Mr Brian Boyle v Kogan Creek Power Pty Ltd
[2012] FWA 9641
•13 NOVEMBER 2012
[2012] FWA 9641 |
|
DECISION |
Fair Work Act 2009
s.739 - Application to deal with a dispute
Mr Brian Boyle
v
Kogan Creek Power Pty Ltd
(C2012/4406)
Electrical power industry | |
COMMISSIONER ASBURY | BRISBANE, 13 NOVEMBER 2012 |
Alleged dispute regarding the issuing of 'Final Written Warning Letter' - Jurisdictional objection on ground that dispute does not relate to a matter arising under the Agreement - Case law - Dispute relates to application of disciplinary policy not referenced in Agreement - No obligation or entitlement claimed under provision of Agreement - Jurisdictional objection upheld - Application to deal with a dispute dismissed.
Background
[1] This decision concerns an application by Mr Brian Boyle under s. 739 of the Fair Work Act 2009 (the Act) for Fair Work Australia to deal with a dispute in accordance with a dispute settlement procedure in the Kogan Creek Power Station Enterprise Agreement 2011 (the Agreement). The dispute relates to a final warning issued to Mr Boyle on 21 February 2012 by Kogan Creek Power Pty Ltd following an investigation in relation to allegations that Mr Boyle had engaged in bullying and harassment.
[2] The CFMEU on behalf of Mr Boyle takes issue with the substance of the allegations and the procedure followed by Kogan Creek Power Pty Ltd with respect to the investigation and the conclusions drawn from it.
[3] A Conference of the parties was conducted on 27 July 2012. At that Conference the CFMEU on behalf of Mr Boyle made a number of assertions to the effect that the process of investigation which resulted in the warning being issued was flawed because of deficiencies in relation to bias on the part of the investigator, natural justice and procedural fairness. The CFMEU also pointed to the conclusion of the investigator to the effect Mr Boyle’s conduct “bordered on bullying and harassment” and sought the removal and/or the downgrading of the final warning on the basis that it was disproportionate.
[4] Kogan Creek Power Pty Ltd participated in the Conference on 27 July 2012 and rejected the assertions made by the CFMEU in relation to the investigation process and outcome. The Company also indicated that the final warning had six months to run at the point the conference was held. Further, Kogan Creek Power Pty Ltd indicated that notwithstanding its preparedness to participate in conciliation, it reserved its position in relation to a jurisdictional objection to Fair Work Australia dealing with the application on the grounds that the dispute does not fall under the dispute settlement procedure in the Agreement.
[5] The matter was unable to be resolved through conciliation. On 24 August 2012, Livingstones Australia on behalf of Kogan Creek Power Pty Ltd forwarded correspondence to Fair Work Australia stating that the Company sought to have the jurisdictional objection dealt with before the matter proceeded any further. A further conference of the parties was held on 5 September 2012 and Directions were issued requiring the parties to file and serve submissions. It was also agreed that the matter would be dealt with on the basis of those submissions without the need for a further hearing.
The Agreement
[6] The Agreement provides at clause 8 for a grievance and dispute settling procedure in the following terms:
“8. Grievance and dispute settling procedures
One of the fundamental objectives of this Agreement is to eliminate lost time in the event of a grievance or dispute arising, and that it is in the best interests of all the parties to achieve prompt resolution of grievances and disputes -
(1) If a dispute relates to:
(a) a matter arising under the agreement; or
(b) the National Employment Standards;
this term sets out procedures to settle the dispute.
(2) An employee who is a party to the dispute may appoint a representative for the purposes of the procedures in this term.
(3) In the first instance, the parties to the dispute must try to resolve the dispute at the workplace level, by discussions between the employee or employees and relevant supervisors and/or management.
(4) If discussions at the workplace level do not resolve the dispute, a party to the dispute may refer the matter to Fair Work Australia.
(5) Fair Work Australia may deal with the dispute in 2 stages:
(a) Fair Work Australia will first attempt to resolve the dispute as it considers appropriate, including by mediation, conciliation, expressing an opinion or making a recommendation; and
(b) if Fair Work Australia is unable to resolve the dispute at the first stage, Fair Work Australia may then:
(i) arbitrate the dispute; and
(ii) make a determination that is binding on the parties.
Note If Fair Work Australia arbitrates the dispute, it may also use the powers that are available to it under the Act.
A decision that Fair Work Australia makes when arbitrating a dispute is a decision for the purpose of Div 3 of Part 5.1 of the Act. Therefore, an appeal may be made against the decision.
(6) While the parties are trying to resolve the dispute using the procedures in this term:
(a) an employee must continue to perform his or her work as he or she would normally unless he or she has a reasonable concern about an imminent risk to his or her health or safety; and
(b) the status quo shall be maintained whilst the above procedures are being followed. "Status Quo" shall mean the circumstances that prevail immediately prior to any change that involves the dispute being implemented; and
(c) an employee must comply with a direction given by the employer to perform other available work at the same workplace, or at another workplace, unless:
(i) the work is not safe; or
(ii) applicable occupational health and safety legislation would not permit the work to be performed; or
(iii) the work is not appropriate for the employee to perform; or
(iv) there are other reasonable grounds for the employee to refuse to comply with the direction.
(7) Where the parties agree have a matter being arbitrated or determined in accordance with (5)(b) above, the parties to the dispute agree to be bound by a decision made by Fair Work Australia in accordance with this term.”
[7] In support of the proposition that Fair Work Australia has jurisdiction to arbitrate the dispute, the CFMEU also point to clauses 1.3(b) and 2.1(j) of the Agreement which provide as follows:
“1.3 (b) A relationship exists between the employer and employee, which is based on mutual respect, trust and acceptance of responsibilities.
...
2.1 (j) Discrimination, and in particular, sexual or any other form of harassment, will not be tolerated in the work place or while performing work for the employer.”
Legislation
[8] Relevant legislative provisions in relation to the power of Fair Work Australia to deal with disputes are as follows:
“595 FWA’s power to deal with disputes
(1) FWA may deal with a dispute only if FWA is expresslyauthorised to do so under or in accordance with another provision of this Act.
(2) FWA 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) FWA may deal with a dispute by arbitration (including by making any orders it considers appropriate) only if FWA is expresslyauthorised to do so under or in accordance with another provision of this Act.
Example: Parties may consent to FWA arbitrating a bargaining dispute (see subsection 240(4)).
(4) In dealing with a dispute, FWA may exercise any powers it has under this Subdivision.
Example: FWA could direct a person to attend a conference under section 592.
(5) To avoid doubt, FWA must not exercise any of the powers referred to in subsection (2) or (3) in relation to a matter before FWA except as authorised by this section.
...
738 Application of this Division
This Division applies if:
...
(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
...
739 Disputes dealt with by FWA
(1) This section applies if a term referred to in section 738 requires or allows FWA to deal with a dispute.
(2) FWA 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 FWA dealing with the matter; or
(b) a determination under the Public Service Act 1999 authorises FWA to deal with the matter.
Note: This does not prevent FWA 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, FWA must not exercise any powers limited by the term.
(4) If, in accordance with the term, the parties have agreed that FWA may arbitrate (however described) the dispute, FWA may do so.
Note: FWA 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), FWA must not make a decision that is inconsistent with this Act, or a fair work instrument that applies to the parties.
(6) FWA may deal with a dispute only on application by a party to the dispute.”
[9] The effect of these provisions is that Fair Work Australia does not have power to deal with a dispute under a dispute settlement procedure in an enterprise agreement other than in a manner authorised by the procedure. The Agreement in the present case, limits the types of disputes subject of the procedure to disputes relating to a matter arising under the Agreement.
Submissions
[10] Kogan Creek contends that the present dispute does not relate to a matter arising under the Agreement, and it would be inconsistent with the Agreement and a contravention of the Act for Fair Work Australia to make a recommendation or arbitrate the matter. In support of this submission, Kogan Creek referred to the decision of Deputy President Sams in Australian Municipal, Administrative, Clerical and Services Union v Sydney Water Corporation t/as Sydney Water 1where reference was made to the decision of Justice Ryan in National Tertiary Education Union v Victoria University.2
[11] It was submitted that the term “matters arising under the agreement” should be interpreted narrowly in this context and limited to disputes about the proper application of an industrial instrument and not extended to subsequent new disputes. It was further submitted that the decision in Construction Forestry Mining and Energy Union v Thiess Pty Ltd 3is on point. In that case Senior Deputy President Hamberger held that a dispute about disciplining an employee was a dispute about whether policies and procedures had been complied with or applied in a fair manner and not a dispute pertaining to the agreement. This was the case notwithstanding that the Agreement contained a provision that it would be supported by policies and procedures that would provide fair and efficient administration of the employment relationship.
[12] Mr Boyle received a final written warning for actions and behaviour that breached the CS Energy Code of Conduct and CS-HR-2 CS Energy Procedure for Achieving and Maintaining a Workplace Free of Discrimination, Harassment and Bullying.
[13] Kogan Creek further contends that the dispute is not a matter arising under clause 2.1(j) of the Agreement, because it concerns the nature of disciplinary action taken by the Company to address an incidence of Mr Boyle engaging in bullying rather than a breach of a provision of the Agreement, or a dispute about whether the Company responded to an incidence of bullying. The purpose of clause 2.1(j) is to place an onus on the Company to establish systems and procedures addressing bullying and harassment and this has no bearing on disciplinary action taken to address those issues.
[14] The dispute does not arise under clause 1.3(b) of the Agreement, because that clause identifies an objective of the parties when the Agreement was made and does not govern the actions of the employer beyond making the Agreement. The dispute relates to a disciplinary matter covered by the Code of Conduct and Procedure and not the Agreement.
[15] The CFMEU contends that the dispute is over the unfair discipline of Mr Boyle by Kogan Creek. Disputes arising in the course of employment but which do not relate to a matter arising under the Agreement (or the NES) would not be subject to arbitration by FWA. Disputes about a disciplinary warning usually arise in the course of employment, and where such a dispute also relates to a matter arising under the Agreement, it falls within clause 8(5)(b)(i).
[16] The CFMEU further contends that clause 8 does not limit disputes to those that arise under the Agreement, but rather, opens up the type of disputes that may be progressed through the disputes procedure to disputes that relate to a matter arising under the Agreement. Words in the Agreement should be accorded their ordinary or usual meaning. 4 The word “relate” is defined in the Macquarie Dictionary as “to tell; to bring into or establish association, connection or relation; to have reference (to) to have some relation (to).
[17] It is submitted that Mr Boyle was disciplined in response to allegations that he had harassed another employee. Kogan Creek maintains that the disciplinary action was issued for actions and behaviour that breached the CS Energy Code of Conduct and CS-HR-2 CS Energy Procedure for Achieving and Maintaining a Workplace Free of Discrimination, Harassment and Bullying. There is a clear connection between the matters in dispute and the Agreement, and clause 2.1(j) imposes a contractual obligation on Kogan Creek and is more than an aspirational statement. This is said to be because of the use of the term “will” in the clause and reference was made to a number of decisions of Fair Work Australia where it was held that the use of such terms imposed an obligation on the employer of a contractual nature. 5
[18] It is contended that the purpose of clause 2.1(j) is to ensure that Kogan Creek attends to and manages any form of harassment such as through the issuance of disciplinary action, whether it be outlined in policies and procedures or not. It is further contended that in erroneously disciplining Mr Boyle, Kogan Creek has breached clause 2.1(j) of the Agreement. The disciplinary action against Mr Boyle is also said to be an attempt by Kogan Creek to comply with the obligation in clause 2.1(j) of the Agreement and this disciplinary action directly relates to a matter arising under the agreement, being an obligation not to tolerate harassment.
[19] It is also contended that harassment and disciplinary action issued as a result of alleged harassment has the ability to impact on the trust and respect of the employment relationship and that failure by Kogan Creek to follow recommendations in the investigation report also has such an impact. This is said to relate a matter arising under the Agreement - clause 1.3(b) which is directed at a relationship of trust between the employer and the employee.
Consideration
[20] In Shop Distributive and Allied Employees Association v Big W Discount Department Stores 6a Full Bench of the Australian Industrial Relations Commission considered whether a dispute concerning a refusal to supply anti-fatigue matting was a dispute over the “application of the agreement”. The Full Bench noted that the agreement imposed an obligation on the employer to achieve and maintain a healthy and safe workplace by abiding by all relevant occupation health and safety legislation, so that a dispute over the provision of anti-fatigue matting was a dispute about how this was to be achieved, and accordingly a dispute over the application of the agreement.7
[21] In Australian Municipal, Administrative, Clerical and Services Union v Sydney Water Corporation t/a Sydney Water Corporation 8 Deputy President Sams dealt with a challenge to the jurisdiction of Fair Work Australia to deal with a dispute over a proposal to restructure and re-evaluate positions. The relevant enterprise agreement provided that Fair Work Australia could arbitrate a dispute that “relates to a matter arising under the Agreement”.
[22] Notwithstanding that there was no reference in the Agreement to the process undertaken in job evaluation, Deputy President Sams held that the manner or process by which a rate of pay is determined is of vital significance to the employment relationship and rates of pay were contained in the agreement. Accordingly, a process and outcome of job re-evaluation to determine where a job sits in the classification structure is a matter arising from the terms of the agreement.
[23] In reaching this conclusion, Deputy President Sams cited with approval the following statement of Ryan J in National Tertiary Education Union v Victoria University: 9
“In common with similar provisions in other industrial instruments, cl 63 is concerned to provide a mechanism for the settlement of disputes about ‘matters’ arising under the Agreement itself. Although I accept that the word ‘matters’ is capable of having a wide connotation, it is confined, in this context, to controversies between parties to the agreement or award about the proper application of the instrument itself. It does not extend to controversies which have been resolved by the making of the award or agreement or new disputes between the same parties which have arisen subsequently.”
[24] Deputy President Sams also noted that job evaluation was directly referred to in the Agreement and a job evaluation policy cross referenced the Agreement, making it logically impossible to argue that a direct reference to job evaluation in the agreement was not relevant to a consideration of whether disputes about job evaluation was a matter “arising from the terms of the agreement”. Further it was noted that job evaluation was and had been an integral component of industrial instruments for some time. It was also of significance that the employer in that case had encouraged employees to accept the re-evaluation process on the basis that any dispute would be resolved by Fair Work Australia, and only later raised the jurisdictional objection.
[25] In Finance Sector Union of Australia v National Australia Bank Limited 10Commissioner Smith considered inter alia whether issues relating to an employee’s ability to balance work and life with respect to the duties given to her by the Bank, was a dispute about the application of an enterprise agreement. The agreement in question included a statement that the Bank actively promoted the health and well-being of its employees with a balance between work and personal life, and that it was committed to ensuring that they balanced their work and personal commitments. In response to an argument that the clause in question was merely aspirational, the Commissioner held that the actions of the Bank could be tested against it, and that the language of the Agreement permitted an examination of the factual circumstances to allow conclusions to be reached about the commitment given by the Bank pursuant to the clause.
[26] This approach was also followed in Coralynn Brewer v Suncorp Staff Pty Ltd 11where Commissioner Spencer dealt with a jurisdictional objection over the application of the Suncorp Group Enterprise Agreement 2011. The applicant in that case alleged that she had been dealt with poorly and inappropriately performance managed, which lead to her ill health. The applicant contended that jurisdiction for Fair Work Australia to deal with her case, arose from a clause of the relevant enterprise agreement which provided as follows:
“Health and Safety
(a) The Group is committed to the provision of a safe and healthy work environment for employees, contractors, customers and visitors. This commitment extends to ensuring that the Group’s operations do not place the community at risk of injury, illness or property damage.
(b) You have an obligation to take reasonable care of Your own health and safety and the health and safety of others affected by Your actions.”
[27] The respondent in that case submitted that the clause did not impose an obligation, and that a dispute over performance management was a dispute over a policy expressly excluded from the enterprise agreement. The Commissioner found that the health and safety clause of the agreement provided an obligation whereby the employer had committed to providing a healthy and safe workplace and other employees also had an obligation regarding the effect of their actions on the health and safety of others. In circumstances where the applicant argued that the supervisor’s conduct brought about her ill health, there was a dispute within the domain of the health and safety clause in the agreement, and Fair Work Australia had jurisdiction to deal with that dispute in accordance with the dispute settlement procedure.
[28] In Construction, Forestry, Mining and Energy Union v Thiess Pty Ltd 12 Senior Deputy President Hamberger dealt with a dispute in relation to disciplinary action taken against a number of employees, which was said by the Union to be based on allegations that were unproven and without factual foundation. In that case, the dispute resolution procedure in the agreement provided that:
“This clause deals with any dispute arising in relation to the National Employment Standards or pertaining to this agreement or in the course of employment in accordance with this clause.
It is the intention of the parties that all disputes arising out of the interpretation or application of this agreement shall be dealt with at the local level to the maximum extent possible...
...the dispute may be referred to Fair Work Australia for conciliation...
If...the matter remains unresolved...then matters or issues pertaining to the National Employment Standards or pertaining to this Agreement may be referred...to Fair Work Australia for arbitration.”
[29] The Union contended in that case that the dispute related to a clause in the Agreement that stated that the Agreement would be supported by policies and procedures determined by the Company to provide guidelines for the fair and efficient administration of the employment relationship. Senior Deputy President Hamberger held that while a dispute over disciplining employees arose in the course of employment, it was not a dispute pertaining to the Agreement so that it could be referred for arbitration. In this regard the Senior Deputy President held that the clause did not incorporate into the agreement, policies and procedures such as the procedure under which the employees had been disciplined.
[30] It was also determined that the clause did not provide a binding commitment to always fairly and efficiently administer the employment relationship, so that any allegation of unfair treatment would ipso facto amount to a dispute pertaining to the agreement. 13 The dispute as notified by the Union in that case, was about the misapplication of policies and procedures and alleged failure on the part of the company to comply with policies and procedures. It did not concern an allegation that the company had failed to adhere to its obligation to maintain such policies and procedures. In circumstances where those policies and procedures were not incorporated into the agreement, a dispute about a failure to comply with them was not a dispute pertaining to the Agreement.14
Conclusions
[31] In the present case, I am unable to accept the argument that the dispute notified on behalf of Mr Boyle is a dispute that “relates to a matter arising under the agreement”. The dispute as notified, indicates that it relates to CS Energy Policy CS-HR-23 - Counselling, Discipline and Dismissal and alleged failures of Kogan Creek to comply with the provisions of that policy, and is about the issuing of a final written warning to Mr Boyle. The policy to which the dispute relates is not incorporated into or referenced in the Agreement.
[32] That the conduct for which Mr Boyle has been disciplined may be described as harassment, does not create a relationship between the dispute and the Agreement by virtue of clause 2.1(j) of the Agreement. That clause simply contains a statement of the attitude that Kogan Creek has to discrimination, and in particular, sexual or any other form of harassment and indicates that the Company will not tolerate such conduct in the workplace. The clause does not require Kogan Creek to take any particular action such as developing a policy about these matters.
[33] The policy that the Company has developed, CS-HR 2 is entitled “CS Energy Procedure for Achieving and Maintaining a Workplace Free of Discrimination, Harassment, Bullying and Vilification”. The policy is not referred to in the Agreement, and in turn does not reference the Agreement within its terms. Mr Boyle does not claim the benefit of an obligation owed to him under that policy.
[34] It does not follow that because a disciplinary action relates to a matter that is referred to in an enterprise agreement, that a dispute about the appropriateness of such action or the way in which it was implemented will be a dispute about that matter. In the NAB case and the Suncorp case, the employees raising the dispute established an obligation on the part of the employer relating to a term of the relevant agreement that had arguably not been complied with. The fact that disciplinary action (or action under a performance review process) had been taken against the employees in those cases was not the primary focus but rather an incident of the alleged failure on the part of the employers to comply with obligations in the agreement.
[35] In the NAB case, the dispute was about whether the actions of the employer were consistent with its obligations to ensure that employees balance their work and personal commitments. In the Suncorp case the dispute was about whether the employer had met obligations with respect to ensuring the employee’s health and safety were not adversely affected.
[36] Unlike the employees in those cases, Mr Boyle does not claim the benefit of any obligation Kogan Creek may have under clause 2.1(j). In relation to clause 1.3(b) of the Agreement, I am unable to accept the argument that the dispute is a matter arising under a clause which simply states the objectives of the agreement in relation to striving to have a relationship between the employer and employees based on mutual respect, trust and acceptance of responsibilities. This is an aspirational clause and cannot derogate from the clear provisions of the dispute resolution clause, and the limits it imposes on matters which may be addressed pursuant to its terms. I am also unable to accept that the clause creates a right to have the disciplinary policy applied fairly so that a dispute about such an issue is a dispute in relation to matter arising under the Agreement.
[37] I accept that this dispute is employment related, and that Mr Boyle may have legitimate concerns in relation to the investigation process and whether the outcome of that process justified the issuing to him of a final warning. However, these matters do not constitute a dispute relating to a matter arising under the Agreement. Accordingly, Fair Work Australia does not have jurisdiction to deal with the dispute using any of the processes contained in clause 8 of the Agreement. The jurisdictional objection is upheld, and the application for Fair Work Australia to deal with a dispute in accordance with the dispute settlement procedure in the Agreement must therefore be dismissed. An Order to that effect will issue with this Decision.
COMMISSIONER
Appearances:
The Construction, Forestry, Mining and Energy Union, for the Applicant.
Livingstones Australia, for the Respondent.
Hearing details:
2012.
27 July and 5 September.
Brisbane.
Jurisdictional question determined on the papers.
1 [2011] FWA 1894.
2 [2008] FCA 1630.
3 [2012] FWA 6985.
4 Kucks v CSR Limited (1996) 66 IR 182.
5 SDA v Big W Discount Department Stores PR924554, 12 November 2002; Finance Sector Union of Australia v National Australia Bank Limited [2008] AIRC 1174; Brewer v Suncorp Staff Pty Ltd[2011] FWA 7334 ; and Goldman Sachs J B Were Services Pty Ltd v Nikolich [2007] FCAFC 120 at para 30 per Chief Justice Black.
6 PR924554.
7 Ibid at [25] - [30].
8 [2011] FWA 1894.
9 [2008] FCA 1630
10 [2008] AIRC 1174.
11 [2011] FWA 7334
12 [2012] FWA 6985.
13 Ibid at [10]
14 Ibid at [11] - [12].
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