Philip Skein v VIP Electrical Pty Ltd

[2014] FWC 830

[2014] FWC 830

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739—Dispute resolution

Philip Skein
v
VIP Electrical Pty Ltd
(C2013/7523)

SENIOR DEPUTY PRESIDENT O’CALLAGHAN ADELAIDE, 3 FEBRUARY 2014

Application to deal with a dispute - request for an opinion - jurisdiction under an enterprise agreement - discretion to provide an opinion.

[1] This decision relates to an application made by Mr Skein on 4 December 2013. That application was made pursuant to s.739 of the Fair Work Act 2009 (the FW Act) and the dispute settlement procedures of the VIP Electrical Enterprise Agreement 2010 (the Agreement). The application was the second application relative to the same dispute which Mr Skein has with VIP Electrical Pty Ltd (VIP). The first application was made on 1 August 2013. That application was the subject of extensive conciliation proceedings. As the matter remained unresolved, Mr Skein sought that the dispute be arbitrated. In a decision I issued on 30 September 2013, 1 I concluded that the Agreement required the agreement of both parties to seek arbitration as an essential prerequisite to any jurisdiction to that effect. The application was dismissed on that basis.

[2] This second application was the subject of a conciliation conference on 16 December 2013. In that conference, Mr Skein confirmed that he now sought an opinion from the Commission relative to the circumstances of the claim he has made for payment by VIP. The VIP position was that this second application should be struck out. VIP foreshadowed a possible costs application. Both parties were directed to provide written material in relation to the actions which might be taken by the Fair Work Commission (FWC or the Commission). Mr Skein was also given the opportunity to make submissions in reply.

[3] Both parties provided submissions accordingly.

[4] In brief summary, Mr Skein’s dispute relates to claims for payments relating to a continuing workplace absence since November 2012. Mr Skein is pursuing workers compensation and/or disability insurance payments. In terms of the disability insurance payments, he asserts that absent payment by the disability insurer, the Agreement establishes a direct payment obligation on VIP rather than an obligation to insure for such payments.

[5] In his submissions, Mr Skein referred to clause 8 of the Agreement which states:

“8. Dispute Settlement Procedure

The following procedure for the avoidance or resolution of disputes shall apply. The mechanism and procedures for resolving industrial disputes will include, but not be limited to the following:

• The employee/s concerned will first meet and confer with their immediate supervisor. The employee/s may appoint another person to act on their behalf and where a representative is involved he/she shall be allowed the necessary time during working hours to interview the employees and the supervisor.

• If the matter is not resolved at such a meeting, the parties will arrange further discussions involving more senior management as appropriate. The employer may also invite into the discussions an officer of the employer Organisation to which the employer belongs.

• If the matter remains unresolved the matter the parties shall jointly or individually refer the matter to the Australian Industrial Relations Commission, or its successor, for assistance in resolving the matter.

The party with the grievance must notify the other party at the earliest opportunity of the problem. Throughout all stages of the procedure all relevant facts must be clearly identified and recorded.

Sensible time limits must be allowed for completion of the various stages of discussion. However, the parties must co-operate to ensure that the dispute resolution procedures are carried out as quickly as possible.

While the parties are attempting to resolve the matter the parties will continue to work in accordance with this agreement and their contract of employment, unless the employee has a reasonable concern about an imminent risk to his or her health or safety. Subject to relevant provisions of the Occupational Health, Safety and Welfare Act 1986 as amended even if the employee has a reasonable concern about an imminent risk to his or her health or safety, the employee must not unreasonably fail to comply with a direction by the company to perform other available work, whether at the same enterprise of another enterprise, that is safe and appropriate for the employee to perform.

While these processes are being followed the parties shall be committed to avoid stoppages of work; lockouts or other bans or limitations on the performance of work and the company shall ensure that all practices applied during the operation of the procedure are in accordance with safe working practices and consistent with established custom and practice at the enterprise.

Conciliation regarding disputes and potential disputes arising out of the operation of this clause will be dealt with by the Australian Industrial Relations Commission, or its successor, or as otherwise agreed between the parties.

In the event that the parties agree to seek arbitration, the Arbitrator's decision shall be binding on all parties

The parties agree that one of the prime aims of this Agreement is to eliminate lost time in the event of a dispute. Further that it is in the best interest of both parties to achieve prompt resolution of disputes.

The most effective procedure to achieve this is for the responsibility for resolution to remain as close to the source as possible. It is with uppermost in mind that the parties agree to strictly adhere to the dispute settlement procedure as follows: -

• In the first instance of a dispute the employee and direct supervisor shall make every effort to genuinely resolve any matter prior to the involvement of a third party.

• Work shall continue without interruption whilst the employee discusses the dispute with the employer's site representative and both parties shall attempt to reach agreement.

• A dispute shall not be referred to a higher level until a genuine attempt to resolve the matter has been made between the above parties.

• Either party has the option to seek third party assistance prior to the involvement of the Australian Industrial Relations Commission (AIRC) or its successor.

• Failing a satisfactory settlement being achieved from the above process, either party may refer the dispute to the AIRC or its successor. Where such industrial disputes are brought before the AIRC, or its successor, conciliation is the preferred resolution process. However, if parties agree to seek arbitration, the Arbitrator's decision made shall be binding on all parties.

Whilst subject to this procedure the status quo occurring immediately prior to the dispute shall remain until the matter is resolved

All employees agree to avoid becoming involved in any disputes that do not directly concern the company.”

[6] Mr Skein asserted that this provision did not limit other options open to the FWC and that an opinion may be useful in resolving the matter in dispute. Secondly, Mr Skein asserts that VIP is obligated to seek the assistance of the Commission to resolve the dispute. He refers to s.595 of the FW Act which authorises the Commission to deal with the dispute by (amongst other means) "expressing an opinion".

[7] The VIP position detailed by its lawyer, Ms Victory, was that the second application constituted an abuse of process and should be dismissed in that Mr Skein was, in practical terms, seeking a determination of the matter masked as an opinion. VIP asserted that, to the extent that Mr Skein was seeking legal research and advice, this was not the role of the Commission.

[8] VIP asserts that s.595 does not establish any form of hierarchical approach to the actions which may be taken by the FWC, and that, as the Commission has undertaken conciliation, the expression of a non-binding opinion was not likely to further assist other than to provide guidance on the next steps in the matter.

[9] In reply, Mr Skein confirmed the advice he provided in the second application, namely that "This application is lodged for the sole purpose of gaining information from the FWC that may assist with the resolution of this dispute." He confirmed his view that the Commission had jurisdiction to express such an opinion.

Findings

[10] I am not inclined to alter the conclusions I reached with respect to Mr Skein in the first application.

[11] This application is made pursuant to s.739. That section states:

“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.”

[12] Mr Skein also relies on s.595 which states:

“595 FWC’s power to deal with disputes

(1) The FWC may deal with a dispute only if the FWC is expressly authorised to do so under or in accordance with another provision of this Act.

(2) The FWC may deal with a dispute (other than by arbitration) as it considers appropriate, including in the following ways:

(a) by mediation or conciliation;

(b) by making a recommendation or expressing an opinion.

(3) The FWC may deal with a dispute by arbitration (including by making any orders it considers appropriate) only if the FWC is expressly authorised to do so under or in accordance with another provision of this Act.

Example: Parties may consent to the FWC arbitrating a bargaining dispute (see subsection 240(4)).

(4) In dealing with a dispute, the FWC may exercise any powers it has under this Subdivision.

Example: The FWC could direct a person to attend a conference under section 592.

(5) To avoid doubt, the FWC must not exercise the power referred to in subsection (3) in relation to a matter before the FWC except as authorised by this section.”

[13] These provisions confirm the capacity of the Commission to act in a number of different ways to resolve disputes. However, it is long established 2 that the jurisdiction for the Commission to act to resolve disputes about the operation of an Enterprise Agreement is dependent on the functions given to the Commission by the parties in the agreement itself. It would be a fundamental misapplication of the provisions of the FW Act to override the jurisdiction bestowed on the Commission in an agreement by relying upon what are, in effect, the enabling provisions in the FW Act.

[14] This means that the initial issue is whether or not the dispute settlement procedure in the Agreement establishes the jurisdiction for the Commission to provide an opinion in the matter and the circumstances sought by Mr Skein. In effect, Mr Skein seeks an opinion about whether he should be paid for the time he has not worked, and, if so, by whom.

[15] The submissions made by both Mr Skein and VIP make it clear that any such opinion may not resolve the matter, will not be in any way binding, but may inform Mr Skein's future actions relative to his claims.

[16] In my decision of 30 September 2013 I considered the Agreement dispute settlement procedure in some detail. The first part of that dispute settlement procedure provides for a mechanism and procedures which "include, but not be limited to the following". 3 The second part is more prescriptive. It relevantly states:

“.... It is with uppermost in mind that the parties agree to strictly adhere to the dispute settlement procedure is as follows:

....

• Failing a satisfactory settlement being achieved from the above process, either party may refer the dispute to the AIRC or its successor. Where such industrial disputes are brought before the AIRC, or its successor, conciliation is the preferred resolution process. However, if parties seek arbitration, the Arbitrator’s decision made shall be binding on all parties.”

[17] I have concluded that the capacity for settlement of Mr Skein's claim through conciliation has been exhausted. Mr Skein remains committed to his claim for payment for the time he has not been able to work. His options include pursuing this claim against the WorkCover authority, the insurer or VIP.

[18] VIP has made it abundantly clear that it is not prepared to agree to pay Mr Skein for this time. As I noted in the 30 September 2013 decision, VIP has offered some assistance to Mr Skein in pursuing his claim against parties other than itself.

[19] I have considered whether the jurisdiction to express an opinion in these circumstances exists. This issue was considered in somewhat similar circumstances by a Full Bench in FSU v ANZ. 4 In that matter the relevant agreement provisions stated:

“18. Disputes Settlement

In the event of a dispute in relation to any matter arising out of or concerning this Agreement the parties will apply clause 10 (procedures for the avoidance of industrial disputes) of the ANZ Group Award without delay. Any such matter which cannot be resolved between the parties will be placed before the Commission for conciliation or where the parties agree for arbitration.”

[20] In that matter, the Commission declined to make a recommendation. The Full Bench concluded that the Commission had the jurisdiction to make a recommendation. It commented on the extent to which a recommendation may be a useful aid in reaching an agreement 5 and that:

“[34] Further, the making of a recommendation does not require the agreement of all parties, though such agreement is of assistance as it increases the likelihood of the recommendation being accepted and implemented by the parties as a means of resolving their dispute.”

[21] The Full Bench considered the propriety of the decision not to make a recommendation in those particular circumstances. I have had regard to that approach.

[22] In this case I consider that the Agreement dispute settlement procedure gives the Commission the jurisdiction or the capacity to express an opinion or make a recommendation. Whether I exercise that jurisdiction in these particular circumstances then becomes a matter of discretion. I have adopted the position that the discretion should be exercised if I consider that it would assist in the resolution of the dispute but that, having arranged for extensive conciliation opportunities there is no binding obligation on the Commission to express an opinion or recommendation if I concluded that it would not assist in the objective of resolving the matter.

[23] I have decided against such an exercise of discretion in these particular circumstances. To the extent that Mr Skein’s claim relates to other entities, including the workers compensation authority and/or the insurer, or potential contractual issues between the insurer and VIP, I consider a recommendation is likely to give rise to natural justice issues and require that matters outside the scope of the agreement or the employment relationship are addressed. To the extent that any recommendation or opinion deals with the interpretation of the Agreement provisions, it is abundantly clear to me that such an opinion or recommendation will not be accepted by VIP if it involves direct payments. In these circumstances Mr Skein would need to pursue his claim in the Court and I consider that any opinion which I may express would then be a complicating factor in that Court process. Even if Mr Skein now only seeks an opinion limited to whether VIP must make the income protection payments referenced in clause 36 of its own motion, this is a matter that involves the interpretation of the Agreement. That interpretation may require consideration of various extraneous factors. Any conclusion I adopted would not be binding on VIP or on a Court, and I am concerned that it is likely to form a distraction to what otherwise may be a relatively straightforward matter.

[24] Given the conclusions I have reached, I think it appropriate that I suggest to Mr Skein that, should he wish to pursue a claim for payment under the Agreement, this matter should be taken up in the Court.

[25] Mr Skein’s application will be dismissed in the FWC on this basis. I stress that no conclusion, adverse or otherwise about Mr Skein's claims can be drawn from this decision.

SENIOR DEPUTY PRESIDENT

 1   [2013] FWC 7612

 2   See, for example: Linfox Australia Pty Ltd v TWU [2013] FCA 659 and CFMEU v AIRC 2001 HCA 16

 3   Agreement, clause 8

 4   PR944901, 22 March 2004

 5   Ibid, paras [31] and [32]

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