Southern Cross Care (SA & NT) Inc T/A Southern Cross Care v Carleine Taylor
[2020] FWC 736
•30 MARCH 2020
| [2020] FWC 736 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.739—Dispute resolution
Southern Cross Care (SA & NT) Inc T/A Southern Cross Care
v
Carleine Taylor; Heather Dutton
(C2019/4589)
SOUTHERN CROSS CARE (SA & NT) INC OPERATIONS SUPPORT SERVICES STAFF ENTERPRISE AGREEMENT 2012 [AE402240]
COMMISSIONER HAMPTON | ADELAIDE, 30 MARCH 2020 |
Application made to determine dispute under the terms of an enterprise agreement – prior proceedings before South Australian Employment Tribunal – whether application an abuse of process – whether matter should be adjourned or dismissed as a matter of discretion – nature of private arbitration considered – history and utility of both proceedings assessed – other proceedings on hold pending the outcome of this application – proceedings not vexations or an abuse of process – Commission proceedings readily able to be deal with the broader issues evident in the dispute – dispute application to be heard as a matter of discretion - directions to be issued.
1. The dispute and the immediate issue
[1] This decision concerns an application made by Southern Cross Care (SA & NT) Inc (SCC) on 25 July 2018 to deal with a dispute between it and United Workers Union (UWU) members, Ms Carliene Taylor and Ms Heather Dutton (the respondent employees). The dispute as notified to the Commission involves the proper application of the Southern Cross Care (SA & NT) Inc Operations Support Services Staff Enterprise Agreement 2012 (the 2012 EA). In particular, the application of the classification criteria to the respondent employees, and potentially other employees, performing or qualified to perform “buddy” work and/or mentoring and/or other supervisory and specialist aged care roles.
[2] In simple terms, the respondent employees are presently classified as a Level 4 employee under the 2012 EA and each seeks to be classified and paid at Level 5 in recognition of their duties including what they describe as supervisory duties conducted in relation to new staff and students engaged by SCC. SCC considers that the work and qualifications of the respondent employees does not fit within the classification criteria for a Level 5 employee and wishes to maintain the existing arrangements.
[3] The dispute has been lodged by SCC under s.739 of the Fair Work Act 2009 (the FW Act) by reference to clause 1.8 of the 2012 EA. Clause 1.8 of the 2012 EA provides as follows:
“1.8 RESOLVING WORKPLACE CONCERNS OR DISPUTES | ||
Where a dispute relates to: • a matter arising under the Agreement, or • the National Employment Standards, the following steps will be taken: | ||
1.8.1 | As soon as practicable after the issue or claim has arisen, it will be considered jointly by the appropriate supervisor, the Employee or Employees concerned. | |
1.8.2 | If the dispute is not resolved, the issue or claim will be considered jointly by the appropriate senior representative of the Employer in conjunction with the Employee in an attempt to settle the dispute. | |
1.8.3 | If the dispute is not resolved, the issue or claim will be considered jointly by the Employer and the Employee who will attempt to settle the dispute. | |
1.8.4 | If the dispute is not resolved, the dispute may then be notified to the FWA. The parties may request that the matter be dealt with by a member of the FWA who will attempt to resolve the dispute by conciliation or by arbitration. | |
1.8.5 | The parties to the dispute agree to be bound by a decision made by Fair work Australia in accordance with this term, subject to either party exercising a right of appeal against the decision to a Full Bench. | |
1.8.6 | Without prejudice to either party, work will continue as normal during the progress of the dispute, and the status quo will be maintained, subject to application occupational health and safety legislation. | |
1.8.7 | An employer or employee may appoint another person, organisation, or association to accompany and/or represent them for the purposes of this clause.” | |
[4] For reasons set out below, the Commission has the necessary jurisdiction to determine the dispute and SCC is seeking that this now take place. The immediate issue is whether it should, as a matter of discretion, refuse to deal with the dispute as now sought on behalf of the respondent employees. The respondent employees contend that the dispute application is an abuse of process, vexatious and contrary to the scheme of the FW Act, principally because it duplicates proceedings in the South Australian Employment Tribunal (SAET) between the same parties. I will for convenience describe this as the strike-out application. SCC strongly opposes the strike-out application and to understand the basis of the respective parties’ propositions it is necessary to consider the history of the matter and some related proceedings.
2. The developments leading to this matter and the strike-out application
The issue was raised in the workplace
[5] On 13 November 2017, Ms Taylor first wrote to her Supervisor at SCC requesting to be reclassified as a Level 5 employee. 1 The communication, which appears to be in the form of a template that was completed by Ms Taylor, set out the following:
“… …
I Carliene Taylor work at Southern Cross Care at Onkaparinga Lodge as a Personal Carer.
I attended and completed the SCC Mentor Workshop on the 17/3/2013
(copy of my Certificate attached)
Since finishing this course I have been responsible and rostered for ongoing supervision of new staff/students at Southern Cross care, these duties include;
• Acting as mentor
• Providing assistance and guidance
• Providing feedback written and oral to staff and students
• Assessment and evaluation
• Signing off on workplace competencies
Currently my classification level is Level AH 4.42and as per the Southern Cross Care Inc. Operations Support Services Staff Enterprise Agreement 2012 my experience and Level meet the requirements of Level AH 5.52.
Could you please rectify my classification to reflect the role I am performing and arrange for any monies owing including back payment to be paid within the next 14 days/
… …” 2
[6] This letter was passed from the Supervisor to Ms Joanne Renshaw, the Manager of Human Resources Advisory for SCC, who sought additional information from the management of the relevant SCC facility. There is no evidence that a response was provided to Ms Taylor at or around that time.
[7] On 27 April 2018, Ms Donna Duke of UWU (then known as United Voice) sent a letter of notice 3 to Ms Renshaw that the Union was now acting for both of the respondent employees. In this letter, the UWU set out a comprehensive basis for the claimed reclassification and requested that the two respondent employees be reclassified as Level 5 employees and receive backpay to the date that they commenced the mentor roles in 2013, within 14 days. The letter also advised that:
“… …
Should no correspondence be received, or this matter is not resolved we may litigate legal proceedings without further contact for an underpayment for our members claim…” 4
[8] On 8 June 2018 Ms Renshaw responded 5 to Ms Duke’s letter outlining that SCC considered that neither employee had the skills required or responsibilities to be classified as a Level 5 employee under the 2012 EA. Further, SCC advised that it considered that the Level 5 classification was a specialist role that was by specific appointment, which had not occurred. Ms Renshaw further advised that, as a consequence, neither employee would receive backpay or be reclassified.
Commencement of South Australian Employment Tribunal Proceedings
[9] On 16 October 2018, UWU took proceedings on behalf of Ms Taylor and Ms Dutton in the SAET, seeking orders pursuant to ss.545 and 546 of the FW Act. 6 This was, in effect, a claim that the two employees had been underpaid as a result of the classification being applied to them by SCC. In particular, that Ms Taylor and Ms Dutton are Level 5, rather than Level 4 employees, under the 2012 EA due to the performance of “mentoring work” and other responsibilities within their capacity.
[10] The particulars of the applications 7 initiating the SAET proceedings included the following:
• In June 2013 the respondent employees were appointed by SCC to undertake mentor duties;
• The two respondent employees were requested to take up the role of Mentor at one of SCC’s sites, undertook training with internal trainers, were issued with a certificate in respect of Mentor duties and subsequently assigned students who were studying for a certificate III;
• The respondent employees were notified during their training that they would classified as a Level 5; and
• The characteristics of the duties, functions and responsibilities met that defined for a Level 5 Classification in the 2012 EA.
[11] On 17 October 2018, the UWU notified SCC of the SAET applications.
[12] On 19 November 2018, conciliation of the SAET applications took place in that tribunal. The matters did not resolve at this conciliation conference.
[13] At some point shortly after the conciliation conference, the parties came to an in-principle resolution to settle the matters. However, ultimately, the parties had a different understanding of the practical import of that resolution and the SAET matters and the issues underlining them were not resolved. This became evident in March 2019.
SCC seek to utilise the dispute resolution procedure of the 2012 EA
[14] On 12 March 2019, EMA Consulting, representing SCC, wrote to the UWU in the following terms:
“… …
I have spoken further to the client this morning. They have affirmed that the subject shifts are buddy shifts. I have instructions to progress this as a dispute under the terms of the EA, the first step of which will be to arrange a meeting with your office and the manager(s) concerned. We will be in contact shortly to do so. We envisage that the first stage of this matter will entail a discussion about why the employer sees it as a buddy shift and why employee(s) are characterising it as mentoring.
Given the above I need to make it clear that the employer’s current proposal to settle the underpayment is withdrawn.
… …” 8
[15] On 20 March 2019, SCC sought to progress the dispute by arranging for the relevant parties to meet.
[16] On 14 June 2019, a meeting was held between representatives of SCC and the UWU. The discussions dealt with different views about the meaning of mentoring and buddying work but did not significantly advance the dispute due in part to the employees not being present to provide further information as to what duties they assert they performed which constitute mentoring and why their held that view. At the conclusion of the meeting, Ms McCarthy advised that the UWU intended to contact the SAET to have those matters called back on.
Fair Work Commission Proceedings Commence
[17] On 25 July 2019, the Form F10 application for the Commission to deal with a dispute was lodged by SCC with the Commission. This application was to settle a dispute between SCC and Ms Taylor and Ms Dutton, as the named parties and this is the matter presently before the Commission.
[18] The particulars of the dispute application were stated in the following terms:
“• The employees are classified at Level 4 under the enterprise agreement
• The employees are routinely required by the employer to perform buddy shifts with students and/or new employees
• The employees assert that the work performed constitutes ‘mentoring’ and on the basis they assert they are more appropriately classified at Level 5 for their substantive role, or as a minimum, for the time spent performing buddy shifts
• The employer disputes this interpretation
• The dispute is about whether the tasks that the employees are performing amount to buddying or mentoring
• The employer’s position is founded on the fact that mentor duties and buddy shifts have been given different meanings under the enterprise agreement.” 9
[19] SCC sought the following as a result of its dispute application:
“The employer seeks for the FWC to arbitrate the matter to issue a determination as to what duties constitute buddying for the purposes of the Agreement and what duties constitute mentoring for the purposes of qualifying for higher duties under Level 5 of the Agreement.” 10
The original Fair Work Commission jurisdictional decision
[20] The dispute application was subject to conciliation before Platt C; however, it was not resolved. In the context of consideration of the matter for potential determination of the dispute, the UWU, on behalf of the respondent employees, contended that the referral for arbitration under clause 1.8 required that both parties make or agree to that referral.
[21] On 12 September 2019, Commissioner Platt issued a Decision, 11 where he found that the Commission had no jurisdiction to arbitrate the dispute given the terms of clause 1.8.4. of the 2012 EA.
[22] Commissioner Platt found:
“[29] It is clear to me that the use of the term “parties” in clause 1.8.4 of the Agreement is a reference to parties plural and not a single party. Accordingly the exercise of the express arbitral powers under clause 1.8.4 cannot be enlivened by a single party to a dispute.”
Fair Work Commission Full Bench Appeal on jurisdiction
[23] On 3 October 2019, SCC lodged a notice of appeal under s.604 of the FW Act.
[24] On 18 December 2019, the Full Bench upheld the appeal and determined 12 that clause 1.8.4 of the 2012 EA permitted each party, or both parties collectively, to refer the dispute to arbitration.13
[25] Regarding further proceedings the Full Bench said:
“[41] In those circumstances and in light of our earlier conclusion that the term ‘parties’ in clause 1.8.4 of the Agreement refers to the parties individually, such that either party ‘may request that the matter be dealt with by a member of the FWA…’, we will remit the matter for determination of how to deal with the matter further. It will then be a matter for the Member to conduct a further conciliation or, if the dispute is intractable and incapable of resolution through conciliation, to proceed to arbitration if requested by one of the parties.
[42] The respondents also objected to hearings under the dispute settlement procedure on the basis that there are already court proceedings on foot, which consistent with s.577 of the FW Act should persuade the Commission not to proceed. That is a matter which is relevant to discretionary decisions as to procedure, and can be dealt with by the Commission during conciliation or arbitration. The issue discussed earlier of the subject matter of the dispute and any jurisdictional objections on that basis can also be dealt with then if necessary.”
[26] Following the appeal, this matter was remitted to the Commission as presently constituted in accordance with the Orders of the Full Bench.
The current proceedings
[27] A directions conference was conducted on 21 January 2020, where the parties agreed that further conciliation was not appropriate and would be unlikely to advance the matter. Further, SCC sought that the Commission arbitrate the dispute and the UWU, on behalf of the respondent employees, confirmed its objection to the Commission conducting the arbitration on the basis of the existing SAET proceedings.
The status of the SAET proceedings
[28] Given the absence of a resolution, the SAET proceedings have been referred to Deputy President Magistrate Cole who has conducted two (procedural) conferences, in late 2019 and early 2020 respectively. No decisions have been issued by the SAET about the matters; however, it is apparent that the SAET is aware of the FWC dispute application and has not yet programmed the hearing of the SAET matters. The evidence before the Commission is that the Deputy President in dealing with the matter has:
“On both occasions the SAET declined to further advance the claims to trial on the basis that it wished to be appraised on where matters were with the FWC proceedings. His Honour agreed that the central question to be determined is pivotal to the question before the SAET, which is whether any underpayment occurred. He made it clear that the matters before the FWC were clearly relevant to the claims, and that the SAET would be reluctant to determine the clams until such time that the FWC determined the wider dispute. His Honour stated that this would also avoid there being two sets of proceedings running concurrently based on the same facts, and the undesirable situation of two different outcomes being reached.” 14
[29] There is also an indication that the SAET will call that matter back on in May 2020 pending a decision from this Commission about whether to exercise its arbitration powers. 15
3. The positions of the parties on the strike out application
3.1 The respondent employees
[30] The respondent employees accept that the Commission has the jurisdiction to arbitrate the matter under s.739(4) of the FW Act. That is, in accordance with the terms of the 2012 EA, the parties have agreed that the FWC may arbitrate (however described) the dispute, and as a result, the FWC may do so.
[31] However, the respondent employees submitted that as a consequence of the SAET proceedings already being on foot dealing with the same matter, the Commission should decline to arbitrate the matter on three related bases; namely that the FWC dispute is an abuse of process, was vexatious, and contrary to the scheme of the FW Act.
Abuse of Process
[32] The respondent employees contend that arbitrating the matter would be an abuse of process as the proceedings in the Commission were not commenced in good faith or to quell an industrial controversy. Rather, the dispute was raised for the purposes of stymying the SAET proceedings and denying them effective relief, including through the attainment of a civil judgement with civil penalties.
[33] It was further contended that the abuse of process was clear from the fact that the dispute involved the same parties and the same issues, and was raised by SCC well after the SAET proceedings had been launched. In that regard, the respondent employees denied the suggestion that in raising the issue with SCC before launching proceedings they were applying the dispute resolution procedure under clause 1.8 of the 2012 EA; rather, the correspondence and discussions were a prelude to the SAET litigation.
[34] In terms of the potential impact of the two proceedings, the respondent employees contended that whilst each may have some broader implications, both only involved the same direct parties, and there was no broader industrial dispute beyond the interpretation of the 2012 EA in the context of the present parties.
[35] The respondent employees also submitted that forum shopping, and having duplicative proceedings, was an abuse of process 16 and capable of brining the administration of justice into disrepute.17
Vexatious
[36] The respondent employees contended that the matter before the Commission was vexatious as this dispute was intended to frustrate the progress of the SAET matter and to provide the employer with an advantage. This was so as the dispute application was filed some 6 months after the SAET proceedings had been taken and SCC was attempting to avoid the Court proceedings.
[37] In that regard, the respondent employees relied upon the decision in Nilsen v Loyal Organ Trust 18:
“A proceeding will be instituted vexatiously where the predominant purpose in instituting the proceeding is to harass or embarrass the other party, or to gain a collateral advantage: see Attorney General v Wentworth (1988) 14 NSWLR 481 at 491.” 19
Scheme of the Act
[38] The respondent employees submitted that the Commission should exercise its powers in accordance with the scheme of the Act, namely that “the Commission is obliged to exercise its powers; and the rights vested in workers to pursue their relief through the courts”.
[39] The respondent employees relied upon the decision of Roberts C in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU) v Simplot Australia Pty Limited 20(Simplot) as follows:
“[31] Although the Act does not specifically preclude the Union from making a s.739 application in the circumstances, it is a general principle that more than one action over basically the same matter or matters is undesirable. In this case, I certainly consider it undesirable that I determine the s.739 application prior to the hearing of the s.394 applications, for the practical reason that any determination by me could impact one way or the other on the determination of the s.394 applications or be in conflict with the findings of the Member who deals with the s.394 applications. The possibility of two different outcomes, or part outcomes, for the same three persons would be perverse.”
[40] The respondent employees further submitted that allowing the Commission to arbitrate the matter would render the outcome of the SAET matter ineffective and would undermine the resolution of grievances through civil enforcement if parties are able to avoid the court system by commencing proceedings with the Commission. In this case, if a finding was made adverse to their interests, the Court would need to interpret the 2012 EA subject to the decision of the Commission. Alternatively, if the Commission found in favour of the respondent employees, they would need to take a further application to the Court to have the 2012 EA enforced with the potential for penalties and interest to be applied.
[41] Finally, the respondent employees contended that allowing the Commission to arbitrate the matter would not be in service of the object of the FW Act that includes:
“Providing accessible and effective procedures to resolve grievances and disputes and providing effective compliance mechanisms”. 21
[42] The respondent employees led evidence from Ms Mary McCarthy, Industrial Officer with the UWU. 22
3.2 Southern Cross Care
[43] SCC contends that the Commission is the correct forum for the dispute to be heard and resolved and seeks that this done through arbitration. That is, hearing the application allows for the parties to deal with the dispute in accordance with the agreed dispute resolution procedure in the 2012 EA.
[44] In light of the Full Bench decision, it was clear that the Commission had the necessary jurisdiction to arbitrate the dispute.
[45] The dispute resolution procedure provides for four stages, outlined in clauses 1.8.1 to 1.8.4 of the 2012 EA. SCC contended that, while it is clear that Ms Taylor and Ms Dutton were exercising their rights in relation to the first stages of the dispute resolution procedure (clause 1.8.1 and 1.8.2 of the Agreement) by communicating their dispute with their Supervisor and then escalating the matter to Human Resources, they had only reached stage 2 of the Dispute Resolution process when they “stepped outside of the dispute resolution procedure required by the Agreement and lodged an underpayment claim in relation to the dispute with the Courts”.
[46] As a consequence of a resolution not being reached by the parties, SCC contends that it then re-enlivened the dispute in terms of the process in the 2012 EA at stage 3 through a meeting that was conducted on 14 June 2019. This meeting did not resolve the dispute and so, following the dispute resolution process, SCC made an application to the Commission as part of stage 4, the final stage of the dispute resolution process.
[47] SCC further contended that as the dispute remained unresolved, it was now appropriate for the Commission to exercise its discretion to arbitrate the dispute. This was particularly so as while the dispute is only between the named parties, given the nature of the matter, the outcome may potentially impact up to 1,300 other employees employed as Level 4 Carers within its operations.
Relationship with Court (SAET) proceedings
[48] SCC contends that the dispute was already in process under the 2012 EA prior to the claim being made to the SAET. In any event, the dispute proceedings do not preclude the respondent employees’ ability to enforce their rights to recover monies via the Court.
[49] SCC further contends that an arbitrated decision of the Commission is still necessary and will assist in informing the Court of the parties’ rights and obligations. That is, any decision of the Commission will be binding on the parties and the SAET would be obliged to determine the underpayment claim having regard to both the 2012 EA and the arbitrated decision. This, it contended, was consistent with relevant High Court authorities.
[50] SCC also suggests that the SAET has acknowledged that the dispute application is relevant and wider in its import, and that the preferred outcome was for it to await the outcome of the Commission proceedings. Given this, the matter falls back to the Commission to determine the rights and obligations where the parties are unable to resolve them between themselves. This was particularly so, given that the Commission was a specialist tribunal with expertise that was recognised by the Courts. 23
Not an abuse of process or vexatious
[51] Relying upon the above, SCC rejected any notion that the dispute application was an abuse of process or vexatious. SCC also contended in that regard that:
• The suggestion that the dispute application was made without proper motivation was without any foundation;
• Compliance with the procedure agreed under the 2012 EA to resolve a dispute could not be described as being improper;
• The dispute about the proper application of the 2012 EA was real and continued;
• The matters in connection were broader than the two respondent employees and involved claims for reclassification, issues about whether employees had been appointed to a relevant role, claims to be reclassified even where they had never been appointed, and the import of the no extra claims provision of the 2012 EA; and
• Its action, in making the application, was seeking to enforce the terms its enterprise agreement and, where those terms were unclear, to clarify them.
The scheme of the Act
[52] SCC relied upon the same objects of the FW Act 24 referenced by the respondent employees but maintained that the Commission should arbitrate the dispute as doing so would be consistent and in accordance with those objects. In particular, by “providing accessible and effective procedures to resolve grievances and disputes” and providing “effective compliance mechanisms”. Indeed, SCC contended that “for the FWC to decline to arbitrate would, in all the circumstances, be contrary to its legislative purpose”.25
[53] SCC also sought to distinguish the case of Simplot cited by the UWU on the basis that in that matter the union concerned sought greater relief than was available in the unfair dismissal jurisdiction, which was properly considered to be a code expressly dealing with such matters. Further, in this case, the relief being sought by it would affect a large portion of the workforce.
[54] SCC led evidence from the following:
• Ms Stephanie Millard – Group Manager – Human Resources and Organisational Development with SCC; 26
• Ms Joanne Renshaw – Manager Human Resources Advisory with SCC; 27 and
• Mr Shayne Bakewell – Principal Consultant, Director – EMA Consulting Pty Ltd.
4. Observations on the evidence
[55] None of the 4 witnesses were required for cross-examination and there appears to be little factual dispute bearing upon the immediate matter. I have accepted all of the evidence on face value.
[56] In terms of the statements attributed to the SAET, there is apparently no independent record of those conferences that has been provided to the parties. Given that the evidence about those proceedings, which was based upon Mr Bakewell’s recollections, was admitted by consent and there is no challenge to that evidence, I have also accepted such whilst noting that no motivations can be properly attributed to the Tribunal beyond what was actually stated and done.
5. Consideration
[57] It is common ground that there is jurisdiction for the Commission to arbitrate the dispute application under the terms of clause 1.8 and s.739 of the FW Act. As a result, consideration of not doing so at this juncture involves an exercise of discretion. That discretion should in my view involve consideration of all of the relevant circumstances of this matter having regard to the statutory objects. The object of the FW Act is relevantly that:
“3 Object of this Act
The object of this Act is to provide a balanced framework for cooperative and productive workplace relations that promotes national economic prosperity and social inclusion for all Australians by:
(a) providing workplace relations laws that are fair to working Australians, are flexible for businesses, promote productivity and economic growth for Australia’s future economic prosperity and take into account Australia’s international labour obligations; and
(b) ensuring a guaranteed safety net of fair, relevant and enforceable minimum terms and conditions through the National Employment Standards, modern awards and national minimum wage orders; and
(c) ensuring that the guaranteed safety net of fair, relevant and enforceable minimum wages and conditions can no longer be undermined by the making of statutory individual employment agreements of any kind given that such agreements can never be part of a fair workplace relations system; and
(d) assisting employees to balance their work and family responsibilities by providing for flexible working arrangements; and
(e) enabling fairness and representation at work and the prevention of discrimination by recognising the right to freedom of association and the right to be represented, protecting against unfair treatment and discrimination, providing accessible and effective procedures to resolve grievances and disputes and providing effective compliance mechanisms; and
(f) achieving productivity and fairness through an emphasis on enterprise level collective bargaining underpinned by simple good faith bargaining obligations and clear rules governing industrial action; and
(g) acknowledging the special circumstances of small and medium sized businesses.”
[58] There are competing considerations bearing upon this present matter and these are reflected to some degree in s.3(e). Before dealing with these considerations it is appropriate to consider the nature of the Commission’s role in arbitrating a dispute under s.739 of the FW Act and the relationship with enforcement proceedings before a Court of competent jurisdiction.
[59] Conciliation and arbitration have been part of the institutional framework for the predecessors of the Fair Work Commission since the enactment of the Conciliation and Arbitration Act 1904 (Cth). Indeed, arbitration, in the sense that (interstate) disputes were determined by the Commission, was at the very basis of what became the award making and dispute resolution role for the Court of Conciliation and Arbitration, and subsequently the more recent predecessors of the Commission. There has also been an historic divide between the creation of rights by arbitration and the role of Courts to interpret and enforce such rights 28 and this largely remains. However, since at least 2001 the Courts have expressly recognised that the statutes have provided the Commission with a much-expanded role, including under the FW Act, to arbitrate disputes about the proper construction and application of instruments by agreement between relevant parties. In that capacity, the Commission is conducting a “private arbitration”, a concept confirmed by the High Court in Construction, Forestry, Mining and Energy Union v The Australian Industrial Relations Commission29 (the private arbitration case) and later reflected in the FW Act.
[60] In the private arbitration case, the High Court was dealing with the validity of s.170MH of the Industrial Relations Act 1988 (Cth), which provided the capacity for a Certified Agreement to enable the Commission to determine disputes, and the impact of s.89A, which had the effect of substantially limiting the general capacity of the Commission to arbitrate disputes. The High Court said:
“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.
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.
To the extent that s 170MH of the lR Act operates in conjunction with an agreed dispute resolution procedure to authorise the Commission to make decisions as to the legal rights and liabilities of the parties to the Agreement, it merely authorises the Commission to exercise a power of private arbitration. And procedures for the resolution of disputes over the application of an agreement made by parties to an industrial situation to prevent that situation from developing into an industrial dispute are clearly procedures for maintaining that agreement. Parliament may legislate to authorise the Commission to participate in procedures of that kind. Accordingly, s 170MH of the IR Act is valid. 30
[61] Their Honours also held that, to the extent that provisions in a certified agreement extended beyond anything that might have been justified by the underlying industrial (constitutional) dispute, those provisions were effective as a matter of “general law” 31
[62] The application of this approach to s.739 of the FW Act was confirmed by the Federal Court in Energy Australia Yallourn Pty Ltd v Automotive, Food, Engineering, Printing and Kindred Industries Union 32 where Bromberg J stated as follows:
“64. As submitted by the Unions, the legal consequences of a determination by the FWC pursuant to a dispute resolution clause and s 739 of the FW Act are clear and have been settled by the Full Court of this Court and by the High Court. In Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v ALS Industrial Australia Pty Ltd (2015) 235 FCR 305, Dowsett, Tracey and Katzmann J at [35] said this:
“Thus it is well settled that “arbitration” by FWC pursuant to a term in an enterprise agreement is a private arbitration, based upon the consent of the parties, and not upon the coercive authority of the Australian state.”
65. At [34], their Honours cited TCL Air Conditioner (Zhongshan) Co Ltd v The Judges of the Federal Court of Australia (2014) 251 CLR 533, including [77]–[79] where the legal consequences of a private arbitration were explained by Hayne, Crennan, Kiefel and Bell JJ as follows (citations omitted):
[77] However, if parties do go to arbitration and the arbitrator makes an award, the making of the award has legal significance in respect of the parties' dispute and their rights and liabilities. As the plurality in Dobbs said: “if, before the institution of an action, an award was made, it [the award] governed the rights of the parties and precluded them from asserting in the Courts the claims which the award determined” (emphasis added). In such a case, the arbitrator's award governs the rights of the parties because “[b]y submitting the claims to arbitration, the parties confer upon the arbitrator an authority conclusively to determine them”.
[78] This gives rise to the general rule that an award made by an arbitrator pursuant to such authority is final and conclusive. Further, the arbitrator's making of an award in exercise of such authority both extinguishes the original cause of action and imposes new obligations on the parties in substitution for the rights and liabilities which were the subject of the dispute referred to arbitration. The former rights of the parties are discharged by an accord and satisfaction. The accord is the agreement to submit disputes to arbitration; the satisfaction is the making of an award in fulfilment of the agreement to arbitrate .
[79] It follows that when an arbitral award is enforced by curial process, the obligations sought to be enforced are those which are created by the award in substitution for the rights and liabilities which were the subject of the dispute referred to arbitration. A party may sue on an award as a cause of action or, in some cases, as in this case, seek enforcement of the award pursuant to the IA Act.
66. In that passage, their Honours approved the following statement by Rich, Dixon, Evatt and McTiernan JJ in Dobbs v National Bank of Australasia Limited (1935) 53 CLR 643 at 653 (citations omitted):
But if, before the institution of an action, an award was made, it governed the rights of the parties and precluded them from asserting in the Courts the claims which the award determined. By submitting the claims to arbitration, the parties confer upon the arbitrator an authority conclusively to determine them. That authority enables him to extinguish an original cause of action. His award will do so if it negatives the existence of liability. It will do so if it operates, not merely to ascertain the existence and measure of the original liability, but to impose a new obligation as a substitute, whether the obligation results from the tenor of the award or from an antecedent undertaking of the parties to give effect to the determination it embodies. The award given under authority of the parties operates as a satisfaction pursuant to their prior accord of the causes of action awarded upon.
67. The proposition to be derived from the above passages is that once an arbitration has been seen through to completion and a determination is rendered, that determination extinguishes the original dispute and replaces it with the determination. It is the arbitral determination that then determines the rights and obligations of the parties bound by it.”
[63] The general limit on the powers of the Commission to arbitrate disputes about or under collective agreements and the notion that parties may agree to give the Commission what amounts to private arbitration powers are reflected in the FW Act by virtue of ss. 595, 739 and related provisions. Broadly summarised, the combined effect of these provisions is that the Commission may only deal with such a dispute if it is expressly authorised to do so under or in accordance with another provision of the FW Act. Section 595(2) does provide such an express authorisation in relation to disputes, but non-consensual arbitration of those disputes is not included. Further, s.595(3) provides that the Commission may deal with a dispute by arbitration only if it is expressly authorised to do so under, or in accordance with, another provision of the FW Act.
[64] In general terms, this means that the Commission may conciliate or use other means of alternative dispute resolution to facilitate the resolution of general disputes occurring in the workplace. However, the capacity for the arbitration of those matters depends upon whether there is specific agreement between the parties in a given matter or some other source of agreed authority to do so.
[65] It is common for dispute resolution provisions in approved enterprise agreements to include access to the Commission to determine (arbitrate) disputes and given the extensive coverage of these instruments this is in practice a significant role. This is the case with clause 1.8 of the 2012 EA.
[66] Based upon decisions of the Court and the Commission, the following observations might safely be made about the provisions of the FW Act that provide for the determination of disputes under the terms of an enterprise agreement:
• In addition to authorising the Commission (or other independent persons) to conciliate or mediate disputes, the parties may also authorise the Commissioner to arbitrate. However, a valid dispute settlement procedure does not need to provide for arbitration; 33
• The Commission is in effect conducting a private arbitration when utilising any agreed arbitration powers under the terms of an enterprise agreement; 34
• The dispute resolution term can be drafted broadly and extend beyond dealing with matters arising under the agreement to matters permitted in the enterprise agreement, subject to the requirements of the FW Act about dealing with disputes; 35
• Unless the parties had complied with the necessary pre-conditions contained in the dispute settlement term prior to seeking arbitration, the Commission may have no jurisdiction to deal with the application; 36
• Where the Commission is authorised to intervene under the dispute settlement term, the Commission may exercise any of the general procedures and powers it possesses, unless the enterprise agreement specifies otherwise; 37
• The Commission’s role in a private arbitration is to make a determination that is binding on the relevant parties to the dispute, but it cannot make orders of the kind that a Court is empowered to grant; 38
• The determination of the dispute cannot vary the terms of the enterprise agreement and must be consistent with those terms; 39
• The Commission’s decision must be in writing and will be published along with any reasons it provides; 40 and
• An aggrieved person may have a right of appeal, or may need to seek leave to appeal to the Full Bench from an arbitration decision, depending upon the terms of dispute resolution provision. 41
[67] Should the Commission ultimately arbitrate this dispute, it would as part of doing so consider the proper construction of the 2012 EA. Several Full Benches of the Commission have outlined the approach that should be adopted in considering the construction and meaning of an enterprise agreement. The most recent statement of the principles was set out in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union’ known as the Australian Manufacturing Workers Union (AMWU) v Berri Pty Limited42 (AMWU v Berri) and I do not propose to set out those principles in this decision.
[68] More recently, the Full Court of the Federal Court in WorkPac Pty Ltd v Skene43 (WorkPac) also provided the following convenient summary of the required approach:
“[197] The starting point for interpretation of an enterprise agreement is the ordinary meaning of the words, read as a whole and in context. The interpretation “… turns on the language of the particular agreement, understood in the light of its industrial context and purpose …”. The words are not to be interpreted in a vacuum divorced from industrial realities; rather, industrial agreements are made for various industries in the light of the customs and working conditions of each, and they are frequently couched in terms intelligible to the parties but without the careful attention to form and draftsmanship that one expects to find in an Act of Parliament. To similar effect, it has been said that the framers of such documents were likely of a “practical bent of mind” and may well have been more concerned with expressing an intention in a way likely to be understood in the relevant industry rather than with legal niceties and jargon, so that a purposive approach to interpretation is appropriate and a narrow or pedantic approach is misplaced.”44 (citations omitted)
[69] The above observations are consistent with the approach taken in AMWU v Berri. In the end, the Commission’s task would include ascertaining the objective intention of the 2012 EA based upon the language and terms of the agreement, when read as a whole, and considered having regard to its context and purpose. This would then be applied to the factual matrix drawn from evidence about the nature and context of the work undertaken by the respondent employees and the nature of their responsibilities, skills and qualification and a determination made dealing with the dispute.
[70] For completeness, I observe that the Commission is not empowered to grant some form of declaratory relief.45 Rather, the Commission would be determining the proper application of the enterprise agreement in order to determine the broader dispute between the parties about that instrument under the terms of the agreed dispute resolution procedure.46 The result, subject to appeal rights, would be binding upon the relevant parties and extinguishes the original dispute about the agreement terms and replaces it with the determination.
[71] SCC and the group of employees making the 2012 EA agreed upon a dispute resolution process that contemplates disputes about a matter arising under the enterprise agreement would be progressed through the steps in clause 1.8, including ultimately, having the Commission arbitrate to resolve an unresolved dispute. The present dispute concerns such a matter. The parties also committed to accepting the outcome of any such arbitration, subject to appeal rights. This does not mean that other means to advance legal interests are not available to the parties or that the Commission is necessarily bound to arbitrate the matter. However, the fact that an agreed dispute resolution procedure is contained within an instrument agreed as part of the enterprise agreement approved by the Commission is an important consideration consistent with this matter being arbitrated.
[72] Given the nature of private arbitration and the broad import of clause 1.8 when applied to this matter, there would be little doubt that the Commission could deal with a dispute that is much broader in scope than would normally be dealt with by the Court in an underpayment of wages claim applying only to the two respondent employees. The question is whether that applies in this case.
[73] The dispute as notified in the s.739 application involves the same parties as the SAET proceedings, being SCC and the respondent employees, and substantially the same immediate issue. That is, whether the terms of the 2012 EA mean that the respondent employees are entitled to be classified and paid as Level 5 employees. This involves, in the case of the dispute and the SAET proceedings, ascertaining the proper meaning of the 2012 EA and applying that to the circumstances of the respondent employees based upon evidence. There is therefore significant potential for a duplication of proceedings.
[74] SCC contends that the dispute application and arbitration is wider in nature and that this makes the exercise of discretion to determine that matter important. It is the case there appears to be other, and potentially many other, employees whose circumstances are similar to those of the respondent employees. However, at least as presently notified and citing only the respondent employees, the outcome of both the arbitration and the SAET proceedings might have real implications for the rights of those other employees, but they would not be bound by either outcome.
[75] Accordingly, it is important to consider whether the dispute application and arbitration itself actually involves a wider dispute than the SAET underpayment of wages proceedings. The relevant provisions of the 2012 EA include those set out below.
[76] Clause 2.3 provides as follows:
“2.3 CLASSIFICATION AND WORK REQUIREMENTS
2.3.1 Employees are, subject to Their qualifications, experience and fitness, required to perform all of the tasks of Their position, including those tasks that are incidental or of a lower classification to the main functions of Their position.
2.3.2 The allocation of tasks and the location of work will be at the Employer's direction considering operational requirements.
2.3.3 An Employee may consent to an appointment by the Employer to another classification of work within this Agreement, in which case this Agreement continues to apply.”
[77] Clause 2.5 deals with training and includes the following:
“2.5.5 Employees are required to act as a buddy to other Employees as and when required by the Employer, including in the orientation of new Employees. Such responsibilities are separate from Employees performing specific training duties for one or more Employees.”
[78] Schedule 4 contains classification definitions for each level of Aged Care employees. Levels 4 and 5 are stated in the following terms:
“A.4 Aged care employee – Level 4
An employee at this level:
• is capable of prioritising work within established policies, guidelines and procedures;
• is responsible for work performed with a medium level of accountability or discretion;
• works under limited supervision, either individually or in a team;
• possesses good communication, interpersonal and/or arithmetic skills; and
• requires specific on-the-job training, may require formal qualifications and/or relevant skills training or experience.
• In the case of a Personal care worker, is required to hold a relevant Certificate III qualification.
A.5 Aged care employee – Level 5
An employee at this level:
• is capable of functioning semi-autonomously, and prioritising their own work within established policies, guidelines and procedures;
• is responsible for work performed with a substantial level of accountability;
• works either individually or in a team;
• may assist with supervision of others;
• requires a comprehensive knowledge of medical terminology and/or a working knowledge of
• health insurance schemes (admin/clerical);
• may require basic computer knowledge or be required to use a computer on a regular basis;
• possesses administrative skills and problem solving abilities;
• possesses well developed communication, interpersonal and/or arithmetic skills; and
• requires substantial on-the-job training, may require formal qualifications at trade or certificate level and/or relevant skills training or experience.
Schedule 5 contains the specific requirements for Level 5 classification for the SCC Specialist positions.”
[79] Schedule 5 contains a comprehensive description of the Level 5 requirements including the following:
“SCHEDULE 5
LEVEL 5 REQUIREMENTS
Classification at Level 5 is based on appointment to an established position not by application for personal reclassification. SCC will determine the establishment of Level 5 positions within the organisational structure based on resident needs, site organisational structure and new services. Level 5 is considered to be a specialist role with the application of skills in specific areas such as Dementia, Living Well Dying Well, WHS, Quality, Allied Health, Lifestyle and providing formal support within the Graduate and Traineeship programs.
Any Level 5 positions must be required by a site to ensure the delivery of quality services. Southern Cross Care, in consultation with the other parties to this agreement, will implement positions at Level 5 consistent with this schedule by 1 July 2014.
To implement the Level 5 Requirements consultative committees will be developed for each of the specific area to identify the following:
• Required training and qualification(s)
• Required competencies and assessment process (if required)
• Evidence of application of training, education, higher level of skills and participation in relevant programs
• Development of Job Descriptions and Duty Statements if required
• Applicability and implementation at each site
• Establishment of positions for each specific area and at sites
• Appointment procedures for each specific area (ie organisational reclassification or reclassification based on completion of training and application of skills)
• Implementation timeline
• Documentation of any new work practices, techniques and methods
The above is not exhaustive and some specific area will have additional requirements and some of the above will not apply to all the specific areas.
Consultative Committees to have HR, staff, union and management representation.”
[80] Having considered the entirety of the dispute as presently revealed to the Commission, I do consider that the dispute application has a broader compass than the underpayment of wages claims. That is, it appears that the dispute reveals a significant and broader contest about how the classifications under the 2012 EA operate in practice. This includes a broader dispute about how appointments are made to classification Level 5, how the criteria in Schedule 5 have been or should have been applied in practice, and whether the nature of the specialist skills contemplated in Schedules 4 and 5 are objectively intended to operate The implementation arrangements contemplated by Schedule 5 may also be relevant and all of these elements have the potential to fundamentally impact upon the practical operation of the enterprise agreement more generally. The contest about the difference between mentoring and buddy shifts, and the immediate circumstances of the respondent employees, is only part of the matter and I consider that a determination dealing with the broader dispute is consistent with agreed dispute resolution process and the objects of the FW Act.
[81] I accept that if broader interests are to be directly involved in the dispute application, the ‘respondency’ to this application may need to be broadened as a matter of natural justice. This could be readily undertaken. However, and in any event, even dealing the immediate parties, the dispute does raise the broader elements outlined above.
[82] I accept that the respondent employees would, if the determination created or confirmed a basis to do so, need to take or continue litigation with a Court of competent jurisdiction, such as the SAET, to enforce any outcome in terms of seeking penalties and interest. This is a consideration militating against a decision to arbitrate the matter, but this applies to all circumstances where a party might seek such remedies over a dispute about the proper meaning of an instrument.
[83] The SAET proceedings were on foot when the dispute application was made and I accept the respondent employees’ proposition that the Commission should be careful not to permit its processes to improperly interfere with enforcement proceedings. In that regard, although the UWU clearly left open the threat to launch enforcement proceedings in its 27 April 2018 correspondence, the actions taken both by the respondent employees and the union to raise and then escalate the issues now forming part of the dispute application were also consistent with the steps required by clause 1.8 of the 2012 EA.
[84] Further, in terms of the status of the SAET proceedings, I consider the fact that the SAET is awaiting the Commission’s decision and has not yet made arrangements to hear those matters is, in the absence of a formal decision about the issue, a relevant but not decisive factor. However, it is clear that undertaking the arbitration in the present circumstances would not be improper. It is also likely to be the case that the Commission’s arbitration could proceed much earlier than the SAET proceedings given the Commission’s statutory charter and relative availability.
[85] To the extent that it might be suggested that the dispute application involves forum shopping, both parties made an election at different times about the form of application, and given the scope of the dispute and the fact that this application accords with the agreed dispute resolution process under the terms of the 2012 EA, I do not consider that it is vexatious or an abuse of process.
6. Conclusions and further proceedings
[86] There are competing considerations touching upon this matter. On balance, I consider that the Commission should deal with the dispute application by arbitration in accordance with clause 1.8 of the 2012 EA and s.739 of the FW Act.
[87] I will shortly convene a (telephone) directions conference to program the arbitration of the matter. In that regard, I observe that the current limitation upon in-person hearings 47 should not present a significant difficulty in dealing with the application. To the extent that there are directly relevant factual disputes, it is likely that these could be resolved through a telephone hearing given the likely (narrow) compass of that evidence.
COMMISSIONER
Appearances:
A Perigo (of counsel), with permission, for Southern Cross Care (SA & NT) Inc.
P Dean (of counsel), with permission, for the Respondent employees.
Hearing details:
2020
Adelaide
March 5.
Printed by authority of the Commonwealth Government Printer
<PR716640>
1 Exhibit SCC2 at Paragraph 3 & 4(JR1).
2 Page 98 of UWU Book of Documents.
3 Exhibit UWU1 Annexure 1.
4 Page 13 of UWU Book of Documents.
5 Exhibit UWU1 Annexure 2.
6 The SAET is an Eligible State Court with jurisdiction to deal with certain matters under the FW Act – s.12, s.539 and Fair Work Regulations 2009 reg.1.06.
7 Annexure 3 to exhibit UWU 1.
8 Annexure 5 to exhibit UWU 1
9 Annexure 6 to exhibit UWU 1.
10 3.1 of the Form F10 application.
11 [2019] FWC 6334.
12 [2019] FWCFB 8252.
13 Ibid at [32] to [36].
14 Exhibit SCC 3 – Affidavit of Mr Bakewell.
15 Based upon SCC submissions at 35, 36 and the evidence of Mr Bakewell.
16 Reynolds v Reynolds [1977] 2 NSWLR 295 at 306.
17 Hunter v Chief Constable of the West Midlands Police and Ors [1982] AC 529 at 536.
18 (1976) 76 IR 180
19 Ibid, 181.
20 [2016] FWC 991.
21 By reference to section 3(e) of the FW Act.
22 Exhibit UWU1.
23 Citing Aldi v SDA (2019) 286 IR 384.
24 Section 3(e) of the FW Act.
25 SCC written submissions at para. 60.
26 Exhibit SCC1.
27 Exhibit SCC2.
28 For both constitutional and statutory reasons. See Amalgamated Society of Engineers v Adelaide Steamship Co. Ltd (1920) 28 CLR 129.
29 (2001) 203 CLR 645. See also Gordonstone Coal Management Pty Ltd v Australian Industrial Relations Commission (1999) 93 FCR 153.
30 203 CLR at 657-658 [30]-[32]. A detailed discussion of this decision and the statutory context leading to that point was provided by the Full Federal Court in Endeavour Energy v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia [2016] FCAFC 82 per North, Jessup and Reeves JJ at [18] to [25].
31 Ibid at [34].
32 [2017] FCA 1245.
33 Woolworths Ltd trading as Produce and Recycling Distribution Centre [2010] FWAFB 1464.
34 Endeavour Energy v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia [2016] FCAFC 82.
35 Boral Resources (NSW) Pty Ltd v Transport Workers’ Union of Australia (2011) 63 AILR ¶101-308; [2010] FWAFB 8437.
36 Transport Workers’ Union of Australia v Skywest Airlines (Australia) Pty Ltd (2011) 63 AILR ¶101-430(7); [2011] FWA 5082 and Transport Workers' Union of Australia v Torrens Transit Services Pty Ltd[2013] FWC 7318.
37 S.739(3) of the FW Act.
38 Energy Australia Yallourn Pty Ltd v Automotive, Food, Engineering, Printing and Kindred Industries Union [2017] FCA 1245 and Duggan v Metropolitan Fire and Emergency Services Board [2017] FCAFC 112 at [94].
39 S.739(5) of the FW Act.
40 S. 601 of the FW Act.
41 See CEPU, AMWU; CFMEU v Mechanical Maintenance Solutions Pty Ltd[2015] FWCFB 1769 and AMWU v Silcar Pty Ltd[2011] FWAFB 2555.
42 [2017] FWCFB 3005.
43 [2018] FCAFC 131.
44 Ibid at [197].
45 AB v Tabcorp Holdings Limited[2015] FWCFB 523 at [11].
46 See Construction Forestry Mining and Energy Union v The Australian Industrial Relations Commission and Another [2001] HCA 16; (2001) 203 CLR 645, Kentz (Australia) Pty Ltd v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia [2016] FWCFB 2019 and Endeavour Energy v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia [2016] FCAFC 82.
47 As a result of control measures introduced in light of the COVID-19 virus.
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