Jim Giannopoulos v Chisholm & Gamon Property Pty Ltd

[2018] FWC 5833

[2018] FWC 5833

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739—Dispute resolution

Jim Giannopoulos
v
Chisholm & Gamon Property Pty Ltd
(C2018/2485)

COMMISSIONER LEE MELBOURNE, 18 SEPTEMBER 2018

Application to deal with a dispute - alleged dispute about any matters arising under the award and the employment agreement - Commission’s power to arbitrate under the terms of the award and/or the contract of employment - no power to arbitrate without consent from both parties - Respondent does not consent to arbitration - application dismissed.

Introduction and background

[1] Mr Jim Giannopoulos has made an application under s.739 of the Fair Work Act 2009 (the Act) notifying a dispute to the Fair Work Commission (FWC). The Respondent is Chisholm & Gamon Property Pty Ltd. The dispute relates to alleged outstanding payments of commission. The dispute resolution procedure relied upon by the Applicant is clause 9 of the Real Estate Industry Award 2010 (the Award) and clause 30 of the written employment agreement between the Applicant and the Respondent (the Employment Agreement).

[2] The Applicant commenced employment with the Respondent on 28 October 2015 in the position of Business Sales/Commercial Sales. The Applicant’s terms and conditions of employment were in accordance with the Award and the Employment Agreement. In his application the Applicant states that he raised a dispute regarding outstanding commission payments with the Respondent on 10 August 2017 and sent numerous emails in relation to the matter between 12 September 2017 and 15 November 2017. The Respondent advised the Applicant that he was not entitled to the outstanding commission payments because he was engaged under a refundable retainer, which is disputed by the Applicant. The Applicant resigned from his employment on 15 November 2017 and despite further correspondence exchanged between the parties, the dispute remained unresolved. 1

[3] This application was lodged with the FWC on 10 May 2018 and the matter was listed for a conference before me on 23 May 2018 in an attempt to resolve the dispute. The conference failed to resolve the dispute. The Applicant subsequently advised that he seeks that the matter be arbitrated by the FWC.

[4] The matter was listed for Mention before me on 18 June 2018. Both parties were represented. Permission to appear was granted to both parties as I was satisfied that the matter was complex and allowing representation would enable the matter to be dealt with more efficiently. The Respondent’s representative advised that the Respondent did not agree to the dispute being arbitrated by the FWC. Further, the Respondent submitted that unless the Respondent agrees to the matter being arbitrated pursuant to either or both clause 9 of the Award or clause 30 of the Employment Agreement that the FWC does not have the power to arbitrate the dispute. The Applicant asserted that there is a unilateral right of arbitration pursuant to both clause 9 of the Award and clause 30 of the Employment Agreement.

[5] The parties agreed at the Mention that the most efficient course was to determine as a threshold issue the question as to whether the terms of clause 9 of the Award and clause 30 of the Employment Agreement require consent from both parties to arbitration in order for the FWC to exercise power. Accordingly, the question to be resolved is:

“Can the FWC exercise powers of arbitration, without the consent of the Respondent, having regard to the terms of clause 9 of the Award and Clause 30 of the Employment Agreement?”

[6] The Applicant and the Respondent both filed written submissions in relation to the FWC’s power to arbitrate the dispute and both were content for the threshold matter to be determined on the papers.

The law to be applied

[7] In relation to the power of the FWC to deal with disputes, s.595 of the Act provides as follows:

“595 FWC’s power to deal with disputes

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

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

(a) by mediation or conciliation;

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

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

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

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

[8] This is an application made pursuant to s.739 of the Act. Relevantly, ss.738 and 739 of the Act provide 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) effectas 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 dispute resolution procedure at Clause 9 of the Real Estate Industry Award 2010 provides as follows:

“9. Dispute resolution

9.1 In the event of a dispute about a matter under this award, or a dispute in relation to the NES, in the first instance the parties must attempt to resolve the matter at the workplace by discussions between the employee or employees concerned and the relevant supervisor. If such discussions do not resolve the dispute, the parties will endeavour to resolve the dispute in a timely manner by discussions between the employee or employees concerned and more senior levels of management as appropriate.

9.2 If a dispute about a matter arising under this award or a dispute in relation to the NES is unable to be resolved at the workplace, and all appropriate steps under clause 9.1 have been taken, a party to the dispute may refer the dispute to the Fair Work Commission.

9.3 The parties may agree on the process to be utilised by the Fair Work Commission including mediation, conciliation and consent arbitration.

9.4 Where the matter in dispute remains unresolved, the Fair Work Commission may exercise any method of dispute resolution permitted by the Act that it considers appropriate to ensure the settlement of the dispute.

9.5 An employer or employee may appoint another person, organisation or association to accompany and/or represent them for the purposes of this clause.

9.6 While the dispute resolution procedure is being conducted, work must continue in accordance with this award and the Act. Subject to applicable occupational health and safety legislation, an employee must not unreasonably fail to comply with a direction by the employer to perform work, whether at the same or another workplace, that is safe and appropriate for the employee to perform.”

[10] Clause 30 of the Employment Agreement provides as follows:

“30. Arbitration of Disputes

In the event of a dispute concerning the contents of this Agreement the parties hereby agree to make every effort to resolve the dispute by consultation and negotiation. If the negotiation process is exhausted without the dispute being resolved, the parties shall refer the matter to the Australian Industrial Relations Commission or another mutually agreed upon arbiter for assistance in resolving this dispute.

Consideration

Does clause 9 of the Award allow the Commission to arbitrate without the consent of the parties?

[11] Clause 9.3 of the Award provides that the parties “may agree” to the process to be utilised by the FWC if a dispute is referred. It is apparent in this matter that the Respondent does not agree to arbitration of the dispute. Clause 9.4 of the Award provides that the FWC may exercise any method of dispute resolution permitted by the Act in respect of the settlement of the dispute. However, this power is limited by s.739(3) of the Act which provides that the FWC must not exercise any powers limited by the term. The Respondent submits and I agree that the ordinary meaning of “consent” as used in clause 9.3 of the Award requires permission or agreement to do something and when used in the context of clause 9.3 of the Award, requires the parties to a dispute to consent to arbitration as a process to be used by the FWC to resolve the dispute. 2

[12] This construction of the terms of the dispute settlement clause is consistent with the interpretation of the Full Bench in CC Pty Ltd T/A Cook Colliery v Construction, Forestry, Mining and Energy Union (Cook Colliery) 3 in construing almost identical clauses in a dispute settlement procedure in an enterprise agreement. In Cook Colliery, the dispute settlement procedure was as follows:

“32. Grievance Procedure

The Grievance Procedure to be followed is:

Overview

Cook Colliery and employees are responsible for attempting to resolve workplace issues as quickly as possible. Supervisors are responsible for making themselves aware of any unresolved workplace and or potential issues and should also seek to resolve them quickly. Cook Colliery or employee/s may appoint another person, organisation or association to accompany and/or represent them for the purposes of this clause.

Step 1

In the event of a dispute, in the first instance the parties must attempt to resolve the matter at the workplace by discussions between the employee/s concerned and the relevant immediate Supervisor.

Step 2

If these discussions do not resolve the dispute, the parties will endeavour to resolve the dispute in a timely manner by discussions between the employee/s concerned and the Shift Co-ordinator.

Step 3

If these discussions do not resolve the dispute, the parties will endeavour to resolve the dispute in a timely manner by discussions between the employee/s concerned and the Site Senior Executive.

Step 4

If such discussions do not resolve the dispute, the parties will endeavour to resolve the dispute in a timely manner and refer the dispute to FWA.

Process

The parties may agree on the process to be utilised by FWA including mediation, conciliation and arbitration.

Power of FWA

Where the matter in dispute remains unresolved, FWA may exercise any method of dispute resolution permitted that it considers appropriate to ensure the settlement of the dispute.

Obligations

While the dispute resolution procedure is being conducted, work must continue in accordance with this Agreement and the Act.

Subject to applicable occupational health and safety legislation, an employee must not unreasonably fail to comply with a reasonable direction by Cook Colliery to perform work, whether at the same or another workplace, provided that it is safe and appropriate for the employee to perform.”

[13] It is evident that the “Process” and “Power of FWA” provisions of the dispute settlement procedure in Cook Colliery are identical to the dispute settlement procedure in clause 9.3 – 9.4 of the Award, save that word “consent” precedes the word “arbitration” and the words “by the Act” do not follow the words “FWA may exercise any method of dispute resolution permitted” in the dispute settlement procedure in Cook Colliery.

[14] In construing the terms of the dispute settlement procedure in Cook Colliery, the Full Bench relevantly found as follows:

“[31] We note the “Process” provision within clause 32 of the Agreement outlines that the parties may agree on the dispute resolution process to be utilised by the Commission including mediation, conciliation and arbitration. However, the “Power of FWA” provision stipulates that, where the matter in dispute remains unresolved, the Commission may exercise any method of dispute resolution “permitted” that it considers appropriate to ensure the settlement of the dispute.

[32] During the hearing, the representatives for the Appellant and the Respondent conceded that the word “permitted” stipulated in the “Power of FWA” provision refers to any method of dispute resolution permitted by the Act to ensure the settlement of the dispute. In this regard, as noted from the above extract, the Respondent relied upon section 739(4) in asserting that the Commission has power to arbitrate the dispute. Section 739(4) of the Act requires there to be agreement between the parties in order for the Commission to arbitrate a dispute. At paragraph 18 of its submissions, the Respondent contended that:

“In accordance with s. 739(4), cl. 32 represents an agreement between the parties that the Commission may arbitrate the dispute.”

[33] However, clause 32 of the Agreement does not expressly state that such an agreement has been reached between the parties. The only reference to “agreement” between the parties in respect of arbitration in clause 32 is within the “Process” provision, which states the parties may agree on the process to be utilised by the Commission, including mediation, conciliation and arbitration. The term “may” confers the parties with discretion to agree upon the process the Commission may utilise, however, no such agreement was expressed by the parties. The notion that parties must reach an agreement before the Commission can arbitrate a dispute was considered in Woolworths, in which the Full Bench held:

“Section 739(4) sets out the circumstances in which Fair Work Australia may arbitrate a dispute, providing that if the parties have agreed that Fair Work Australia may arbitrate, Fair Work Australia may do so. It appears to us that s 739(4) strongly implies the negative stipulation that if the parties have not agreed, Fair Work Australia has no power to arbitrate.”

[34] In this regard, the Commission can only arbitrate a dispute with express agreement of the parties to that dispute. Thus, as clause 32 does not represent an agreement between the parties and there has been no other express agreement, clause 32 of the Agreement cannot be construed so as to allow the Commission to arbitrate the dispute.

[35] As there was no agreement, section 739(4) is not enlivened and, therefore, the Commission is not expressly authorised to deal with the dispute pursuant to section 595(3) of the Act.

[36] In Award Modernisation, the Full Bench, in reference to the Black Coal Mining Industry Award, found that the dispute resolution clause in contemplation did not provide for compulsory arbitration.

[37] Relevantly, Clause 9.4 of the Black Coal Mining Industry Award 2010 states:

“Where the matter in dispute remains unresolved, the Commission may exercise any method of dispute resolution permitted by the Act that it considers appropriate to ensure the settlement of dispute.”

[38] Moreover, we note the “Power of FWA” provision within clause 32 states:

“Where the matter in dispute remains unresolved, FWA may exercise any method of dispute resolution permitted that it considers appropriate to ensure the settlement of the dispute.”

[39] As both the Appellant and the Respondent made the concession that the term “permitted” in the “Power of FWA” provision refers to any method of dispute resolution permitted by the Act, we are of the view that these clauses are synonymous in nature.

[40] Noting the similarities between clause 9.4 of the Black Coal Mining Industry Award and clause 32 of the Agreement outlined above, and as clause 9.4 was considered not to provide for compulsory arbitration, we are not satisfied that the Full Bench in Award Modernisation erred in its construction. Accordingly, clause 32 of this Agreement, consistent with the construction in Award Modernisation, should not be construed so as to empower the Commission to arbitrate the dispute without the agreement of the parties.

[41] For the above reasons, we are satisfied that the Commission did not have jurisdiction to arbitrate the dispute in accordance with clause 32 of the Agreement as there was no express agreement between the parties for such to take place.” 4 [Endnotes omitted]

[15] I respectfully agree with the determination of the Full Bench in that matter. The minor variations between the two dispute settlement procedures do not affect the ultimate construction of the term. Clause 9 of the Award, consistent with the construction in Award Modernisation 5and confirmed in Cook Colliery, cannot be construed so as to empower the FWC to arbitrate the dispute without the agreement of the parties.

[16] It follows that the Award does not empower the FWC to arbitrate the dispute without the consent of both the Applicant and Respondent. As the Respondent does not consent, there is no power to arbitrate the dispute in accordance with the Award.

Does clause 30 of the Employment Agreement allow for arbitration of the dispute without the consent of the Respondent?

[17] Section 738(c) of the Act provides that the FWC may deal with a dispute if:

“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.”

[18] The dispute as set out in section 2.1 of the application refers to “outstanding commission payments” that the Applicant claims he has not received. The dispute also involves a claim from the Respondent that the Applicant was engaged under a “refundable retainer”. The Applicant disputes this characterisation of his remuneration and submits that it does not form part of his contract, was never discussed and is contrary to clauses 15, 16 and 17 of the Award.

[19] It is not suggested by the Applicant and nor is it apparent that the dispute relates to the National Employment Standards (NES). Therefore, whether jurisdiction for the FWC is enlivened turns on whether the dispute is about a safety net contractual entitlement. The Respondent submits that the Applicant has not demonstrated such a requirement. The essence of the Respondent’s submissions on this point is that only clause 15 of the Award (which deals with payment by wages with commission, bonus or incentive payments) is relevant to the matter and that the employer’s obligation under this clause is to confirm commission arrangements in writing, with which the Respondent has complied. 6 The Applicant submits that the dispute is about a matter under the Award.7 It is not possible at this point to determine whether or not the dispute is about a safety net contractual entitlement as, to a certain extent, this will turn on factual circumstances which I do not have evidence of before me. As the Applicant points out, in the event the matter proceeds, these are matters upon which the Applicant would lead evidence.8

[20] In the circumstances, I simply make the observation that the power conferred on the FWC is only limited by “…the extent that the dispute is about any matters in relation to…a safety net contractual entitlement” (emphasis added). I note that the Respondent submits that I should find there is no such dispute as clause 15 has been satisfied and that if the FWC determines it has jurisdiction it would be involving itself in matter regarding over Award payments which is outside its power to deal with a safety net contractual matter. 9 However, in my view this is an overly narrow construction of s.738 which provides scope for dealing with matters in relation to a safety net contractual entitlement. I therefore do not accept the Respondent’s submissions that the way the dispute has been framed means that it cannot be found to be about a matter in relation to a safety net contractual entitlement. In any event, it is not necessary to determine this matter for the reasons that follow.

[21] Clause 30 of the Employment Agreement is set out above. The title of the clause is “Arbitration of Disputes”. However, other than the title, it is apparent that the clause does not contain any reference, express or otherwise between the parties to arbitration as a method of dealing with a dispute. The only time the word “arbiter” is used is in reference to “another mutually agreed upon arbiter”, that is, other than the FWC. In this matter the parties have not agreed upon another body, arbiter or otherwise to deal with the matter. The dispute has been lodged with the FWC. There is no express reference in the clause to the FWC having powers of arbitration. 10 I agree with the Respondent that it is apparent that the word “arbiter” is used in this way as a noun rather than a verb. The key matter is that the only power expressly conferred to the FWC or another “mutually agreed arbiter” is for “assistance” in resolving the dispute. The word “arbitration” does not appear at all in the body of the clause. While the clause is titled “Arbitration of Disputes” it is apparent that the parties have not expressly agreed to anything other than assistance being provided. Of course, that assistance might extend, by agreement, to arbitration. However, the title of the clause in referring to arbitration cannot be construed to be conferring a power on the FWC to arbitrate as part of the “assistance” without the consent of the parties.

[22] A further consideration is that the clause provides for the “parties” to refer the matter. Indeed, it suggests that the dispute cannot be unilaterally referred to the FWC at all. This can be contrasted with clause 9 of the Award which provides for “a party” to unilaterally refer the matter to the FWC. Rather, as the word “shall” mandates action to be taken. Clause 30 indicates the parties have agreed that they will together refer the matter in the event the dispute is not resolved. It is also apparent from the ordinary meaning of the words that the “parties” are mutually referring the matter for “assistance”. Having done so and in the absence of any express provision to the contrary, it is straining the words of the clause to suggest that it provides for a unilateral right of one party to insist on arbitration. This further supports that properly construed, the clause does not provide for a right for the FWC to exercise arbitral power without the consent of the parties.

[23] For the reasons set out above, I do not accept the submission of the Applicant that the terms of clause 30 can be construed to mean that the parties have agreed that the FWC has the power to arbitrate disputes of a particular type (which includes this dispute) and that consent is not required after the dispute has been raised by either of the parties. 11 I agree with the Applicant that such dispute settlement procedures can be found in enterprise agreements. However, clause 30 is not such a clause. It also follows that clause 30 cannot be relied upon as a source of prior agreement to the exercise of arbitration power under the dispute settlement term at clause 9 in the Award, as the Applicant appears to suggest.

Conclusion

[24] Section 739(4) of the Act permits the FWC to arbitrate the matter if under the relevant term/s of the Award or the contract of employment the parties have agreed that FWC may arbitrate the dispute.

[25] For the reasons set out above, the FWC has no power under the Award to arbitrate a dispute in accordance with clause 9 of the Award, in the absence of the consent of both parties. Further, the Employment Agreement permits the FWC to provide “assistance” to the parties in resolving a dispute and does not confer arbitration powers, by the express consent of the parties or otherwise, to the FWC.

[26] It is apparent that the Respondent has not, and does not, agree or consent to the arbitration of the matter by the FWC pursuant to the terms of the Award, the Employment Agreement or otherwise. As section 595 of the Act operates to preclude the FWC from exercising any power not expressly conferred on it under or in accordance with the Act, the absence of the Respondent’s consent means that the FWC does not have the power to arbitrate the matter pursuant to either the Employment Agreement or the Award. It follows that the answer to the question posed must be in the negative.

[27] The Commission does not have power to arbitrate the dispute and, accordingly, the application is dismissed. An order to that effect will be issued concurrently with this decision.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

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 1   Form F10 – Application for the Commission to deal with a dispute in accordance with a dispute settlement procedure at Q2.1

 2   Respondent’s outline of submissions, filed 16 July 2018 at [10](e)

 3   CC Pty Ltd T/A Cook Colliery v Construction, Forestry, Mining and Energy Union[2017] FWCFB 2749

 4   [2017] FWCFB 2749 at [31] – [41]

 5   Award Modernisation [2008] AIRCFB 1000

 6   Respondent’s outline of submissions, filed 16 July 2018 at [14] – [15]

 7   Applicant’s outline of submissions, filed 2 July 2018 at [3] – [8]

 8   Applicant’s outline of submissions, filed 2 July 2018 at [6]

 9   Respondent’s outline of submissions, filed 16 July 2018 at [20]

 10   The dispute has been lodged with the Fair Work Commission by the Applicant. I agree with the Applicant’s submission that the fact that the parties identify the Australian Industrial Relations Commissionas the agreed arbiter and the matter has been referred to the Fair Work Commissionis of no consequence.

 11   Applicant’s outline of submissions, filed 2 July 2018 at [15] – [18]