Health Services Union v Department of Health and Human Services East Division

[2015] FWC 2463

[2015] FWC 2463 [Note: An appeal pursuant to s.604 (C2015/3769) was lodged against this decision - refer to Full Bench decision dated 10 November 2015 [[2015] FWCFB 7095] for result of appeal.]

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739—Dispute resolution

Health Services Union
v
Department of Health and Human Services East Division
(C2015/145)

State and Territory government administration
COMMISSIONER BISSETT	MELBOURNE, 15 APRIL 2015

Alleged dispute regarding Schedule C and Clause 13 – Jurisdictional objection.

[1] The Health Services Union – Victorian No.2 Branch (HACSU) has made an application pursuant to s.739 of the Fair Work Act 2009 (the Act) for the Commission to deal with a dispute in accordance with the dispute settling procedure of the HACSU Department of Human Services Disability Services Enterprise Agreement 2012-2016 (the Agreement).

[2] The dispute relates to matters arising under Schedule C of the Agreement.

[3] The Department of Health and Human Services (the Department), the Respondent to the application, objects to the matter being dealt with on the grounds that the Commission does not have jurisdiction to deal with the dispute.

[4] This decision deals with the jurisdictional question only.

The Agreement

[5] The dispute resolution procedure of the Agreement is at clause 13. It states in part:

13. DISPUTE SETTLING PROCEDURES

13.1 Resolution of disputes and grievances

13.1.1 Unless otherwise provided for in this Agreement, a dispute or grievance about a matter arising under this Agreement or the National Employment Standards, other than termination of employment, must be dealt with in accordance with this clause. This includes a dispute or grievance about whether an Employer had reasonable grounds to refuse a request for flexible working conditions or an application to extend unpaid parental leave.

13.1.2 This clause does not apply to any dispute on a matter or matters arising in the course of bargaining in relation to a proposed workplace agreement.

13.1.3 The Employer or an Employee covered by this Agreement may choose to be represented at any stage by a representative, including a union representative or Employer’s organisation.

[6] The procedure then sets out in some detail the steps to be taken, the powers of the Commission in dealing with matters and so on.

[7] Clause 17 of the Agreement deals with grievances and discipline procedures. It provides:

17. GRIEVANCES AND DISCIPLINE

17.1 Employees shall be subject to and entitled to the benefit of the grievance procedure as set out in this clause and Schedule B, and the discipline procedure as set out in Schedule C.

...

17.7 Reference to FWC

17.7.1 Matters which remain in dispute at the completion of the grievance and discipline procedures may be dealt with under the dispute settlement clause of this Agreement (Clause 13).

[8] Schedule C of the Agreement sets out the detailed procedure for dealing with unsatisfactory performance and discipline issues (the Schedule C process). Schedule C has three distinct streams - unsatisfactory performance, misconduct and serious misconduct. On receipt of the relevant documentation from local management, the Department’s central office must determine which stream a matter will be dealt with under.

[9] Unsatisfactory performance matters are progressed with an emphasis on informality, timeliness, fairness, with documented outcomes and with a remediating intent (clause 4 of Schedule C).

[10] Misconduct matters are dealt with without unnecessary delay and within agreed timeframes, and with an emphasis on procedural fairness. The maximum disciplinary outcome of such matters is a warning that cannot be a final warning (clause 5 of Schedule C).

[11] Serious misconduct matters are dealt with in two stages - the review stage, which is detailed at clause 8 of Schedule C and a hearing stage at clauses 9 and 10 of Schedule C which includes a disciplinary outcome. Possible outcomes of the serious misconduct stream include formal counselling, reassignment, a formal warning or termination of employment.

[12] Schedule C also establishes timeframes within which matters should be dealt and a process for an extension to set timeframes. It also provides for representation, movement of matters between the three streams, opportunity for an employee to admit to allegations against them and limitations on any restrictions put on an employee.

[13] Clause 17 of Schedule C states:

17. REVIEW OF DECISIONS

17.1 Where allegation/s under this Schedule are proven and remedial or disciplinary action of any kind are applied against the Employee, the Employee may use the Disputes Settlement Procedures under this Agreement to seek a review of findings or outcomes.

17.2 Where the Employee's employment is terminated, the Employee may apply for relief at the Fair Work Commission, but may not use the Disputes Settlement Procedures under this Agreement to seek a review of the findings or of the termination of the Employee's employment.

The matter in dispute

[14] The dispute notified to the Commission by HACSU is that the Department has failed to carry out the review stage of a serious misconduct matter in accordance with the requirements of clause 8 of Schedule C. HACSU claims that the Reviewer appointed under clause 8 failed to ‘provide a fair and balanced version of the evidence in relation to the allegation/s’ in that the report provided to the employee under clause 8.6 was heavily redacted. There is a further complaint that the report was not provided to the employee’s representative in accordance with clause 13 of Schedule C.

[15] HACSU has sought that the charges against its member be withdrawn on the basis that the Department has failed to follow the procedure in Schedule C.

The jurisdictional issue

[16] The matter to be determined in this case is whether clause 17.7.1 or clause 17.1 of Schedule C places some limitation on the jurisdiction of the Commission to deal with a dispute arising under Schedule C of the Agreement prior to the completion of the Schedule C process.

The Department

[17] The Department says that the wording, ‘unless otherwise provided’, at the beginning of clause 13 means that matters arising under the agreement or the NES can be dealt with in accordance with the dispute resolution procedure unless the Agreement provides otherwise. That is, the default position that matters arising under the Agreement can be dealt with through the dispute resolution procedure is displaced by the operation of other provisions of the Agreement. The Department submits that, in respect of matters arising under Schedule C, the dispute resolution procedure (clause 13) is displaced by the combined effect of clause 17.7.1 and clause 17.1 of Schedule C.

[18] The Department submits that clause 17.1 of Schedule C, read in conjunction clause 17.7.1 of the Agreement means that an employee only has access to the dispute resolution procedure of the Agreement described at clause 13 where:

(a) the process established in the discipline procedure in schedule C has been exhausted; and
(b) allegations against the employee are proven; and
(c) remedial or disciplinary action has been applied.

[19] The Department say that, by giving effect to the ordinary meaning of the Agreement, as it puts it, the dispute resolution procedure is available ‘only at the conclusion of the Schedule C process’.

[20] The Department also submits that a consideration of the predecessor instruments to the Agreement strongly supports its interpretation of the Agreement. The 1999, 2001 and 2004 agreements each contained dispute settlement procedures that it says established separate processes for grievances relating to classification; grievance and discipline matters and roster changes. It submits that the agreement reached in 2008 (the immediate predecessor to the current Agreement) suggests that the particular dispute resolution procedure in respect of discipline matters operated in place of, rather than in conjunction with, the formal dispute resolution process.

[21] The Department says that the three streams in Schedule C (unsatisfactory performance, misconduct and serious misconduct) each allow for both findings and outcomes. It is appropriate, in its submission, that any external review by the Commission only occur after a decision has been made. To do otherwise will result in inconvenience and injustice.

[22] The Department submits that to allow for the construction of the Agreement proposed by HACSU would result in the Commission being asked to conciliate and arbitrate in a vast range of investigations at any one of the many steps in the process set out in Schedule C. Such a result would be ‘inimical to the mutual intention of the parties to ensure that, where practicable, employee grievances are resolved at the workplace level as expeditiously as possible.’

HACSU

[23] HACSU says that the dispute between it and the Department is whether the Department properly applied clause 8 of Schedule C of the Agreement to misconduct allegations under investigation.

[24] HACSU submits that the opening words of the dispute resolution procedure at clause 13.1 operate to broaden the range of disputes that can be dealt with under the clause beyond those strictly arising under the Agreement or the NES. That is, the wording of some other clauses in the Agreement expands the reach of the dispute resolution procedure. Specifically HACSU says clause 17.7.1 of the Agreement and clause 17.1 of Schedule C operate to broaden the jurisdiction of the Commission in certain, defined circumstances where jurisdiction might otherwise not exist.

[25] HACSU says that clause 17.7.1 of the Agreement requires a specific state of affairs (matters remain in dispute) to exist at a specific period of time (the completion of the procedures) to invoke the dispute resolution procedure without the matter having to arise under the Agreement or the NES.

[26] The same analysis, it submits, is true of clause 17.1 of Schedule C. In that case the prescribed state of affairs is that allegations are proven and remedial or disciplinary action is taken.

[27] Clause 17.7.1 and clause 17.1 of Schedule C therefore do not operate to limit the application of clause 13 to matters in Schedule C but to allow for dispute resolution procedure to apply to matters once the process in Schedule C is complete when the dispute resolution process might otherwise be unavailable because of some jurisdictional bar. That is, the clauses operate to expand the jurisdiction of the Commission.

[28] HACSU submits that clause 8 of Schedule C (the review stage in the serious misconduct stream) is a discrete part of the process. It has a clear purpose - to present a fair and balanced version of the evidence in relation to the allegation/s - with an outcome that could place an employee at risk of substantial penalties. How the functions under clause 8 of Schedule C are performed and whether they are carried out appropriately may be subject to dispute. It says that all clause 17.7.1 of the Agreement does is ensure that an employee’s rights are not exhausted once the process in Schedule C is complete.

[29] HACSU submits that the construction preferred by the Department would result in injustice as a dispute could never be brought about a matter that goes to the process in Schedule C. This would result in an aggrieved employee having to accept a potentially flawed process without recourse to a remedy at the time of the error. This puts the employee to inconvenience and stress of the hearing and outcome stage before they are able to raise any dispute. Even then the dispute, on the Department's view, is restricted to the outcome of the process with no capacity for remedy in respect of the process.

Principles

[30] The principles applicable to the interpretation of an agreement are well settled and I have considered the authorities referred to me by the parties.

[31] In The Australasian Meat Industry Employees Union v Golden Cockerel Pty Limited 1 a Full Bench of the Commission carefully considered the relevant authorities dealing with the principles of construction of agreements. It concluded:

[41] From the foregoing, the following principles may be distilled:

1. The AI Act does not apply to the construction of an enterprise agreement made under the Act.

2. In construing an enterprise agreement it is first necessary to determine whether an agreement has a plain meaning or contains an ambiguity.

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

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

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

6. Admissible evidence of the surrounding circumstances is evidence of the objective framework of fact and will include:

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

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

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

7. The resolution of a disputed construction of an agreement will turn on the language of the Agreement understood having regard to its context and purpose.

8. Context might appear from:

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

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

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

9. Where the common intention of the parties is sought to be identified, regard is not to be had to the subjective intentions or expectations of the parties. A common intention is identified objectively, that is by reference to that which a reasonable person would understand by the language the parties have used to express their agreement.

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

[32] I respectively adopt the principles as enunciated by the Full Bench and have applied them in this case.

[33] In doing so I have remained mindful of the comments of Kirby J in Amcor Limited v Construction Forestry Mining & Energy Union where he said,

The nature of the document, the manner of its expression, the context in which it operated and the industrial purpose it served combine to suggest that the construction to be given to cl 55.1.1 should not be a strict one but one that contributes to a sensible industrial outcome such as should be attributed to the parties who negotiated and executed the Agreement. Approaching the interpretation of the clause in that way accords with the proper way, adopted by this Court, of interpreting industrial instruments and especially certified agreements. I agree with the following passage in the reasons of Madgwick J in Kucks v CSR Ltd, where his Honour observed:

“It is trite that narrow or pedantic approaches to the interpretation of an award are misplaced. The search is for the meaning intended by the framer(s) of the document, bearing in mind that such framer(s) were likely of a practical bent of mind: they may well have been more concerned with expressing an intention in ways likely to have been understood in the context of the relevant industry and industrial relations environment than with legal niceties or jargon. Thus, for example, it is justifiable to read the award to give effect to its evident purposes, having regard to such context, despite mere inconsistencies or infelicities of expression which might tend to some other reading. And meanings which avoid inconvenience or injustice may reasonably be strained for. For reasons such as these, expressions which have been held in the case of other instruments to have been used to mean particular things may sensibly and properly be held to mean something else in the document at hand.” 2

[italics in original; references removed]

History of the Agreement

[34] Clauses 13, 17 and Schedule C of the Agreement effectively replicate the provisions contained in the HACSU Department of Human Services Disability Services Certified Agreement 2008-2012 (2008 Agreement). The 2008 Agreement was, however, a departure from the provisions of the HACSUA Department of Human Services Disability Services Certified Agreement 2004 (the 2004 Agreement).

[35] The 2004 Agreement contains a differently structured dispute resolution procedure to that of the 2008 (and current) Agreement. Clause 25 of the 2004 Agreement is headed ‘dispute settlement’ and has a number of substantial sub-clauses. Sub-clause 25.1 is headed ‘Introduction of change’ and deals with consultation on the introduction of major change in the workplace. Sub-clause 25.2 is headed ‘dispute resolution’, sub-clause 25.3 ‘grievances relating to classification’, sub-clause 25.4 ‘grievance and discipline’ and sub-clause 25.5 ‘roster change’.

[36] Sub-clause 25.2 states that:

In any dispute, other than a roster change, which arises it must be dealt with in the following manner.

[emphasis added]

[37] It then describes the need to discuss the matter locally, the right to be represented, referral of the matter to more senior management and, ultimately, referral for conciliation and arbitration to the Commission’s predecessor.

[38] Sub-clause 25.4 in the 2004 Agreement is, for all intents, unchanged and became clause 17 of the 2008 and the current Agreement. Sub-clause 25.4.7 is replicated in clause 17.7.1 of the Agreement (set out above).

[39] Schedule C to the 2008 (and the current) Agreements is not in the same form as that found in the 2004 Agreement. Schedule C is new, is more structured and detailed, establishes timeframes for activities and introduces the review stage to the serious misconduct stream.

[40] There is no equivalent to clause 17.1 of Schedule C in the 2004 Agreement. This clause first appears in the 2008 Agreement.

Consideration

[41] I am satisfied that there is ambiguity in the wording of clause 13, particularly when considered in conjunction with clause 17.7.1 of the Agreement and clause 17.1 of Schedule C. This much is clear from the reasoned and logical interpretations of clause 13 pressed on me by the Department and by HACSU.

[42] Whilst I am satisfied that there is ambiguity or uncertainty the only material I have to assist in the resolution of this dispute is the language of the Agreement itself and, as relevant, the predecessor Agreements. There is no evidence, beyond the language of the earlier Agreements, of ‘prior negotiations’ or matters in ‘common contemplation’ that I have been taken to.

[43] The 2004 Agreement does not provide any assistance to the Department in its submissions. The 2004 Agreement is clear that ‘any dispute (other than a roster change)’ must be dealt with in accordance with sub-clause 25.2. This suggests that disputes in relation to sub-clauses 25.1, 25.3 and 25.4 (discipline and grievance matters) are subject to the process in sub-clause 25.2 but issues arising under sub-clause 25.5 (roster changes) are not. The language of the dispute clause changes substantially in the 2008 Agreement but it was not put to me that this indicates any change in the intention of the parties as to how the disputes in relation to discipline matters and grievance matters should be dealt with. The 2004 Agreement it seems is neither help nor hindrance, particularly when considered in conjunction with the inclusion of clause 17.1 of Schedule C.

[44] The argument before me is whether the words ‘Unless otherwise provided for in this Agreement’ in clause 13 operate to broaden or limit the application of the dispute resolution procedure. What follows is how clause 17.7.1 and clause 17.1 of Schedule C interact with those words.

[45] Both parties are correct in their interpretation of the opening words of clause 13. Clause 13 establishes a general rule - that all matters arising under the agreement or the NES will be dealt with in accordance with the clause 13 procedure. An exception is then given to that general rule and that exception is where the agreement otherwise says so. There is no restriction on the exception. Depending on the wording of the specific provision which creates the exception, it may operate to broaden the reach of the dispute settling procedure or it may operate to limit it.

[46] There are a number of clauses in the Agreement where some additional specific provision is made with respect to settling disputes. Some of these clauses provide for clarification or certainty that the dispute settling procedure does apply or that it applies to the outcome of the operation of a specific clause 3 while others place some additional criteria or restriction around the operation of the dispute settling procedure.4

[47] Clause 17.1 of Schedule C is set out above. A simple reading of the words of the clause suggest that it operates to either clarify the operation of the dispute settling procedure or extend the reach of the dispute settling procedure (if there is any uncertainty) to certain outcomes of the operation of Schedule C. That is, this clause makes clear that where there is a proven allegation and a remedial or disciplinary penalty is imposed (not including dismissal) then the finding or the penalty can be reviewed using the dispute settling procedure.

[48] There is nothing in clause 17.1 of Schedule C which otherwise suggests any limit to the dispute settling procedure with respect to Schedule C unless the absence of specific permission should be taken to mean that there is no permission. Such an outcome would be at odds with the meaning of clause 13 as set out above.

[49] Clause 17.7.1 of the Agreement is also set out above. On its plain wording it allows for matters that remain in dispute at the end of the Schedule B or C process to be dealt with under the dispute settling procedure process.

[50] By its wording this clause clarifies that the completion of the Schedule B or C process (that deal with grievances and disciplinary matter) - that is there is some final outcome - does not mean that a dispute that arose during the process which was not resolved loses jurisdiction. The clause does not suggest such disputes cannot be dealt with prior to the end of the process but rather proposes how they are dealt with should they remain in dispute at the end of the process.

[51] If it had been the intention of the parties that any matter is dispute in relation to Schedule B or C could only be dealt with in accordance with the dispute settling procedure at the completion of the Schedule B or C, process it could reasonably be expected that the clause would clearly say so. Rather the clause seems to contemplate that there will be disputes that arise during the operation of the Schedule B or C processes, not all of which will be resolved, even though the process has come to an end. Despite this, and to avoid any doubt as to jurisdiction, such outstanding matters will be able to be dealt with in accordance with the dispute settling procedure.

[52] If it had been the intention to establish some limitation on the ability to deal with a dispute during the Schedule C process it can reasonably be expected that such a limitation would be made clear. A limitation on access to the Commission was included, for example, in clause 26.4 of the Agreement which deals with disputes over roster changes and requires disputes to be notified to the Commission within seven days of the posting of the roster.

[53] I therefore conclude that neither clause 17.7.1 nor clause 17.1 of Schedule C operate to limit the Commission dealing with the dispute in relation to Schedule C as notified by HACSU.

Conclusion

[54] For all of the reasons given above I am satisfied that I have jurisdiction to deal with the dispute as notified by HACSU.

[55] In reaching my conclusion I have had regard to the submissions of both the Department and HACSU, particularly with respect to the point in time at which an external review (that is by the Commission through the dispute settling procedure) is appropriate and the potential effect of any extended delay in access to such a review. These are important issues but which, it seems, are matters best considered with the merits of an application to the Commission to deal with the dispute.

[56] I appreciate that the conclusion I have reached in respect of the Agreement opens the door to a range of disputes and even multiple disputes over a single discipline process (in addition to the outcome of that process). Whilst this might create inconvenience to the parties this is not grounds for accepting the interpretation favoured by the Department. No evidence of any surrounding circumstances was put such that I could draw the conclusion sought by the Department.

[57] HACSU and the Department are directed to confer on appropriate directions for the hearing of the merits of the application. Draft agreed directions should be provided to my chambers within seven days of the issue of this decision.

COMMISSIONER

Appearances:

M. Harding of Counsel with K. Marshall of the HACSU.

C. Symons of Counsel with N. Richmond and J. Cooney of the Department.

Hearing details:

2015.

Melbourne:

March 27.

 1   [2014] FWCFB 7447.

 2 [2005] HCA 10 at [96].

 3   See, for example clause 19.8 and in particular clause 19.8.2(e); clause 20 and in particular clause 20.5; clause 22.3 and in particular clause 22.3.2(g).

 4   See clause 26 and in particular clause 26.5 and 26.6.

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