Sarah Noisette v Brotherhood of St Laurence

[2017] FWC 3075

[2017] FWC 3075

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739—Dispute resolution

Sarah Noisette
v
Brotherhood of St Laurence
(C2016/7402)

DEPUTY PRESIDENT CLANCY MELBOURNE, 6 JUNE 2017

Application to deal with a dispute - jurisdiction.

Background and Directions

[1] On 14 December 2016, Ms Sarah Noisette filed an application against Brotherhood of St Laurence (BSL) under s.739 of the Fair Work Act 2009 (the Act) for the Fair Work Commission to deal with a dispute.

[2] Ms Noisette purports to bring the application under clause A.19 – Dispute Settling Procedure of the Brotherhood of St Laurence, NUW and SDA Enterprise Agreement 2013 (the Agreement). The Agreement was approved by the Commission on 28 April 2014 and commenced operation on 5 May 2014.

[3] The dispute concerns an alleged entitlement to Accrued Days Off (ADO). The Agreement provides for ADOs in clause A.10.16 as follows:

“A.10.16.1
(a) The ADO system is not available to part-time, casual employees or generally to shift workers or those employees whose pattern of work does not allow time to accrue.
(b) Positions that require paid replacement employees will generally be ineligible for the ADO system.

A.10.16.2
Subject to A.10.16.1(a) and (b) a full time employee may accrue one day off per 19 days worked by increasing their ordinary hours of work from 7.6 hours per day to 8 hours per day (152 hours worked over 19 days, following by 1 ADO).

By mutual agreement other arrangements may be made to accrue days off.

ADOs should be taken at mutually agreed time that minimises disruption to work requirements and imposition on colleagues. It is the intention of this clause that ADOs are taken as soon as practicable after they accrue. Provided appropriate notice is given ADOs will not be unreasonably refused.

The following principles will apply:

(a) No more than two ADOs should accrue at any one time without prior agreement from an employee’s immediate manager. If an employee’s ADO bank exceeds two days, the employee will be directed to take the extra time at times directed by their manager and will be advised that if this occurs again their participation in the system will be reviewed and may be ceased.

(b) ADOs cannot be converted to Personal Leave once they have been taken.”

[4] Additionally, Ms Noisette made reference in her Form F10 – Application for the Commission to deal with a dispute in accordance with a dispute settlement procedure (the Application) to her contract of employment with BSL dated 16 June 2014 (the Contract), which contains the following reference:

“A Full Time Staff member may accrue one rostered day per nineteen days work through increasing their usual working hours of 7.6 hours per day to eight hours per day.”

[5] In describing what the dispute is about in her Form F10, Ms Noisette stated:

“My employer is refusing to honour my contract of employment, specifically my entitlement to ADOs (accrued days off).

My contract of employment includes ADOs, the agreement I am covered by states that I shall not be unreasonably refused them.”

[6] The dispute was the subject of a conference convened by me on 25 January 2017 which did not resolve it. At the conference, BSL submitted Ms Noisette’s claim for the Commission to deal with the dispute pursuant to clause A.19 of the Agreement is a claim relating to a purported entitlement to ADOs pursuant to the Contract and therefore not within the scope of the Agreement’s Dispute Settling Procedure. Accordingly, on 25 January 2017, I caused Directions to be sent to the parties for the filing of material in relation to BSL’s jurisdictional objection to the Application.

[7] BSL filed written submissions and written submissions in reply were filed on behalf of Ms Noisette by the National Union of Workers (NUW). The parties consented to me determining BSL’s jurisdictional objection having regard to the written material filed, without a hearing.

Clause A.19 – the Agreement’s Dispute Settling Procedure

[8] Clause A.19 of the Agreement provides:

“The parties to this Agreement are committed to good industrial relations practices
and procedures based on consultation and goodwill. The employer shall ensure that they advise employees subject to this procedure that they may be represented by their union or nominated employee representative from the beginning of this procedure.

If a dispute arises about this Agreement, or the NES, the parties to this dispute will attempt to resolve the dispute at the workplace level. This includes a dispute or grievance about whether an employer had reasonable grounds to refuse a request for flexible working conditions or an application to extend unpaid parental leave.

A Union representative appointed by an employee, who is also an employee of the company, shall have reasonable access to resources (including photocopier, telephone, fax machine, email) to perform their role.

1. Any dispute shall, in the first instance, be discussed between the employee(s) concerned, their representative if requested, and the immediate line manager or supervisor. The line manager or supervisor must make a genuine attempt to resolve the matter speedily.

2. If the matter cannot be resolved, it will be referred to the appropriate line manager who will attempt to resolve the matter speedily. The line manager shall consult with the employee when endeavouring to resolve the matter.

3. If the matter is still not resolved, the matter shall be immediately referred for discussion to the Brotherhood Human Resources Consultant, the Senior/General Manager, the employee(s) and their representative if requested.

4. Should the matter still be unresolved either party shall be entitled to refer it to the Fair Work Commission (FWC) for conciliation, and if necessary, arbitration. The parties shall not raise any jurisdictional matters pertaining to the FWC powers to settle any dispute via arbitration. All parties will abide by any decision resulting from a matter being referred to FWC.

5. If arbitration is necessary, the parties agree that FWC shall exercise all powers as are necessary to make the arbitration effective.

6. The parties agree that all disputes between the parties are to be settled as quickly as possible and no unnecessary delays are to be sanctioned by either party.re to be sanctioned by either party.

7. While these procedures are being followed, both parties agree that on a ‘without prejudice’ basis there will be no change to existing work or management practices or procedures, so that the status quo is maintained.

8. During the entire period of the dispute, from the time when the matter first arises until the time of its resolution (at whatever stage the resolution occurs) normal work shall continue, unless the performance of normal work would place at risk the health and safety of the employee(s) concerned.”

[my emphasis]

Submissions on jurisdictional objection – BSL

[9] BSL summarised its position in its written submissions as follows:

• insofar as the claim is dependent on an entitlement to ADOs pursuant to the Contract, the Commission has no power to deal with the claim;

• the Commission’s power to deal with disputes is set out in Part 6-2 of the Act;

• subdivision B of Division 2 of Part 6-2 of the Act prescribes the powers given to the Commission;

• those powers are exercisable only if a term in an enterprise agreement gives the Commission the power to deal with a dispute;

• the Commission’s powers in relation to a dispute are confined by s.739(3) which states FWC must not exercise any powers limited by the term;

• the term in the Agreement is clause A.19;

• clause A.19 of the Agreement is limited to disputes about the Agreement or disputes about the National Employment Standards (NES);

• while some disputes clauses in other agreements refer to “any matters affecting the employment relationship”, the Agreement does not; and

• hence, disputes over a common law contract of employment, such the Contract, are not within the scope of clause A.19 and therefore not within the jurisdiction of the Commission.

[10] BSL addressed the Commission’s power to deal with a dispute by reference to s.595, s.738 and s.739 of the Act. It submitted s.739(3) of the Act makes it clear that the Commission cannot go beyond the limits of clause A.19, and its ability to deal with a dispute pursuant to step 5 of clause A.19 is tempered by the Agreement’s requirement that the dispute in question beabout the Agreement or the NES. BSL submitted the words “about this Agreement, or the NES” in clause A.19 should be accorded their ordinary or usual meaning and “not given some artificial broadening to include disputes about an employment contract”.

[11] BSL also submitted that the statement “[T]he parties shall not raise any jurisdictional matters pertaining to the FWC powers to settle any dispute via arbitration” in step 4 of clause A.19 must be read in the context of the clause itself and is limited to the raising of jurisdictional issues in relation to disputes about the Agreement or NES, such that a dispute must be one that comes within the scope of clause A.19 in the first place before step 4 “can have any work to do”.

[12] In concluding its written submissions, BSL made reference to the Contract not containing a separate dispute settlement clause.

Submissions in reply – Ms Noisette

[13] In reply submissions, the NUW asserted on behalf of Ms Noisette:

“It is irrelevant to the question of jurisdiction that Ms Noisette has included the right to access ADOs under the Contract in her answer at 2.1 of the Form F10 given she has ultimately sought to rely on the provisions of the Agreement. The Contract bolsters her right to access ADOs as it provides confirmation on the intention of the Brotherhood to provide ADOs to full time employees. The Contract however is not the critical instrument being relied upon, per the responses given at 1.2-1.4 of the Form F10, contrary to the Brotherhoods [sic] submissions at paragraph 3 that the claim of the Applicant is pursuant to the Contract…

…

Even if the FWC considers that the subject matter in the Form F10 should have been expressed more narrowly so it only referred to Ms Noisette’s rights under the Agreement, the NUW would seek that the FWC allows this amendment pursuant to s 586(a) of the Act. Pursuant to this sub-section, the FWC may allow amendments of any applications on any terms that it considers appropriate.”

[14] Ms Noisette took issue with what she described as BSL’s “implication” that the dispute does not relate to a dispute about the Agreement. She submitted the Contract “clearly stipulates on page 1 that [the] Agreement forms part of Ms Noisette’s employment” and that she “is therefore entitled to the provision under the Agreement, including both the ADO clause, and the clause which has allowed her to lodge this dispute”. Ms Noisette asserted that the provision in the Contract with respect to ADOs points to an intention on the part of BSL but it is not the basis of the Application.

[15] It was further submitted on behalf of Ms Noisette that the “Position Description” for her role as Area Manager “further confirms the intention of the Brotherhood to have the provisions of the Agreement cover Ms Noisette’s employment”. In support of this proposition, reference was made to the statement “Conditions as per the BSL and ASU, SDAEA, NUW Enterprise Agreement (2010)” in the “Conditions of Employment” section of the “Position Description” document Ms Noisette attached to her submissions. She stated that “the 2010 Agreement was the predecessor to the current Agreement”.

[16] Ultimately, Ms Noisette submitted the Application was made in reliance on a provision in the Agreement and is therefore a matter which can be heard by the Commission under clause A.19 of the Agreement.

[17] Both parties raised the issue of the relationship between the Contract and the Agreement. When first considering their submissions, I raised a threshold question of whether Ms Noisette is able to access the Dispute Settling Procedure of clause A.19 of the Agreement, at all.

[18] I raised this because it was not immediately obvious how Ms Noisette falls within the categories of employees bound by the Agreement. Clause A.2 of the Agreement stipulates it is binding upon “Employees of the Brotherhood working in the occupations and or locations described in Sections B, C, and D”. While Section B deals with retail classifications, these do not include retail Area Managers and Ms Noisette’s starting remuneration of $60,000 per annum bore no relationship to any of the applicable pay rates. Section C cannot apply and while Section D is said to apply to “employees engaged in or whose work supports the operation of Work & Learning and other employees not covered in Sections B or C”, the position of Area Manager for retail is not specifically described within a Section D classification and her starting remuneration bore no apparent relationship to any of the Section D pay rates as at 30 June 2014.

[19] I required the parties to further address me in relation to this threshold question and in particular how they say Ms Noisette falls within the categories of employees bound by the Agreement, such that she is able to access the Dispute Settling Procedure of clause A.19.

[20] In a response to this request dated 5 May 2017, the NUW submitted that Ms Noisette falls within the categories of employees bound by the Agreement and that she is appropriately classified as a Section D, Level 7 employee.

[21] In this regard, the NUW submitted the classification structure for Section B extends as far as Level 5 Store Manager, but for positions higher than a Store Manager (Levels 6-8) it refers to Section D Classification Levels. It noted the Section D - Classifications table described “Typical Positions” in Level 7 as “Program or Function Manager, Senior Advisor and Senior Manager” and referred to the following duties and conditions listed as descriptors for a Level 7 employee:

• responsible for a BSL service and/or the provision of expert advice, a service area or operational function under limited supervision;

• provides high-level program, policy and or technical advice;

• supervision of employees or a team may be required;

• influence internal/external stakeholders; and

• roles require the identification and development of ideas, decision making, devising of action plans and the capacity to implement.

[22] The NUW asserted an Area Manager is a type of Senior Manager and the fact that this term is used in both Level 7 and Level 8 indicates it can refer to more than one specific role and is consistent with Ms Noisette’s position being more senior than a Store Manager but in turn reporting to a more senior manager. In its response on 5 May 2017, the NUW further stated:

“…Ms Noisette is responsible for the management of 7 retail outlets. She oversees the work of the store managers of these outlets. Ms Noisette analyses sales data in order to design strategies to improve sales performance, and then works directly with store managers to implement these strategies. This responsibility clearly demands that she ‘provide high level program, policy and or technical advice’, as well as the ‘identification and development of ideas, decision making, devising of action plans and the capacity to implement’ as per the level 7 classification.

She is also responsible for performance management of staff (including preparing performance development plans and overseeing their implementation and assessment), recruitment, dispute resolution and disciplinary processes, as well as consultation and advice on occupational health and safety. All of these processes require ‘decision making, devising of action plans and the capacity to implement’ as per the level 7 classification. In the course of her ordinary duties, she deals with operations, sales, and customer service. She is responsible for liaising with suppliers, donors, government agencies and other external groups (see contract of employment, ‘Organisational Relationships’), as well as retail area managers, and staff internally.

Ms Noisette works almost entirely without supervision. She moves between the stores to oversee the work of the store managers during which time there is no supervision of her work. Roughly once a fortnight she meets with a senior manager to whom she reports to discuss the performance of the retail stores located in the geographic area for which she is responsible. This is consistent with the Agreement classification description for a level 7 senior manager which stipulates ‘responsible for a BSL service and/or the provision of expert advice, a service area or operational function under limited supervision’.”

[23] The NUW submitted Section D provides for employees in management positions and it would be inconsistent with the classification schedule to exclude an Area Manager who is responsible for managing a number of retail stores from coverage, when the Agreement explicitly covers Senior Managers directly above Store Managers.

[24] As to Ms Noisette’s starting rate of pay, the NUW acknowledged the rate in the Contract did not line up with that of a Level 7 employee under the Agreement. It suggested the rate of pay as laid out in the Contract is not determinative of an employee’s coverage under an enterprise agreement and it may be that Ms Noisette has not been correctly paid.

[25] Finally, the NUW advised that Ms Noisette was allowed to vote on the most recent enterprise agreement for BSL that, pending approval, will replace the (current) Agreement and suggested that because Ms Noisette’s coverage was undisputed for the purpose of voting on the new agreement, it follows that she is covered by the Agreement.

[26] In its response dated 5 May 2017, BSL did not contest the fact that Ms Noisette’s employment is covered by the Agreement.

[27] BSL asserted Ms Noisette’s position is a Level 6 employee with her salary at least the same as, if not more than, the minimum salary rate for a Level 6 employee as set out in the Agreement.

[28] However, BSL submitted the Agreement is not incorporated into the Contract. In this regard, it relies on Byrne v Australian Airlines Ltd 1(Byrne), submitting that terms of industrial awards are not automatically incorporated as terms of an employment contract without the express intention of the parties. It further relies on ACTEW Corporation Ltd v Pangallo2(ACTEW), in which it was held that the principle articulated in Byrne in respect of awards also applied in the case of certified enterprise agreements.

[29] BSL submitted there is no express intention to incorporate the terms of the Agreement into the Contract in this case. It submitted the Contract’s wording, “Enterprise Agreement Coverage - Brotherhood of St Laurence NUW & SDA, as varied from time to time”, was simply a statement of fact that the Agreement applies to the employment in addition to the Contract but neither that reference, nor any other term in the Contract, incorporates the Agreement into the Contract. I have noted Ms Noisette’s submission in this regard was that the Contract “clearly stipulates on page 1 that [the] Agreement forms part of Ms Noisette’s employment”.

Consideration

[30] There were two preliminary matters which the parties required me to decide.

[31] Firstly, I was asked to consider the phrase in sub-clause 4 of clause A.19 of the Agreement “[T]he parties shall not raise any jurisdictional matters pertaining to the FWC powers to settle any dispute via arbitration”. Having done so, I consider that its meaning must be derived from the wording of the sub-clause as a whole and its place within the escalating steps outlined in the Dispute Settling Procedure of clause A.19 of the Agreement:

“4 Should the matter still be unresolved either party shall be entitled to refer it to the Fair Work Commission (FWC) for conciliation, and if necessary, arbitration. The parties shall not raise any jurisdictional matters pertaining to the FWC powers to settle any dispute via arbitration. All parties will abide by any decision resulting from a matter being referred to FWC.”

[32] In my view, the bar on raising a jurisdictional matter outlined in sub-clause 4 is limited and operates only within the context of sub-clause 4 to prevent a party objecting to the Commission proceeding to settle a dispute by way of arbitration if conciliation has failed to resolve it. Sub-clause 4 of clause A.19 of the Agreement does not operate to prevent BSL raising its jurisdictional objection.

[33] Secondly, BSL’s jurisdictional objection was based on Ms Noisette’s claim for an entitlement pursuant to the Contract. It says this means the dispute it is not within the scope of the Agreement’s Dispute Settling Procedure. As to this, I note the Form F10 described the dispute as relating to both clause A.10.16 of the Agreement and the Contract 3 and have proceeded on this basis.

[34] I turn then to the broader question before me for determination. As indicated by BSL, the Full Court of the Federal Court in ACTEW held that the principle outlined in Byrne applies to enterprise agreements, i.e. the terms of an enterprise agreement are not automatically incorporated into a contract of employment but must be expressly incorporated. It was also held in ACTEW:

“The submission for the appellant that a certified agreement is solely the creature of statute having force by virtue of the statute remains correct. In a sense, the term ‘agreement’ is a misnomer because it will bind individuals whether or not they authorise it or are in favour of it. There is no scope for private law concepts of contract or equity in such circumstances.” 4

[35] The impact of ACTEW in the matter before me seems to be that if Ms Noisette is an employee who is covered by the Agreement, she is entitled to prosecute a dispute under the Dispute Settling Procedure of clause A.19 provided the dispute “arises about this Agreement, or the NES”. However, if Ms Noisette wants to rely on matters that are contained in the Contract, I would need to be convinced that the words used in the Contract are capable of supporting a finding that the Agreement terms were expressly incorporated into the Contract.

[36] I have considered the submissions of the parties in relation to the threshold question I posed whether Ms Noisette is able to access the Dispute Settling Procedure of clause A.19 at all. There was no common ground in relation to the Agreement classification applicable to Ms Noisette. This raises a doubt as to whether this matter was ever discussed, let alone agreed. Secondly, Ms Noisette’s remuneration of $60,000 per annum upon commencement, as outlined in the Contract, was less than the applicable weekly pay rates for any of the pay points in either of the classifications put forward by the parties as being applicable to her. This seems unusual.

[37] Notwithstanding these factors, the parties appear to agree Ms Noisette is covered by the Agreement.

[38] Turning to the Contract, in Soliman v University of Technology, Sydney 5, it was held that a reference in a contract of employment to an appointment being “subject to” and “governed by” certain industrial instruments did not have the effect of incorporating them. I adopt that reasoning in this case and also have regard to the observation made by Jagot J that because agreements “are legislative instruments capable of alteration from time to time without any involvement of the applicant”, reference to them in a contract is indicative of “relevant information capable of affecting the parties’ contractual relations rather than documents intended to be binding and enforceable as part of their contractual relations”.6

[39] In this case, the Contract did not contain any express wording to the effect that the Agreement “will be incorporated” or “forms part of [the] contract of employment”. The wording used was:

“ENTERPRISE AGREEMENT COVERAGE: Brotherhood of St Laurence NUW & SDA, as varied from time to time”.

[40] I also note the Contract stipulates:

“CHANGE TO REMUNERATION, POSITION, DUTIES OR LOCATION: Your employment by the BSL will continue to be subject to the terms of this Agreement, unless varies or replaced by an agreement in writing, despite any change to your remuneration, position, duties or location”; and

“ENTIRE AGREEMENT: This Agreement replaces any prior agreement between the parties as to the terms and conditions of the Employee’s employment, including any prior written or verbal undertakings or statements”.

[41] Having regard to this wording, I cannot conclude, as submitted on behalf of Ms Noisette, that the terms of the Agreement were intended to be incorporated in the Contract and to have contractual effect. I also do not consider the “Position Description” document Ms Noisette attached to her submissions assists her assertion that the Agreement forms part of the Contract. The “Position Description” document is not signed by the parties and nor was the enterprise agreement to which it refers operating when she entered into the Contract.

[42] It was not submitted and nor was there any evidence before me suggesting that the terms of the Agreement ought to be implied into the Contract. On the facts of this case, I do not consider there is a basis to contend that the Agreement would be incorporated, on the authority of BP Refinery (Westernport) Pty Ltd v Shire of Hastings 7, as an implied term into the Contract.

[43] Accordingly, I am not persuaded that the wording contained in the Contract between Ms Noisette and BSL or the circumstances in this case are such that the Contract incorporates the terms of the Agreement, either expressly or by implication.

[44] Finally, I note that the Contract does not contain a term providing for a procedure to deal with disputes capable of falling within s.738(c) of the Act.

Conclusion

[45] In response to my enquiry, the parties have essentially expressed a consent position that Ms Noisette is covered by the Agreement. Their basis for so agreeing is unusual but if this is and was their common intention, then it seems to me that Ms Noisette is able to access the Agreement’s Dispute Settling Procedure and prosecute her dispute relating to clause A.10.16 of the Agreement (Accrued Days Off).

[46] As far as the entitlement, if any, to Accrued Days Off under the Contract is concerned, my conclusion is that Ms Noisette is not able to access the Dispute Settling Procedure of clause A.19 of the Agreement to pursue a claim because I am not persuaded the Agreement forms part of the Contract.

[47] I will now proceed on the basis that I have jurisdiction to deal with Ms Noisette’s dispute only insofar as it relates to clause A.10.16 of the Agreement. Both parties will no doubt consider their position in light of my decision and I will allow them some time to do so before convening a teleconference to discuss the future conduct of Ms Noisette’s application.

DEPUTY PRESIDENT

 1 (1995) 185 CLR 410.

 2 (2002) 127 FCR 1.

 3   Applicant’s Form F10, question 1.4.

 4 (2002) 127 FCR 1 at [33].

 5 (2008) 176 IR 183.

 6   Ibid at 199.

 7 (1977) 180 CLR 266.

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