Mr Nathan Watego v Dramet Pty Ltd

[2021] FWC 6087

[2021] FWC 6087

FAIR WORK COMMISSION

DECISION

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

Mr Nathan Watego
v
Dramet Pty Ltd
(C2019/6784)

COMMISSIONER SPENCER BRISBANE, 7 OCTOBER 2021

Alleged dispute about any matters arising under the modern award and the NES; [s146]

INTRODUCTION

[1] An application was lodged pursuant to s.739 of the Fair Work Act 2009 (the Act), by Mr Nathan Watego (the Applicant/employee), who disputed the outcome of a prior Supported Wage System (SWS) assessment conducted by an assessor on behalf of the Department of Social Services (the Department). The Applicant has been employed by Dramet Pty Ltd T/A Drakes Supermarket (the Respondent/the employer) on the SWS as a retail worker. The assessor (as a result of the SWS assessment) concluded that the Applicant, had a performance level of 77.08%. The dispute pertains to the assessor rounding the percentage figure down to 70%. It was alleged that this was undertaken as an “adjustment for supervision”, that occurred at the assessment. A Statement was released in this matter, the Applicant’s father, Mr Sydney Watego, who represented the Applicant, did not accept a range of the outcomes and sought a decision in this matter. The Applicant was also represented by Mr Rodney Gardner. The Respondent was represented by Mr Andrew Short, Partner of Minter Ellison.

[2] The Applicant in summary terms raised two complaints in relation to his dispute. The Applicant primarily argued that the Respondent made a representation through the assessor that it would agree to paying him 80% ‘Supported Wage’, and that the Respondent is bound by that representation (asserted representation). The Applicant also disputed the methodology by which the assessor determined his 2019 productivity assessment for the Supported Wage System, and the subsequent productivity assessment rating.

[3] The Applicant’s representative submitted that the figure should have been revised upwards to either 80% or 90%. The SWS assessment outcome is important because it determines the Applicant’s rate of pay, as a percentage. It is this matter, the manner in which the Department assessor, dealt with the corresponding percentages; outcome of the assessment process and the relevant Supported Wage percentage that the Applicant’s representative considered should be arbitrated by the Fair Work Commission (the Commission).

[4] Dramet Pty Ltd T/A Drakes Supermarket (the Respondent) refuted that there was any obligation to adjust the percentage rounding arising from the assessor’s assessment and therefore the resulting wage. However, the Respondent as a result of discussions before the Commission made proposed increased percentage amounts as offers of compromise, but the Applicant did not accept such. The Applicant objected to this and argued that the only compromise offered was 75% the day following the assessment which had been agreed to overnight by the assessor and the Respondent. This was accepted by the Applicant pending the outcome of the dispute before the Commission.

[5] A number of conferences, discussions and exchanges of information occurred in this matter. The Applicant contended that the assessor acted incorrectly in not rounding the assessment percentage of income upwards and that the Commission should therefore arbitrate the assessor’s actions in this assessment matter. The Respondent argued that the Commission does not have jurisdiction to deal with the dispute. The Respondent raised the following jurisdictional objections:

•  The powers of the Fair Work Commission are limited to requiring the Respondent to comply with the payment obligations for a Supported Wage based on the agreed productive capacity for an employee (as set out in any Wage Assessment Agreement that is lodged at the Fair Work Commission).

•  The proper process to deal with the Applicant's associated complaints about the methodology of the productive assessment is to submit a written request to the SWS assessment team of the Department of Social Services outlining why the assessment should be reconsidered.

•  Any determination by the Fair Work Commission is only able to make a determination about whether or not the assessment has been conducted in accordance with the Supported Wage System. The Commission cannot make a determination about what the value of the productive capacity should have been afforded on the last occasion arising out of that assessment. A further assessment would have to occur again by an Accredited Assessor, and the Respondent had proposed this. It is understood that a further annual assessment since this time has occurred, but the Applicant’s representative argued against the assessment outcome that was under consideration in the present dispute.

[6] Both parties agreed that the Drakes Supermarkets Retail Agreement 2012 (Agreement) applied to the Applicant’s employment. Clause 41 of the Agreement outlines the grievance procedure to be followed and confers jurisdiction on the Commission to conciliate or arbitrate disputes arising under either the Agreement or the National Employment Standards, (the latter of which is not relevant for present purposes) (conducted by assessors within the domain of the Department) being relevant for present purposes of this dispute. For the reasons that follow, disputes about SWS assessments cannot properly be characterised as disputes arising under the Agreement.

RELEVANT PROVISIONS

[7] This application was made under s.739 of the Act, which sets out the circumstances in which a dispute can be dealt with by the Commission:

“739 Disputes dealt with by the FWC

(1) This section applies if a term referred to in section 738 requires or allows the FWC to deal with a dispute.

(2) The FWC must not deal with a dispute to the extent that the dispute is about whether an employer had reasonable business grounds under subsection 65(5) or 76(4), unless:

(a) the parties have agreed in a contract of employment, enterprise agreement or other written agreement to the FWC dealing with the matter; or

(b) a determination under the Public Service Act 1999 authorises the FWC to deal with the matter.

Note: This does not prevent the FWC from dealing with a dispute relating to a term of an enterprise agreement that has the same (or substantially the same) effect as subsection 65(5) or 76(4) (see also subsection 55(5)).

(3) In dealing with a dispute, the FWC must not exercise any powers limited by the term.

(4) If, in accordance with the term, the parties have agreed that the FWC may arbitrate (however described) the dispute, the FWC may do so.

Note: The FWC may also deal with a dispute by mediation or conciliation, or by making a recommendation or expressing an opinion (see subsection 595(2)).

(5) Despite subsection (4), the FWC must not make a decision that is inconsistent with this Act, or a fair work instrument that applies to the parties.

(6) The FWC may deal with a dispute only on application by a party to the dispute.”

[8] Section 738 of the Act provides:

“738 Application of this Division

This Division applies if:

(a) a modern award includes a term that provides a procedure for dealing with disputes, including a term in accordance with section 146; or

(b) an enterprise agreement includes a term that provides a procedure for dealing with disputes, including a term referred to in subsection 186(6); or

(c) a contract of employment or other written agreement includes a term that provides a procedure for dealing with disputes between the employer and the employee, to the extent that the dispute is about any matters in relation to the National Employment Standards or a safety net contractual entitlement; or

(d) a determination under the Public Service Act 1999 includes a term that provides a procedure for dealing with disputes arising under the determination or in relation to the National Employment Standards.”

[9] Accordingly, the Fair Work Commission is able to deal with a dispute under the Agreement to the extent that the dispute relates to a matter arising under the Agreement. This is a threshold issue for determination.

[10] As referred to above, clause 41 of the Agreement reads:

“41 GRIEVANCE PROCEDURE

41.1 Step 1: A grievance between an employee and the employer about matters arising under this Agreement or the NES should be discussed at the first instance between the employee and the employee's line manager.

41.2 Step 2: If the matter is not settled the employee may raise the matter with the relevant Store Manager/Store Supervisor.

41.3 Step 3: If the matter is not settled the employee may raise the matter with the HR Manager· at Head Office.

41.4 Step 4: If the matter still cannot be resolved either party may refer it to Fair Work Australia for conciliation and only after all reasonable attempts to settle the matter by conciliation have failed, for arbitration. If arbitration is necessary Fair Work Australia may exercise the procedural powers in relation to hearings, witnesses, evidence and submissions which are necessary to make the arbitration effective.

41.5 The decision of the member will bind the parties, subject to either patty exercising a right of appeal against the decision to a Full Bench.

41.6 It is a term of this agreement that while the grievance resolution procedure is being conducted work shall continue as normal before the dispute arose unless

(i) an employee has a reasonable concern about an imminent risk to his or her health or safety, and

(ii) the employee has not unreasonably failed to comply with a direction by the employer to perform other available work, whether at the same or another workplace that was safe and appropriate for the employee to perform.

41.7 An Employee is entitled to have attend or be represented by a person of the employee's choice.”

[11] Clause 22 of the Agreement deals specifically with the SWS. Clause 22.4 states:

“For the purpose of establishing the percentage of the agreement rate to be paid to an employee under this agreement, the productive capacity of the employee will be assessed in accordance with the Supported Wage System …”

(emphasis added)

[12] Further, cl 22.6 states:

“The assessment of the applicable percentage should be subject to annual review or earlier on the basis of a reasonable request for such a review. The process of review shall be in accordance with the procedures for assessing capacity under the Supported Wage System.”

(emphasis added)

[13] Clause 22.1 defines “Supported Wage System” as:

“the Commonwealth Government System to promote employment for people who cannot work at full award wages because of a disability, as documented in “[Supported Wage System: Guidelines and Assessment Process]” (sic)”

[14] The “[Supported Wage System: Guidelines and Assessment Process]” is considered to be a reference to the Supported Wage System in Open Employment Handbook (Handbook) and the Supported Wage System Assessment Guidelines (Guidelines), both of which are published by the Commonwealth Government.

[15] There appears to be no term in the Agreement itself that deals specifically with disputes regarding SWS assessments. For the purposes of making or reviewing SWS assessments, the Agreement merely assumes that there are established procedures under the SWS that are to be found in the Handbook and the Guidelines. Those established procedures under the SWS are not incorporated into the Agreement in a way that disputes about SWS assessments, would be considered, disputes arising under the Agreement.

[16] The “Disputes” section of the Handbook states the following:

“Once the employee has been engaged on SWS provisions, the dispute resolution mechanisms available to other employees in the workplace apply. The FWC has jurisdiction over disputes that an SWS employee may have with an employer. A nominee of the employee may be involved to ensure the interests of the employee are adequately represented.” 1

[17] However, it then goes on to say:

“If one or more parties disagree with the productivity rating [i.e. the outcome of the SWS assessment], they need to try to discuss their different views, and seek to resolve them and reach agreement. If they fail to reach agreement, they may submit a request for a review of the assessment process, with the Department’s Assessment Team.

The employer, employee, employee’s nominee or a union representative can lodge a request for a review. The request must be in writing (email is acceptable) and must outline the specific parts of the assessment process which they would like reviewed, making reference to the requirements for conducting assessments outlined in this Handbook.

It is not sufficient to base a request for review on disagreement with the result alone. Grounds for requesting a review of the assessment must include evidence that the assessment was not conducted in accordance with this Handbook and that it would result in significant disadvantage to the employee and/or the employer.

The Department will respond to requests for review within 21 calendar days. The Department will not change the productivity rating, but may request that an assessor conduct parts of the assessment again or in cases where there is clear evidence that the assessment was not properly conducted, may request a new assessment.” 2

(emphasis added)

[18] The Handbook draws a distinction between matters within the jurisdiction of the Commission and those matters for the Department’s Assessment Team.

[19] The Guidelines reiterate this position in the following terms:

“If any party to the SWS Wage Assessment Agreement still wishes to dispute the result they should contact the Department’s Assessment Team, who will either provide the party with the details of how to submit a request for a review of the Assessment; or if their dispute relates to industrial relations matters, direct them to the relevant industrial relations authority which has jurisdiction in the matter.” 3

[20] By setting SWS assessment matters apart from “industrial relations matters”, the Guidelines make it clear that disputes about SWS assessments are not appropriate for being dealt with at the Commission. They should instead be referred to the Department’s Assessment Team. The Guidelines are explicit in relation to the process for disputing the outcome of an assessment.

[21] The Respondent provided submissions in relation to what matters clause 22 of the Respondent's Agreement contemplated. The Respondent submitted that with regards to the Supported Wage provisions under the Agreement, the matters contemplated are:

(a) The eligibility criteria for a person to be paid a Supported Wage (clause 22.2);

(b) An obligation for the Respondent to pay an applicable minimum percentage of the relevant minimum rate of pay for the employee's class of work having regard to their assessed productive capacity (clause 22.3);

(c) An entitlement for the employee's productive capacity to be assessed in accordance with the Supported Wage System in order to establish the applicable Supported Wage, and to be documented in an assessment instrument by the employer and an Accredited Assessor;

(d) An obligation for the employer to lodge an assessment instrument with the Registrar of the Industrial Relations Commission signed by the Respondent and an affected employee (clause 22.5.1);

(e) An ability for the Registrar of the Industrial Relations Commission to refer the assessment instrument to a union if it is not a party to the assessment, and specifies that that assessment instrument will take effect unless an objection is notified to the Registrar within a prescribed timeframe (clause 22.5.2);

(f) A requirement that the Supported Wage be reviewed annually (though this may occur earlier in certain circumstances) (clause 22.6);

(g) Obligations on the Respondent in relation to maintaining other terms and conditions of employment under the Enterprise Agreement for an employee on a Supported Wage (clause 22.7);

(h) Provisions about implementing reasonable workplace adjustments (clause 22.8);

(i) Provisions about implementing a trial period of work prior to the Respondent and an employee establishing a continuing employment relationship (clause 22.9).

[22] The Respondent submitted that points (a) and (d) to (i) are not in issue in this dispute, which the Applicant did not contest.

[23] The Respondent submitted that in relation to point (b), the Applicant does not dispute that the Respondent is paying a higher Supported Wage than is associated with the Applicant's 2019 assessed productive capacity as recorded in the 2019 Wage Assessment Agreement (that is, it is paying a 75% Supported Wage for a 70% assessed productive capacity), but rather disputed the the methodology used by the accredited assessor to determine the 2019 assessed productive capacity.

[24] The Applicant disputes that he was assessed at 70% productive capacity, and submitted that he was in fact assessed at 77.08% (77.19%), which should have been rounded up to 80% and, with further adjustment for weighting, should have been set at 86%, and rounded up to 90% in accordance with the Guidelines.

[25] The Respondent submitted in relation to (c) that the Applicant did not and does not dispute that the 2019 assessment was undertaken by an accredited assessor within the framework of the Supported Wage system. The Applicant agreed with this submission.

[26] In this matter, as discussed at the conferences, it is not for the Commission to arbitrate the manner in which an assessment occurred, or was conducted by the assessor or to direct a resulting percentage to be amended. As the parties have been referred to, in the conference discussions, the impediment to such a further process is that parties are in dispute over the level of assistance provided to the Applicant, as observed by the assessor during the assessment (and that in actual working terms, this assistance would not be present). Further, the parties are in dispute over the outcome of an exchange of emails at that time with the assessor over the rounding of the final percentage, and finally, what the percentage for the Applicant should be.

[27] The combined effect of clause 22 of the Agreement, the Handbook, and the Guidelines is that disputes about SWS assessments are effectively carved out of the jurisdiction, that is conferred on the Commission by clause 41 of the Agreement.

[28] With further reference to these issues, the Handbook states that the applicable percentage of the minimum rate of pay is to be calculated with reference to the relevant industrial instrument. 4 For present purposes, the Agreement provides that the percentage of the minimum rate of pay, rounded to a tenth (whether rounded up or down is unspecified), is equal to the outcome of the employee’s SWS assessment. The Handbook further states that “agreement was reached between employers, unions and the Australian Government for the majority of Industrial Instruments the actual (unrounded) assessed rate would be rounded to the nearest ten percentile band.”5 It is unclear whether the current Agreement is included in that “majority of Industrial Instruments”.

[29] The Guidelines and the Handbook suggest that weighting should be given to each duty that the employee actually performs, rather than what the employee ought to perform. 6 The Handbook, however, allows for circumstances where the outcome of the SWS assessment may be rounded up or down within the same percentile, even if the resulting figure is not the nearest tenth percentile. In order to round the figure in such a manner, the assessor is required to make specific factual findings.7 As raised with the parties, these matters and a further timely assessment are matters for the Department and the assessor.

[30] The Respondent in submissions made specific reference to the Guidelines, the Agreement, and the Commission’s authority as contemplated by the Act. I note that the Applicant continually referenced the Supported Wage ‘legislation’ 8 but did not identify what legislation was being referred to or where the Commission was conferred specific power under s.739 to deal with the dispute. References to ‘legislation’ appear to be a reference to the Guidelines.

[31] Section 739 of the Fair Work Act 2009 provides for the Commission to deal with disputes by way of private arbitration pursuant to a dispute resolution term in an Enterprise Agreement. The Commission can only deal with disputes that the dispute resolution term permits it to deal with.

[32] If the dispute resolution clause provides for arbitration of disputes ‘about matters arising under this Agreement or the NES…’, then for the Commission to have jurisdiction to arbitrate, the dispute must be about a ‘matter arising’ under the agreement or the NES.

[33] In consideration as to the meaning of ‘matters arising’, in AMWU v Thiess Degremont Joint Venture, 9 SDP Watson held that a ‘matter arising in relation to an agreement’ is a phrase of wide import, but not unlimited. The Senior Deputy President stated that the operation of such a dispute resolution clause will only be attracted if the dispute can be linked to ‘the application or interpretation’ of the Agreement. Similarly, in Australian Municipal, Administrative, Clerical and Services Union v Sydney Water Corporation t/a Sydney Water,10DP Sams cited Ryan J in National Tertiary Education Union v Victoria University,11 where his Honour said:

‘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.’

[34] Where the supported wage clause in an Enterprise Agreement provides that ‘the productive capacity of the employee will be assessed in accordance with the Supported Wage System’, a dispute about whether the productive capacity of an employee was assessed in accordance with the SWS would be a ‘matter arising’ under the agreement. For example, if the employer didn’t engage in the SWS assessment process at all and instead decided that the employee’s capacity was 50%, the Commission would have jurisdiction to deal with a dispute about that. In such a case, the Commission could make a finding that an assessment had not been conducted in accordance with the SWS. That does not mean the Commission is empowered to conduct its own assessment.

[35] A dispute that is not about whether the assessment was done in accordance with the SWS, but rather about dissatisfaction with the outcome of an assessment (or the exercise of the Assessor’s discretion), would be difficult to characterise as a ‘matter arising’ under the agreement, as it would not relate to the proper application or interpretation of the agreement.  

[36] Section 595(1) of the Act provides that the Commission may deal with a dispute only if it is expressly authorised to do so under or in accordance with the Act. As set out above, the Commission lacks jurisdiction to determine the SWS assessment outcome. The Commission could only determine whether the assessment had been conducted in accordance with the Supported Wage System, and not a determination about what the value of the productivity capacity (i.e. the percentage) should be. The Respondent’s representative has at all times submitted that the Commission is jurisdictionally barred from determining the dispute. It was submitted that there is no legislative provision referring applications to the Commission in relation to disputing the value or outcome of an assessment under the Guidelines, the Agreement, the Award or the Act.

[37] This matter has been the subject of consent conciliation. There was scope to reach an agreed position on the applicable percentage, but not the arbitration of the percentage point from the prior assessment. The above views have been discussed and reiterated to both parties at the series of conferences and in the volume of detailed correspondence exchanges. The current applicable percentage resulted from the assessor’s consideration of relevant matters at the SWS assessment, and the process following such. It was confirmed that the Applicant may raise before the Department the ‘percentage’ matter arising from the assessment or to seek a further assessment by the Department’s assessor that would provide a current annual assessment. It is understood that a further satisfactory annual assessment has occurred, however the Applicant remains aggrieved with the prior percentage result.

[38] This decision has been provided on the recent request of the Applicant’s representative. The Respondent has been notified of the requested release of this decision.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

<PR734681>

 1   Supported Wage System in Open Employment Handbook, p 14.

 2   Supported Wage System in Open Employment Handbook, pp 14-15.

 3   Supported Wage System Assessment Guidelines, p 11.

 4   Supported Wage System in Open Employment Handbook, p 23.

 5   Supported Wage System in Open Employment Handbook, p 23.

 6   Supported Wage System Assessment Guidelines, pp 9-10; Supported Wage System in Open Employment Handbook, pp 22-23.

 7   Supported Wage System in Open Employment Handbook, pp 23-24.

 8   For example, Applicant’s correspondence of 9 December 2019 in response to the Respondent’s correspondence of 5 December 2019; Applicant’s Submissions in Reply dated 9 January 2020; Applicant’s correspondence of 10 May 2020.

 9 (2012) 226 IR 390.

 10   [2011] FWA 1894.

 11 [2008] FCA 1630.