Ms Sue Cordelle v Medibank Private Limited

[2014] FWC 1194

[2014] FWC 1194

FAIR WORK COMMISSION

DECISION

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

Ms Sue Cordelle
v
Medibank Private Limited
(C2014/2713)

COMMISSIONER ROE MELBOURNE, 17 FEBRUARY 2014

Alleged dispute pursuant to the disputes settlement procedure of the Medibank Private Enterprise Agreement 2013 - whether FWC is authorised to arbitrate the dispute - have the necessary steps of the disputes settlement procedure been completed.

[1] On 20 January 2014 Sue Cordelle (the Applicant) made an application to the Fair Work Commission (the Commission) to deal with a dispute in accordance with the dispute resolution procedure in the Medibank Private Enterprise Agreement 2013 (the Agreement). The application was made pursuant to Section 739 of the Fair Work Act 2009 (Cth) (the FW Act).

[2] A conciliation conference in relation to the dispute was conducted by Commissioner Lee on 4 February 2014, but was unsuccessful in resolving the matter. Medibank Private Limited (the Respondent) agreed to participate in the conference to see if the dispute could be resolved, but reserved its rights in relation to the Commission's jurisdiction to deal with the dispute.

[3] It is not in dispute that Step 5 of the disputes settlement procedure provides for arbitration of matters where conciliation fails. However, I was concerned about whether or not there was jurisdiction to arbitrate given that the Applicant in her Application indicated that Steps 1 and 2 of the disputes settlement procedure had been followed but made no mention of Steps 3 or 4.

[4] I sought submissions from the parties about the jurisdiction to arbitrate and indicated to the parties that I proposed to determine the jurisdiction matter based upon the submissions received. No objection was received from the parties to this proposed course of action. The parties provided submissions which have formed the basis for this decision. The submissions of the Applicant were received first and then the submissions of the Respondent. To ensure procedural fairness I gave the Applicant an opportunity to provide further submissions in reply.

[5] I sought submissions from the parties to the following questions:

(a) Whether or not Step 3 of the dispute resolution procedure has been complied with and if so how?

(b) Whether or not the Commissioner can arbitrate this matter in the absence of compliance with Step 3 if it is found that step 3 has not been complied with and if so why?

(c) Whether if it is found that Step 3 has not been complied with, whether or not the parties agree that in the circumstances of this case the matter can or should still proceed to be determined by arbitration pursuant to Clause 14.5?

[6] The disputes settlement procedure in the Agreement is as follows.

“14. GRIEVANCE & DISPUTE SETTLEMENT PROCEDURE

14.1 The following is the agreed process to genuinely attempt to resolve grievances and/or disputed issues at the workplace that may arise during the life of this Agreement. This process deals with matters which pertain to the relationship between Medibank and persons who, at any time when the Agreement is in operation, are employed by Medibank and are bound by the Agreement. For the avoidance of doubt this includes matters in relation to the National Employment Standards.

14.2 The parties to the dispute must genuinely attempt to resolve the dispute at the workplace level and at any subsequent step in the dispute resolution process.

14.3 Either party may be assisted at any stage of the process by a representative of their choice, including a union representative. Representatives will act in good faith and will be dealt with in good faith by the other party including (but not limited to):

14.3.1 Notification of the dispute;

14.3.2 Speaking on behalf of the party; and,

14.3.3 Advising the respective party of the nature and details of the dispute.

14.4 The Procedure

Step 1:

The matter will be discussed between the employee, his or her supervisor and, if the employee so chooses, their employee representative.

If the matter pertains to the interpretation and/or application of this Agreement and/or any other regulatory matter, the issue will be discussed between the appropriate People & Culture representative, the relevant Manager, the employee and, if the employee has chosen a representative, the employee representative. If the matter, in this context, remains unresolved the parties should proceed to "Step 3" of the procedure.

Step 2:

If unresolved in Step 1, the matter will be referred to a representative from the People & Culture department and a higher level Supervisor/Manager.

The employee may choose to have an employee representative involved.

Step 3:

If the grievance is still under dispute, the matter may be referred to the relevant representative of Medibank’s executive team for consideration. The employee may choose to have an employee representative involved.

Step 4:

On conclusion of Step 3, if the matter remains unresolved, the parties may agree to private mediation. Agreement in this context means (but is not limited to) mutual agreement on cost, choice of mediator and terms of reference. An attempt to reach such an agreement is not a condition precedent on proceeding to Step 5.

If the matter remains unresolved, the parties shall proceed to the next step of the procedure.

Step 5:

The matter will be referred to the Fair Work Commission for conciliation. If the matter is not resolved through conciliation, either party may refer the matter to arbitration. If the Fair Work Commission arbitrates the dispute, it may make a decision that is binding on the parties. In arbitrating a dispute, the Fair Work Commission may use the powers that are available to it under the Act.

Any decision made by the Fair Work Commission 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 any such decision. Subject to this right of appeal, the parties to the dispute agree to be bound by a decision made by the Fair Work Commission in accordance with this clause.

14.5 If Medibank, an employee and/or the employee’s chosen employee representative fail to observe the procedure set out in clause 14 (which inhibits genuine resolution at the workplace) the parties agree that the matter can be referred immediately by any party of the dispute to the Fair Work Commission consistent with Step 5.

14.6 Although this procedure refers to employees in the singular the procedure also applies to collective disputes.

14.7 With the exception of reasonable health and safety concerns, an employee will continue to work as reasonably directed by Medibank within the normal operational requirements that existed prior to the dispute while the matter is resolved.”

[7] The parties agree that Step 3 of the procedure has not been followed. The parties agree and I am satisfied that Step 4 is not mandatory. The parties agree that the subject matter in dispute is a matter concerning the interpretation and or application of the Agreement, namely the evidence requirements for absence on personal leave. In these circumstances I am satisfied that the procedure provides that Step 1 and Step 2 are combined.

[8] The Respondent argues that the manner in which the Applicant proceeded to involve People and Culture in the dispute was problematic. However, I am satisfied based on the submissions of the parties that there has been an opportunity for discussion involving People and Culture, line management and the Applicant concerning the matters in dispute. To the extent required by the procedure Steps 1 and 2 have been satisfied.

[9] The Applicant argues that it is not mandatory to complete Step 3 before proceeding to Step 5. The Respondent argues that Step 3 is mandatory unless the conditions referred to in Clause 14.5 are met. The Respondent argues that the conditions referred to in Clause 14.5 are not met. The Applicant argues that in the event that I find that Step 3 is mandatory Clause 14.5 enables the matter to bypass any step and proceed to Step 5 and that the circumstances of this case fit the requirements of Clause 14.5.

[10] I am satisfied that the meaning of “may” in Step 3 is unclear on a plain reading of the words of Step 3, read in the context of the clause as a whole. Having regard to the common industrial meaning and structures of disputes settlement procedures in this form, more than one interpretation is possible. It is possible that the word “may” could mean that the relevant step can be missed if a party elects to do so and in such a circumstance is able to proceed directly to Step 5. That is Step 3 is purely discretionary. However, it is possible that the word “may” could be discretionary in much more limited senses.

[11] In the circumstances of this clause the parties have directly contemplated the situation where adherence with Step 3 would not be consistent with the objective of genuine resolution of the dispute through the inclusion of Clause 14.5. Steps 2, 3, 4 and 5 specifically refer to the possibility that the matter may be settled so “may” is not intended to be discretionary in that sense. The word “may” however could be used to allow for the possibility that a party or the parties to a dispute may elect not to proceed further with attempting to resolve the matter using the procedure even though the matter is not settled. This could be because they consider the matter should be resolved through another process or because the initiating party considers it unnecessary or fruitless to make further attempt to resolve the dispute. It is also possible that “may” could mean that the use of the step is discretionary where the parties do not wish to utilise the step presumably because they do not think it is necessary or would be fruitful in assisting the resolution of the dispute. That is “may” is discretionary in the sense that the parties may agree to use or not use the step but it is not discretionary in the sense that a party can unilaterally decide not to use the step.

[12] I should not interpret the words in a strict technical fashion but I must have regard for the context of the Agreement as a whole. I should give effect to the mutual intention of the parties who made the Agreement provided that the words can be reasonably interpreted to mean what was intended.

[13] I have regard to the fact that the High Court (in the judgment of Owen J in South Australian Cold Stores Ltd v Electricity Trust of South Australia 1) has held that,pending any exceptional circumstances that might point to a contrary intention, the use of the word ‘may’ prima facie confers a discretion either to do, or not to do, a certain act.

[14] In Finance Facilities Pty Ltd v Federal Commissioner of Taxation 2the following was said:

“While Parliament uses the English language, the word ‘may’ in a statute means may… it is a word of permission, of authority to do something which otherwise he could not lawfully do. If the scope of the permission be not circumscribed by context or circumstances, it enables the doing, or abstaining from doing, at discretion, of the thing so authorised.”

[15] Similarly, in the joint judgment of Dixon CJ, Webb, Fullagar, Kitto and Taylor JJ in Wardv Williams³:

“... you begin with the prima facie presumption that permissive or facultative expressions operate according to their ordinary natural meaning. “The authorities clearly indicate that it lies on those who assert that the word “may” has a compulsory meaning to show, as a matter of construction of the Act, taken as a whole, that the word was intended to have such a meaning” — Re Gleeson [1907] V.L.R. 368, at p. 373.”

[16] Reading the clause as a whole and its objectives in particular, make it unlikely in my view that the clause could be read as meaning that a party could unilaterally elect to not raise the matter at Step 3. Such a reading is not impossible on a plain reading of the words but it is unlikely if the words are read in context.

[17] There are several aspects of the construction of the clause which support this conclusion.

[18] Firstly, the introductory words to Step 4 are: "On conclusion of Step 3, if the matter remains unresolved…" When Step 3 is considered in the context of the dispute resolution procedure, it is clear that it is a step that must be followed by the parties unless there is agreement to do otherwise. This is obvious from the language used in Step 4. That step - which is truly optional - allows the parties to agree to mediation. However, the provision states "An attempt to reach such an agreement is not a condition precedentto proceeding to step 5". The inference to be drawn from this language is that Step 4, unlike each other step in the dispute resolution process, is not a condition precedent to progressing to the next step.

[19] Secondly, the words immediately before Step 5 - being the referral to the Commission - state: "If the matter remains unresolved, the parties shall proceed to the next step of the procedure". This suggests that the preceding steps must have been exhausted by the parties before the matter can be referred to the Commission.

[20] Thirdly, the language of Clauses 14.1, 14.2, 14.3 and 14.4 suggests that the clause sets out a process or a procedure which must be followed. The concept of procedural steps and the concept of genuinely attempting to resolve the matter at the workplace level suggests that except where otherwise specified a dispute should progress through each of the steps.

[21] Fourthly, Clause 14.5 allows for progression to Step 5 without following other steps in a specified circumstance, namely, “if Medibank, an employee and/or the employee’s chosen employee representative fail to observe the procedure set out in clause 14 (which inhibits genuine resolution at the workplace)”. The most common circumstances when their could conceivably be a failure to observe the procedure which inhibits genuine resolution at the workplace would be where a party unreasonably delays access to a step in the procedure or unreasonably prolongs such step or where the circumstances are such that the step would be an unnecessary or pointless technicality. I consider it unlikely that there will be situations where compliance with Step 1 would be of no possible utility. It is hard to conceive of a situation where there is no utility in an attempt to resolve a dispute at this level prior to proceeding to conciliation. Given that Step 4 is optional and Steps 1 and 2 can be combined in cases of disputes about the interpretation or application of the Agreement there would be very little work for Clause 14.5 to do if Step 3 is regarded as optional at the absolute discretion of a party. Step 14.5 makes most sense if Step 3 is regarded as mandatory except where 14.5 applies or where the parties jointly do not seek to utilise Step 3.

[22] I am satisfied that when read in conjunction with Clause 14.5 the word “may” suggests that Step 3 is optional where that step is incapable of contributing towards a resolution of the dispute. Clause 14.5 clarifies that the procedure cannot be read as mandating technical compliance where this is of no utility in the resolution of the dispute or where compliance would simply lead to delay or frustration.

[23] Fifthly and finally, Step 3 says that “the matter may be referred” to the executive team. It does not say that the employee may do this or the employer may do this. The emphasis is on the subject of the dispute being referred not on a particular party referring the dispute. This suggests that where a party wishes to refer the matter to the executive team then it must be so referred but where the parties do not wish to refer the matter to the executive team because they do not think it is necessary or would assist in the resolution of the dispute then the step is not required. So it is the step of referring the matter in dispute to the executive team which is discretionary. In this sense the disputes resolution process is a joint process of the parties not a process which is optional for a specific party except where that is specifically provided for as in Step 4. This reading is supported by the words at the end of Step 1 in a circumstance where the matter in dispute relates to the interpretation or application of the Agreement (as is the circumstances of this case): “If the matter, in this context, remains unresolved the parties should proceed to "Step 3" of the procedure.” These words strongly suggest that proceeding to Step 3 is mandatory and that the parties jointly are responsible for Step 3.

[24] I am satisfied that “may” is only discretionary in Step 3 where the parties jointly elect not to utilise the step or where the circumstances of Clause 14.5 apply, that is where compliance with the step would be incapable of advancing the resolution of the dispute or would inhibit the resolution of the dispute.

[25] It is clear from the jurisdictional objection of Medibank that there is no agreement to skip Step 3. The parties strongly disagree as to whether in the circumstances of this case Clause 14.5 applies. That is, there is disagreement as to whether or not compliance with Step 3 would be incapable of advancing the resolution of the dispute or would inhibit the resolution of the dispute. The Applicant submits that Medibank have been deliberately delaying and obstructing the resolution of the dispute and have shown no willingness to adjust their position and therefore to require compliance with Step 3 would lead to further unnecessary delay and would frustrate the resolution of the dispute.

[26] The nature of the dispute is of some assistance in this case. If the nature of the dispute was collective; that is, one where the union or a group of employees was in dispute with Medibank about the application or interpretation of the Agreement and it was obvious that there was no likelihood of change of position then I would be inclined to find that the circumstances in Clause 14.5 apply and or that there was no utility in following Step 3. The nature of the dispute in this case is an individual grievance about how the Agreement is being interpreted or applied to instances of absence from work. The absences from work are periods of less than one day where the Applicant provides a statutory declaration to attest that she is unwell and where the Respondent is refusing to accept this as adequate evidence to justify personal leave. The Applicant submits that the Respondent has also said that regardless of the reason for these short periods of absence they will be regarded as lateness not as personal sick leave. The Respondent submits that it did accept statutory declarations for such absences initially but after there had been a significant number of such absences decided pursuant to Section 57.8 of the Agreement that further documentation was required.

[27] The dispute is really about the management of absences by an individual employee pursuant to the Agreement. The Applicant suggests that there are some performance management and disciplinary aspects to the way in which the Respondent has handled the matter. This is the sort of dispute which is normally most appropriately handled at the workplace. This is not to deny the right of the Applicant, should the dispute not be resolved at the workplace, to have the matter dealt with under the disputes settlement procedure of the Agreement including Step 5.

[28] There is no doubt that there was a very short period between dealing with this matter under Steps 1 and 2 of the procedure and the notification to the Commission. In fact the Applicant advised that she would notify the Commission if she did not receive a satisfactory response at the same time as she formally notified Medibank of the dispute. I am not suggesting that there was anything improper in notifying Medibank that she intended to take the matter to the Commission if she did not receive a satisfactory response. The issue had been brewing for some time before it became a formal dispute. As it transpired the notification to the Commission occurred only a short time after the dispute was formally notified to Medibank. The dispute was first advised formally on Friday 17 January 2014. Less than 8 hours later a draft application to the the Commission was provided. The formal application to the Commission was made on Monday 20 January 2014. I am not satisfied that there was adequate time between the notification of the dispute and the notification to the Commission for Medibank to arrange for Step 3 of the procedure to be complied with.

[29] I am not satisfied that at the time the dispute was notified to the Commission Clause 14.5 applied. Nor am I satisfied that at that time no effective purpose could be served by compliance with Step 3.

[30] Having regard to the submissions of the parties I accept that Medibank has a firm position about its rights and obligations under the Agreement which is unlikely to change as a result of Step 3. However, I consider that it is possible that a resolution to the underlying issues might be found. Furthermore, the Applicant considered based on her reading of certain correspondence that Medibank would under no circumstances allow part day personal leave for the Applicant. Medibank have now clarified that it will not accept statutory declarations as sufficient evidence in the Applicant’s circumstances for part day absences. This shows that positions are not immutable.

[31] The Applicant believes that the provision in Clause 14.7 which she calls a status quo provision offers her some protection. That provision requires:

“With the exception of reasonable health and safety concerns, an employee will continue to work as reasonably directed by Medibank within the normal operational requirements that existed prior to the dispute while the matter is resolved.”

[32] There may be some dispute about what the normal operational requirements that existed prior to the dispute are in the circumstances of this case.

[33] I am satisfied that there is no jurisdiction to arbitrate the dispute until and unless Step 3 is complied with.

[34] I recommend that the parties comply with Step 3. In the event that the matter is not resolved through Step 3 then either party can seek to relist this matter. If at that stage the circumstances have changed such that further conciliation is appropriate then that will be available. In the event that the parties do not believe that the finding of Commissioner Lee that conciliation is exhausted should be disturbed then arbitration will occur.

[35] In my view it would be inappropriate to require the Applicant to make a new application in the event that the parties fail to resolve the dispute in accordance with Step 3 of the procedure. The dispute has been notified and it has not been resolved. It is only the application for arbitration at this point in the disputes settlement process which has been dismissed by this decision.

COMMISSIONER

 1 (1965) 115 CLR 247, at 264 to 265.

 2 (1970) 127 CLR 106 at 134, Windeyer J.

3 (1955) 92 CLR 496 at 505 to 506.

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