New South Wales Local Government, Clerical, Administrative, Energy Airlines and Utilities Union t/a United Services Union v Essential Energy

[2019] FWC 4265

[2019] FWC 4265

FAIR WORK COMMISSION

DECISION

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

New South Wales Local Government, Clerical, Administrative, Energy Airlines & Utilities Union t/a United Services Union
v
Essential Energy
(C2018/6456)

DEPUTY PRESIDENT SAMS SYDNEY, 19 JUNE 2019

Application to deal with a dispute – dispute concerns an employee’s entitlement to an allowance when employed – dispute filed after the termination of employment – jurisdiction of the Commission – same dispute raised when employee was employed – dispute concluded – relevant principles considered – steps in the Dispute Settlement Procedure could not have been followed if the agreement did not and could not apply to the employee – application dismissed.

INTRODUCTION

[1] This decision arises from an application filed by the New South Wales Local Government, Clerical, Administrative, Energy Airlines & Utilities Union t/a United Services Union (the ‘Union’), pursuant to s 739 of the Fair Work Act 2009 (the ‘Act’) which seeks to have the Fair Work Commission (the ‘Commission’) deal with a dispute in accordance with a Dispute Settlement Procedure (‘DSP’) in an enterprise agreement. The dispute notification was filed on 16 November 2018. The Form F10 identifies Essential Energy (‘Essential’) as the respondent to the dispute under the DSP (cl 1.14) of the Essential Energy Enterprise Agreement 2018 (the ‘2018 Agreement’).

[2] Shortly stated, the dispute concerns the non-payment of the Electrical Safety Rules Allowance (‘ESRA’) to one of the Union’s members, a former employee of Essential, Mr Robert Walker. It is claimed that Mr Walker is entitled to be paid the ESRA from the time of his appointment as an Environmental Specialist in July 2014, up to the termination of his employment on 26 May 2017, for reasons of redundancy. The Union asserts that the provisions outlined in cl 6.16 of Table 5 to the Essential Energy Enterprise Agreement 2013 (the ‘2013 Agreement’) apply to Mr Walker’s position description and duties.

[3] In accordance with my usual practice, I convened a conference of the parties on 18 December 2018. Ms M Pond, Organiser (C & A) appeared for the Union and Mr Walker. Mr L Shanahan (K & L Gates) with Mr M Minog appeared for Essential, with permission being granted for the respondent to be represented by a lawyer, pursuant to s 596 of the Act.

[4] It will be immediately apparent that the s 739 application was lodged some 16 months after Mr Walker ceased employment with Essential. Unsurprisingly, prior to the conference, Essential’s legal representative had filed an application to dismiss the application on the grounds that the Commission had no jurisdiction to deal with the matter, as the 2018 Agreement (and its incorporated DSP) could no longer have applied to Mr Walker. Moreover, an earlier dispute notification (C2015/5355) about the same matter had been resolved and concluded in October 2016.

[5] As Essential’s jurisdictional objection was pressed in the conference on 18 December 2018, I issued directions and listed the matter for jurisdictional hearing on 22 February 2019. However, the Commission was subsequently informed that both parties sought for the matter to be determined ‘on the papers’. I will proceed to do so on that basis.

THE DISPUTE SETTLEMENT PROCEDURE

[6] The Union does not contend that Mr Walker’s dispute arises under the DSP in the 2013 Agreement; rather, it is said that the dispute arises under the terms of the DSP (cl 1.14) of the 2018 Agreement. That clause reads as follows:

‘Dispute Settlement Procedure

(a) The dispute resolution procedure will be used to deal with all disputes arising out of the employer-employee relationship.

(b) While a dispute being dealt with under the dispute resolution procedure work is to continue as normal. The process will not be accompanied by industrial action.

(c) Disputes should, as far as possible, be resolved at their source and at the lowest possible level.

(d) Disputes should remain in the part of the organisation concerned without interference from employees involved.

(e) While a dispute is being dealt with under the dispute resolution procedure a union may apply to the Fair Work Commission for an interim order imposing the status quo (that is the situation that existed immediately prior to the issue that gave rise to the dispute) for a period of up to 8 weeks after the application for the order or such longer period as the Fair Work Commission may determine. Such an order will only be made in [sic] the Fair Work Commission is satisfied that:

(i) there is an arguable case that the change is not either safe, or legal, or fair;

(ii) the balance of convenience favours the grant of an interim order.

(f) All relevant parties must participate in the dispute resolution procedure to try to resolve the matter quickly and efficiently, and arrange and attend meetings without unnecessary delay. If any party fails to comply with these obligations and an interim order has been made pursuant to paragraphs 1(e), another party may apply to the Fair Work Commission for the status quo to be suspended or revoked. The Fair Work Commission is authorised to determine any such application.

(g) If a dispute concerns a workplace change which is urgent in nature, a party may apply to the Fair Work Commission to have the dispute proceed immediately to conciliation and/or arbitration without the need to follow the prior steps in this procedure. The Fair Work Commission is authorised to determine any such application.

(h) All those involved in dealing with a dispute shall adopt an interest-based approach. They shall appreciate the interests and points of view of the other parties approach discussions in good faith, work cooperatively to try and resolve the matter, and arrange and attend meetings without unnecessary delay.

(i) Essential Energy will, where possible, take the needs of employees into account when making decisions.

(1) Local Matters

(a) Tier 1: Resolution of local matters will be sought at their source with the involvement of the following:

•  the employee(s) concerned and the union delegate (if requested by the employee(s));

•  the supervisor and manager (if required);

•  the relevant union(s). ‘

(b) Tier 2: If the issue or dispute is not resolved at the local level, it may be referred to the corporate level with involvement of the following:’

•  the union organiser(s), relevant local delegate and employee(s) concerned if necessary;

•  Executive Manager(s), affected local managers, General Manager People & Services and Manager Employee Relations.

An independent third party facilitator may be engaged to assist in resolving the issue or dispute, if agreed by all affected parties.

(c) Tier 3: If the issue or dispute remains unsolved, it may be referred to the Fair Work Commission for conciliation and/or arbitration, by either Essential Energy and/or the relevant union(s) with the rights of the parties to appeal being reserved. If both parties agree, a person other than the Fair Work Commission can be asked to deal with the issue or dispute, as provided for under s.740 of the Fair Work Act 2009.

(2) Corporate-wide Issues

(a) Tier 2: Claims or issues may be raised by either:

•  Employee(s);

•  Relevant Union(s); or

•  Essential Energy.

Resolution of the issues raised should involve:

•  Relevant member(s) of Executive Management and any other necessary resources; and

•  Union Organisers and relevant Delegates to ensure input reflects the organisation or the issues raised.

(b) Tier 3: If the issues remain unsolved the matter may be referred to the Fair Work Commission for conciliation and/or arbitration with the rights of the parties to appeal being reserved. If both parties agree, a person other than the Fair Work Commission can be asked to deal with the issue or dispute, as provided for under s.740 of the Fair Work Act 2009.

(3) Other Initiatives

There will be joint training of union delegates and line managers in dispute resolution.

BACKGROUND

[7] The factual context of this matter is largely uncontroversial. In December 2013, Mr Walker was identified as a ‘redeployee’, in accordance with Essential Energy’s Redeployment Policy. He continued in his then-role until he was successful in applying for the position of Environmental Specialist with Essential on 13 July 2014. In this role, he was paid the same rate of pay as his previous role, but was not paid the all-purpose ESRA under cl 15 of the 2013 Agreement. He (and another employee) lodged a grievance about the matter on 1 August 2014, which was ultimately taken as a dispute to the Commission in Matter C2015/5355. The dispute was listed for conciliation before Hamberger SDP on two occasions and the matter was closed on 5 October 2016. The dispute was not agitated again by Mr Walker or the Union, prior to his termination of employment and not until this notification (16 November 2018).

[8] It must be stressed that the Commission does not intend to comment on - let alone determine - the merits of Mr Walker’s claim as to the payment of the ESRA during his time as an Environmental Specialist with Essential. That may become a consequential consideration, if the respondent’s jurisdictional objection is dismissed. I turn then to the submissions of the parties.

SUBMISSIONS

For Essential

[9] Essential submitted that it is well established that there is no jurisdiction for the Commission to deal with a dispute under a DSP of an agreement, if the dispute is initiated at a time when the person(s) in dispute are no longer employed; see: ING Administration Pty Ltd v Jajoo PR974301 (‘Jajoo’), Telstra Corporation Limited v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia [2007] AIRCFB 374 (‘Telstra’) and Deakin University v Rametta[2010] FWAFB 4387 (‘Deakin’). However, depending on the terms of the relevant industrial instrument, a former employee can continue to have a dispute dealt with, consistent with a DSP, provided the employee initiated the dispute prior to the termination of their employment; see: Construction, Forestry, Mining and Energy Union v North Goonyella Coal Mines Pty Ltd[2015] FWCFB 5619. The Commission must therefore:

(a) identify the powers conferred on the Commission by the Agreement;

(b) identify any limits on those powers; and

(c) determine whether this dispute is one that can be resolved by the Commission under the terms of the Agreement.

[10] Essential submitted that while the 2018 Agreement (approved by the Commission 12 months after Mr Walker’s termination of employment) does not expressly exclude former employees, the language used in the 2018 Agreement at cls 1.2, 1.3 and 1.14 means it can only apply to existing employees of Essential. Clauses 1.2 and 1.3 provide as follows (see also cl 1.14 in [6] above):

‘1.2 PARTIES

The parties to this Enterprise Agreement are:

•  Essential Energy

•  Essential Energy employees as defined in clause 1.3 (Coverage)

•  Communications Electrical, Electronic, Energy, Information, Postal, Plumbing & Allied Services Union of Australia (CEPU NSW).

•  Australian Municipal, Administrative, Clerical & Services Union NSW United Services Branch (USU),

•  Association of Professional, Engineers, Scientists & Managers, Australia NSW Branch (APESMA)

•  The Construction, Forestry, Mining and Energy Union, Mining and General Division (South Western District) NSW Branch (CFMEU)

1.3 COVERAGE

This Enterprise Agreement applies to Essential Energy and its employees who are paid a base weekly rate of pay up to and including Pay Point 44 as contained in Section 6 Clause 6.12 (Table 1: Essential Energy Rates of Pay) of this Enterprise Agreement. Employees whose base weekly rate of pay is above Pay Point 44 will not be covered by the terms of this Enterprise Agreement and shall instead be in accordance with a Total Remuneration Package (TRP) contract of Employment.

Under the terms of this Enterprise Agreement, Essential Energy will not offer Total Remuneration Package (TRP) contracts to any new employees whose base weekly rate of pay is up to and including Pay Point 44 as contained in Section 6 Clause 6.12 (Table 1: Essential Energy Rates of Pay) of this Enterprise Agreement.

This Enterprise Agreement otherwise governs all employment, wages and conditions of the employees to whom this Enterprise Agreement applies.’ (my emphasis)

[11] It was said that the Agreement only covers current employees who are paid a base weekly rate of pay up, to and including Pay Point 44. As Mr Walker’s employment ended on 26 May 2017, the 2018 Agreement could not have applied to him when the dispute was initiated. Accordingly, the Commission has no jurisdiction to deal with the current dispute.

[12] Essential detailed the nature and outcome of the dispute lodged by the Union in 2014 in respect to the same matter of Mr Walker’s alleged right to the ESRA and Essential Energy’s Salary Maintenance Policy. After two conciliation conferences, that matter was ultimately closed when the Senior Deputy President sought an update of the status of the matter in 2016, and warned that if no response was received by 30 September 2016, the file would be closed. There was no response from the Union. Moreover, there was a lengthy period of non-activity by the Union and Mr Walker before re-agitation of the same matter in November 2018 – two years after the 2015 matter was closed, and almost three years after the Senior Deputy President’s second conference. It was observed that no explanation was provided for such a delay.

[13] The respondent put that to the extent ‘representative error’ was relied on by Mr Walker, such a claim does not sit comfortably with the four weeks he had to decide whether he would accept voluntary redundancy in 2017, or the three years since the claim was first agitated, during which he could have pursued other legal channels available to him.

[14] In the alternative, it was submitted that the 2015 and 2018 disputes are about different subject matters. The 2015 dispute concerned the application of salary maintenance to a redeployed employee. The current dispute is about whether Mr Walker’s role as an Environmental Specialist meant he qualified for the ESRA. This was not a matter raised by the Union or Mr Walker, prior to the termination of his employment. In any event, the dispute arose under different agreements and different DSPs.

For the Union

[15] Ms Pond submitted that Mr Walker’s dispute was initiated well before the termination of his employment. The subject matter of the dispute in 2014/2015 is the same – Mr Walker claims an entitlement to ESRA in his Environmental Specialist role, according to the Salary Maintenance Policy. Therefore, there is no jurisdictional impediment to the Commission determining the matter.

[16] The Union disputed Essential’s submission that the matter was resolved in 2016 and that the dispute is different to the dispute raised firstly as a grievance in 2014. This grievance had not been resolved in 2016 and remained extant at the time of his termination; see: Construction, Forestry, Mining and Energy Union v Thiess Pty Ltd[2016] FWC 5089. It was put that as an ongoing dispute need not depend on the filing of a claim in the Commission, the Commission has power to deal with the matter, provided the employee had initiated the dispute before the termination of employment..

CONSIDERATION

Statutory provisions and relevant authorities

[17] The jurisdiction of the Commission to deal with disputes, pursuant to dispute settlement procedures in enterprise agreements, is provided for in ss 738 and 739 of the Act as follows:

‘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.

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.’

[18] As summarised in the decision of a Full Bench of the Commission in Construction, Forestry, Mining and Energy Union v North Goonyella Coal Mines Pty Ltd [2015] FWCFB 5619, the Commission may deal with a dispute only by way of an application by a party to the dispute (s 739(6)); it is prohibited from exercising any powers limited by the dispute resolution procedure (s 739(3)); it may arbitrate only if the agreed dispute resolution procedure permits it to do so (s 739(4)); and it must not make a decision that is inconsistent with the Act, the enterprise agreement or any other applicable fair work instrument (s 739(5)).

[19] To the extent that the Act and the terms of a DSP in an enterprise agreement authorise the Commission to make decisions as to the legal rights and liabilities of the parties to an agreement, it authorises the Commission to exercise a power of private arbitration; see: Construction, Forestry, Mining and Energy Union v Australian Industrial Relations Commission (2000) 203 CLR 645 at [31]-[35]. It is well established that, depending on the terms of a DSP in an enterprise agreement, a former employee can continue to have a dispute dealt with, consistent with the terms of a particular DSP, provided that the employee has initiated the dispute before the termination of his or her employment.

The present dispute

[20] In my view, it is somewhat unrealistic for Mr Walker to continue to press a claim, which, in essence, is that Essential pay him the ESRA for ‘all purposes’ from 30 July 2014 to 26 May 2017, when:

(a) the matter was effectively ended in October 2016 when Senior Deputy President Hamberger closed the file in matter C2015/5355, as a consequence of no response being received from the Union or Mr Walker. There had been no agitation of the claim being November 2015 to October 2016; and

(b) there is then a hiatus of almost two years where nothing is agitated by the Union or Mr Walker about his alleged ongoing dispute with his former employer.

[21] It is very difficult to reconcile a proposition that Mr Walker’s grievance remained unresolved and on foot for 2 years, yet there is no evidence he did anything about it, either with the Union or independently. Bluntly, the ‘ESRA ship’ has long since sailed.

[22] I accept the Union and Ms Pond in particular, have an obligation to represent their members’ interests, including I presume, an ongoing member’s interest. However, there must come a point where the Union’s resources, not to mention Essential’s time, resources and costs, are better served where the prospects of a case such as this are, at best, remote.

[23] Ms Pond’s submission that Mr Walker’s 2014 grievance has remained unresolved and ongoing cannot be accepted, as the dispute was concluded by the Senior Deputy President in October 2016. On one view, this fact raises issues of estoppel in the bringing of this application. However, I make no finding on that possibility, as I propose to determine the jurisdictional objection on more well established grounds.

[24] Ms Pond submitted that this dispute/grievance has been ongoing and unresolved, and therefore remains jurisdictionally competent. However, this ignores the express terms of the DSP under the terms of the 2013 Agreement, under which the 2015 dispute was lodged. They are not relevantly different to the terms of the 2018 Agreement. Clause 1.15.2 requires that as a last step in the DSP of the 2013 Agreement, the Commission may exercise all of its powers under the Act, including conciliation and/or arbitration once a dispute is filed, assuming all the preceding steps in the DSP had been followed. With the Commission’s involvement, and the Senior Deputy President’s ultimate closing of the file, the terms of the DSP of the 2013 Agreement have been exhausted. This means the DSP is at an end, and one cannot backtrack a step in the process. In order to re-agitate the matter, a person would need to file a fresh dispute after complying again with all the preceding steps. This process was not reagitated while Mr Walker was employed. Once his employment ended, he could not possibly engage a DSP under an agreement which no longer covered or applied to him; see Grabovsky v United Protestant Association NSW Ltd t/a UPA[2019] FWC 3718.

[25] Bisset C dealt with a not dissimilar proposition in Freeman v State of Victoria [Department of Education & Training] t/a Department of Education & Training [2018] FWC 212. At [47]-[48] the Commissioner said:

‘[47] Finally, even if the dispute is essentially the same as that commenced under the 2013 Agreement, this does not allow steps taken under the 2013 Agreement to be attributed to meeting the requirements of the 2017 Agreement. There is nothing in the dispute settlement procedure of the 2107 Agreement to suggest that this is possible.

[48] It is not possible to retrospectively comply with the requirements of the dispute settlement procedure. That Ms Freeman sought to advise Mr White of the matters in dispute after she notified the dispute to the Commission does not cure the fundamental issue. If it was possible to take steps in the dispute settlement procedure retrospectively or out of order, this would make a nonsense of the requirement to take certain steps before notifying the dispute to the Commission.’

[26] The respondent directed my attention to and relied on the decisions in Jajoo, Deakin and Telstra to establish the following legal proposition:

‘An employee who is no longer employed may still be able to utilise the provisions of the DSP, including access to the Commission under the Agreement, which previously applied to him/her in respect to a dispute/grievance, but only if that dispute/grievance was initiated before the termination of employment and subject to the Agreement’s terms permitting it to be dealt with. The position becomes a little less straightforward when the Agreement formerly covering the employee has been replaced by a new Agreement and the old Agreement ceases to have any application.

[27] Section 54(2) of the Act reads as follows:

‘(2) An enterprise agreement ceases to operate on the earlier of the following days:

(a) the day on which a termination of the agreement comes into operation under section 224 or 227;

(b) the day on which section 58 first has the effect that there is no employee to whom the agreement applies.’’

In effect, this means that two agreements covering the same employees cannot co-exist.

[28] In Construction, Forestry, Mining and Energy Union v Broadspectrum Australia Pty Ltd[2017] FWCFB 269, the Full Bench discussed the relevant authorities and reaffirmed the proposition frequently cited from Jajoo. At [42]-[47] the Full Bench said:

‘[42] Jajoo is authority for the finding that if an employee agitates a claim arising under an enterprise agreement while employed, the Commission has the jurisdiction to deal with the dispute, even after that employee’s relationship with the employer is terminated. This is consistent with National Tertiary Education Industry Union v The University of Wollongong (‘Wollongong’), where a Full Bench considered the jurisdiction of the Commission to deal with a dispute lodged by the National Tertiary Education Industry Union regarding various matters including redundancy payments in relation to the employment of a specified employee.

[43] In Wollongong, a Full Bench of the Commission found that the Commission had jurisdiction to entertain a notification and upheld an appeal against the decision of Commissioner Lawson to the effect that no jurisdiction existed. The notices lodged by the NTEU were lodged one day prior to the termination of the employee’s employment.

[44] If we were to follow Jajoo and Wollongong, we would find that the Commission had the requisite jurisdiction to deal with the dispute on the basis that Mr Crawford was an employee at the time that he lodged his application. It is true, however, that Jajoo and Wollongong were decided prior to the enactment of section 739 of the Act. Primarily, for this reason, Broadspectrum asserts that the principles of stare decisis do not bind the Commission in relation to Jajoo and Wollongong.

[45] We agree with Broadspectrum to the extent that it asserts that we are not bound by the principles of stare decisis in relation to Jajoo and Wollongong. However, while we are not bound by the principles of stare decisis, we are of the view that we should depart from Jajoo and Wollongong only if we are persuaded that there is a sufficient reason to do so.

[46] Broadspectrum have pointed to Patrick Projects in support of its assertion that we ought to depart from Jajoo and Wollongong. Certainly, the Full Bench in Patrick Projects stated that:

“An application for the Commission to deal with a dispute in accordance with a dispute settlement procedure of an Enterprise Agreement pursuant to s.739 of the Act can only be heard when the applicants are employed.”

[47] Prima facie, this statement indicates a departure from Jajoo and Wollongong. A closer analysis reveals, however, that the Full Bench in Patrick Projects were considering a different issue to that which arose in Jajoo and Wollongong, and to what arises in this case. The employees in Patrick Projects lodged their applications after the employment relationship had ended. The Full Bench’s finding in Patrick Projects is consistent with Jajoo on the basis that the Full Bench in Jajoo concluded that the Commission’s jurisdiction is enlivened, and only remains enlivened, for applications that are lodged prior to the termination of the employment relationship. On this basis, we are not persuaded that Patrick Projects is a sufficient reason to depart from Jajoo and Wollongong.’

[29] For the reasons I have sought to explain, and applying the principles of established authority, I am not satisfied that the Commission has jurisdiction to deal with the dispute, in accordance with the DSP in the 2018 Agreement or the 2013 Agreement. Ergo, this application must be dismissed. I order accordingly.

DEPUTY PRESIDENT

Final written submissions:

For the applicant, 18 February 2019.

For the respondent, 5 February 2019.

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