Roslyn Anne Drinkwater v LiveBetter Services Ltd - [2022] FWC 2809

[2022] FWC 2809

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.739—Dispute resolution

Roslyn Anne Drinkwater
v

LiveBetter Services Ltd

(C2022/773)

COMMISSIONER MATHESON

SYDNEY, 14 NOVEMBER 2022

Alleged dispute about matters arising under a Copied State Award – jurisdictional objection raised by Respondent – whether dispute resolution procedure followed – jurisdictional objection upheld – application dismissed.

Ms Roslyn Drinkwater (Applicant) has made an application pursuant to s.739 of the Fair Work Act 2009 (Cth) (Act) for the Fair Work Commission (Commission) to deal with a dispute in accordance with a dispute settlement procedure.

Background

In September 2017, the Applicant’s employment transferred from the New South Wales Government to LiveBetter Services Ltd (Respondent) pursuant to the National Disability Insurance Scheme (NSW Enabling) Act 2013 (NSW) (Enabling Act). The Applicant was a casual employee at the time of transfer.

Section 14 of the Enabling Act provides:

“Transfers to non-government sector employment
(1) The Minister may, for the purposes of the authorised implementation, enter into an agreement (a “transfer agreement”) with an employer in the non-government sector for the transfer of the employment of a disability services employee to the employment of that employer as the “new employer” of the employee.

(2) The Minister may by order in writing transfer the employment of a disability services employee to the employment of the new employer to give effect to a transfer agreement.

(3) A transfer of employment under this section does not require the consent of the person transferred.

(4) A transfer agreement must contain provision to give effect to the following requirements:

(a)the employment of a transferred employee with the new employer is to be on the same terms and conditions as applied under an industrial instrument to the employee as a disability services employee immediately before the transfer of employment,

…

(c)the provisions of section 15 apply in respect of the transferred employee.

(5) A transfer agreement may specify an employment guarantee period for the transferred employee and if it does so must contain provision to give effect to the following requirements:

(a)the terms and conditions of employment of the transferred employee with the new employer under an industrial instrument cannot be varied during the employment guarantee period for the transferred employee except by agreement entered into by or on behalf of the transferred employee in accordance with any applicable industrial law,

…”

The Respondent entered into a transfer agreement with the relevant Minister (Transfer Agreement) and, in accordance with section 14(4)(a) of the Enabling Act, the Applicant was employed on the same terms and conditions as applied under an industrial instrument to her as a disability services employee immediately before the transfer of employment. In particular, one of the awards that covered the Applicant prior to the transfer and continued to apply to the Applicant’s employment when she was transferred to the employment of the Respondent in September 2017 was the Crown Employees Ageing, Disability and Home Care - NSW Department of Family and Community Services (Community Living Award) 2015 (NSW Community Living Award).

On 5 July 2018, the Applicant was offered a position as a part-time Support Worker, Disability Services, with the Respondent. The Applicant accepted the offer and signed a contract of employment which provided that the Applicant’s employment was “underpinned” by the Social, Community, Home Care and Disability Services Industry Award 2010 (SCHCDS Award).

The dispute has arisen as the Applicant asserts that she continued to perform the same duties that she was performing prior to accepting the part-time position and, as such, remained a transferring employee covered by the NSW Community Living Award and not the SCHCDS Award. The Applicant submits that the conditions under the SCHCDS Award are inferior to those under the NSW Community Living Award and seeks a determination that the terms of the NSW Community Living Award applies to her employment.

In particular, the Applicant submits that the NSW Community Living Award became a copied State award for the purposes of Part 6-3A of the Act.

Section 768AF of Part 6-3A of the Act provides:

“If there is a transfer of business, then this Division provides for certain terms and conditions of a transferring employee’s employment with the old State employment to be transferred to the employment with the new employer.

The transfer of those terms and conditions is achieved by creating a new instrument--called a “copied State instrument” --for the transferring employee. The new instrument is a federal instrument that is enforceable under this Act.

…
A copied State award copies the terms of a State award that covered the transferring employee and the old State employer immediately before the termination of the employee’s employment with the old State employer.
…”

Section 768AI of Part 6-3A of the Act provides:
“What is a copied State award?
(1) If, immediately before the termination time of a transferring employee:
(a)a State award (the original State award) was in operation under the State industrial law of the State; and

(b)the original State award covered (however described in the original State award or a relevant law of the State) the old State employer and the transferring employee (whether or not the original State award also covered other persons);

then a copied State award for the transferring employee is taken to come into operation immediately after the termination time.

Note 1: Even though a copied State award comes into operation in relation to the transferring employee, it will not be enforceable by the employee or another person (for example, the new employer) unless and until it applies to the employee or other person. In particular, it will not apply to the employee or new employer before the employee becomes employed by the new employer. For when the copied State award applies to a person, see section 768AM.

Note 2: A copied State employment agreement for the transferring employee may also come into operation immediately after the termination time, see subsection 768AK(1). If it does, then the State's interaction rules that were in force immediately before the termination time apply for the purposes of working out the interaction between the copied State award and the copied State employment agreement (see item 11 of Schedule 3A to the Transitional Act as that item applies in a modified way because of section 768BY).

(2) The copied State award is taken to include the same terms as were in the original State award immediately before the termination time.

Note: The State’s instrument content rules that were in force immediately before the termination time apply to the copied State award (see item 10 of Schedule 3A to the Transitional Act as that item applies in a modified way because of section 768BY).

(3) If the terms of the original State award were affected by an order, a decision or a determination of a State industrial body or a court of the State that was in operation immediately before the termination time, the terms of the copied State award are taken to be similarly affected by the terms of that order, decision or determination.”

The Applicant submitted that the copied state award is taken to include the same terms as were in the original NSW Community Living Award, save that item 13 of Schedule 3A of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth) (Transitional Act) operated so that the dispute resolution term in the NSW Awards, which conferred the power to resolve disputes on the NSW Industrial Commission (NSW IRC), had effect as if the reference to the NSW IRC was a reference to the Commission.

Item 13 of Schedule 3A of the Transitional Act provides:

“13 References in Division 2B State instruments to State industrial bodies

(1) Subject to subitem (2), if a term of a Division 2B State instrument is expressed to confer a power or function on a State industrial body, that term has effect as if references in it to the body were instead references to the FWC.

(2) If a term of a Division 2B State instrument is expressed to confer a power or function on the registrar, or a deputy registrar, of a State industrial body, that term has effect on and after the Division 2B referral commencement as if references in it to the registrar or a deputy registrar were instead references to the General Manager of the FWC.
…”

The Applicant submits that the relevant industrial instrument and clause that enlivens the Commission’s jurisdiction to deal with this dispute is the dispute resolution procedure in the NSW Community Living Award (Dispute Resolution Procedure).

The jurisdictional objection

The Respondent challenged the jurisdiction of the Commission to determine the dispute and a jurisdictional hearing was held on 15 June 2022. At the hearing, the Applicant was represented by Mr Tony Slevin of Counsel, instructed by Ms Lucy O’Halloran and Ms Sharny Chalmers of the Community and Public Sector Union (CPSU), and the Respondent was represented by Mr Ryan Haddrick of Counsel, instructed by Ms Nikki Town and Ms Jess McLaughlin of Ovartis Lawyers.

In advance of the hearing, the Respondent filed submissions on 13 May 2022, the Applicant filed submissions on 1 June 2022 and the Respondent filed submissions in reply on 13 June 2022.

Witness evidence

Ms Nerissa Marat, Executive General Manager People and Culture of the Respondent gave evidence as a witness for the Respondent. Ms Narat’s evidence primarily related to the terms of the Transfer Agreement. Ms Narat’s evidence was that:

On 11 April 2017, the Respondent entered into an “Implementation and Sale Agreement” with the NSW State Government which was the Transfer Agreement required by s.14 of the Enabling Act.[1]
Completion of the transaction took effect on and from 3 September 2017.[2]
The guarantee period under the Agreement commenced on and from 3 September 2017 and concluded 3 September 2022 (Guarantee Period).[3]
Clause 13.7 of the Transfer Agreement (attached to Ms Narat’s statement) states:
“On or around the date of this Agreement, the Vendor will consult with the
Purchaser with respect to the content and form of a communication in writing
from the Vendor to each Employee in relation to the following:
(a)       the effect of the Employees Transfer Order and the commencement of
employment with the Company;
(b)      requesting confirmation from each Employee as to whether he/she
wishes any authorised deductions from pay in effect to continue with the Company; and
(c)       any other matters the Vendor and the Purchaser consider should be
communicated to Employees in connection with commencement of
employment with the Company on or prior to Completion, including
confirmation of the Employee Commitments, and issue any such communication”.[4]
Clause 13.8 of the Transfer Agreement (attached to Ms Narat’s statement) states:
“The Parties agree to a form of communication with Employees regarding the
terms and conditions of employment of the Transferring Employees from
Completion being substantially in the form set out in Schedule 10 (Transfer
Terms Letter), and further agree that:
(a) on or around the date of this Agreement the Purchaser will agree with
the Vendor the content of any variations required to the Transfer Terms Letter to form a communication in writing from the Purchaser to each Employee in relation to the following:
(i)acknowledging the Employee Commitments; and
(ii)guaranteeing the Employee Commitments in the period on and after Completion, and issue, through the Vendor, any such communication; and
(b) at or around the time of Completion, the Purchaser will procure that
the Company will issue each Transferring Employee with a further written communication, the content and form of which must be substantially in the form of the Transfer Terms Letter and otherwise agreed with the Vendor, confirming that the Company will be bound by, and comply with the Employee Commitments on and from Completion.”[5]
“Employee Commitments” is defined at clause 1.1 of the Transfer Agreement as:

“…the confirmations, undertakings and commitments to and in respect of Employees as set out in clause Schedule 9.”[6]

Schedule 9 of the Transfer Agreement, attached to Ms Narat’s statement, provides that:

“From Completion, the Purchaser acknowledges and agrees, and undertakes to procure that:
…
(b) (Bound by Relevant Industrial Instruments) the Company is covered by the Relevant Industrial Instruments which applied to the employment of Transferring Employees immediately before Completion and will remain covered by the Relevant Industrial Instruments in respect of the Transferring Employees at all times during the Guarantee Period and thereafter subject to the provisions of the Fair Work Act 2009 (Cth) and the remainder of this Schedule 9…”[7]

Summary of the Respondent’s submissions - jurisdiction

The Respondent submits that the Commission does not have jurisdiction to hear and determine the application or grant the relief sought by the Applicant. In particular, the Respondent submits:[8]

the necessary jurisdictional steps required prior to the initiation of a dispute before the Commission have not been complied with;

item 13(1) of Schedule 3A of the Transitional Act cannot, consistent with the Constitution, statutorily change the identity of an agreed arbitrator of a dispute. The provision has no effect, to the extent that it alters the agreed arbitrator from being the NSW IRC to the Commission; and

in the present circumstances, the necessary consensual foundation required for the Commission to arbitrate the dispute is not present.

The Crown Employees Ageing, Disability and Home Care – NSW Department of Family and Community Services (Community Living Award) 2015 is a copied State award for the purposes of Part 6-3A of the Act (Copied State Award)[9] and the Respondent has acknowledged that this is the relevant award in question.[10] The Respondent submits that:[11]

section 768AI of the Act has the effect that the Copied State Award “is taken to include the same terms as were in the original State award immediately before the termination date”; and

this means the Copied State Award is the same as the relevant State award and, subject to any legislative construction provision, has exactly the same text as the state award as approved and made by the NSW IRC.

The Respondent submits that there is no “general provision” in the Transitional Act that allows the Commission to “interpret a copied State instrument so that it adapts, best fits, modifies, or squeezes the language of the industrial instrument to be easily interpreted and applied by the [Commission]”.[12]

The Respondent acknowledged that there are exceptions to this, including the operation of item 13 of Schedule 3A of the Transitional Act such that, in the case of a reference to the conferral upon “a State industrial body” of a power or function, that reference to “a State industrial body” is to be construed as a reference to the Commission.[13] Therefore, the reference to the NSW IRC in the Copied State Award is statutorily required to be construed as a reference to the Commission.

The Respondent submitted that the Copied State Award has not been the subject of an application to the Commission to vary its terms and therefore the text of the Copied State Award as made by the NSW IRC applies.[14] The Respondent submitted that the steps in the Dispute Resolution Procedure need to be complied with and summarised these as follows:[15]

“First, pursuant to cl 21(ii), the Applicant needs to notify their immediate manager in writing as to the substance of the grievance, dispute or difficulty, and request a meeting to discuss the matter.

Second, pursuant to cl 21(iv), the immediate manager or other appropriate employee must convene a meeting in order to resolve the grievance, dispute or difficulty within two days (or as soon as practicable) of the matter being brought to his or her attention.

Third, pursuant to cl 21(v), if the grievance, dispute of difficulty remains unresolved after the second step, then the Applicant may request to meet with the appropriate person at the next level of management “in order to resolve the matter”. That manager at the next level of management shall respond within 2 days or as soon as practicable.

Fourth, again, pursuant to cl 21(v), the third step must be repeated up each level of management until the Applicant arrives at the Regional Manager or Branch Head, “in order to resolve the matter”.

Fifth, pursuant to cl 21(vi), the Regional Manager or Branch Head may (which, of course, as a matter of statutory construction, means that the Regional Manager or Branch Head must have an opportunity to) refer the matter to ADHC’s Human Resources or Employment Relations Branch for consideration.1 And, pursuant to cl 21(vii), the ADHC shall “provide a written response to the staff member and any other party involved in the grievance, dispute or difficulty …”.

Sixth, only after the five jurisdictional steps described above have occurred, may, pursuant to cl 21(ix), the Applicant (as a “staff member”), the union on their behalf, or the Departmental Head, refer the matter to Industrial Relations Commission of New South Wales “if the matter is unresolved following the use of [the] procedures”.

Very importantly – and it appears to be accepted by the Applicant in paragraph 11 of the Applicant’s outline of submissions – the sixth step, that is, the invocation of cl 21(ix), may only be done “if the matter is unresolved following the use of these procedures”, that is, the procedures set out in cl 21 of the Copied State Award. Clause 21(ix) makes it crystal clear – the reference to the Industrial Relations Commission of New South Wales (and therefore the FWC) is only permissible if the dispute “is unresolved following the use of these procedures”.” (Respondent’s emphasis)

The Respondent submits that there is no evidence before the Commission that the Applicant took these steps.[16]

However, the Respondent also raises a more fundamental objection, being that item 13(1) of Schedule 3A of the Transitional Act cannot statutorily change the identity of an agreed arbitrator of a dispute.[17]

In particular, the Respondent submitted that CFMEU v Australian Industrial Relations Commission[18] (the Private Arbitration Case) is authority for the constitutional principle that arbitration (when not undertaken by a Chapter III Court):

can only be undertaken if the parties to the dispute consent to, or agree to an arbitration; and

may be invoked when the parties have agreed “to submit disputes as to their legal rights and liabilities for resolution by a particular person or body and to accept the decision of that person as binding on them”.[19] (Respondent’s emphasis)

In support of this submission, the Respondent relied on the following passage of the High Court in the Private Arbitration Case:[20]

“[30] There is, however, a significant difference between agreed and arbitrated dispute settlement procedures. As already indicated, the Commission cannot, by arbitrated award, require the parties to submit to binding procedures for the determination of legal rights and liabilities under an award because Ch III of the Constitution commits power to make determinations of that kind exclusively to the courts. However, different considerations apply if the parties have agreed to submit disputes as to their legal rights and liabilities for resolution by a particular person or body and to accept the decision of that person as binding on them.

[31] Where parties agree to submit their differences for decision by a third party, the decision maker does not exercise judicial power, but a power of private arbitration. Of its nature, judicial power is a power that is exercised independently of the consent of the person against whom the proceedings are brought and results in a judgment or order that is binding of its own force. In the case of private arbitration, however, the arbitrator’s powers depend on the agreement of the parties, usually embodied in a contract, and the arbitrator’s award is not binding of its own force. Rather, its effect, if any, depends on the law which operates with respect to it.” (Respondent’s emphasis)

The Respondent submitted that it is not constitutionally permissible for the Commonwealth Parliament to enact legislation that compels a private arbitration between two parties where one or more of the parties has not agreed to the person or body undertaking the arbitration. It submitted that the parties must not only agree that their dispute will be arbitrated, but must also agree as to who will arbitrate that dispute.[21]

The Respondent submitted that, in this case, the power has been invested in the NSW IRC[22] and, whilst item 13(1) of Schedule 3A of the Transitional Act statutorily requires the reference to the NSW IRC to be read as a reference to the Commission, that statutory command cannot exceed the constitutional competence of the Commonwealth Parliament.[23]

The Respondent also submitted that there is no consensual foundation for the imposition of arbitration as the Respondent was, as a consequence of the Enabling Act, compelled to take the employees that were formerly New South Wales Crown employees.[24] In support of this submission, the Respondent relied on One Tree Community Services Inc v United Workers’ Union[25] and submitted that the Respondent could not have recruited its own workforce or conducted its business without being legally bound by the obligations imposed upon it.[26]

Summary of the Applicant’s submissions

The Applicant submitted that:[27]

section 595(1) of the Act provides that the Commission may deal with a dispute only if expressly authorised to do so under or in accordance with another provision of the Act;

in satisfaction of the above requirement, the Commission is able to exercise a power to arbitrate in accordance with a dispute resolution procedure in a modern award or enterprise agreement under Part 6-2 of the Act;

Part 6-2 of the Act applies, in accordance with s.738, if a modern award, enterprise agreement, contract of employment or public service determination includes a term that provides a procedure for dealing with disputes;

the Copied State Award came into operation by force of Part 6-3A of the Act and is a copied State award;

section 768BX (Item 16) provides that Part 6-2 of the Act has effect in relation to a transferring employee as if a reference to a modern award included a copied State award for the transferring employee;

section 768BY(1) (Item 1) and 768BY(2) (Item 3), read together with the item 13 of Schedule 3A of the Transitional Act, provide that a term of a copied State award which is expressed to confer a power or function on a State industrial tribunal has effect as if it referred to the Commission; and

as such, Part 6-2 of the Act applies to a copied State Award as if it were a modern award and to the Commission as if a copied State award referred to the Commission rather than a State industrial tribunal.

The Applicant submitted that:[28]

there has been compliance with the relevant disputes procedure so the Commission may deal with the dispute;

item 13(1) of Schedule 3A of the Transitional Act is to be read with s.768BY of the Act and operated such that the Commission was the arbitrator for the purposes of the Copied State Award when the Respondent agreed to afford the terms of the Copied State Award to the Applicant and, as such, the Respondent agreed to the Commission taking on the role of arbitrator; and

no subsequent agreement was required as the Respondent, by agreeing to afford the Applicant the terms and conditions that applied immediately prior to the transfer, agreed that the Commission could make binding orders in resolution of disputes.

Consideration

Section 595 of the Act deals with the Commission’s power to deal with disputes, providing as follows:

“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.”

Sections 738 and 739 of the Act set out provisions in the relation to the Commission dealing with disputes 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.”

Is there agreement for the Commission to arbitrate?

Section 739(1) of the Act enables the Commission to “deal with a dispute” if a term referred to in section 738 requires or allows the Commission to deal with a dispute. Section 738 has the effect that this includes a term:

of a modern award that provides a procedure for dealing with disputes;
of an enterprise agreement that includes a procedure for dealing with disputes, including a term referred to in s.186(6);
in a contract of employment or other written agreement that 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 (NES) or a safety net contractual entitlement; or
in in a determination under the Public Service Act 1999 that provides a procedure for dealing with disputes arising under the determination in relation the NES.

However, with the exception of a Court established Chapter III of the Australian Constitution, the agreement or consent of the parties to a dispute is required to arbitrate a dispute and this extends to disputes arising under the Act. Notwithstanding this s.739(4) of the Act provides that if in accordance with a term referenced above, the parties have agreed that the Commission may arbitrate (however described) the dispute, the Commission may do so.

Agreement to arbitrate is required in order for the Commission to have jurisdiction, as determined by the High Court in the Private Arbitration Case[29]in which Gleeson CJ, Gaudron, McHugh, Gummow, Kirby, Hayne and Callinan JJ said:

“[29] …it is incidental to the conciliation and arbitration power for the Parliament to permit parties to an industrial situation to agree on the terms on which they will settle the matters in issue between them conditional upon their agreement having the same legal effect as an award. So, too, it is incidental to that power for the Parliament to give legal effect to agreed procedures for maintaining a settlement of that kind and, also, for it to authorise the Commission to participate in those procedures.
[30] There is, however, a significant difference between agreed and arbitrated dispute settlement procedures. As already indicated, the Commission cannot, by arbitrated award, require the parties to submit to binding procedures for the determination of legal rights and liabilities under an award because Ch III of the Constitution commits power to make determinations of that kind exclusively to the courts. However, different considerations apply if the parties have agreed to submit disputes as to their legal rights and liabilities for resolution by a particular person or body and to accept the decision of that person as binding on them.

[31] Where parties agree to submit their differences for decision by a third party, the decision maker does not exercise judicial power, but a power of private arbitration. Of its nature, judicial power is a power that is exercised independently of the consent of the person against whom the proceedings are brought and results in a judgment or order that is binding of its own force. In the case of private arbitration, however, the arbitrator's powers depend on the agreement of the parties, usually embodied in a contract, and the arbitrator's award is not binding of its own force. Rather, its effect, if any, depends on the law which operates with respect to it.”

In considering whether there is agreement for the Commission to arbitrate, it is helpful to retrace how the Copied State Award came to apply to the parties.

As mentioned above, following the introduction of the Commonwealth’s National Disability Insurance Scheme (NDIS), the Enabling Act enabled the NSW Government to cease providing disability services directly and provide these services through non-government entitles. The Enabling Act enabled the transfer of employees from the NSW Government to private sector employer without requiring the employees’ consent to do so. A Full Bench of the NSW Industrial Relations Commission summarised the features of the Enabling Act as follows:

“21. The important features of these provisions may be summarised as follows:

1. The Minister may enter into an agreement with a non-government employer to transfer staff to that employer.
2. The transfer does not require the consent of the employee.

3. The transfer agreement is require to contain a provision that the terms and condition of employment of the transferred employee are to be the same as applied under an industrial instrument which applied to the employee prior to the transfer.

4. The transfer agreement may contain a requirement for an employment guarantee period (subsequently specified as 2 years).

5. The transfer agreement may contain other provisions as to the terms and conditions of employment of the transferred employees.

6. The transfer is not a termination of employment.

7. The transferred employee is not entitled to any payment or other benefit by reason of the transfer.” [30]

The Full Bench of the NSW Industrial Relations Commission went on to observe:

“22. These are unilateral transfers from secure public sector employment to non-government sector employers. Employees’ accrued rights may well be transferred but the financial obligation to meet those rights in the future is not guaranteed by the Government (see s 9). The precise terms of the transfer agreements are not disclosed to the employees, nor are they parties to such agreements with rights of enforcement of terms potentially made for their benefit.
23. The only substantial protection the employees have in their future employment is found in the industrial instruments which cover them. That is so because of s 14(4)(a) of the Enabling Act and the terms of the Fair Work Act 2009 (Cwlth).”

The Applicant was covered by the NSW Community Living Award immediately before the transfer of her employment. Where there is a transfer of business from a State public sector employer to a national system employer as set out in s.768AD of the Act, the State industrial award that applied to the relevant employees before the transfer continues to apply and binds the new employer. The State award becomes a copied State award under the Act, comes into effect when the employee is terminated by the State public sector employee and ceases to operate at the end of the five-year period prescribed in s.768AO of the Act.

At the time the Applicant was transferred to her new employer in the non-government sector the NSW Community Living Award became a copied State award in accordance with Part 6-3A of the Act dealing with transfer of business from a State public sector employer.

Relevantly, s.768BX of the Act has the effect of modifying the Act for the purposes of dealing with copied State instruments, including copied State awards. Item 16 of s.768BX provides that in relation to Part 6-2 of the Act which sets out the provisions in the Act for dealing with disputes, where the term ‘modern award’ is used, this includes a reference to a copied State award for the transferring employee.

Further, s.768BY of the Act provides for the modification of the Transitional Act for copied State instruments. In particular, s.768BY(1) provides that a reference to a Division 2B State instrument is a reference to a copied State instrument for the transferring employee for the transferring employee in relation to each relevant transitional provision from the time specified in section 768BY(2). The term ‘relevant transitional provision’ is defined in s. 768BY(2) of the Act and provides that item 13 of Schedule 3A of the Transitional Act is a relevant transitional provision, subject to the exceptions in notes 1 and 2 of Schedule 3A which state:

“Note 1: A Division 2B State award will be taken not to include a term from the source award that provides for the settlement of disputes relating to matters arising under the award: see item 7.

Note 2: This item does not apply to a term of a Division 2B State employment agreement that provides for the settlement of disputes relating to matters arising under the agreement: see item 8.”

The effect of these exceptions is that the dispute clauses in Item 7 of Schedule 3A in the Transitional Act do not apply to copied State awards, with the result that the provisions requiring the State industrial body to be references to the Commission have effect. In this regard, Item 13(1) of Schedule 3A of the Transitional Act provides that if a term of a Division 2B State instrument is expressed to confer a power or function on a State industrial body, that term has effect as if references to the body were references to the Commission.

While the Dispute Provision is therefore to be read as replacing the Industrial Relations Commission of New South Wales with the Commission, the Respondent’s objections raise question around whether item 13(1) of Schedule 3A of the Transitional Act can statutorily change the identity of an agreed arbitrator of a dispute[31] and whether in the circumstances of this matter, the necessary consensual foundation required for the Commission to arbitrate the dispute is present.

The Applicant submitted that “the constitutional challenge to Item13 of Schedule 3A of the Transitional Act must fail as Item 13 did not, as asserted by the Respondent, operate to vary the Award to impose a private arbitrator without its agreement. There was not a need for the Award term to be varied as asserted by the Respondent. Item 13(1) operated immediately before the transfer and the Respondent agreed to the term when the transfer occurred.”[32]

The Respondent clarified that:

it does not challenge the constitutional validity of any provision of the Act or any other instrument and does not ask the Commission to find that any statutory provision or a provision of any instrument is constitutionally invalid;[33]

it does ask the Commission to properly construe Item 13(1) of Schedule 3A of the of the Transitional Act consistent with the Constitution; and

it submits that consistent with s.15A of the Acts Interpretation Act 1901 (Cth), Item 13(1) of Schedules 12A of the Transitional Act “must be read down so that it permissibly allows the [Commission] to ‘deal with the dispute’ that could previously have been dealt with by the Industrial Relations Commission of New South Wales, but so that, properly construed, it does not give a person or body, other than the Industrial Relations Commission of New South Wales, a power to arbitrate.”[34]

The Applicant also submitted that:

the Respondent’s argument that there was no subsequent agreement must also fail;

there was no need for a subsequent agreement;
the agreement that is relied upon is the transfer agreement, similarly to the Respondent in One Tree Community Service Inc v United Workers Union[35] where the Full Court of the Federal Court said the Respondent voluntarily submitted to the binding force of the award, including the binding force of the requirement in clause 21(x) to be bound by any order or determination of the Commission in relation to the dispute.[36]

The Respondent submitted that the Applicant’s submission in this regard is factually and legally incorrect. In particular it submitted that:

the Respondent did not voluntarily submit to the binding force of the award prior to the end of the five-year Guarantee Period;[37]
on 11 April 2017, the State of New South Wales and the Respondent entered into the Transfer Agreement required by s.14 of the Enabling Act with completion taking effect on and from 3 September 2017;
the Guarantee Period under the Transfer Agreement commenced on and from 3 September 2017 and concluded on 3 September 2022;[38]
clause 13.4 of the Transfer Agreement provided that:
“The Purchaser acknowledges and agrees that as a result of the above, each Transferring employee still employed by the Vendor immediately prior to Completion will commence employment with the Company on Completion on terms and conditions consistent with Schedule 9,”[39]
Schedule 9 of the Transfer Agreement was headed “Purchaser and the Company obligations regarding Employees (Employee Commitments)” with the relevant part of Schedule 9 providing that:

“From Completion, the Purchaser acknowledges and agrees, and undertakes to
procure that:
…
(c)(Bound by Relevant Industrial Instruments) the Company is covered by the Relevant Industrial Instruments which applied to the employment of Transferring Employees immediately before Completion and will remain covered by the Relevant Industrial Instruments in respect of the Transferring Employees at all times during the Guarantee Period, and thereafter subject to the provisions of the Fair Work Act 2009 (Cth) and the remainder of Schedule 9 …” (Respondent’s emphasis); [40]

the Respondent has not voluntarily submitted to the binding force of the Copied State Award, in so far as the Copied State Award is modified in its operation by the Act;[41]
the Applicant’s submission that “Item 13(1) of Schedule 3A of the Transitional Act is to be read with s 768BY of the FW Act and operated such that the FWC was the arbitrator for the purposes of the Award when the Respondent agreed to afford the terms of the Award to Ms Drinkwater”, is “factually incorrect” and Schedule 9 of the Transfer Agreement together with Schedule 10 which sets out the agreed draft letter to be sent to potential Transferring Employees, makes clear that the provisions of the Act are only agreed to with effect from after the expiration of the Guarantee Period;[42]
it is not constitutionally permissible for the Commonwealth Parliament to enact legislation that compels a private arbitration between two parties where one or more of the parties has not agreed to the person or body undertaking the arbitration. The parties must not only agree that their dispute will be arbitrated, they must also agree as to who will arbitrate that dispute;[43]
Item 13(1) of Schedule 3A of the Transitional Act must be construed in conformity with the Constitution, and, absent an agreement between the parties, the provision
cannot operate to substitute a State industrial body with the Commission, for the purposes of an arbitration, if no consent has been given for that person or body to arbitrate;[44]

Item 13(1) of Schedule 3A of the Transitional Act does operate to substitute the FWC
for a State industrial body for all powers or functions that were conferred upon a State
industrial body (such as conciliation, and mediation), except, properly construed, absent the consent of the parties, the item does not operate to substitute a State industrial body with the Commission if the power or function to be invoked is that of arbitration. Consent is not required for the Commission to conciliate, or mediate; consent is required for the purposes of arbitration;[45]
the Respondent agreed to afford the terms of the Copied State Award to the Applicant (and the other transferring employees) until the expiration of the Guarantee Period. The Respondent did not agree to afford the terms of the Copied State Award, as modified by the operation of the Transitional Act, to the Applicant.
While the Transitional Act picked up and applied the terms of the pre-existing state award in a statutorily created instrument called a “copied State Award” (and in
doing so, modified the operation of the pre-existing state award without the agreement
of the Respondent), the Transitional Act cannot constitutionally operate to modify the person or body that is to arbitrate a dispute in circumstances where the parties have identified another person or body as arbitrator. Therefore, whilst the Transitional Act created the Copied State Award and modified the operation of several clauses in that industrial instrument, it did not modify the identification of the Industrial Relations Commission of New South Wales as the body to undertake any arbitration because consent was not given.[46]

The Respondent agreed to the Industrial Relations Commission of New South Wales
being permitted to arbitrate a dispute – as a consequence of the wording of Schedule 9
of the Agreement. The Respondent did not agree to the Commission being the arbitrator. Properly construed, item 13(1) of Schedule 3A of the Transitional Act does not operate to compel a modification in the identity of the arbitrator in circumstances where the parties have not consented to the change in arbitrator and if it did, the provision would be beyond power.[47]

One Tree Community Service Inc v United Workers Union[48] dealt with an enterprise agreement made under the Act containing a dispute resolution clause which provided that the Commission could arbitrate a dispute and make a determination that was binding on the parties to the dispute. The facts in this matter are distinguishable from those in One Tree Community Service Inc v United Workers Union[49] in that this matter is concerned with a copied State award, rather than an enterprise agreement made under the Act, and a provision within a copied State award that does not expressly identify the Commission as the body empowered to arbitrate the dispute.

However in One Tree Community Service Inc v United Workers Union[50], One Tree argued that while it became covered by the enterprise agreement by operation of law, specifically the transfer of business provisions in Part 2-8 of the Act, it was not bound by the arbitration power in the dispute settlement clause of the enterprise agreement because it was not a party to the agreement and did not agree to the Commission arbitrating disputes in accordance with s.739(4) of the Act.

The majority of the Full Court of the Federal Court found that the primary question to determine was “whether the facts demonstrate a consensual foundation sufficient to support a conclusion that the FWC has been authorised by the disputants to hear and determine by way of private arbitration the cl 77 dispute raised by the UWU.”[51]

Before turning to the relevant facts, the Court rejected “One Tree’s contention that a sufficient consensual foundation cannot be demonstrated in the absence of a contract made between the parties to a dispute which obliges those parties to be bound by the arbitral determination.”[52] The Court observed that while a contractual provision of that kind is the common means of creating the necessary consensual foundation for private arbitration, the decision of the High Court in Breckler[53] demonstrates that the requisite consensual foundation is not dependent upon the existence of an inter partes agreement between the disputants.[54] The Court went on to say:

“There is no inconsistency between the approach taken in Breckler and the later authorities. Whilst several observations made in the Private Arbitration Case and in TCL refer to an “agreement” for private arbitration as providing the authority for arbitration of that kind, those observations do not confine the source of the requisite authority to an inter partes agreement. Nor is there any principled basis for rejecting the common voluntary submission of the disputants to a private arbitration, as providing the necessary authority to bind those persons to the outcome of an arbitration which each has separately bound itself to observe. As long as the arbitrator’s authority is sourced in the consent of the parties, for the purpose of establishing that the arbitrator’s authority is not sourced in the coercive sovereign power of the Commonwealth, it does not matter whether the arbitrator derives authority from a single multi-party agreement or the unilateral consent of each party.”[55]

The Court found that the facts of the case in One Tree Community Service Inc v United Workers Union provided a basis for the conclusion that One Tree voluntarily submitted to the binding force of the enterprise agreement, including the requirement in clause 77.7 of the dispute settlement procedure that it “agreed to be bound by a decision made by the [FWC].”[56]

In One Tree Community Service Inc v United Workers Union it was not in contest that despite One Tree having had no involvement in the making of the enterprise agreement, the enterprise agreement applied to it as a result of a “transfer of business” pursuant to Part 2-8 of the Act. The Court turned to the following factual findings of the primary judge.

“At [95] the primary judge held that One Tree’s consent to being bound by the EA ‘was manifested through its actions’ which the primary judge described at [96] as follows:
(1)it was entirely optional as to whether or not One Tree acquired the
business. It did not have to take any steps that would trigger the transfer of business provisions of the FW Act. However it did so knowing of the existence of the EA; and

(2)no application has ever been made by One Tree (as might be expected shortly following the acquisition) to the Commission for an order that the EA not apply to it under s 318 or for an order to vary cl 77 of the EA pursuant to s 320 of the FW Act. No comment is made about the likely prospects of either such applications, but given that the statutory regime contemplates such applications in appropriate circumstances, the absence of making such an application might suggest acquiescence on One Tree’s part to the terms of the EA.

At [92] the primary judge observed that ‘[a] new employer does not need to structure itself in a manner that gives rise to a “transfer of business” under s 311(1) of the FW Act.’ His Honour went on to find that One Tree could have recruited its own workforce and that it had contingency plans to recruit its own workforce if it could not reach agreement in relation to the transferring employees.”[57]

The above factual findings led the Court to the conclusion that One Tree elected to be subject to the binding force of the enterprise agreement, with the Court finding:

“Those factual findings sustain the objectively ascertainable conclusion that One Tree made a voluntary election to have the binding force of the EA (including that of cl 77) applied to it. In other words, in circumstances where One Tree could have conducted its business without being legally bound by the obligations imposed upon an employer by the EA, One Tree knowingly chose to structure its business in a manner which would subject it to those obligations. One of those obligations was that it agreed to be bound by the determination of the FWC of a cl 77 dispute.

Contrary to One Tree’s submissions, the consensual foundation evident from those facts is not relevantly different from that in Breckler. One Tree contended that the election made by the trustees in Breckler was an act directly expressing the trustees’ wishes to subject themselves to the very statutory provisions which empower the SCT to resolve disputes between the trustees and its members. That was said to be very different to One Tree’s entry into a commercial transaction which triggered a mandatory statutory consequence.

There is no finding in Breckler as to the subjective intent of the trustees, although it is unlikely that the trustees wished to have their decisions reviewed and substituted by decisions of the SCT. If the subjective intent of the trustees was relevant (which we doubt) it is more likely they were driven by an intent to provide to the trust the tax benefits which their election provided. Equally, it may be said here that One Tree was driven by the commercial benefits available to the conduct of its business by its employment of the transferring employees and its acquisition of some of the assets of Mission. However, in each case, the incentives that may have subjectively motivated the choice or election made do not deny the voluntary acceptance of and voluntary submission to the legal consequences of the making of the election.”[58]

The Court also found that offers of employment made to the transferring employees confirmed that One Tree had elected to be subject to the binding force of the enterprise agreement with the Court stating:
“It may be accepted, as One Tree contended, that the contracts of employment made by One Tree with the transferring employees do not embody One Tree’s agreement to be bound by private arbitrations conducted by the FWC under cl 77. But no reliance on that source of authority was made by either the primary judge or the UWU. Nor do the terms of the employment agreements made with the transferring employees serve to deny the fact that One Tree voluntarily elected to submit to the binding force of the EA. To the contrary, the offers made by One Tree to the transferring employees confirmed that One Tree had elected to submit to the binding force of the EA. Although those offers stated that the EA would not be incorporated into the employment agreements as a contractual term, they nevertheless acknowledged that the binding force of the EA would govern their relationship. The ‘relevant commencing classification’ One Tree offered to each transferring employee was referrable to it. An employee who accepted One Tree’s offer was entitled, having regard to the terms in which it was expressed, to have accepted that offer on the basis that the offer had acknowledged that the EA would remain binding in all regards on both them and their prospective employer without exception. Clauses 51 and 52 of the individual offers simply reflected that position.”

The Court did accept One Tree’s submission that consent needed to be actual rather than deemed by statute however noted that the primary judge’s findings regarding One Tree’s conduct which were regarded as providing the basis for consent were not challenged.[59] The Court also found One Tree’s submission that evidence would need to be considered about how commercially practicable it would have been for One Tree to do otherwise than to trigger the transfer of business provisions in Part 2-8 of the Act to be “unpersuasive” and said:

“If One Tree wanted to establish that the commercial circumstances in question mandated its conduct to the extent that that conduct should be regarded as involuntary, it was for One Tree to establish that before the primary judge. In doing so One Tree would have had to confront observations made in Breckler, particularly those at [44].”

I have considered the facts of this matter together with the principles arising in One Tree Community Service Inc v United Workers Union. I find that the Respondent made a commercial decision to be a provider under the NDIS and, as a consequence of that decision, entered into the Transfer Agreement and voluntarily submitted to the relevant framework that regulates employment in relation to those employees it employed to deliver the relevant NDIS services. That framework is summarised earlier in this decision however it is worth noting that the Transfer Agreement expressly provided that the Respondent was to be “covered by the Relevant Industrial Instruments which applied to the employment of Transferring Employees immediately before Completion and will remain covered by the Relevant Industrial Instruments in respect of the Transferring Employees at all times during the Guarantee Period and thereafter subject to the provisions of the Fair Work Act 2009 (Cth) and the remainder of this Schedule 9…”[60].

The Respondent submitted that this makes clear that the provisions of the Act are only agreed to with effect from after the expiration of the Guarantee Period, which expired in September 2022. However, this submission does not acknowledge that there was a transfer of business under the Act impacted by Part 6-3A of the Act and that the NSW Community Living Award became a copied State Award for the purposes of Part 6-3A.

The Respondent submitted that it could not have recruited its own workforce or conducted its business without being legally bound by the obligations imposed upon it.[61] However, while the Respondent was required to take on the employees that had formerly been employed by the NSW Government before the Transfer Agreement was entered into, it made the commercial decision to take on the services and enter into the Transfer Agreement despite this requirement. As a result of its commercial decision to be a NDIS provider and enter into the Transfer Agreement to support this, the Respondent voluntarily submitted to the binding force of the Copied State Award, by virtue of the operation of the Act, along with Item 13(1) of Schedule 3A of the Transitional Act which is to be read with s.768BY of the Act and operates such that the Commission was the arbitrator for the purposes of the Copied State Award when Respondent agreed to be bound by it. As such, I find that the Respondent agreed to the Commission taking on the role of arbitrator.

However, before I can be satisfied that the Commission has jurisdiction to arbitrate the dispute, the further question of whether the Applicant followed the requisite steps in clause 21 of the dispute resolution procedure requires consideration. I deal with this below.

The steps required by the dispute resolution procedure

The dispute resolution procedure relied on by the Applicant is at clause 21 of the Copied State Award and provides:

“21. Dispute Resolution Procedures

(i)All grievances and disputes relating to the provisions of the Award shall initially be dealt with as close to the source as possible, with graduated steps for further attempts at resolution at higher levels of authority within ADHC, if required.

(ii)A staff member is required to notify, in writing, their immediate manager as to the substance of the grievance, dispute or difficulty, request a meeting to discuss the matter and, if possible, state the remedy sought.

(iii)Where the grievance or dispute involves confidential or other sensitive material (including issues of harassment or discrimination under the Anti-Discrimination Act 1977) that makes it impractical for the staff member to advise their immediate manager the notification may occur to the next appropriate level of management, including where required, to the Department Head or delegate.

(iv)The immediate manager shall convene a meeting in order to resolve the grievance, dispute or difficulty within two working days, or as soon as practicable, of the matter being brought to attention.

(v)If the matter remains unresolved with the immediate manager, the staff member may request to meet the appropriate person at the next level of management in order to resolve the matter. This manager shall respond within two working days, or as soon as practicable. The staff member may pursue this sequence of reference to successive levels of management until the matter is referred to the Regional Manager or Branch Head.

(vi)The Regional Manager or Branch Head may refer the matter to ADHC’s Human Resources or Employment Relations Branch for consideration.

(vii)If the matter remains unresolved, ADHC shall provide a written response to the staff member and any other party involved in the grievance, dispute or difficulty, concerning action to be taken, or the reason for not taking action, in relation to the matter.

(viii)A staff member, at any stage, may request to be represented by their union.

(ix)The staff member or the union on their behalf, or the Department Head, may refer the matter to the Industrial Relations Commission of New South Wales if the matter is unresolved following the use of these procedures.

(x)The staff member, union and ADHC shall agree to be bound by any order or determination by the Industrial Relations Commission in relation to the dispute.

(xi)Whilst the procedures outlined in subclauses (i) to (x) above are being followed, normal work undertaken prior to notification of the dispute or difficulty shall continue unless otherwise agreed between the parties, or, in a case involving occupational health and safety, if practicable, normal work shall proceed in a manner which avoids any risk to the health and safety of any staff member or member of the public.”

The Applicant has filed correspondence with its ‘Form F10 – Application for the Commission to deal with a dispute in accordance with a dispute settlement procedure’, which establishes that:

On 19 March 2019, the CPSU wrote to the Chief Executive Officer of the Respondent indicating that it was aware that other service providers had placed transferred employees on conditions other than copied State awards, suggesting this was in breach of the Act and the transfer agreement with the Department of Family and Community Services. The correspondence indicates that its purpose is to inform the Respondent of the CPSU’s position to ensure it was not undertaking the same practices. By way of summary, that position was that:

othe Act affords the protection of employment conditions for all transferred employees for up to five years, including both casual and temporary contract employees, and this protection extends to subsequent contracts; and

othe CPSU requested that employees who may have had their employment transferred to the Respondent or a subsidiary, who were undertaking the same or similar work to which they were undertaking upon transfer and who have had their conditions changed from the copied State awards, be reverted to the applicable copied State awards and be back paid if they have suffered a reduction in pay.

On 11 November 2021, the CPSU wrote to the Respondent’s Head of Human Resources on behalf of the Applicant:

ostating that s.768BL(1) of the Act provides that a copied State award will apply to a transferring employee (including casual employees) from the time of transfer and for a period of five years or when an enterprise agreement is made;

ostating that the Applicant had her employment terminated and was offered employment under the terms and conditions of the SCHCDS Award;

ostating that the rates of pay and terms and conditions under the SCHCDS Award are inferior to those under the Copied State Award;

ostating that the Applicant continues to undertake the same work that she undertook at the time of transfer and so the Copied State Award would continue to apply; and

oseeking that the Copied State Award be applied to the Applicant and that she be back paid any money owed to her as a result of her being moved onto the SCHCDS Award.

On 24 November 2021, the CPSU again wrote to the Respondent’s Head of Human Resources stating that it had not received a response, notifying of a dispute under the Copied State Award and stating that, if it did not receive a response by close of business on 7 December 2021, it may commence proceedings in the Commission.

On 7 December 2021, the Respondent’s Head of Human Resources replied to the CPSU’s letter dated 24 November 2021 via email stating that the Respondent did not agree with the CPSU’s view that the Applicant was covered by the Copied State Award and that her employment is properly covered by the SCHCDS Award.

On 20 December 2021, the CPSU replied stating it anticipates proceeding with a dispute application and would be seeking the assistance of the Commission to resolve the dispute.

The CPSU has represented the Applicant during the course of the dispute, and this is clearly contemplated by clause 21(viii) of the dispute settlement procedure in the Copied State Award. Under the procedure, clause 21(ix) states that the staff member, or the union on their behalf, may refer the matter to the NSW IRC if the matter is unresolved following the use of these procedures. The Applicant submits that the NSW IRC is to be read as the Commission due to the operation of the Act. However, clause 21(ix) makes it clear that the escalation of the dispute to the relevant tribunal can only occur if the matter is unresolved following the use of the procedures in the clause. This includes:

a requirement in clause 21(i) that all grievances and disputes relating to the provisions of the Copied State Award be dealt with initially as close to the source as possible, with graduated steps for further attempts at resolution at higher levels of authority, if required;

a requirement in clause 21(ii) that the staff member notify, in writing, their immediate manager as to the substance of the grievance, dispute or difficulty, request a meeting to discuss the matter and, if possible, state the remedy sought; or

as stated in clause 21(iii), where the grievance or dispute involves confidential or other sensitive material (including issues of harassment or discrimination under the Anti-Discrimination Act 1977) that makes it impractical for the staff member to advise their immediate manager the notification may occur to the next appropriate level of management, including where required, to the Department Head or delegate;

a requirement as set out in clause 21(iv) for the immediate manager to convene a meeting in order to resolve the grievance, dispute or difficulty within two working days, or as soon as practicable, of the matter being brought to attention;

as stated in clause 21(v), an ability to request to meet the appropriate person at the next level of management in order to resolve the matter if the matter remains unresolved with the immediate manager. This manager is required to respond within two working days, or as soon as practicable and the staff member may pursue this sequence of reference to successive levels of management until the matter is referred to the Regional Manager or Branch Head.

The Applicant submitted that:[62]

the requirements of clause 21(i) have been met by the CPSU in raising the issue in relation to the Applicant with the Respondent’s Head of Human Resources, Ms Tegan Baker, on 11 November 2021 and this “was close to the source of the dispute which was one over a significant HR issue”;

the requirements of clause 21(ii) have been met as the correspondence of 11 and 24 November 2021 notified the substance of the dispute in writing to the immediate manager, requested a meeting to discuss the matter and stated the remedy sought;

clause 21(iv) required the manager to convene a meeting and the Head of Human Resources, Ms Baker, did not do so;

the dispute remained unresolved and, while clause 21(v) gave the Applicant an option to refer the matter to the next level of management, and then successive levels of management, she did not take this option;

clause 21(vii) required the employer to provide a written response to the staff member and any other party involved in the dispute which the Respondent did in an email on 7 December 2021; and

clause 21(ix) permitted the Applicant to refer the matter to the Commission as the matter was unresolved and she had, through her union, used the procedures in the clause.

Ms Marat, Executive General Manager People and Culture of the Respondent gave evidence for the Respondent. Ms Marat’s evidence was that she understood that:[63]

the Applicant’s immediate manager in November 2021 was Mr Francis Phiri (Coordinator, Disability Services);

Mr Phiri’s immediate manager was Ms Leah Muhlhan (Area Manager Supported Independent Living); and

Ms Muhlhan’s immediate manager was Mr Nigel Greer (Head of Supported Independent Living).

As noted above, the Respondent submits that there is no evidence before the Commission that the Applicant took the steps outlined in clause 21 of the Copied State Award.[64]

On the evidence before me, it is apparent that the CPSU, acting on behalf of the Applicant, has bypassed the step set out in clause 21(ii) of the dispute settling procedure and moved straight to escalating the matter to the Head of Human Resources, Ms Baker, who is not the Applicant’s immediate manager.

The Applicant directed me[65] to the following observations of Flick J in Qantas Airways Ltd v Australian Licensed Aircraft Engineers Association (No 2) (2020) 298 IR 447:

each of the requirements in a dispute procedure must be construed with a degree of flexibility consistent with the industrial context in which the clauses were drafted;[66]

central to the procedures is the necessity for there to be a dispute. The essence of the meaning of dispute is that there is an occasion during which there is an exchange of “opposing views” or positions;[67]

the term “dispute” is to be given a flexible meaning such that it can apply to a single or small group of employees or a larger number of employees and simply involving those employees putting forward their commonly held “opposing” view as to the position of an employer;[68]

the terms “meeting” and “discussion” should be construed with a degree of informality and flexibility. The requirement that there be a “meeting”, or a “discussion” obviously does not involve the necessity for a formally convened meeting or a formal discussion;[69]

there needs to be some minimum content to dispute resolution steps provisions. There needs to be an occasion when those participating in the meetings know that there are opposing views being expressed and that those opposing views need to be resolved;[70] and

it is not necessary for those participating in the meeting or discussion to know that they are participating in a meeting which formed part of a dispute resolution procedure.[71]

The Respondent submits that the Applicant has misinterpreted what was decided in Qantas Airways Ltd v Australian Licensed Aircraft Engineers Association (No 2) and has expressed the guiding principles too expansively.[72] In this regard, the Respondent noted that, in the Full Court appeal, referring to Flick J’s reasoning, Besanko J observed that:

“[109] The cross-respondent referred on a number of occasions in its written and oral submissions to the fact that his Honour had held that substantial compliance with, inter alia, cl 6.1 of the Qantas Agreement and cl 20.1 of the Jetstar Agreement was sufficient having regard to the terms of those clauses and that strict compliance was not required. His Honour made observations to that effect in the course of considering whether those clauses, among others, “imposed mandatory pre-requisites or pre-conditions which needed to be satisfied prior to the exercise of any power to refer a ‘matter’ as a ‘dispute’ to the Commission” (Qantas (No 2) at [50]). As I have said, his Honour concluded that the clauses imposed pre-conditions which must be satisfied before a “dispute” or “matter” can be referred to the FWC (see the discussion in Qantas (No 2) at [50]–[60]).

[110] Having made these observations, his Honour turned to consider the meaning and application of the clauses to the facts. Having determined the meaning of the clauses, I do not understand his Honour to analyse the application of the clauses to the facts by reference to notions of substantial compliance. As I read his Honour’s reasons, he determined that there had been compliance with the clauses as he construed them…”[73]

The Respondent submitted that the Applicant has misinterpreted what Flick J said in Qantas Airways Ltd v Australian Licensed Aircraft Engineers Association (No 2),[74] noting that Flick J actually said:

“[61] In very summary form, it is concluded that each of these requirements must be construed with a degree of flexibility consistent with the industrial context in which the two clauses were drafted: cf. Kucks (1996) 66 IR at 184 per Madgwick J; Wanneroo [2006] FCA 813 at [57], (2006) 153 IR at 440 per French J.”

The Respondent submitted that:[75]

the reference to “each of these requirements” in the statement above was a reference to the requirement that there be a “meeting” and that there be a “dispute” in respect of the dispute resolution procedure under consideration; and

His Honour was merely construing what amounted to a “meeting” or “dispute” and was not expressing any assertion that there is a degree or flexibility in satisfying the jurisdictional steps, clearly set out in the industrial instrument, as to whether those steps occur at all.

The principles arising from Qantas Airways Ltd v Australian Licensed Aircraft Engineers Association (No 2) do not establish that a party that wishes to bring a dispute is able to bypass steps in the dispute resolution process, which the Applicant has done in escalating the matter to human resources without first going through her immediate manager.

The Applicant also took me[76] to the decision of the Full Bench of the Commission in DP World (Fremantle) Ltd v Construction, Forestry, Maritime, Mining and Energy Union[2019] FWCFB 3965 and the Full Bench’s observations that:

the dispute settling provision “did not intend that the operation of the dispute procedure might be frustrated by one party’s non-cooperation preventing all or any stages of the procedure being followed to completion” [77];

a “condition for access to arbitration, namely that the dispute has not been resolved ‘despite the foregoing procedures being followed’, should be construed as meaning that the procedures have been followed to the extent reasonably possible by the party seeking arbitration”;[78]

“’discussion’ is a word which has different meanings depending on the context, and may in different contexts mean a face-to-face discussion, a telephone discussion or a written discussion”;[79] and

it considered the only indispensable element for one party to comply with the procedure was for it to attempt to engage in mutual communication with the other party in a genuine attempt to resolve the dispute.[80]

In the matter before me, there is no evidence that the dispute procedure has been frustrated by the Respondent. Further, as there is no evidence that the Applicant has undertaken the step in clause 21(ii), being the requirement to notify her immediate manager in writing as to the substance of the grievance, dispute or difficulty, and request a meeting to discuss the matter, I am not satisfied that the Applicant has followed the dispute procedure in the Copied State Award to the extent reasonably possible.

Further, while the Full Bench said:

“The only indispensable element, we consider, for one party to comply with clause 29.2.4 is for it to attempt to engage in mutual communication with the other party in a genuine attempt to resolve the dispute,”[81]

this statement was made in the context of the Full Bench’s consideration of the meaning of the term “discussion” in the dispute settlement procedure under consideration in that matter. The Full Bench’s statement does not stand for the principle that all that is required to comply with a dispute settlement procedure as a precondition for the bringing of a dispute is that a party engage in mutual communication with the other party in a genuine attempt to resolve the dispute, disregarding other steps that may be prescribed by the relevant clause.

On the evidence before me, I am not satisfied that the Applicant has undertaken the step in clause 21(ii) as prescribed by the Copied State Award. This is not an optional step in the dispute resolution procedure except where the grievance or dispute involves confidential or other sensitive material (including issues of harassment or discrimination under the Anti-Discrimination Act 1977) that makes it impractical for the staff member to advise their immediate manager. The Applicant did not produce any evidence establishing that the grievance or dispute involves confidential or other sensitive material that made it impractical for the Applicant to advise her immediate manager. I am therefore not satisfied that the Applicant has undertaken the necessary jurisdictional steps as a precondition for referring the dispute to the Commission.

Conclusion

On the basis that the procedure in clause 21 of the Copied State Award has not been followed, the application is dismissed and I decline to make further orders.

However, in considering whether the steps in the appropriate dispute resolution provision have been followed it is necessary to identify the instrument containing the dispute resolution provision and I note that in addressing its jurisdictional objections the Respondent has acknowledged that the Copied State Award is the relevant award.[82] The Respondent’s arguments turning to the question of whether the parties have agreed for the Commission to arbitrate engage with substantive dispute in so far as they turn to the application of the Copied State Award and as such this decision regarding jurisdiction may actually resolve the substantive dispute between the parties.

COMMISSIONER

Appearances:

Mr T Slevin of Counsel, instructed by Ms L O’Halloran and Ms S Chalmers of the Community and Public Sector Union, for the Applicant.

Mr R Haddrick of Counsel, instructed by Ms N Town and Ms J McLaughlin of Ovartis Lawyers, for the Respondent.

Hearing details:

2022.
Sydney (by Video using Microsoft Teams).
June 15.

[1] Statement of Nerissa Marat, [5].

[2] Ibid, [5].

[3] Ibid, [6].

[4] Ibid, [9].

[5] Ibid, [10].

[6] Ibid, [7].

[7] Ibid, [11].

[8] Respondent, ‘Outline of Argument’, filed 13 May 2022, [3].

[9] Respondent, ‘Outline of Argument’, filed 13 May 2022, [13]; Applicant, Outline of Argument re Jurisdictional Objection’, filed 1 June 2022, [3].

[10] Respondent, ‘Submissions in Reply’, filed 13 June 2022, [4]..

[11] Respondent, ‘Outline of Argument’, filed 13 May 2022, [14].

[12] Ibid, [19].

[13] Ibid, [20].

[14] Ibid, [25]-[26].

[15] Respondent, ‘Submissions in Reply’, filed 13 June 2022, [7]-[13].

[16] Ibid, [15].

[17] Respondent, ‘Outline of Argument’, filed 13 May 2022, [3(b)].

[18] (2001) 203 CLR 645.

[19] Respondent, ‘Outline of Argument’, filed 13 May 2022, [38].

[20] (2001) 203 CLR 645, [30]-[31].

[21] Respondent, ‘Outline of Argument’, filed 13 May 2022, [39].

[22] Ibid, [40].

[23] Ibid, [41].

[24] Ibid, [44].

[25] (2021) 284 FCR 489.

[26] Ibid, [84]-[85].

[27] Applicant, ‘Outline of Argument re Jurisdictional Objection’, filed 1 June 2022, [4]-[6].

[28] Ibid, [8].

[29] [2001] HCA 16.

[30] Re Crown Employees (New South Wales Department of Family and Community Services) Residential Centre Support Services Staff Award 2015; Re Crown Employees Ageing, Disability and Homecare - NSW Department of Family and Community Services ((Community Living Award) 2015 [2017] NSWIR Comm 1058; 270 IR 19 at [13] – [20]/

[31] Respondent, ‘Outline of Argument’, filed 13 May 2022, [3(b)].

[32] Applicant, ‘Outline of Argument re Jurisdictional Objection’, filed 1 June 2022, [31].

[33] Respondent’s Submissions in Reply filed 13 June 2022, at [33].

[34] Ibid, at [34].

[35] [2021] FCAFC 15 at [78].

[36] Applicant, ‘Outline of Argument re Jurisdictional Objection’, filed 1 June 2022, [32].

[37] Respondent’s Submissions in Reply filed 13 June 2022, at [38].

[38] Ibid, at [39].

[39] Ibid, at [40].

[40] Ibid, at [42].

[41] Ibid, at [45].

[42] Ibid, at [48].

[43] Ibid, at [51].

[44] Ibid, at [52].

[45] Ibid, at [53].

[46] Respondent’s Submissions in Reply filed 13 June 2022, at [54].

[47] Ibid, at [55].

[48] [2021] FCAFC 15.

[49] Ibid.

[50] Ibid.

[51] [2021] FCAFC 15 at [70].

[52] Ibid, at [71].

[53] Attorney-General (Cth) v Breckler (1999) 197 CLR 83.

[54] [2021] FCAFC 15 at [71].

[55] Ibid, at [77].

[56] Ibid, at [78].

[57] [2021] FCAFC 15 at [83] – [84].

[58] Ibid, at [85] – [87].

[59] Ibid, at [89].

[60] Statement of Nerissa Marat, [11].

[61] (2021) 284 FCR 489, [84]-[85].

[62] Applicant, ‘Outline of Argument re Jurisdictional Objection’, filed 1 June 2022, [15]-[20].

[63] Respondent, ‘Statement of Nerissa Marat’, dated 13 June 2022, [4].

[64] Respondent, ‘Submissions in Reply’, filed 13 June 2022, [15].

[65] Applicant, ‘Outline of Argument re Jurisdictional Objection’, filed 1 June 2022, [13].

[66] (2020) 298 IR 447, [61].

[67] Ibid, [62].

[68] Ibid, [65].

[69] Ibid, [65].

[70] Ibid, [70].

[71] Ibid, [70].

[72] Respondent, ‘Submissions in Reply’, filed 13 June 2022, [19].

[73] Australian Licensed Aircraft Engineers Association v Qantas Airways Ltd (2022) 314 IR 231, [109]-[110].

[74] Respondent, ‘Submissions in Reply’, filed 13 June 2022, [22]-[23].

[75] Ibid, [24], [26].

[76] Applicant, ‘Outline of Argument re Jurisdictional Objection’, filed 1 June 2022, [14].

[77] [2019] FWCFB 3965 at [26].

[78] Ibid, at [26].

[79] Ibid, at [29].

[80] Ibid, at [29].

[81] Ibid, at [29].

[82] Respondent, ‘Submissions in Reply’, filed 13 June 2022, [4] – [5].

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