The Australian Workers' Union v Alcoa World Alumina Australia Limited
[2012] FWA 9222
•1 NOVEMBER 2012
[2012] FWA 9222 |
|
DECISION |
Fair Work Act 2009
s.739—Dispute resolution
The Australian Workers’ Union
v
Alcoa World Alumina Australia Limited
(C2012/3625)
COMMISSIONER WILLIAMS | PERTH, 1 NOVEMBER 2012 |
s.739 - Application to deal with a dispute.
[1] This matter involves a dispute brought before the Tribunal through clause 19−Dispute Settlement Procedure of the Alcoa World Alumina Australia WA Operations AWU Enterprise Agreement 2011 [AE883477] (the Agreement) by The Australian Workers’ Union (the applicant or the AWU). The respondent is Alcoa World Alumina Australia Limited (the respondent or Alcoa).
Background
[2] In March 2012, Mr David Dunn a Mobile Equipment Operator employed by Alcoa was involved in an incident at Alcoa’s Huntly mine site. A haul truck he was operating made contact with a bund wall on a mining haul road. The haul truck was a Caterpillar 789, with a capacity of 190 tonnes and a gross combined mass of 320 tonnes.
[3] A bund wall is a barrier made out of rocks and clay approximately 1.5 metres high constructed along the side of haul roads as a physical barrier to prevent mine vehicles leaving the road in the event of operator error or mechanical malfunction and to stop rain water runoff encroaching on bushland along the roads to prevent dieback.
[4] Following an investigation into the incident Alcoa’s mine management decided that Mr Dunn should be subjected to disciplinary action. Alcoa proposed that Mr Dunn receive a first and final written warning and a 2 week suspension without pay.
[5] Alcoa’s decision was communicated to Mr Dunn and Mr Price, the AWU Convenor, on 16 March 2012. Mr Price advised Alcoa that the AWU was placing the matter into dispute.
[6] The AWU’s position is that the disciplinary penalty to be imposed upon Mr Dunn is excessive in all the circumstances.
[7] Despite the applicant and respondent attempting to resolve the matter through the dispute settlement procedure in the Agreement, the matter was not resolved and on 30 April 2012 the dispute was referred to Fair Work Australia by the AWU.
[8] The AWU seeks arbitration by the Tribunal to resolve the dispute and a determination that the disciplinary penalty to be imposed is excessive and for the disciplinary penalty to be set aside and not imposed on Mr Dunn.
[9] The relevant provisions relating to disciplinary procedures and the dispute resolution procedure are set out in clause 18 and 19 of the Agreement as follows:
“18. DISCIPLINARY PROCEDURES
(a) Disciplinary action up to and including suspension without pay or termination may be applied at times at the discretion of the Company. Prior to the application of the discipline, where the employee elects to have a representative, the form of discipline will be discussed with their Representative (e.g. Shop Steward or Site Convenor).
(b) If it is deemed appropriate by the Company that the employee be stood aside, the AWU Senior Site Employee Representative will be notified prior to the employee being stood aside. Any such standing aside will be without loss of pay or entitlement until the Company makes its decision on the disciplinary action, if any, to apply. It is expressly agreed that the standing aside of employees will not be prevented as a result of such standing aside being placed in dispute (i.e. the status quo provisions of clause 19 will not apply in circumstances where the standing aside of an employee is put into dispute).
(c) Supervision will conduct an inquiry into the incident, which will involve the employee, relevant Shop Steward and any other appropriate personnel.
(d) If the Company takes a decision to dismiss an employee, the Union shall be notified prior to the dismissal taking effect and may put the matter in dispute. If, prior to the termination being activated, the Union has chosen to put the matter in dispute (which is agreed to be the only time the Union can do so under this Agreement), the case will be referred for immediate arbitration under Stage 4 of clause 19 in the dispute resolution procedure, bypassing other levels of the disputes procedure. The continuation of pay and entitlements will be on the condition that no industrial action is taken over the matter.
(e) The provisions of sub-clause (d) above will only to employees who have completed the minimum employment period as defined by the Act.
(f) The parties agree to accept any decision and abide by the decision-making processes of Fair Work Australia.
(g) Nothing affects the right of the Company to dismiss any employee without notice for serious misconduct and in such cases payment will be made up to the time of dismissal only.
19. DISPUTE RESOLUTION PROCEDURE
(a) The parties recognise that the emphasis is on problem solving and conciliation as a satisfactory means to resolve issues. The parties undertake to, at all times, remain committed to the satisfactory and timely resolution of issues. Accordingly, all disputes including disputes in relation to the National Employment Standards will be progressed in accordance with the relevant procedure prescribed below.
(b) Whilst the resolution of a grievance or dispute is being processed in accordance with the clause the status quo (i.e. the normal conditions/arrangements in existence immediately prior to the cause of the dispute arising) will be observed.
(c) It is the responsibility of the most senior company representative named in the Dispute Resolution Form to schedule meetings in relation to the dispute resolution process.
(d) The dispute resolution procedure is outlined below. At any stage, the timeframes may be maintained by re-rostering involved personnel to enable attendance at meetings. The onus is on the Company to arrange re-rostering to enable the timeframes to be met. Every reasonable attempt will be made to re-roster within the next block of shifts off or lesser amount of time as agreed between the Company and the representative. Where re-rostering occurs, a full shift will be worked by the employee (including attendance at the dispute resolution meeting).
(e) The process will not stop for the availability of any one individual. If the involved personnel identified below are unavailable to attend, a designee will attend in their place. Where a designee is nominated, it is the responsibility of the person making the nomination to ensure that the designee has relevant background information and authority to act on behalf of the nominating individual.
Sequence | Involved Personnel | Methodology | Timeframes | Documentation | ||
Initiation | Employee raising the dispute. Immediate Supervisor. Employee Representative as requested by the employee. The discussion may not be limited to the above personnel. | Meeting between the involved personnel. The formal template documentation is not required at this step unless it becomes evident that escalation of the dispute will occur. | Initial meeting occurs within 2 working days (within block of shifts) or on an agreed extension to the nominated timeframe. | If resolved, the Immediate Supervisor documents the outcomes. | ||
First Stage | Department Supervisor Senior Area Representative In addition, it is optional to include the personnel in the stage above. | Meeting between the involved personnel. Formal template documentation required at the inception of this step. The person raising the grievance or | Meeting occurs within 2 working days of the initial meeting held pursuant to the initiation sequence above. At the commencement of First Stage, the | DR Form to be completed and circulated to participants in the process | ||
matter in dispute shall complete all relevant aspects of the template and serve the template on the other party. | template will be served (unless an agreed extension to the nominated timeframe). | |||||
| Second Stage | OC Manager Site Convenor In addition, it is optional to include the personnel in the stage above. | Meeting between the involved personnel. | Meeting occurs within 2 working days of the meeting held for First Stage or on an agreed extension to the nominated timeframe. | DR Form to be completed and circulated to participants in the process | ||
| Third Stage | HR Representative Production Manager Site Convenor State Organiser In addition, it is optional to include the personnel in the stage above. If the issue has cross site implications, the appropriate personnel may be invited. | Meeting between the involved personnel | Meeting occurs within 5 working days of the meeting held for Second Stage or on an agreed extension to the nominated timeframe. In the event the State Organiser or his/her proxy cannot make the meeting, the Third Stage meeting will proceed. | DR Form to be completed and circulated to participants in the process | ||
Fourth Stage | Fair Work Australia, appropriate location personnel, and nominated representatives. *See Note 1 below. | Conciliation or, if necessary, or if applied for by a party following conciliation, arbitration | After the Third Stage meeting either party can file in to FWA. This will be done within 5 working days of the Third Stage meeting occurring. If the initiator of the dispute does not lodge in FWA within 5 working days, this dispute is withdrawn from the dispute resolution process and is considered resolved. Schedule determined by availability of FWA. | Prescribed formal documentation | ||
Important Notes:
1. The reference to ‘nominated representatives’ in the 4th stage, above, is to ensure continuation of the historical approach to representation, so that the parties continue to have the right to each nominate a representative of their choice.
2. Where the site union convenor or, in his/her absence, another site representative of the union participates in proceedings at Fair Work Australia dealing with a dispute at his/her site, time so spent during ordinary rostered work time will not result in deduction of pay, subject to the convenor and other representative complying with re-roster arrangements nominated by the Company.
3. Where a dispute relates to the meaning or effect of a term of this Agreement, either party may refer the matter to arbitration in the event conciliation does not result in the resolution of the dispute.
4. In circumstances where a dispute arises from the application of clause 21 – Consultation Clause, that dispute shall be referred straight to a meeting between a State Organiser of the union (or his/her nominee), a senior site representative of the union, and a representative nominated by the Company (per stage 3 of above procedure, with no need for recourse to stages 1 or 2), prior to, if necessary, being referred by either party direct to Fair Work Australia for conciliation and then arbitration – and subject to the applicable timeframes outlined above.
5. The parties to the dispute and their site based representatives must, at all times in the dispute resolution process, act in good faith in accordance with the spirit and intent of this Agreement.”
[10] In determining this matter there is first a difference between the parties as to the jurisdiction and powers of the Tribunal in dealing with this application and then dependent upon the outcome of that question there is also a difference between the parties as to whether or not Alcoa’s disciplinary action proposed for Mr Dunn was unreasonable in the particular circumstances of this case.
The AWU’s submissions
[11] It is not in dispute on the evidence in this case that Mr Dunn is to receive a record of written warning arising out of the incident that occurred on site on 6 March 2012, which would comprise both a first and final warning and he would be subject to a 2 week suspension without pay for what Alcoa alleges was his failure to report the incident involving the bund wall (the discipline).
[12] The discipline was “disciplinary action up to and including suspension without pay” within the meaning of clause 18(a) of the Agreement.
[13] Further clause 18 of the Agreement makes explicit reference to the dispute resolution procedures as set out in clause 19 (see clauses 18(b) and 18(f)).
[14] The dispute resolution procedure in clause 19 of the Agreement refers to all disputes being “progressed in accordance with the relevant procedure described below”.
[15] The procedure as set out in clause 19 culminates in conciliation “or, if necessary...arbitration” in Fair Work Australia.
[16] An “Important Note” to clause 19 includes note 3. which sets out that:
“Where a dispute relates to the meaning or effect of a term of this Agreement, either party may refer the matter to arbitration in the event conciliation does not result in the resolution of the dispute” [Emphasis added]
[17] Sections 738 and 739 of Fair Work Act 2009 (the Act) deal with the Tribunal’s ability and jurisdiction to deal with disputes.
“Division 2—Dealing with disputes
Subdivision A—Model term about dealing with disputes
737 Model term about dealing with disputes
The regulations must prescribe a model term for dealing with disputes for enterprise agreements.
Subdivision B—Dealing with disputes
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 FWA
(1) This section applies if a term referred to in section 738 requires or allows FWA to deal with a dispute.
(2) FWA 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 FWA dealing with the matter; or
(b) a determination under the Public Service Act 1999 authorises FWA to deal with the matter.
Note: This does not prevent FWA 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, FWA must not exercise any powers limited by the term.
(4) If, in accordance with the term, the parties have agreed that FWA may arbitrate (however described) the dispute, FWA may do so.
Note: FWA 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), FWA must not make a decision that is inconsistent with this Act, or a fair work instrument that applies to the parties.
(6) FWA may deal with a dispute only on application by a party to the dispute.”
[18] Clause 19 of the Agreement clearly satisfies this threshold requirement imposed by section 738(b) of the Act.
[19] Section 739 of the Act confers broad power on Fair Work Australia by virtue of this section, if the terms of the dispute settlement procedure are also broad (see Cape Australia Holdings Pty Ltd t/a Total Corrosion Control Pty Ltd v Construction, Forestry, Mining and Energy Union 1 (Cape Australia)).
[20] Clause 19 of the Agreement includes a term that provides a procedure for dealing with disputes. Once it is established that section 738 and 739 apply the starting point is the language of the Agreement, within the context of the limitations prescribed by section 739(3) of the Act.
[21] Section 739(3) of the Act curtails or fetters the scope of the powers of Fair Work Australia. It provides that in “dealing with a dispute, FWA must not exercise any powers limited by the term”,meaning the terms of the dispute resolution procedures of the agreement (see Cape Australia at paragraphs [19] and [20]).
[22] The discretion to refer a matter to Fair Work Australia pursuant to clause 19 of the Agreement is extremely wide.
[23] Firstly, the clause relates to “all” disputes. Secondly, the “Important Notes” set out at the conclusion of clause 19 make it clear that a dispute can involve either a dispute about a meaning of a term of the Agreement or the effect of a term of the Agreement.
[24] In this case, the applicant is exercising its right under the Agreement in relation to the “effect” of the penalty imposed upon Mr Dunn pursuant to clause 18.
[25] The “effect”of the penalty is the suspension and formal warning. The Tribunal cannot examine whether the effect of the penalty involved is excessive without receiving relevant evidence.
[26] There is no impediment (express or implied) standing in the way of the Tribunal substituting the finding of the decision maker and imposing a finding of its own. Indeed, the provisions of clause 18(f) of the Agreement foreshadow that Fair Work Australia will make a finding, given that the parties agree to abide by the decision of Fair Work Australia.
[27] The language of the Agreement could not be any clearer. The parties have agreed that Fair Work Australia may arbitrate the dispute. The power of Fair Work Australia to do so is explicitly conferred upon it in section 739(4) of the Act, when read with clause 19 of the Agreement.
[28] The respondent seeks to rely upon a reference in the decision of SDP Lacy in Alcoa of Australia Limited trading as Alcoa World Alumina Australiav The Australian Workers’ Union 2to support the erroneous contention that Fair Work Australia has no jurisdiction in relation to reviewing the penalty imposed in this case.
[29] This decision of SDP Lacy may be distinguished from this matter before the Tribunal and indeed has no application to this case because:
a) The dispute resolution clause of the agreement that was the subject of the decision of SDP Lacy was completely different to clause 19 of the Agreement and had no such equivalent clause referring all unresolved disputes arising out of the Agreement to Fair Work Australia;
b) The decision involved a previous legislative scheme and not the Fair Work Act;
c) SDP Lacy himself provided no authority in support of the observation he made (in passing and not as a guiding principle of his reasons) at paragraph [5] of his decision; and
d) It is a decision of a single Tribunal member and clearly at odds with the Full Bench in Cape Australia and on that basis alone can be justifiably distinguished.
Alcoa’s submissions
Jurisdiction
[30] Section 739 of the Act which is relied upon by the applicant applies where a term referred to in section 738, which includes a term of an enterprise agreement included pursuant to section 186(6), requires or allows the Tribunal to deal with a dispute. Its effect is to impose limitations on the Tribunal in the exercise of its powers arising from such terms.
[31] One of the limitations arising from section 739 is contained in subsection (3) which provides that the Tribunal may not exercise any powers limited by the term.
[32] The word term (which is not defined by the Act), should not be artificially constrained to only mean the words contained within clause 19 of the Agreement.
[33] The Agreement contains a number of terms, separate to clause 19, which specify independent dispute resolution processes or which have the effect of placing limits on the operation of clause 19. By way of example:
a) Clauses 10.2(a) and (b) both include dispute resolution processes related to disputes over change to start and finish times which are distinct and separate from clause 19;
b) Clause 10.4(f) provides for a resolution process for disagreements on the implementation of change in respect of meal and crib breaks which allows for immediate recourse to the Tribunal following consultation with employees;
c) Clause 11.10 provides for a specific limitation on the operation of clause 19 by voiding the requirements of the status quo contained at 19(b) of the Agreement;
d) Clause 18, properly interpreted (as opposed to the interpretation sought by the applicant), includes a term for the resolution of disputes, but only in respect of a disciplinary outcomes involving the termination of an employee’s employment;
e) Clauses 21.2(d) and 21.3(b) both provide for issues not resolved through consultation to be dealt with under the process contained at clause 19 — with clause 21.3(b) stating that such referrals are to relate to the application of clause 21.3 only; and
f) Similarly to clause 11.10, clauses 23.1(g) and 23.2(c) contain specific modifications which limit the operation of clause 19 by voiding the requirements of the status quo contained at 19(b) of the Agreement.
[34] An examination of the language in section 738(b) of the Act supports the proposition that separate and distinguishable terms are to be recognised, as that subsection clearly recognises that an enterprise agreement can contain terms other than those terms required to be included in an enterprise agreement pursuant to section 186(6) of the Act.
[35] The proper interpretation of clause 19 of the Agreement can therefore only be determined by considering it in the context of the whole Agreement and in accordance with the well established principles for the interpretation of agreements.
[36] A sensible industrial outcome in this case would be one where the Tribunal recognises that the parties had agreed that the respondent has the “discretion” to determine disciplinary outcomes so long as the applicant or employees were able to dispute any decision to terminate.
[37] In accordance with the general principles of interpretation, provisions which provide for a more specific approach to the dispute settlement process (through establishing a specific process outside of clause 19 or which modify the effect of clause 19 or which prescribe a right or entitlement which has the effect limiting the powers available under clause 19) should be considered to take precedence over clause 19 on the basis that it is a provision of specific intent, which therefore overrides the more generalised operation of clause 19 3.
[38] Accordingly, the respondent submits that the Tribunal ought conclude that, as consequence of the specific provisions at:
a) clause 18 which provide for a specific entitlement for the respondent to determine disciplinary action at its own discretion (which has the effect of limiting the powers available under clause 19); and/or
b) clause 18 which clearly contemplates only a capacity to dispute the termination of an employee’s employment and no other disciplinary outcome; its powers are limited by the effect of such provisions on the operation of the term of the Agreement relied on by the applicant because clause 18 places a clear and unambiguous limit on the scope of powers available to the Tribunal under clause 19.
[39] Clause 18 of the Agreement prescribes a disciplinary procedure. Clause 18 makes provision for Alcoa to freely exercise its managerial prerogative to undertake disciplinary processes and to determine appropriate disciplinary outcomes for affected employees covered by it, subject only to compliance with the terms and limitations contained within that clause.
[40] Clause 18(a) specifically provides for disciplinary action up to and including suspension without pay or termination at the discretion of the company.
[41] The parties to the Agreement recorded, unambiguously, their agreement to the proposition that the respondent be entitled to exercise managerial prerogative to impose disciplinary outcome of its choosing in each instance where disciplinary action was decided on as being appropriate.
[42] Clause 18(a) also provides that where the employee elects to have a representative, the form of discipline is to be discussed with the representative prior to the application of the disciplinary outcome. In respect of the incident the subject of these proceedings:
a) Mr Dunn elected to be represented by the AWU;
b) Mr Robinson notified both the AWU and Mr Dunn of the intended disciplinary outcome of 2 weeks suspension without pay and a first and final written warning on 16 March 2012;
c) The notification was provided before the 2 weeks suspension was implemented and before the drafted first and final written warning attached to the application was presented to Mr Dunn;
d) As a consequence of the applicant putting the disciplinary outcomes proposed by the respondent into dispute on 16 March 2012 and enlivening the status quo as provided for at clause 19(b) of the 2011 Agreement, the disciplinary outcomes proposed by the respondent are yet to be applied;
e) That is, Mr Dunn has not served the proposed 2 week suspension and the drafted first and final written warning has not been placed on Mr Dunn’s personnel file.
[43] The respondent submits that the obligations established by clause 18(a) of the Agreement have been met by Alcoa.
[44] Clause 18(b) of the Agreement provides for the standing down of employees whilst a disciplinary outcome is determined. It is submitted that the respondent met the requirements of this clause in requiring Mr Dunn to not resume work until part way through his rostered shift on 7 March 2012 by notifying Mr Kelly that Mr Dunn would be stood aside, prior to actually applying the stand down.
[45] Clause 18(c) of the Agreement provides for supervision to conduct an inquiry into the incident which is to involve the employee, the relevant shop steward and any other appropriate personnel.
[46] Mr Robinson gave directions to Mr Williams to commence an inquiry on 6 March 2012.
[47] The inquiry was subsequently undertaken by Mr Robinson between 7 March 2012 and 16 March 2012. The inquiry involved:
a) Mr Dunn, who provided a written statement on 6 March 2012 and who participated in further interviews/meetings on 7 March 2012 and 16 March 2012;
b) Mr Kelly, in his role as Shop Steward, on 6 March 2012;
c) Mr Cocker, as a support person, on 7 March 2012;
d) Mr Price, as AWU Convenor, on 16 March 2012;
e) Mr Alexander, who provided a written statement on 6 March 2012 and who participated in further interviews/meetings on 7 March 2012 and 16 March 2012;
f) Mr Spilsbury, who provided a written statement on 6 March 2012;
g) Mr Williams, who commenced the inquiry on the instructions of Mr Robinson; and
h) Mr Robinson, who was involved as the Alcoa’s representative and who took the final decision on the disciplinary outcome to be applied to Mr Dunn.
[48] It is the respondent’s submission that the requirements of clause 18(c) of the Agreement have been met by Alcoa.
[49] Clause 18(d) of the Agreement is not directly relevant to this matter as the respondent has not taken a decision to terminate the employment of Mr Dunn. It is the position of the respondent however that this clause is indirectly relevant in that it demonstrates that the parties turned their minds to the inclusion of a specific avenue to challenge the decision making of the respondent, in place of the more generalised dispute settlement process in clause 21.
[50] The capacity to challenge the decision making of the respondent under clause 18(d):
a) is limited to decisions made by the respondent to terminate the employment of an employee - which is not the case in this matter; and
b) does not, consistent with the requirements of section 194 of the Act, apply to an employee who has not completed the minimum employment period prescribed by section 383 of the Act. This is confirmed at clause 18(e) of the 2011 Agreement.
[51] It is the respondent’s submission that, whilst clause 18(d) does not relate to the matter under consideration, it demonstrates that the parties intended to allow for Fair Work Australia to consider a decision to terminate an employee and not other disciplinary outcomes which can be applied at the discretion of the respondent.
[52] Clause 18(e) of the Agreement is an exclusion to subclause 18(d) for an employee who has not completed the minimum employment period contemplated by section 383 of the Act.
[53] Clause 18(f) of the Agreement, in the submission of the respondent, is directly linked to the capacity to challenge a decision to terminate an employee’s employment and mandates that the parties accept the decision of Fair Work Australia and clause 18(g) of the Agreement confirms that the capacity to challenge a decision to terminate the employment of an employee under clause 18 does not prevent the company terminating employees without notice for serious misconduct.
[54] The respondent accepts that the dispute settlement procedure contained at clause 19 of the Agreement does not preclude disputes being raised in respect of disciplinary processes conducted by the respondent and that such disputes can be conciliated and if unresolved following conciliation, arbitrated by Fair Work Australia consistent with the powers conferred by the Agreement.
[55] However, the Agreement does not confer any power on Fair Work Australia to overturn disciplinary action that has been applied at times at the discretion of the company under clause 18(a).
[56] The respondent submits that the powers conferred by the Agreement upon Fair Work Australia to arbitrate on disciplinary processes pursuant to clause 19 are, based on the language in clause 18 (and, if this provision is ambiguous, the intent of the parties at the time that the Agreement was negotiated) but are limited to the following:
a) Determination on whether the disciplinary procedure as contemplated by clause 18 has been complied with by the respondent — which the respondent asserts is the case in this matter; and/or
b) Determination on whether a decision to terminate an employee’s employment is justified — which is not relevant to this matter.
[57] Having regard for the above, it is the respondent’s submission that, pursuant to the terms of the Agreement:
a) it was entitled to, at its discretion, take a decision to apply disciplinary action to Mr Dunn of a 2 weeks suspension without pay and a final written warning; and
b) whilst the applicant is entitled to dispute the matter, any determination must, as a consequence of the terms of the Agreement, be limited only to whether the respondent complied with the procedures contemplated in clause 18 of the Agreement.
[58] Justice Kirby in Amcor Ltd v Construction, Forestry, Mining and Energy Union 4, held that construction of agreements should not be strict but should contribute to a sensible industrial outcome. A conclusion that disciplinary action, as adopted by the respondent pursuant to a clear and unambiguous right in the Agreement to determine disciplinary action at its discretion, may be overturned or varied by the Tribunal would be contrary to such principle.
[59] To void the right which was included in the Agreement for the employer at its discretion to apply disciplinary action would result in an injustice.
Limits within the Act
[60] It is the respondent’s submission that, in the event that the Tribunal is not persuaded that the Agreement limits its powers, that its powers are nonetheless limited by the operation of section 739(5) of the Act.
[61] Section 739(5) of the Act prevents the Tribunal from making a decision which is inconsistent with the Act or a fair work instrument.
[62] The Agreement clearly provides at clause 18(a) that “Disciplinary action up to and including suspension without pay or termination may be applied at times at the discretion of the Company”.
[63] The first sentence of clause 18(a) contains a right of the employer to determine and apply disciplinary action decided upon by it at its discretion.
[64] It is submitted that this is no less an immutable right than the rights of employees under the Agreement, such as the right of permanent employees to a specified amount of annual leave (clause 13.1(a)) or the restriction on the maximum number of ordinary hours that may be worked by a shift worker (clause 10.3).
[65] Whilst a party may raise a dispute in respect of an entitlement and the Tribunal may have the power under the appropriate dispute resolution terms to determine matters surrounding the entitlement and/or conciliate/mediate in an attempt to resolve such disputes, it is unable to make a decision which negates that right.
[66] To suggest otherwise would lead to the absurdity that any right or entitlement under an enterprise agreement could be eliminated or otherwise negated by simply raising a dispute in respect of such right/entitlement on an assertion that the right/entitlement is unjust or unreasonable, including as a result of circumstances which occur at a later date.
[67] It is the submission of the respondent that the Tribunal, as a consequence of section 739(5) of the Act, does not have the power to overturn or otherwise modify the disciplinary outcome proposed in respect of Mr Dunn as such a decision would be inconsistent with the express terms of the Agreement providing for disciplinary outcomes to be determined at the sole discretion of the respondent.
[68] Any suggestion that section 739(5) of the Act does not have the effect as submitted above can only arise from an interpretation of clause 18(a) of the Agreement which must amount to a new claim. However, as new claims are prevented by the operation of clause 25.3 of the Agreement it is submitted that section 739(5) of the Act represents an absolute barrier to the applicant’s claim.
Limits arising from Decisions
[69] The respondent further submits that, even if the Tribunal has the power to overturn or otherwise modify the disciplinary decision of the respondent, it must take into account the limitations which have been long recognised in its decisions, including those of its predecessors, before intruding on the respondent’s right to exercise its managerial prerogative by substituting its own opinion.
[70] In Community and Public Sector Union v Australian Broadcasting Commission 5, SDP Marsh referred to Commissioner Smith in ACT Minister for Health v Australian Nursing Federation6, where the Commissioner said:
“However, far a case to be made out in relation to the failure of management to exercise its responsibilities properly, it is necessary to go beyond demonstrating a viable and/or credible alternative to that decided upon. It needs to be clearly understood that the preferred option of a "third person", namely the Commission, is irrelevant to the case that the ANF has to prove. It is eventually the responsibility of management to succeed or indeed fail. It is trite to stale that the exercise of managerial prerogative also includes the possibility that a decision may not prove to be the right one. Simply put, it is not the Junction of this Commission to substitute its view for that of the employer as to the most efficient way of managing the enterprise.”
[71] Further, SDP Marsh found that the Australian Industrial Relations Commission must be:
“mindful of the care which a third party such as the Commission must take in exercising its discretion to make binding decisions in areas which are described as being within the realm "management prerogative". Notwithstanding the scope of 5.170LW, the traditional notion of managerial prerogative is not automatically displaced by the width of the Commission's empowerment which remains a factor to be weighed in determining the relative merits of a claim or counter claim. The extent or otherwise of the intervention of the Commission into an area designated as management prerogative will depend on the circumstances of each matter.”
[72] SDP Lacy has previously considered similar circumstances in Alcoa of Australia Limited trading as Alcoa World Alumina Australia and The Australian Workers’ Union 7.
[73] In that decision, SDP Lacy was asked to consider a proposed suspension without pay for a 2 month period under the Alcoa World Alumina Australia Pinjarra Refinery Agreement 2005 [AG842547] for an employee who had committed a safety breach at the Pinjarra Alumina Refinery.
[74] SDP Lacy, in considering the terms of the applicable agreement, which contains similar terms to those included in the current Agreement, stated:
“It is not within my power under the terms of the Agreement to modify any penalty that the employer deems fit to impose. Accordingly, I find that Alcoa is acting within the terms of the Agreement in imposing the penalty it has imposed.”
[75] In conclusion it is Alcoa’s submission that it is not open to the Tribunal, on a correct interpretation of the terms of the Agreement, to overturn or otherwise vary the disciplinary outcome as proposed by the respondent at its discretion.
Consideration
[76] The AWU seeks arbitration on the question as to whether the particular discipline, being a final written warning and a 2 week suspension without pay, is appropriate in all the circumstances and obviously argue that it is not and so the disciplinary penalty should be set aside by the Tribunal.
[77] The first matter to be determined in this case is whether the Tribunal has jurisdiction to review the particular discipline Alcoa have decided should be applied to Mr Dunn.
[78] As submitted by the parties sections 738 and 739 of the Act deal with the jurisdiction the Tribunal has to determine disputes brought before it such as in this matter.
[79] The effect of section 738 and 739 is that the Tribunal is able to use voluntary methods of dispute resolution without the agreement of the parties to a dispute, provided the dispute is one which it is authorised to deal with, but the Tribunal “...can only arbitrate if it has been specifically empowered to do so”. 8
[80] A Full Bench of the Tribunal considered the application of section 738 and 739 in the decision of Cape Australia Holdings Pty Ltd T/A Total Corrosion Control Pty Ltd v Construction, Forestry, Mining and Energy Union. 9
[81] At paragraph [19] the Full Bench said:
“...Section 739 deals with the circumstances where a dispute settlement procedure in an enterprise agreement requires or allows the Tribunal to deal with a dispute. For present purposes ss.739(3) and (4) are particularly relevant. It is convenient to set out these subsections again:
“... (3) In dealing with a dispute, FWA must not exercise any powers limited by the term.
(4) If, in accordance with the term, the parties have agreed that FWA may arbitrate (however described) the dispute, FWA may do so.” [emphasis added]
[20] Section 739(1) makes it plain that the phrase ‘the term’ in ss.739(3) and (4) is a reference to a term referred to in s.738. In the context of an enterprise agreement ‘the term’ being referred to in ss.739(3) and (4) is the dispute settlement procedure in the agreement.
[21] The Tribunal’s jurisdiction to deal with a dispute over the application of an enterprise agreement depends on the terms of the dispute settlement procedure in the relevant agreement.”
[82] What is clear then from the authorities and the provisions of the Act is that it is the terms of the Agreement that provide the procedure for settling disputes which is determines the breadth of the Tribunal’s jurisdiction.
[83] The parties in this matter agree that clause 19−Dispute Resolution Procedure of the Agreement is the term referred to in subsection sections 739 (3) and (4) of the Act, however the respondent argues that the terms of the dispute settlement procedure in the Agreement also includes clause 18−Disciplinary Procedures and includes a number of other provisions found in other clauses in the Agreement.
[84] In support of this, Alcoa point to other clauses in the Agreement which either specify a variant of clause 19−Dispute Resolution Procedure for particular disputes and/or limit the operation of clause 19 when dealing with particular matters. In some instances the other clauses expressly direct what approach the Tribunal shall take when dealing with a particular type of dispute.
[85] Examples of these are:
“10. Hours of Work
(a)...
(ii) In the event such agreement is not reached immediately, then the matter may be referred by either party to FWA for determination (or alternatively, to WAIRC for expedited mediation / arbitration);
(iii) In determining the matter, the parties agree that it shall be dealt with expeditiously and that, in determining the matter, FWA / WAIRC shall consider the direct financial impact, lifestyle impacts including but not limited to carer responsibilities and other personal impacts and reasonableness of the proposal;
(iv) The outcome of any such determination(s) relevant to the Department as mentioned or the operation shall form the status quo in relation to any future matters which are comparable, (e.g.: where the temporary change will have comparable impacts to those outlined in (iii) above or where the temporary change is comparable in terms of job scope and start/finish times).
(b)...
(iii) in the event such agreement is not reached, through the application of the relevant procedure prescribed by Clause 21, if necessary with the final outcome being determined by FWA.
In determining the matter, the parties expressly agree that FWA shall consider the following:
• The direct financial impact of the proposed change; and
• The lifestyle impacts, including, but not limited to, carer responsibilities and other personal obligations on the employee(s) directly affected by it.” [Underlining added]
“11. SUPPLEMENTARY SHIFTS
....
11.10 Notwithstanding anything else in this agreement, there can be no dispute over the use of a contractor in lieu of offering supplementary shifts. It is expressly agreed by the parties that the dispute resolution process shall apply only where the application of the supplementary shift clause (or a process related issue) is in dispute. In the event a dispute is raised in relation to the application of the clause, the status quo requirements of clause 19 shall not prevent or delay the performance of such work.” [Underlining added]
[86] Considering this, in my view the broader approach of the respondent is correct in this case. There is no reason to read section 738(b) of the Act so narrowly as to mean it only applies when an enterprise agreement includes a dispute settlement procedure that is contained in a single clause. In my view an enterprise agreement which is drafted such that multiple clauses read together provide a dispute settlement procedure falls within the meaning of section 738(b) of the Act.
[87] Similarly I believe it is correct to read subsection 739(3) of the Act broadly so as to mean that the direction, that the Tribunal must not exercise any powers that are limited by the agreement’s term, extends to all the provisions of the agreement that taken together make up the dispute settlement procedure which the parties included in their agreement.
[88] Consequently in my view while the general jurisdiction for the Tribunal to deal with a dispute may be found in clause 19−Dispute Resolution Procedure when considering a particular dispute the Tribunal will need to have regard for any limitation on its powers as, identified in section 739(3) of the Act, which is prescribed in some other clause of the Agreement.
[89] In this instance then I agree with Alcoa that clause 19−Dispute Resolution Procedure which provides for all disputes to be progressed in accordance with the procedure detailed therein is not the total answer to the jurisdictional question in this matter. Rather this clause needs to be read in conjunction with, in this instance, clause 18−Disciplinary Procedures to determine whether for this particular dispute the Tribunal is empowered to arbitrate or not.
[90] In support of this approach, as Alcoa argues, clause 18 is a specific clause that would override clause 19 which is a general provision. Clause 18 provides specific examples of the rights the union has to challenge particular types of actions of the company through the dispute resolution procedure in clause 19. By implication this suggests that not all actions of the company in terms of disciplinary action are able to be challenged through clause 19−Dispute Resolution Procedure.
[91] Subclause (a) of clause 18−Disciplinary Procedures says that disciplinary action up to and including suspension without pay or termination may be applied at times at the discretion of the company.
[92] The clause goes on to prescribe various rights and obligations. The clause details that employees have a right to have a representative attend any disciplinary discussions, that particular union representatives will be notified prior to employees being stood down, that any standing aside will be without loss of pay or entitlement. It is also prescribes that the standing aside of employees will not be prevented as result of the union disputing the company's actions through clause 19−Dispute Resolution Procedure.
[93] The clause further prescribes a right for the employee and the union shop steward to be involved in an inquiry into an incident.
[94] The clause prescribes that when Alcoa decides to dismiss an employee the union shall be notified prior to this and the union may put the matter in dispute. Further the clause prescribes that if the union disputes the dismissal the case will be referred for immediate arbitration under stage four of clause 19−Dispute Resolution Procedure, bypassing other levels of the procedure. The clause prescribes that there will be a continuation of pay and entitlements whilst the matter is determined, conditional on no industrial action being taken.
[95] Finally the clause preserves to the company the right to dismiss an employee without notice for serious misconduct.
[96] The specific provisions of clause 18−Disciplianry Procedures in these ways expressly override the general provisions of clause 19−Dispute Resolution Procedure.
[97] Reading this clause in context then the question is whether the opening words of clause 18−Disciplinary Procedures, that disciplinary action may be applied “at the discretion of the Company” is, under section 739(3) of the Act, a limitation on the powers the Tribunal can exercise in dealing with this dispute. Particularly do these words prevent the Tribunal arbitrating in this matter?
[98] If the Tribunal was empowered under the terms of the Agreement to arbitrate on all disputes regarding disciplinary action there would be no need for the express provisions of clause 18−Disciplinary Procedures to detail the various rights an employee and/or the union has in particular situations. Many disputes quite different in character from this matter may be bought by the union under clause 19−Dispute Resolution Procedure to do with disciplinary issues. Such disputes might involve the company’s decision to stand aside an employee, or the companies alleged failure to comply with its obligations under the clause to have discussions with employees and union representatives, or to involve them at various points or to notify them at particular stages of its actions. I accept that there is no limitation on the powers of the Tribunal to deal with disputes regarding such matters.
[99] However with regard to a dispute over the reasonableness of particular disciplinary action in my view the proper construction of clause 18−Disciplinary Procedures is that the company has the discretion to apply disciplinary action and so the Tribunal is not empowered to interfere with this. This construction gives meaning to the words “...the discretion of the Company”.
[100] This construction is consistent with the ordinary meaning of the words in the Agreement. “Discretion” is defined in the Macquarie Dictionary to mean:
“noun 1. power or right of deciding, or of acting according to one's own judgement; freedom of judgement or choice.”
[101] Under clause 18−Disciplinary Procedures the company has the power or the right to decide on disciplinary action. Considering the context of the balance of this clause and the Agreement’s other terms this right of the company is not subject to challenge under the general clause 19−Dispute Resolution Procedure.
[102] Alcoa has referred the Tribunal to the decision of SDP Lacy in Alcoa of Australia Limited trading as Alcoa World Alumina Australia v The Australian Workers Union 10and argues that this decision should be followed by the Tribunal in this case.
[103] The respondent however says this decision can be distinguished and should not be applied.
[104] Whilst I accept that the legislative background of the SDP Lacy case was different and this case is not a binding precedent it is a case that nonetheless is relevant in this instance.
[105] I note that the terms of the agreement before SDP Lacy were, contrary to the applicant’s view, similar in many ways to those in the current Agreement.
[106] Clause 18−Industrial Relations Procedures of the 2005 Agreement was as follows:
“18. INDUSTRIAL RELATIONS PROCEDURES
The parties recognise the importance of uninterrupted production and supply to customers and agree that conciliation is the most satisfactory means to resolve matters. Accordingly, the parties agree to discuss issues exhaustively with the outcome being determined on the facts, logic and merit involved.
(a) Grievance Procedure
(i) The parties agree to process any grievance or other matter in dispute in accordance with this procedure. The status quo will be observed while the issue is being progressed. For the avoidance of doubt, if the dispute relates to management's decision to utilize contractors pursuant to Clause 19 — Supplementary Labour and/or Contractors of this Agreement, it is expressly agreed that the status quo requirements of this sub clause shall not prevent or delay the performance of such work by contractors.
(ii) The parties are committed to the satisfactory and timely resolution of issues, by those most directly involved, as appropriate.
(iii) Consistent with the intent of paragraphs (i) and (ii) hereof, the procedure to be followed is:
(1) The employee with the grievance will raise the problem with the immediate supervision. Every effort will be made to resolve the issue within two working days or any agreed extension. The relevant Shop Steward may, at the request of the employee, become involved during this period;
(2) If not settled, the issue will be submitted to the next level of Company authority and the relevant Site Union Convenor. Every effort will be made to resolve the issue within a further two working days or any agreed extension;
(3) If not settled, the issue will be progressed to include other appropriate Company representatives, relevant Site Union representatives and Union Officials. Discussions will continue for as long as is necessary, but every effort will be made to resolve the issue within seven days; and
(4) If the issue cannot be resolved through this mechanism it will then be referred to the Australian Industrial Relations Commission for prevention and settlement of the dispute.
(iv) Until the matter is determined in accordance with the above procedure, work will continue normally.
(b) Disciplinary Action
(i) Disciplinary action may be either a written reprimand, suspension without pay or dismissal. Other forms of disciplinary action may be applied by agreement between the parties.
(ii) Where supervision becomes aware of an incident, which in its opinion may lead to disciplinary action, the employee concerned is to be notified in the first instance.
(iii) If it is deemed appropriate by the Company that the employee be stood aside, this will be without loss of pay or entitlement until the Company makes its decision on the disciplinary action, if any, to apply.
(iv) Supervision will conduct an inquiry into the incident with the employee, relevant Shop Steward and any other appropriate personnel.
(v) If, in the Company's opinion, dismissal is warranted, the relevant Site Union Convenor or an Official of the Union will be involved prior to the decision being taken.
(vi) If the Company takes a decision to dismiss an employee, the Union may put the matter in dispute. If the Union subsequently refers the matter to the Australian Industrial Relations Commission, the employee will continue to receive normal pay and entitlements until the matter is determined. The continuation of pay and entitlements will be on the condition that no industrial action is taken over the matter.
(vii) The parties agree to accept any decision and abide by the decision-making processes of the Australian Industrial Relations Commission.”
[107] Contrary to the applicant’s submission it can be seen that the terms of the 2005 and 2011 agreements are relevantly quite similar. Clause 18(a)(i) of the 2005 agreement provided that “any grievance or other matter in dispute” would be processed in accordance with this procedure. This requirement was effectively the same as the current Agreement’s provisions which say that “all disputes” will be progressed in accordance with the disputes procedure in Clause 19.
[108] SDP Lacy found he was empowered to determine whether Alcoa under the applicable agreement was entitled to apply discipline but he was not empowered to review or modify the particular discipline Alcoa had applied. His reasons for so finding however are not detailed such as to be helpful in resolving the jurisdictional contest in this matter.
[109] Notwithstanding this it is appropriate that the Tribunal, within the context of the legislation as varied from time to time, adopt a consistent approach to matters that come before it so that the parties are able to go about their business in the knowledge that the Tribunal will respond to issues in a predicable manner over time. Whilst this is in no way a determinative point it is desirable that my conclusion on this matter is consistent with that of SDP Lacy previously.
[110] If I am wrong on this jurisdictional question I agree with the respondent that this sort of dispute is one where the Tribunal should not easily interfere in the decisions of management. The opportunity for every verbal counselling session, file note or warning letter issued by Alcoa’s supervisors and managers to be subject to arbitration would inevitably have a debilitating effect on the management of the respondent and erode their ability to properly discharge their duties. The employees of Alcoa do retain the critical protection that should a supervisor or manager take unwarranted disciplinary action resulting in their dismissal this can be challenged. In such cases their rights enshrined in the Agreement and the Act to pursue a remedy from unfair dismissal can be activated and the company’s actions will then be fully reviewed and where appropriate can be overturned.
[111] In conclusion the Tribunal does not have jurisdiction to review the disciplinary action of the company as the applicant seeks and this application is dismissed.
COMMISSIONER
Appearances:
T Hammond of Counsel for the applicant.
M Vallence of Heelan & Co Industrial Relations and Management for the respondent.
Hearing details:
2012.
Perth:
July 31.
Final written submissions:
Applicant, 15 August 2012.
Respondent, 22 August 2012.
1 [2012] FWAFB 3994 at paragraphs[20] and [21].
2 PR966345.
3 Davids Distribution Pty Ltd v National Union of Workers Print Q1851.
4 (2005) 222 CLR 241.
5 PR915827.
6 L2261.
7 PR966345.
8 Woolworths Ltd trading as Produce and Recycling Distribution Centre [2010] FWAFB 1464 at paragraph [19].
9 [2012] FWAFB 3994.
10 PR966345.
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