” suggests simply that the matter is to be viewed again. Had the parties intended this to be an appeal then the Agreements would have contained an express statement to that effect.4

[9] Further, Entire Mechanical and Entire Fire Protection submitted that the Agreements provide that the dispute is referred “at first instance to the VBIDP” and this expression supports its submissions. 5 It was submitted that the use of this term would make little sense if the dispute is solely determined by the VBIDP, subject only to an appeal in case of error. The expression “at first instance” suggested that the dispute may be further escalated for resolution.6

[10] Entire Mechanical and Entire Fire Protection submitted that the use of the expression “refer for review” rather than “appeal” is significant. It submitted that if the matter is referred from one body to another it is for determination by the body to which the matter is referred. There is no need to identify error. 7

[11] Further the Agreements provide that the Commission “may exercise its conciliation and/or arbitration powers in such review”. This, they say, supports the view that the merits of the dispute will be before the Commission. 8 Further, both Agreements provide detailed mechanisms for the exercise of the Commission’s powers of conciliation and arbitration. Those clauses make reference to the dispute and the matters in dispute. This all supports the submission that the Commission is not, required to find error in the decision of the VBIDP, before determining the merits of the dispute.

[12] Entire Mechanical and Entire Fire Protection relied on clause 14.14 of the Mechanical Agreement and clause 14.7(d) of the Fire Protection Agreement to support its contentions. Those clauses relevantly provide that:

“Before making its determination the FWC will give the parties an opportunity to be heard formally on the matter(s) in dispute. In making its determination the FWC will only have regard to the materials, including witness evidence, and submissions put before it at the hearing and will disregard any admissions, concessions, offers or claims made in mediation.”

[13] This, it submitted, supported its contention that the Commission is to determine the dispute on its merits.

[14] Entire Mechanical and Entire Fire Protection submitted that the VBIDP Charter itself supported its submissions, because it provides that either party may refer the dispute to the Australian Industrial Relations Commission. There is nothing in the Charter that limits the right of a party to have the matter determined by the Commission. Such review is not limited by requirement to find appealable error.

[15] Entire Mechanical and Entire Fire Protection relied on the decision of Deputy President Ives in CDK Commercial Construction Pty Ltd v CFMEU. 9In this decision, Deputy President Ives, notwithstanding that nobody put a contrary view, considered the nature of the Commission’s jurisdiction when conducting a review of a decision of the VBIDP. The agreement under consideration matter provided a party with the right to refer the decision to the Australian Industrial Relations Commission for review.

[16] Deputy President Ives held that the review should be by way of a hearing de novo. He did note that this approach did not mean that the findings of the VBIDP will be irrelevant to the Commission, but they will receive consideration along with other relevant material before the Commission. Entire Mechanical and Entire Fire Protection submitted that the decision of the Full Bench in CFMEU v J.A. Dodd Ltd 10 also supports their contentions. It submitted that I should follow the approach of Deputy President Ives.11

Submissions in Reply of Entire Mechanical and Entire Fire Protection

[17] It was submitted that if it had been intended by the parties to restrict the review to an appeal stricto sensu the Agreements would have included words of limitation. 12 Entire Mechanical and Entire Fire Protection submitted that the extensive powers of conciliation and arbitration would make little sense if the review was simply to determine if the VBIDP fell into error. It submitted that the fact that the Commission makes a final determination is inconsistent with the Commission having a limited appellate role.13 It was accepted that the disputes procedure is a stepped process but at each step it is the entire dispute that is agitated. It rejected the submission that its approach would see a party not running its best arguments until it got to the Commission. It submitted that it is in all parties’ interests to have the matter resolved promptly. It further submitted that if I were to depart from the decision of Deputy President Ives the matter should be determined by a Full Bench.

Submissions of the CEPU

[18] The CEPU submitted that whether there was a distinction between the use of the term “appeal” and “review” was not relevant. The nature of the “review” and hence the Commission’s role is divined from the terms of the Agreements. It contends that the review is in the nature of an appeal and the review is either a determination of whether the judgement below was right on the material before the VBIDP or a re-hearing based on the evidence before the VBIDP. 14

[19] The CEPU submitted that if the review is by way of a re-hearing, Entire Mechanical and Entire Fire Protection must establish that the decision is incorrect as a result of some legal, factual or discretionary error and the parties are limited to the evidence they led before the VBIDP. 15

[20] It submitted that the disputes procedure is a stepped process and that parties are required to act in good faith at all times. It submits that there is an implied prohibition on a party failing to cooperate and putting its case fully to VBIDP. It cannot save up its material to use before the Commission. Any reading of the disputes resolution procedure which permitted this to occur should not be supported. 16

[21] The CEPU did not accept the submission of Entire Mechanical and Entire Fire Protection that the use of the term “review” meant “view the matter again”. It also contended that the use of the term “at first instance” means no more than the opportunity to refer the matter to the VBIDP as the first formal external step provided for in the stepped process. 17

[22] The CEPU contended that I am not bound by the decision of Deputy President Ives relied upon by Entire Mechanical and Entire Fire Protection. It contended that a contrary position was not put to Deputy President Ives. It further submitted that in a related matter which went on appeal to the Full Bench did not discuss the nature of the review to be undertaken. The CEPU submitted that while the Commission does generally follow decisions of previous Full Bench decisions in the absence of cogent reasons for not doing so, this does not apply to single member decisions. 18

[23] The CEPU rejected the contention that there would be no role for conciliation as conciliation could look at the question of error on the part of the VBIDP.

[24] The CEPU also rejected the submissions of Entire Mechanical and Entire Fire Protection in relation to clauses 14.14 and 14.7(d) of the Agreements. It submitted that the only matters to be excluded were matters raised in mediation. It does not exclude material before the VBIDP.

[25] It further submitted that the reference to evidence in those clauses is consistent with it being descriptive of material before the Board. It submitted that the parties may be able lead new evidence subject to the normal approach on appeal to the leading of new evidence. 19

[26] It also rejected the submission put in relation to use of the term “formal determination”. That term does no more than indicate the outcome of the process. It does not determine the nature of the process.

[27] It also rejected the submission that the dispute resolution clause refers to “the dispute” as the matter before the Commission. The Agreements make it clear that what is referred is the decision. This should be the primary focus.

[28] In answer to my question about the nature of the process before the VBIDP, it was put that there were statements before the VBIDP and some oral evidence was given. Entire Mechanical and Entire Fire Protection did not cross examine the union’s witnesses. The outlines of submissions also contained evidence. It was also submitted that the VBIDP was required to afford natural justice. As a consequence it submitted that to the extent Deputy President Ives at [24] made an assessment of the processes adopted by the VBIDP, those findings do not apply to this matter.

Findings

[29] The dispute resolution clauses in the Agreements are attached to this decision. There is no material difference between the clauses. The parties did not put forward any extrinsic material to support their construction of the Agreements and hence the Commission’s role in the disputes resolution procedure.

[30] I accept the submission that the one must look to the Agreements to determine the meaning to be given to the words “refer the decision to the Commission for review.”

[31] I accept that the fact that the parties did not use the word appeal is relevant. However that does not resolve the issue because the term review is not defined in the Agreements. However the meaning attached to the term can be ascertained from the Agreements.

[32] I am satisfied that the parties intended the Commission to conduct a re-hearing of the matter. These are my reasons.

[33] Unlike the disputes resolution procedure considered by Deputy President Ives, the parties to these Agreements have included details about the Commission’s role once a decision is referred to it. The inclusion of those provisions support the conclusion that the Commission’s role was not limited to determining simply whether the judgment of the VBIDP was right on the material before it or a re-hearing on the evidence before the VBIDP.

[34] Once the decision is referred to the Commission the Commission can exercise its conciliation and arbitration powers. The conciliation process is not limited to conciliating the decision. The process makes clear that what is being conciliated is the dispute. However that is not determinative of the matter. It is not unusual, even at the appellate level, for conciliation of the underlying dispute to be undertaken. The mere fact that the Agreements provide for conciliation is not determinative of the nature of the review.

[35] If conciliation is unsuccessful, the Commission is empowered to make a formal determination which is binding on the parties. Before it makes its determination the parties have the right to be heard on “the matters in dispute”. There is nothing in this language which limits the dispute to one about the correctness of the decision of the VBIDP. Further, in making its determination the Commission “will only have regard to the materials, including witness evidence, and submissions put before it at the hearing.”

[36] There is no suggestion in this language that the Commission is limited to a consideration of the material that was before the VBIDP subject to a limited right to call new evidence.

[37] I accept the submission of the CEPU that the decision of Deputy President Ives relied upon by Entire Mechanical and Entire Fire Protection is not binding on me. I also accept that the submission that the nature of the proceeding before the VBIDP in this matter was significantly different to that discussed by Deputy President Ives. A detailed decision was made by the Panel. Witnesses were called although there is no recording of the hearing. Submissions were made and factual findings were made on the evidence before the VBIDP.

[38] However, I consider it relevant that from at least since 2006 the parties were on notice that Deputy President Ives and, from 2011, Commissioner Blair 20 had formed the view, albeit without opposition and in relation to a matter involving different parties, that the review meant a hearing de novo. After Deputy President Ives’ decision, the parties included in predecessor agreements21 the detailed procedures which are contained in the current Agreements about how the Commission was to exercise its conciliation and arbitration powers. If the parties had wished to limit the Commission’s role they could have entered into agreements which provided for such limitation and they did not.

Future conduct of the matter

[39] If the parties request a conciliation of the matter they should notify my chambers. If there is no agreement as to the utility of a conciliation, then the matter will be set down for a hearing and determination of the applications before the Commission.

[40] Entire Mechanical and Entire Fire Protection proposed directions. I direct the parties to confer about conciliation and the directions, as the current directions would require the parties to file material in January with a hearing in March. If the parties are not able to agree on conciliation and directions by 14 December 2016 I will issue the directions proposed by Entire Mechanical and Entire Fire Protection.

DEPUTY PRESIDENT

Appearances:

R. Millar for the Applicants.

E. White for the Respondent.

Hearing details:

2016.

Melbourne:

30 November.

Entire Fire Protection Pty Ltd and CEPU - Plumbing Division (Vic) Fire Protection Agreement 2015-2019

Entire Mechanical Services Pty Ltd and CEPU - Plumbing Division Victorian Branch Enterprise Agreement 2015-2019

 1   Exhibit A1 at [7]

 2   Exhibit R1 at [9]

 3   Exhibit A1 at [8]

 4   Ibid at [9]

 5   Ibid at [10]

 6   Ibid

 7   Ibid at [11]

 8   Ibid at [12]

 9   [2006] AIRC 587, Print PR 974122.

 10   [2007] AIRCFB 989

 11   Exhibit A1 at [22]

 12   Exhibit A2 at [3]

 13   Ibid at [5]

 14   Exhibit R1 at [9]-[10]

 15   Ibid at [11]

 16   Ibid at [13]-[16]

 17   Ibid at [22]

 18   Ibid at [28]-[31]

 19   Loftus v Earth Force Personnel Pty Ltd [2014] FWCFB 1978 at [15] and The Australian Workers’ Union v Killarnee Civil & Concrete Contractors Pty Ltd and Ors [2011] FWAFB 4349 at [22].

 20   [2011] FWA 5221 at [5]

 21   Entire Mechanical Services Pty Ltd & CEPU Plumbing Div Collective Agreement 2008-2011 at clause 48 provided for the dispute to be referred to the Commission and the Entire Mechanical Services Pty Ltd and CEPU –Plumbing Division (Vic) Enterprise Agreement 2011-2015 [2012] FWAA 6408 at clause 14 which provided for the decision to be referred to the Agreement.

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