Mr Grant Welsh v Broadspectrum (Australia) Pty Ltd

[2016] FWC 3770

[2016] FWC 3770

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739 - Application to deal with a dispute

Mr Nathan Brown; Mr Grant Welsh
v
Broadspectrum (Australia) Pty Ltd
(C2016/310)

Manufacturing and associated industries / black coal mining industry
COMMISSIONER SAUNDERS	NEWCASTLE, 16 SEPTEMBER 2016

Alleged dispute about any matters arising under the enterprise agreement – application dismissed.

[1] The background to this dispute is set out in my earlier decision dated 18 April 2016, 1 in which I rejected a number of jurisdictional objections raised by Broadspectrum (Australia) Pty Ltd (Broadspectrum).

[2] I characterised the dispute between the Applicants and Broadspectrum in the following way in my earlier decision dated 18 April 2016: 2

“… In my view, the proper characterisation of the dispute is a dispute about whether the Applicants are entitled to long service leave in accordance with the Coal LSL Act, notwithstanding the fact that they are covered by an Enterprise Agreement which provides for such employees to be entitled to long service leave in accordance with the NSW Building and Construction Industry (Portable Long Service Leave) Act 1983 (Building LSL Act).”

The evolution of the dispute

[3] A dispute may evolve during proceedings in the Fair Work Commission (Commission). It may therefore be necessary in some cases when ascertaining the character of a dispute to have regard to both the nature of the dispute alleged in an originating application and the factual circumstances as they evolve. 3 This is such a case.

[4] On the final day of the hearing, 22 July 2016, Mr Smith, on behalf of Broadspectrum, made a statement from the bar table, in order to ensure the Commission was “informed” of “recent developments”, to the effect that:

• Broadspectrum had lost the contract to provide maintenance services to Centennial Coal at the Cooranbong site, which is the location where the Applicants are based;



• Given the loss of contract to provide maintenance services at the Cooranbong site, Broadspectrum had decided that it was no longer commercially viable to provide maintenance services to Centennial Coal at the Myuna site;



• The employees at Cooranbong and Myuna had been advised by Broadspectrum that their positions were at risk of being made redundant;



• Broadspectrum had entered into a period of consultation with the employees regarding any measures to avoid or mitigate the effects of the redundancies, and that period had concluded;



• No employees had been given notice of termination but a decision in that regard was imminent;



• Centennial Coal had informed Broadspectrum that it was taking the work the subject of the maintenance services contract back to be done by its own employees; and



• The date when Broadspectrum’s maintenance services would cease on the Cooranbong site would be determined by Centennial Coal.

[5] I made clear to Mr Smith at the hearing on 22 July 2016 that there was no evidence before me in relation to any such matters, nor had any party, at that time, made a submission that these “recent developments” would result in me no longer having jurisdiction to deal with the dispute or would otherwise impact the determination of the dispute. I also made it clear that any party seeking to rely on these “recent developments” would need to seek leave to adduce additional evidence and/or file submissions.

[6] Following the conclusion of the hearing on 22 July 2016, Mr Smith filed a written submission on 28 July 2016, for which he sought leave at the time of filing, concerning the effect of the termination of the Applicants’ employment and related issues. Mr Endacott, on behalf of Mr Brown and Mr Welsh, and at my request, filed a written submission in response on 10 August 2016 and Mr Smith filed a written reply submission on 16 August 2016.

[7] Although no evidence has been adduced in relation to the following matters, on the basis of the submissions filed by the parties on 22 July 2016, 10 August 2016 and 16 August 2016 it is clear and not in dispute that:

• on Monday, 25 July 2016, Broadspectrum gave notice to its employees at Cooranbong and Myuna (including the Applicants) that their employment would come to an end on Sunday, 31 July 2016;



• on Sunday, 31 July 2016, Broadspectrum’s services were no longer required by Centennial Coal at Cooranbong and Myuna and the Applicants’ employment with Broadspectrum came to an end; and



• with effect from Monday, 1 August 2016, the Applicants were employed by Centennial Coal.

Jurisdiction

[8] The language used in the dispute settlement procedure 4 in the Transfield Services Limited (Maintenance Services – Wyee) Collective Agreement 2011-15 (Enterprise Agreement) does not suggest that the parties to it objectively intended that the Commission would no longer have jurisdiction to deal with a dispute if an employee who had pursued a grievance under the procedure was dismissed prior to the determination of the dispute.5 Indeed, the change in language from “employee” in step 1 of the dispute settlement procedure to “aggrieved party” in steps 2 and 3 of the dispute settlement procedure suggests that there is no requirement for a party to a dispute to retain the status as an “employee” to pursue the dispute beyond step 1. Similarly, “any party” to the dispute may apply to the Commission to have it conciliated or arbitrated pursuant to clause 11.2, after steps 1 to 3 have been concluded.

[9] The Applicants followed steps 1 to 3 in the dispute settlement procedure and then applied, pursuant to clause 11.2 of the Enterprise Agreement, to the Commission for resolution of their grievance by conciliation and then arbitration while they were employed by Broadspectrum. They only ceased employment with Broadspectrum on 31 July 2016, which was nine days after the final witness had given oral evidence and closing oral submissions had been made. In those circumstances, I am satisfied that I have jurisdiction to arbitrate and determine the dispute, notwithstanding the fact that the Applicants are no longer employed by Broadspectrum.

Coal Mining Industry (Long Service Leave) Administration Act 1992 (Coal LSL Act)

[10] Before considering how the recent developments might impact the dispute, it is necessary to appreciate and understand some of the salient aspects of the Coal LSL Act.

[11] Up until 31 December 2009, the determination of whether an employer was covered by the Coal LSL Scheme was dependent on whether the employer was bound by the Coal Mining Industry (Production and Engineering) Consolidated Award 1997 (Coal Award 1997) or an enterprise agreement linked to that award. The Coal Award 1997 was only binding on employers specifically named in the award or a relevant roping-in award, and it only applied in New South Wales, Queensland and Tasmania.

[12] The Coal Award 1997 included detailed long service leave provisions in clause 36. Under the terms of the Coal Award 1997, an employee accrued long service leave “at the rate of 13 weeks for each 8 years of continuous service in the coal mining industry”. Employers were obliged under the terms of the Coal Award 1997 to provide long service leave to their eligible employees and then seek reimbursement of the amount paid from the Coal Mining Industry (Long Service Leave) Funding Corporation (Coal LSL Corporation).

[13] Under the Fair Work Act 2009 (Cth) (FW Act), modern awards are not permitted to include long service leave entitlements. This created a problem for the operation of the coal mining long service leave scheme. The Federal Government addressed the problem by amending the Coal LSL Act (which previously dealt with administrative matters in relation to the operation of the Coal Mining Industry LSL Fund) to include substantive long service leave entitlements, based on those in the Coal Award 1997.

[14] The Coal Mining Industry (Long Service Leave Funding) Amendment Act 2009 amended the Coal LSL Act by inserting a new definition of “eligible employee” as “an employee who is employed in the black coal mining industry …”. The expression “black coal mining industry” in the Coal LSL Act has the same meaning as in the Black Coal Mining Industry Award 2010.

[15] Unlike many other long service leave schemes, the Coal LSL Act:

(a) is a portable long service leave scheme, in that it enables “eligible employees” to carry a period of qualifying service across to other employers in the black coal mining industry; and

(b) does not require an “eligible employee” to have a continuous period of qualifying service of six years (in the case of redundancy) or eight years (in other cases). Instead, provided that an “eligible employee” has a break of less than eight years between one period of qualifying service and the next period of qualifying service, the periods can be combined together to reach the requisite qualifying period (s.39A(2)(c) of the Coal LSL Act).

[16] If an “eligible employee” completes a period of qualifying service that is, or periods of qualifying service that add up to, at least eight years, and the “eligible employee” wishes to take long service leave, they must apply, in writing, to their employer to take such leave (s.39AB(1) of the Coal LSL Act). The employer must, no later than 14 days after the application is made, inform the employee whether or not the employer grants the long service leave.

[17] If an “eligible employee” takes a period of long service leave, their employer must pay the employee for the long service leave no less than an amount than is equal to the base rate of pay that would have been payable to the employee during the period had the employee not taken the leave (s.39AC(1) of the Coal LSL Act).

[18] In the event that an “eligible employee” ceases to be an “eligible employee” (other than by death) and, at the time of so ceasing, the “eligible employee” has a period of untaken long service leave, the employee may request their employer, in writing, to make a payment in respect of the period of accrued long service leave (s.39C(1) of the Coal LSL Act). In those circumstances, the employer is obliged, within 30 days after the request is made, to pay the employee in respect of their period of accrued long service leave.

[19] If an “eligible employee” dies and has a period of untaken long service leave, then the employee’s legal personal representative may request the employer, in writing, to make a payment in respect of the employee’s accrued long service leave. The employer must comply with a request (ss. 39C(2) & 39CC of the Coal LSL Act).

[20] If an “eligible employee” ceases to be an “eligible employee” because of ill health or because he or she retires from the black coal mining industry on or after reaching the age of 60 years and, at the time of so ceasing, the employee has completed a period, or periods, of qualifying service in respect of which the employee is not entitled to long service leave, then the employee may request to their employer, in writing, to make a payment in respect of long service leave. The employer is required to comply with such a request (s.39CA of the Coal LSL Act).

[21] If an “eligible employee” ceases to be an “eligible employee” because he or she is made redundant and, at the time of so ceasing, the employee has completed a period, or periods, of qualifying service (being a period that is, or periods that are up to, at least six years), then the employee may request the employer, in writing, to make a payment in respect long service leave. The employer is obliged to comply with such a request (s.39CB of the Coal LSL Act).

[22] If an “eligible employee’s” employer is insolvent, is being wound up or has ceased to exist, the “eligible employee” can apply, in writing, to the Coal LSL Corporation for a payment in respect of a period of untaken long service leave. The Coal LSL Corporation must make such a payment to the “eligible employee” (s.48 of the Coal LSL Act).

[23] In the event of a dispute about matters in relation to long service leave under the Coal LSL Act, a party to the dispute may take the dispute to the Commission for it to be dealt with, but the Commission cannot arbitrate the dispute without the consent of the parties (s.39D of the Coal LSL Act). 6

[24] A person who is or was an “eligible employee” may apply to the Federal Court or the Federal Circuit Court for appropriate relief in the event of a contravention of a civil remedy provision of the Coal LSL Act (s.39DA of the Coal LSL Act). Similarly, an employee organisation may make such an application on behalf of a member.

[25] The employer of an “eligible employee” is required to pay a 2.7% payroll levy on “eligible wages” paid to an “eligible employee”. 7 Such levies are paid into the Coal LSL Fund. The Coal LSL Corporation has the power to sue for and recover unpaid levy payments (s.11(1)(d) of the Coal Mining Industry (Long Service Leave) Payroll Levy Collection Act 1992).

[26] When an employer makes a payment in respect of long service leave to a person who is or was an “eligible employee”, the Coal LSL Corporation must pay the employer out of the Coal LSL Fund the “reimbursable amount the Board decides in accordance with the Employer Reimbursement Rules” (s.44 of the Coal LSL Act).

How do the recent developments impact the dispute?

[27] The following facts are not in dispute:

(a) Mr Brown was employed by Broadspectrum for about three years and Mr Welsh was employed by Broadspectrum for about one year. They have each worked in the black coal mining industry prior to their employment with Broadspectrum;

(b) Neither Mr Brown nor Mr Welsh made an application to take long service leave during their employment with Broadspectrum; and

(c) Neither Mr Brown nor Mr Welsh has made a request, in writing (or otherwise), to Broadspectrum to be paid any amount in respect of any long service leave entitlement.

[28] The Applicants contend that they were “eligible employees” within the meaning of the Coal LSL Act during their employment with Broadspectrum and they remained “eligible employees” on the cessation of their employment with Broadspectrum because they were immediately employed by Centennial Coal. Because the Applicants contend that they have remained “eligible employees”, they have not made a request or application for any long service leave payment from Broadspectrum under the Coal LSL Act. 8 Indeed, by reason of their position that they remain “eligible employees” in their employment with Centennial Coal, any request, application or claim they make in the future in relation to long service leave under the Coal LSL Act must be made to their employer at the time, not Broadspectrum.

[29] The Applicants also contend that, on the in-sourcing of the work back to Centennial Coal and the employment by Centennial Coal of the Applicants, the Enterprise Agreement became a “transferable instrument” and the Applicants became “transferring employees”, with the result that the Enterprise Agreement continues to apply to them.

[30] Broadspectrum contends that there is no evidence before the Commission in relation to whether the Applicants are “eligible employees” in their employment with Centennial Coal or whether the Enterprise Agreement became a “transferable instrument” and the Applicants became “transferring employees”. I do not need to resolve these questions, because I can determine the dispute by reason of the undisputed facts set out in paragraph [27] above and by taking the Applicants’ case at its highest concerning the matters referred to in the previous two paragraphs.

[31] In light of the fact that the Applicants neither made an application to take long service leave during their employment with Broadspectrum nor have they made a request to Broadspectrum to be paid in respect of any long service leave entitlement, it is clear from the provisions of the Coal LSL Act set out above that the Applicants do not have any entitlement to long service leave from Broadspectrum, regardless of whether they were “eligible employees” during their employment with Broadspectrum.

[32] If the Applicants wish to take long service leave in the future at a time when they have the requisite qualifying period or periods of service, or if they cease to be “eligible employees” at some time, they will be entitled to make an application not to Broadspectrum, but to their employer at the time, whether it be Centennial Coal or some other employer, for payment in respect of such long service leave and their employer at the time will be obliged under the provisions of the Coal LSL Act to make such payments to the Applicants. Any employer that makes such a payment will be entitled to be reimbursed out of the Coal LSL Fund the “reimbursable amount the Board decides in accordance with the Employer Reimbursement Rules” (s.44 of the Coal LSL Act).

[33] It follows that the Applicants are not entitled to long service leave, or payment in lieu thereof, from Broadspectrum in accordance with the Coal LSL Act, regardless of whether the Applicants were, during their employment with Broadspectrum, “eligible employees” within the meaning of the Coal LSL Act.

[34] I recognise that an issue may arise in the future in connection with an application by one or more of the Applicants to their employer at the time, or the Coal LSL Corporation (if the employer is insolvent etc), to take, or receive payment for, long service leave under the Coal LSL Act in respect of their qualifying periods of service including, so it would be contended by the Applicants, their employment as “eligible employees” with Broadspectrum. For that reason, I have considered whether I should make a determination in these proceedings of whether the Applicants were “eligible employees” within the meaning of the Coal LSL Act when they were employed by Broadspectrum. I have decided that I should not make such a determination, for three reasons.

[35] First, having found that the Applicants have no entitlement to payment or otherwise from Broadspectrum in respect of long service leave under the Coal LSL Act (for the reasons set out above), if I proceeded to make a determination as to whether the Applicants were “eligible employees” within the meaning of the Coal LSL Act when they were employed by Broadspectrum, I would, in effect, be granting relief akin to a declaration and no other relief. In so doing I would stray into the exercise of judicial power by expressing an opinion about a legal matter, but not for the purpose of taking some other step in the exercise of the Commission’s own functions and powers. 9 Such a task is reserved for a Chapter III Court.

[36] Secondly, there would be no utility in making a determination of whether the Applicants were “eligible employees” within the meaning of the Coal LSL Act when they were employed by Broadspectrum. A determination by me in this arbitration of whether the Applicants were “eligible employees” within the meaning of the Coal LSL Act when they were employed by Broadspectrum would bind the Applicants and Broadspectrum as the parties to the present dispute, but it would not bind third parties such as Centennial Coal, any subsequent employer of the Applicants in the black coal mining industry or the Coal LSL Corporation. That is because the Commission in dispute settlement proceedings under s.739 of the Act can only make a determination binding on the parties to the dispute. Accordingly, if the Applicants in the future made a claim for long service leave under the Coal LSL Act against their current employer (or the Coal LSL Corporation, in the event of insolvency etc of the employer), in assessing whether or not the Applicants had completed periods of qualifying service (including service with Broadspectrum) that add up to at least six or eight years (as the case may be), neither the current employer nor the Coal LSL Corporation would be bound by my determination in this arbitration of whether the Applicants were “eligible employees” within the meaning of the Coal LSL Act when they were employed by Broadspectrum.

[37] In addition, because I do not have the power to order Broadspectrum to pay the 2.7% payroll levy prescribed under the Coal Mining Industry (Long Service Leave) Payroll Levy Act 1992 on “eligible wages” paid to “eligible employees”, there would be no utility in making a determination of whether the Applicants were “eligible employees” when they were employed by Broadspectrum. The Coal LSL Corporation can commence proceedings against Broadspectrum to seek such an order if it believes there is a proper justification for doing so.

[38] Further, whether or not Broadspectrum pays a levy on the “eligible wages” paid to the Applicants (assuming they were “eligible employees” during their employment with Broadspectrum) will not have any impact on the amount the Applicants will be paid by way of long service leave payments under the Coal LSL Act if they take such leave, or apply for payment in lieu thereof, in the future. That is because their employer at the time will be liable to make the full payment prescribed by the Coal LSL Act for any entitlement to long service leave under the Coal LSL Act. Upon making such a payment, the employer can seek reimbursement from the Coal LSL Fund.

[39] The Applicants contend that Broadspectrum has an obligation to maintain accurate employee records, including leave records. The payslips provided by Broadspectrum to the Applicants during their employment showed their long service leave entitlement as “Construction Ind LSL NSW”. The Applicants contend this is an error in Broadspectrum’s records and the payslips should show the Applicants’ long service leave entitlement as being governed by the Coal LSL Act. Resolution of the current dispute will, so it is submitted by the Applicants, “enable employee records to appropriately reflect what the true entitlement was … so there could be no current or future concern about what the Applicants accruals were for the period of their employment that is disputed between the Applicant and the Respondent with respect to LSL”. 10 In my view, the flaw in this argument is that, just as my determination in this arbitration of the question of whether the Applicants were “eligible employees” during their employment with Broadspectrum would not bind Centennial Coal, any future employer of the Applicants or the Coal LSL Corporation, nor would Broadspectrum’s employee records bind any such entity or be decisive or determinative of the question in any future dispute or legal proceedings.

[40] Thirdly, by not making a determination of whether the Applicants were “eligible employees” within the meaning of the Coal LSL Act when they were employed by Broadspectrum I am not shutting the Applicants out from making a claim for long service leave benefits under the Coal LSL Act or otherwise interfering with their rights, if any, under that statute. In the event that the Applicants wish to take long service leave or seek a payment in respect of long service leave in the future, they will be able, in accordance with their rights under the Coal LSL Act, to notify their employer, in writing, at the time that they wish to take a period of long service leave, or receive payment in respect of a period of untaken long service leave (in the case of ceasing to be an “eligible employee”). If the employer (or the Coal LSL Corporation, in the event of insolvency etc of the employer) refutes that the applicant has an entitlement to long service leave, or payment in lieu of such leave, for any reason, including because the Applicants’ service with Broadspectrum was not a “qualifying period of service” under the Coal LSL Act, the Applicants or their union will be able to commence proceedings in the Federal Court or the Federal Circuit Court and seek appropriate relief (s.39DA of the Coal LSL Act). In such proceedings the Court would make a finding about whether the Applicants were “eligible employees” within the meaning of the Coal LSL Act during their employment with Broadspectrum.

Conclusion

[41] For the reasons set out above, I am satisfied that the Applicants do not have any entitlement from Broadspectrum for long service leave under the Coal LSL Act, regardless of whether they were “eligible employees” during their employment with Broadspectrum. I am also satisfied, for the reasons set out above, that I should not, in the arbitration of the present dispute, determine whether the Applicants were “eligible employees” within the meaning of the Coal LSL Act during their employment with Broadspectrum. The Applicants’ application for the Commission to deal with a dispute under s.739 of the FW Act is therefore dismissed.

COMMISSIONER

Appearances:

Mr K Endacott, of the Construction, Forestry, Mining and Energy Union, for the Applicants;

Mr S Smith, and Ms V Paul, of the Australian Industry Group, for the Respondent.

Hearing details:

2016.

Newcastle:

June, 7, 8, 9.

 1   [2016] FWC 2004

 2   [2016] FWC 2004 at [29]

 3   MUA v ASP Shipping Management Pty Ltd[2015] FWC 4523 at [19] & [23]; R v Bain; Ex parte Cadbury Schweppes Australia Ltd (1984) 159 163 at 168; United Firefighters’ Union v Metropolitan Fire and Emergency Services Board PR973884

 4   The dispute settlement procedure (clause 11) is set out in full in paragraph [13] of my earlier decision ([2016] FWC 2004)

 5   ING Administration Pty Ltd v Jajoo PR974301 at [59]

 6 As set out in my earlier decision, the current dispute came to the Commission through the dispute settlement procedure in the Enterprise Agreement, rather than by any reliance on s.39D of the Coal LSL Act.

 7   Coal Mining Industry (Long Service Leave) Payroll Levy Collection Act 1992 & Coal Mining Industry (Long Service Leave) Payroll Levy Act 1992

 8   Applicants’ written submissions filed on 10 August 2016 at [7]

 9   Kentz (Australia) Pty Ltd v CEPU[2016] FWCFB 2019 at [52]-[54] and [72]-[74], applying CFMEU v Wagstaff Piling Pty Ltd & Ors (2012) 203 FCR 371; [2012] FCAFC 87 at [21]-[22], [30]-[31], [33], [41] & [61]-[67]

 10   Applicants’ submissions dated 10 August 2016 at [4]

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