Lend Lease Project Management and Construction (Australia) Pty Limited v CFMEU
[2015] FWCFB 1889
•31 MARCH 2015
The attached document replaces the document previously issued with the above code on 31 March 2015.
The document has been edited to correct the last sentence of paragraph [2]. This sentence originally read: “The investigation into the altercation resulted in a decision not to take any disciplinary action against Mr Genovese, and his stand-down was lifted on 31 July 2014.” This sentence now reads: “The stand-down was lifted on 31 July 2014.”
Catherine Taylor
Associate to Vice President Hatcher
Dated 10 April 2015
| [2015] FWCFB 1889 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604 - Appeal of decisions
v
Construction, Forestry, Mining and Energy Union
(C2015/1396)
VICE PRESIDENT HATCHER | SYDNEY, 31 MARCH 2015 |
Appeal against decision [[2015] FWC 257] and Order [PR560380] of Deputy President Lawrence at Sydney on 22 January 2015 in matter number C2014/6296.
Introduction and background
[1] Lend Lease Project Management and Construction (Australia) Pty Limited (Lend Lease) has applied for permission to appeal and appeals a decision of Deputy President Lawrence issued on 22 January 2015 1 (Decision) and an accompanying order2 (Order) of the same date. The Decision and Order were made arising from an arbitration conducted pursuant to the dispute resolution process contained in clause 19, Conflict Resolution, of the Lend Lease Project Management & Construction/CFMEU Joint Development Agreement Mark 8 2012-16 (Agreement). The dispute the subject of the arbitration had arisen at the Barangaroo South Project (Barangaroo), and involved the question of whether Mr Peter Genovese, a Construction, Forestry, Mining and Energy Union (CFMEU) delegate who had been employed at that project but had gone off work for an extensive period due to a psychological illness, should return to work to his former role as delegate at Barangaroo or should return to work at an alternative work site nominated by Lend Lease. The Order made by the Deputy President, which took effect on 27 January 2015, required that “Mr Peter Genovese be returned to his normal duties/role at the Lend Lease Barangaroo site, in accordance with the return to work plan drafted by Ms Irene Bagia, dated 10 October 2014”. Lend Lease contends that the Decision and Order were attended by appealable error and should be quashed.
[2] The factual background to this appeal may be summarised as follows. Lend Lease is the developer of Barangaroo. Mr Genovese is employed as a construction worker by Lend Lease, and in recent years his role has been to act as CFMEU delegate and employee safety representative at the Barangaroo site. Arising from an altercation with a manager in February 2014, he was stood down from work with pay pending an investigation of the incident on 26 March 2014. During this period, Mr Genovese developed a psychological illness which required his hospitalisation. The stand-down was lifted on 31 July 2014.
[3] At this point, Mr Genovese’s health having recovered to a significant degree, a dispute arose about his return to work. Mr Genovese had been cleared to return to work at Barangaroo, subject to a graduated return to work plan, by his two treating doctors, Dr Chandler and Dr Paisley. However Lend Lease took the position that it would not permit Mr Genovese to return to work at Barangaroo until it was satisfied that such a return to work could be effected in a safe and durable manner. After various communications between Lend Lease and Mr Genovese’s solicitors, Mr Genovese was required by Lend Lease to attend a consultation with Dr Lousie Crowle, an occupational physician, on 17 September 2014. Dr Crowle subsequently issued a report dated 25 September 2014 in which she stated the opinion that Mr Genovese was medically fit to commence a graded return to the duties of his usual position and roles at Barangaroo, although he was not yet fit to return to work on a full-time basis. Dr Crowle made a number of recommendations to support a graduated return to work at the Project, including the development of an agreed return to work plan. She also stated that if Lend Lease was unable to support a return to work plan at Barangaroo, alternative work sites could be considered.
[4] Lend Lease then began to take steps to prepare a return to work plan for Mr Genovese. Lend Lease directed Mr Genovese to meet with Ms Bagia, an injury management and assessment consultant hired by Lend Lease, to progress the development of the return to work plan. After Ms Bagia met with Mr Genovese on 7 and 10 October 2014, and also met with his treating doctor, Dr Chandler, she sent a draft return to work plan, which provided for Mr Genovese to return to work at Barangaroo on a graduated basis, to Lend Lease on 13 October 2014. However Mr Murray Coleman, the Managing Director of Lend Lease, did not accept the plan insofar as it involved a return to work at Barangaroo, and proposed instead that the return to work plan proposed by Ms Bagia be implemented at a different and much smaller worksite, namely the Nanoscience project at the University of Sydney. This alternative proposal was not acceptable to Mr Genovese.
[5] Consequently the dispute about Mr Genovese’s return to work, which had throughout the course of the events described above been the subject of various conciliation proceedings before the Commission, was set down for arbitration by the Deputy President in accordance with clause 19 of the Agreement. The hearing occurred on 6 and 25 November and 2-3 December 2014.
The Decision
[6] In the Decision, after setting out the background to the dispute and the relevant provisions of the Agreement and the Fair Work Act 2009 (FW Act), the Deputy President summarised the evidence before him, including the medical evidence. This included reference to a certificate of Dr Chandler dated 4 August 2014 in which he stated “I consider he should resume work in his normal job at Barangaroo as it is important that he succeeds back at the same job”, and a return to work certificate of Dr Paisley dated 7 August 2014 which stated “It is important for him to return to his prior position as he is already familiar with the workplace and colleagues as well as the duties expected of him. A change of workplace may place additional stress on him which could be detrimental to his recovery.” 3 The Deputy President also quoted at some length a subsequent report by Dr Paisley dated 21 October 2014, which stated:
“In my opinion Mr Genovese is safe to return to his usual Full-Time employment position and could safely perform the inherent requirements. However it would be best if he could be reintroduced on a graduated basis given that he has not worked for the past 7 months. I have already proposed commencing at 2 days per week and this could be increased by 1 day per week every 1-2 weeks as tolerated. I predict that he would be back to his usual full-time within 1-2 months.
I believe the best course of action for Lend Lease to assist Mr Genovese’s wellbeing would be to enact a return to work plan at the Barangaroo site immediately. The ongoing uncertainty regarding his work situation, and looming threat of being moved to another worksite, is likely to have a detrimental effect on his mental health if unnecessarily prolonged. The loss of role, sense of purpose, identity, control and self-esteem are factors associated with unemployment being a well recognised risk factor for Major Depression.
. . .
As long as his workload is effectively managed and he is monitored, I can see no reason why he couldn’t return to this site again, especially now that he is well. Moving to another site would mean the loss of the positive aspects of his job at Barangaroo and may lead to more stress (unfamiliar site, new colleagues, additional uncertainty) as well as possibly even a sense of feeling ostracised, punished or demoted as a result of his medical condition. There is no medical reason why he should be shifted to another workplace and indeed a move may indeed be detrimental to his mental health for the reasons outlined above.” 4
[7] The Deputy President also referred to a witness statement made by Ms Bagia, who was not required for cross-examination by Lend Lease, in which she stated: “I confirm that in my professional opinion Mr Genovese will be able to cope with the work and is psychologically ready and able to return to the Barangaroo site”. 5
[8] The evidence of Mr Coleman, who made two statements of evidence for the purpose of the arbitration on behalf of Lend Lease and was subject to extensive cross-examination, was summarised in detail in the Decision. The Deputy President’s summary of this evidence included the following:
“[29] Mr Coleman asserts that he wants Mr Genovese to return to work as soon as possible. He further asserts that his decision is based on his view of his duty of care to Mr Genovese and all workers at Barangaroo.
[30] Mr Coleman’s statement sets out in detail the chain of events relating to Mr Genovese’s return to work from Lend Lease’s viewpoint. He asserts that he has taken the same approach to Mr Genovese as he would to any employee.
[31] The main issue for Mr Coleman was “the avoidance or effective management of workplace stress” (Exhibit D1, Para 45). The professional advice did not resolve this issue for him. Accordingly, he made a decision that a return to work at the smaller University of Sydney site would be less stressful and therefore more appropriate. This decision was based on his extensive professional knowledge and experience.
. . .
[33] In his supplementary statement (Exhibit D2) Mr Coleman provides further detail about the size and complexity of the Barangaroo site. He points out that delegates and safety representatives are required to deal with issues which do not arise on other sites. These have included bomb-threats, fires and the suicide of a worker. He emphasises the pressure that is created on all involved by the public attention given to Barangaroo. All of this contrasts with the much more confined layout and low-key nature of the University of Sydney site.”
[9] The Decision then set out the parties’ respective submissions. The summary of Lend Lease’s submissions included the following:
“[44] Lend Lease framed the question which is to be determined by the Commission as follows: “By not agreeing to a return to work plan that would have Mr Genovese resume specified duties at the Barangaroo site and by imposing a requirement that the graduated return to work be at the Nanoscience Project, has the Respondent failed to treat an Employee Representative fairly and without discrimination as required under clause 16.1(d) of the JDA8?” (Submission, 27 November 2014, paragraph 1)
[45] Lend Lease submits that the CFMEU has not established that this clause has been breached. It further submits it is not appropriate for the Commission “to overrule a judgment call made by a responsible and experienced Managing Director on a complex safety and rehabilitation issue”. (Submission, 27 November , paragraph 5)
[46] Clause 16.1(d), Lend Lease submits, protects against unfair or discriminatory treatment in the carrying out of the employee representative function. Mr Genovese does not have special rights or immunities as a union delegate. The CFMEU needs to establish that Mr Coleman’s decision is illegitimate or unreasonable. Lend Lease submits that the decision of Mr Coleman was genuine and responsible.”
[10] The Deputy President introduced his consideration of the matter as follows:
“[50] Ultimately, the issue to be determined in this matter is a narrow one. Both Lend Lease and the CFMEU agree that Mr Genovese should return to his normal duties in accordance with Ms Bagia’s return to work plan of 10 October 2014. The difference is about the location. The CFMEU says at Barangaroo, Lend Lease says at the Nanoscience Project, University of Sydney.
. . .
[52] This case is unusual to say the least. We have the Managing Director of a major employer personally involved in the return to work plan of an employee following a medical condition. There was acceptance of Mr Genovese’s role as a virtually full-time delegate and health and safety representative. This was the role to which, it was accepted, he would return to as a CW5. Furthermore, the Commission is required to resolve a dispute about a matter which would usually be dealt with by relatively junior employees in accordance with established policies and practices and based on medical and other professional advice.”
[11] The Deputy President then analysed the extent of his power to arbitrate the matter. By reference to ss.738, 739 and 595 of the FW Act and clause 19 of the Agreement, the Deputy President determined that he had a general power, without any specified limitation, to deal with the dispute by arbitration 6, and that he should do so having regard to that part of the object of the FW Act set out in s.3(e).7 In that context, he identified the issue requiring resolution in the following terms:
“[59] It seems to me that the question to be answered by the Commission, as framed by Lend Lease, set out in [28] and [44] above is too narrow. Rather, I would frame the question as: “Is it appropriate for the Commission to exercise its powers by arbitration to settle the dispute? Further, if the Commission considers it should intervene, what orders would be fair and practical in all the circumstances?”
[12] The Deputy President’s reasoning as to the conclusion he reached that an order should issue requiring Mr Genovese to be returned to work at Barangaroo in accordance with Ms Bagia’s proposed return to work plan was as follows:
“[62] I accept that there is a high bar for the Commission to intervene to overturn the decision of management in a case such as this. As I have already noted, this case is very unusual. It should have been resolved by conciliation but in three conferences it could not be.
[63] I do not doubt the integrity of Mr Coleman or question the veracity of his evidence. I accept that he is a senior manager with many years of experience in the construction industry. He has a responsibility to ensure a safe system of work on all Lend Lease sites including Barangaroo, However, Lend Lease have agreed to the Commission resolving disputes in an exceptional case such as this.
[64] I have come to the view that it is appropriate to grant the orders sought by the CFMEU in the circumstances of this case for the following reasons:
(a) Lend Lease set up its own policies and procedures to deal with these matters but has departed from them. At each step, the choices made, such as the selection of Dr Crowle and Ms Bagia were Lend Lease’s. Yet, it failed to follow the process to its conclusion.
(b) All of the medical and professional advice is in favour of a return to work at Barangaroo. The views of Dr Chandler, Dr Paisley, Dr Crowle and Ms Bagia are set out in [8], [12], [13], [24] [25] and [26] above.
(c) Mr Coleman’s particular concern was that the nature of the Barangaroo site would increase Mr Genovese’s workplace stress and therefore impede his return to full health. It would have a possible negative impact on other employees. Of course, these are all matters of judgement. There can never be a 100% guarantee in such matters. There was no advice in favour of a return to work on other sites. Dr Crowle did canvas the pros and cons of other sites but did not recommend in favour of the University of Sydney or any other alternative site.
(d) Section 346 and s.347 of the FW Act provide protections for the role of union delegate. This is not a general protections case. However, Clause 16.1(d) of the Agreement is relevant, in my view, and should be taken into account. I do not find, on a formal basis, that there has been a breach of that clause. I do not believe that is necessary.
I find, however, that Mr Genovese has been treated differently to other employees as a result of his role as union delegate. I will not speculate as to the reason for this.
Mr Coleman admitted that he had not been personally involved in the return to work processes of other employees (See [48] above).
The evidence was that Lend Lease had detailed policies and procedures to deal with these issues. It had specialist, experienced staff to deal with them, as one would expect in a large professional employer. There was no evidence that the usual practices had been departed from in other cases.
I agree with Mr Dalton that clause 16 does not give union delegates special privileges but it does emphasise that they must be treated fairly. The fact that they are not treated in the same way as other employees is a factor that the Commission is entitled to take into account in the exercise of its judgment.
(e) A return to work at the University of Sydney project is relatively short term and clearly does not involve a role comparable to the role that Lend Lease has accepted for Mr Genovese over many years. In the absence of professional advice that this should occur, there is disadvantage to Mr Genovese even with the resolution of the differential wage issue. Another dispute is likely to arise, in my view.
(f) There is no evidence that a return to work at Barangaroo will have a negative effect on industrial harmony on the site.”
Submissions
[13] Lend Lease submitted that the Decision was attended by appealable error in five respects. First, Lend Lease submitted that the Deputy President erred in characterising the issue before him as one involving simply a determination of an appropriate outcome, with the Deputy President thereby stepping into the shoes of the employer and making a choice between two alternative outcomes. Absent a finding that Lend Lease’s decision to return Mr Genovese to work at the Nanoscience project was inconsistent with its obligations under the Agreement, the Deputy President should have determined the matter in accordance with the principle stated in Australian Federated Union of Locomotive Enginemen v State Rail Authority (NSW) 8(XPT Case) and affirmed in CFMEU v HWE Mining Pty Ltd9, namely that the Commission should not interfere with the right of an employer to lawfully manage its own business unless injustice and unreasonableness (which included effects of health and safety) to employees resulted. No finding in accordance with this principle was made by the Deputy President.
[14] Secondly, Lend Lease submitted that the Deputy President failed to consider the evidence of Mr Coleman and evaluate his reasoning, and in particular did not engage with the task of assessing whether the judgment exercised by Mr Coleman was logical, responsible and reasonable, notwithstanding that at paragraph [63] of the Decision the integrity of Mr Coleman and the veracity of his evidence was accepted. That evidence articulated the basis of Mr Coleman’s concerns about Mr Genovese returning to work at Barangaroo by reference to the size and scale of works there, the number of employees and subcontractors engaged, the level of public and media scrutiny, the practical difficulties in managing or confining Mr Genovese’s role to reduce the risks to his health to an acceptable level, and his own observations that Mr Genovese remained in a fragile emotional state. These issues had not adequately been addressed by Dr Chandler, Dr Paisley, Dr Crowle or Ms Bagia.
[15] Thirdly, the Deputy President’s conclusion that Lend Lease had departed from its policies and procedures and had not followed to completion all steps in the return to work process was not supported by any factual finding, and there was no evidence to support it. Fourthly, in the absence of any finding that Lend Lease had breached clause 16.1(d) of the Agreement, there was no basis for the Deputy President stating that clause 16.1(d) was “relevant”, and the finding that Mr Genovese had been treated “differently” was without meaning or content because his position was unique.
[16] Finally, it was submitted that the Decision and Order were made in excess of jurisdiction and without power. By virtue of s.29(2)(b) of the FW Act, the dispute resolution procedure in cl.19 of the Agreement was subject to applicable State OHS laws, relevantly the Work Health and Safety Act 2011 (NSW) (WHS Act) and the Workplace Injury Management and Workers’ Compensation Act 1998 (NSW) (WIMWC Act). Section 19(1) of the WHS Act imposed a primary obligation to ensure, so far as was reasonably practicable, the health and safety of workers at the workplace, and Part 5 Division 5 of the WHS Act contained a process to resolve disputes about that primary obligation. Sections 46-48 of the WIMWC Act contained relevant obligations upon employers and employees concerning the return to work of injured workers, and ss.305-310 of that Act established procedures to resolve disputes about return to work obligations. The relevant obligations under the WIMWC Act applied to any “injured worker” being an employee who had received a workplace injury, defined as an injury to a worker in respect of which compensation was or might be payable under the WIMWC Act. There was evidence that Mr Genovese’s illness was substantially caused by work, and therefore the WIMWC Act applied. The Decision and Order were made in excess of jurisdiction and were beyond power because they were made without reference to and without consideration of the identified obligations in the WHS Act and the WIMWC Act. Because the Deputy President decided the matter simply on the basis of what was appropriate and without consideration of the identified obligations under the WHS Act and the WIMWC Act, the arbitration was not consistent with and therefore not subject to State OHS laws. This last ground of error was not raised in the notice of appeal, and Lend Lease sought leave to amend its appeal notice to add this ground. We grant such leave.
[17] Lend Lease submitted that permission to appeal should be granted because of the significance of the dispute in the context of such a large construction project, the importance of the questions raised concerning managerial prerogative and the interaction between the Commission’s disputes resolution powers under federal industrial instruments and State OHS laws, and the nature and the substance of the errors identified.
[18] The CFMEU, on Mr Genovese’s behalf, submitted that:
(1) The XPT Case was not referred to by Lend Lease in the hearing at first instance, which explains why it was not referred to in the Decision. In any event, as disclosed by paragraph [61] of the Decision, the Deputy President determined the matter by reference to a test of what was fair and reasonable, which was not inconsistent with the principle stated in the XPT Case. The Deputy President found, in substance, that Mr Genovese had not been treated fairly. That was sufficient for the purposes of the principle in the XPT Case. Having found unfairness, it was not necessary for the Deputy President to make a separate finding about the reasonableness of Mr Coleman’s decision.
(2) The fact of Mr Coleman’s personal involvement in the process of Mr Genovese’s return to work was a departure from policy and procedure, and supported the Deputy President’s finding in paragraphs [61] and [64] of the Decision that there had been a departure from policy and procedure and a failure to follow the process to its conclusion.
(3) In relation to clause 16(1)(d), the Commission as an arbitral body was not empowered to make a finding that the provision had been breached, since this would constitute an impermissible exercise of judicial power. However the Deputy President was entitled to treat clause 16(1)(d) as relevant to his inquiry into the question of fairness for the purpose of determining what rights should be created.
(4) Lend Lease’s jurisdictional submission (which was not raised at first instance) was of little merit. A similar point was considered and rejected in the Full Bench decision in Master Builders Australia Limited. 10 In that decision, the Full Bench had determined that a provision of a modern award which purported to diminish a right or obligation under a State OHS law was of no legal effect, but pointed to the Explanatory Memorandum to the Fair Work Bill 2008 as demonstrating that a modern award provision could supplement rights and obligation under such laws. The disputes resolution procedure in cl.19 of the Agreement supplemented rather than diminished rights and obligations under the WHS Act and the WIMWC Act. In respect of the WIMWC Act, the obligations concerning injury management plans in that Act only applied to such plans where they were prepared by an employer’s insurer. That was not relevant here.
(5) Permission to appeal should be refused, or in the alternative the appeal should be dismissed.
Consideration
Arbitration power under the Agreement
[19] It is convenient to commence our consideration of Lend Lease’s appeal by ascertaining the nature and scope of the arbitration power that was exercised by the Deputy President under cl.19 of the Agreement.
[20] Section 595(3) of the FW Act provides that the Commission “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”. One express source of such an arbitration power is contained in Div.2 of Pt.6-2 of the FW Act. Section 738(b) provides (relevantly) that the Division applies if “an enterprise agreement includes a term that provides a procedure for dealing with disputes, including a term referred to in subsection 186(6)”. In relation to such a term, s.739(4) provides: “If, in accordance with the term, the parties have agreed that the FWC may arbitrate (however described) the dispute, the FWC may do so”. However, s.739(5) imposes a limitation upon this power of arbitration by providing: “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”. One effect of the limitation in s.739(5) is that, in arbitrating a dispute in accordance with the disputes resolution procedure in an enterprise agreement, the Commission may not make a decision which is inconsistent with any provision of the enterprise agreement. Further, s.739(3) provides that “In dealing with a dispute, the FWC must not exercise any powers limited by the term”, so that if, for example, any arbitration power in the disputes resolution procedure of an enterprise agreement may be exercised only in relation to certain specified categories of dispute (such as disputes about the application of the agreement or the NES), the Commission is not permitted to arbitrate any dispute falling outside these categories.
[21] The disputes resolution procedure in the Agreement is contained in clause 19, Conflict Resolution, which relevantly provides:
“19.1 The Parties recognise that one of the aims of the Agreement is to eliminate lost time in the event of a dispute and to achieve prompt resolution. The most effective procedure is for the responsibility for resolution to remain as close to the source of the dispute as possible. To this end, the following processes are agreed:
(a) Disputes Procedure
In the event of a dispute occurring, the following procedure will be adopted:
(i) Discussion between those directly affected;
(ii) Discussion on the project between the site management and the Employee affected or a representative nominated by the employee (including Union delegate);
(iii) Discussion between senior Company management and the Employee affected, or if nominated by the Employee their Representative or appropriate
union official;
(iv) The relevant Union official commits to make him/herself available to be involved at any stage of the procedure as required, or in respect of any potential dispute. The Company agrees to facilitating access to the project for the relevant Union official to represent Employees under this procedure subject to the Union official complying with all site rules and reasonable requests and reasonable directions of site management.
A dispute will not be referred to the next level of the above procedure until a genuine attempt to resolve the matter has been made at the appropriate level.
(b) Reference to the relevant State Board or Panel
. . .
(c) Reference to Fair Work Australia
A dispute may be referred to FWA for conciliation and if required, arbitration, in either of the following circumstances:
(i) If the dispute still exists after the above disputes procedure has been carried out, the dispute may be referred by any of the parties to the dispute to FWA; or
(ii) If any party to the dispute refuses or fails to follow any step of the above disputes procedure the non breaching party will not be obligated to continue through the remaining steps and may immediately refer the matter to FWA.
(d) Notice of Disputes
Should a dispute arise and it does not appear to be one which can be settled immediately, the party raising the matter will notify the other party or parties by telephone within 48 hours of the dispute arising and confirm it in writing.”
[22] No relevant limitation on the scope of the Commission’s power to arbitrate a dispute under clause 19 may be identified in the terms of clause 19 itself. It is not necessary to explore the outer limits of what might constitute a “dispute” for the purpose of clause 19, since there was no issue that the dispute concerning Mr Genovese’s return to work was one to which clause 19 applied. We consider that an unrestricted power to arbitrate a dispute involves the conferral on the decision-maker of a broad discretion. Lend Lease accepted in its submissions that the power exercised by the Deputy President was discretionary in nature and that (leaving aside for present purposes Lend Lease’s jurisdictional ground of appeal based on alleged inconsistency with State OHS laws), it was necessary for it to demonstrate error of the type identified in House v The King. 11
[23] As earlier stated, the relevant effect of s.739(5) was that, in exercising his discretionary arbitral power under cl.19, the Deputy President was not permitted to make a decision which was inconsistent with any provision of the Agreement. Three provisions of the Agreement were relevant to the dispute involving Mr Genovese’s return to work. The first was clause 14, which deals with “Environmental Health and Safety”. Subclause (c) of clause 14 provides:
“(c) Organising work so that the health and safety of all Employees and protection of the environment are recognised as being of paramount importance and is therefore integrated into the Environmental Health and Safety Plan”.
[24] Second, clause 16 of the Agreement concerns “Employee Representatives”, and specifies the rights of such representatives. Subclause 16.1(d) provides that elected employee representatives will “Be treated fairly and to perform their role as Employee Representative without any discrimination in their employment”. Third, Appendix E of the Agreement sets out Lend Lease’s Environmental, Health and Safety Policy, and provides among other things as follows:
“We are committed to eliminating harm to people and minimising any environmental impact and will comply with all environmental work and health and safety legislation, regulation and other requirements as a minimum. We will move well beyond compliance to get new benchmarks in environmental, health and safety management wherever possible.”
[25] Lend Lease did not contend that the Decision or Order were inconsistent with these provisions of the Agreement or with any other provision of the Agreement. Accordingly, subject to the determination of Lend Lease’s jurisdictional point, the relevant question remains whether the Deputy President erred in the exercise of his discretion.
XPT Case
[26] The principle stated in the XPT Case was as follows:
“It seems to us that the proper test to be applied and which has been applied for many years by the Commission is for the Commission to examine all the facts and not to interfere with the right of an employer to manage his own business unless he is seeking from the employees something which is unjust or unreasonable. The test of injustice or unreasonableness would embrace matters of safety and health because a requirement by an employer for an employee to perform work which was unsafe or might damage the health of the employee would be both unjust and unreasonable.” 12
[27] It may be accepted that the above principle is one which should be taken into account and given significant weight in the exercise of an arbitral discretion concerning whether the Commission should intervene in relation to a lawful business management decision by an employer. However to elevate the XPT Case principle into an immutable rule applicable to any employer decision is to overstate the effect of the principle. In this case, the question of Mr Genovese’s fitness to return to work at Barangaroo was, we consider, primarily a medical one and for that reason any management decision concerning that matter did not readily fall within the ordinary run of business management decisions about which the XPT Case principle was concerned. The opinion on that question of qualified medical practitioners was inevitably a matter which would have to be given significant weight.
[28] Although the Deputy President was not expressly taken by Lend Lease to the XPT Case or any subsequent decision which affirmed or applied the principle stated in that case, nonetheless he recognised that the management decision of Mr Coleman not to allow Mr Genovese to return to work at Barangaroo should not lightly be interfered with when he referred to there being a “high bar for the Commission to intervene to overturn the decision of management in a case such as this”. 13 That, in substance, afforded appropriate weight to the XPT Case principle in the circumstances. Nonetheless it is clear from the Deputy President’s reasoning in the Decision that he regarded the weight of the medical evidence as being such as to justify intervention in the matter against the decision taken by Mr Coleman.
[29] We consider that this approach was reasonably open to the Deputy President. The medical evidence before him, which was not contested, all went one way. Dr Chalmers, Dr Paisley and Dr Crowle all expressed the view that Mr Genovese was fit to return to work at Barangaroo on a graduated basis. This view was supported by Ms Bagia, who although not a medical practitioner had demonstrated expertise and experience in the area of workplace injury management and had been nominated by Lend Lease to prepare a return to work program for Mr Genovese. Not only, as the Deputy President found, was there no medical or expert opinion in favour of Mr Genovese returning to work at the Nanoscience project, Dr Paisley had expressed the view that a return to work at a site other than Barangaroo would pose a risk to Mr Genovese’s mental health.
[30] We therefore reject Lend Lease’s submission that the Deputy President erred in the exercise of his discretion by failing to take into account the XPT Case principle.
Consideration of Mr Coleman’s evidence
[31] For similar reasons, we reject Lend Lease’s submission that the Deputy President erred in failing to consider and evaluate the evidence of Mr Coleman. As we have earlier recited, the Deputy President at paragraph [63] of the Decision accepted the integrity and veracity of Mr Coleman’s evidence, as well as his seniority as a manager and the extent of his experience in the construction industry. In doing so, we consider that the Deputy President accepted that Mr Coleman’s evidence concerning the decision he had taken and the reasons for it was given in good faith and was to be accorded weight. However, it overstates the matter to submit that the Deputy President thereby “accepted” Mr Coleman’s evidence. The gravamen of Mr Coleman’s evidence - that is, his concern that the nature of the Barangaroo site would detrimentally affect Mr Genovese’s level of workplace stress and endanger a full and durable recovery - was specifically considered by the Deputy President in paragraph [64](c) of the Decision, but it is clear that the Deputy President preferred the “medical and professional advice in favour of a return to work at Barangaroo” 14 and the lack of any such advice in favour of a return to work at any other site.15 Such a conclusion was reasonably available.
Departure from policies and procedures
[32] Read in the context of paragraph [64] as a whole, the Deputy President’s finding that, in dealing with Mr Genovese’s return to work, Lend Lease had departed from its own policies and procedures appears to be, in substance, a conclusion that the decision-making role of Mr Coleman in the process in lieu of its own “specialist, experienced staff” represented a departure from the “usual practices”. 16 That conclusion was well supported by the evidence. Mr Coleman’s lack of any prior involvement in the return to work process of any other employees, referred to by the Deputy President in paragraph [64](d) of the Decision, was conceded by him in cross-examination.17 Lend Lease had a head of injury management, Michael Stoddart, who was usually involved in making decisions in relation to return to work plans18, but in this case he was not the decision-maker and his recommendation that Mr Genovese should return to work at Barangaroo was overridden.19 The process it followed in Mr Genovese’s case whereby it selected Dr Crowle and Ms Bagia to provide expert advice concerning Mr Genovese’s return to work but then failed to heed that advice was also clearly unusual. We do not consider that the Deputy President erred in finding that Lend Lease departed from its own policies and procedures.
Differential treatment of Mr Genovese
[33] For the reasons we have just stated, there was a sound basis for the Deputy President to conclude, as he did in paragraph [64](d) of the Decision, that Mr Genovese had been treated differently. The Deputy President further found that this was a result of his role as a union delegate. Lend Lease does not challenge the correctness of this finding in its appeal, but contends that the Deputy President erred by treating clause 16.1(d) of the Agreement as relevant in circumstances where he made no finding of any breach of that clause, and that the finding that Mr Genovese was treated differently had no meaning or content because his position was unique.
[34] We do not agree. Clause 16.1(d) of the Agreement, which we have earlier quoted, required union delegates such as Mr Genovese to be treated fairly and without discrimination. It was clearly relevant in circumstances where Mr Genovese had been found to be subject to differential treatment. While the Deputy President would have been entitled to express the opinion in the course of exercising his arbitral function that Lend Lease had contravened clause 16.1(d), the fact that he decided to refrain from doing so did not have the effect of rendering clause 16.1(d) irrelevant. We consider that the fact that Mr Genovese was subject to differential treatment when, consistent with medical advice, he sought to return to his work as the delegate at Barangaroo was a significant matter which the Deputy President was entitled to take into account.
Jurisdictional issue - interaction with State OHS laws
[35] Section 29 of the FW Act deals with the interaction of, relevantly, enterprise agreements with State and Territory laws as follows:
29 Interaction of modern awards and enterprise agreements with State and Territory laws
(1) A modern award or enterprise agreement prevails over a law of a State or Territory, to the extent of any inconsistency.
(2) Despite subsection (1), a term of a modern award or enterprise agreement applies subject to the following:
(a) any law covered by subsection 27(1A);
(b) any law of a State or Territory so far as it is covered by paragraph 27(1)(b), (c) or (d).
(3) Despite subsection (2), a term of a modern award or enterprise agreement does not apply subject to a law of a State or Territory that is prescribed by the regulations as a law to which modern awards and enterprise agreements are not subject.
[36] In relation to s.29(2)(b), s.27(1)(c) covers any State or Territory law which “deals with any non-excluded matters”. Under s.27(2), the “non-excluded matters” referred to include, in paragraph (b), workers compensation, and paragraph (c), occupational health and safety. No relevant regulation has been made pursuant to s.29(3) to displace the operation of s.29(2)(b) in respect to State and Territory laws dealing with workers compensation or occupational health and safety. Therefore, to the extent that there is any inconsistency between an enterprise agreement and any State or Territory law dealing with workers compensation or occupational health and safety, the State or Territory law prevails and the inconsistent provision of the enterprise agreement is rendered of no legal effect. 20 The Explanatory Memorandum for the Fair Work Bill 2008 explained that the intended effect of s.29(2) was (relevantly) that an enterprise agreement “cannot diminish, but may supplement, rights and obligations under these laws”. This is consistent with the ordinary meaning of s.29(2).
[37] Lend Lease’s jurisdictional challenge to the Decision alleged inconsistency with two NSW statutes, the WHS Act and the WIMWC Act. The WHS Act is plainly a State law which deals with occupational health and safety, and the CFMEU did not submit otherwise. The WIMWC Act deals with both workers compensation and occupational health and safety, and again there was no submission to the contrary. Therefore, by force of s.29(2)(b), the Agreement applies subject to the WHS Act and the WIMWC Act.
[38] The nature and effect of the inconsistency alleged by Lend Lease to exist between the Agreement, the WHS Act and/or the WIMWC Act was somewhat elusive. It was not suggested that, because of any alleged inconsistency, there was no legal capacity at all for the Commission to arbitrate the dispute concerning Mr Genovese under clause 19 of the Agreement. Lend Lease appears to have accepted that there was jurisdiction to deal with the dispute under clause 19. Rather, Lend Lease’s contention was that clause 19 did not authorise the Commission to arbitrate the dispute “simply by reference to what the Commission regarded as appropriate in the circumstances”. 21 That proposition appeared to suggest that there was some constraint upon the conduct of the arbitration by the Deputy President under clause 19 of the Agreement by virtue of that provision being subject to the WHS Act and the WIMWC Act.
[39] In relation to the WHS Act, Lend Lease relied upon s.19(1), which relevantly imposes upon Lend Lease, as a person conducting a business or undertaking, a primary obligation to ensure, so far as is reasonably practicable, the health and safety of workers at its workplace. Lend Lease also identified Div.5 of Pt.5 (ss.80-82) of the WHS Act, which establishes a resolution process for health and safety issues arising at a workplace, as relevant, and contended that disputes about the primary obligation in s.19(1) were amenable to this resolution process. It is important to observe that Lend Lease did not submit that the mere existence of the resolution process for health and safety issues in Div.5 of Pt.5 of the WHS Act gave rise to an inconsistency with the different dispute resolution procedure in clause 19 of the Agreement insofar as health and safety disputes were concerned such that s.29(2)(b) of the FW Act operated to render cl.19 legally ineffective in relation to disputes of that nature. Instead, Lend Lease submitted that the outcome arbitrated by the Deputy President involved an excess of jurisdiction because it was not reached by reference to the primary health and safety obligation under s.19(1) of the WHS Act.
[40] Lend Lease did not in its appeal submissions, as we understood them, contend that there was any actual inconsistency between the Decision and Order made pursuant to clause 19 of the Agreement and the primary obligation in s.19(1) of the WHS Act in the sense that the Decision and Order conflicted with or diminished Lend Lease’s obligation under s.19(1). Indeed, to the extent that the Decision made it clear that the outcome determined by the Deputy President was to a substantial degree based on the medical and professional advice of Dr Chandler, Dr Paisley, Dr Crowle and Ms Bagia that Mr Genovese was fit for a graduated return to work at Barangaroo, and the lack of any such advice in favour of a return to work anywhere else, we consider that it was consistent with Lend Lease’s obligation under s.19(1) to ensure so far as practicable Mr Genovese’s health and safety at the workplace. In the absence of any identified inconsistency, we do not consider that Lend Lease’s submission in the terms that it was put raises in substance a jurisdictional issue at all. It really only amounts to a proposition that the Deputy President erred in the exercise of his discretion by not taking into account s.19(1) of the WHS Act. However, given that Lend Lease did not submit at first instance that s.19(1) should be taken into account in the decision to be made, or even draw the Deputy President’s attention to that provision, no error can arise in this respect.
[41] In relation to the WIMWC Act, Lend Lease pointed to Div.3 of Ch.7 (ss.305-310) of that Act which, as stated in s.305, “applies in respect of a dispute that concerns a failure by a party to the dispute to comply with an obligation imposed by or under Chapter 3”. Division 3 of Ch.7 sets out a procedure for the resolution of such disputes by the Workers Compensation Commission established by the WIMWC Act. Provisions under Ch.3 of the WIMWC Act which might give rise to a dispute to which Div.3 of Ch.7 applied which were identified by Lend Lease as relevant to Mr Genovese’s case were s.46, which deals with an employer’s injury management plan obligations, s.47, which deals with a worker’s injury management plan obligations, and s.48, which deals with a worker’s return to work obligation.
[42] Again, it was not contended by Lend Lease that the mere existence of this dispute resolution procedure meant that there was no jurisdiction for the Commission to arbitrate Mr Genovese’s dispute under clause 19 of the Agreement at all, but only that an arbitration which did not resolve the dispute by reference to the content of the return to work obligations imposed by the WIMWC Act was in excess of jurisdiction. For the same reasons as already stated in relation to the WHS Act point, we do not consider this submission raises any real jurisdictional issue. No actual inconsistency between the Decision and Order made pursuant to clause 19 of the Agreement and the obligations imposed by ss.46-48 of the WIMWC Act was identified by Lend Lease, nor do we consider that there was any such inconsistency; accordingly no issue under s.29(2)(b) of the FW Act arises. Nor, given that neither party suggested at first instance that those obligations should be taken into account such as to support a particular outcome, can it be suggested that there was any error in the Deputy President’s exercise of the discretion in this connection.
[43] In any event, we do not consider that the identified provisions of the WIMWC Act had any relevant application to Mr Genovese’s dispute. Sections 46 and 47 concern the employer’s and the injured worker’s obligations under an “injury management plan”. As s.45 of the WIMWC Act makes clear, an “injury management plan” for the purposes of ss.46 and 47 is one established by the employer’s workers compensation insurer. There was no question of an insurer preparing an injury management plan for Mr Genovese because, apparently, he never made a workers’ compensation claim in the first place, and there was nothing in the evidence to suggest that Lend Lease’s insurer had any role in the return to work process for Mr Genovese. In relation to s.48, there was never any suggestion that Mr Genovese had failed to comply with his obligation (under s.48(1)) to “make reasonable efforts to return to work in suitable employment or pre-injury employment”; indeed the evidence demonstrated that it was Mr Genovese’s agitation to return to work at Barangaroo which gave rise to the dispute. Therefore the dispute before the Deputy President simply did not concern any of the matters dealt with by ss.46-48A of the WIMWC Act, and consequently there could be no inconsistency to which s.29(2)(b) of the FW Act applied.
[44] We therefore reject the submission that the Decision was made in excess of jurisdiction or that the Order was beyond power.
Conclusion
[45] Lend Lease has not succeeded in establishing any appealable error in the Decision or Order. We do not consider that there are any public interest grounds requiring the grant of permission to appeal under s.604(2) of the FW Act, and we do not consider that there is any discretionary ground justifying the grant of permission to appeal.
[46] Accordingly permission to appeal is refused.
VICE PRESIDENT
Appearances:
F. Parry QC and R. Dalton of counsel, for the Appellant.
I. Latham of counsel with T. McCauley, solicitor for the Respondent.
Hearing details:
2015.
Sydney:
2 February.
1 [2015] FWC 257
2 PR560380
3 Decision at [24]
4 Decision at [24]
5 Decision at [26]
6 Decision at [53]-[58]
7 Decision at [60]
8 (1984) 295 CAR 188
9 (2011) 214 IR 194
10 [2012] FWAFB 10080
11 (1936) 55 CLR 499 at 504-5
12 (1984) 295 CAR 188 at 191
13 Decision at [62]
14 Decision at [64](b)
15 Decision at [64](c)
16 See Decision at [64](d)
17 Transcript, 2 December 2014, PN426-432
18 Transcript, 2 December 2014, PN699-700
19 Transcript, 2 December 2014, PN697
20 See Armacell Australia Pty Ltd and others [2010] FWAFB 9985 at [30]
21 Lend Lease’s written appeal submissions, paragraph 40.
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