United Firefighters' Union of Australia v Country Fire Authority
[2014] FWC 3176
•16 MAY 2014
[2014] FWC 3176 |
FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.739 - Application to deal with a dispute
United Firefighters' Union of Australia
v
Country Fire Authority
(C2012/6673)
COMMISSIONER WILSON | MELBOURNE, 16 MAY 2014 |
Application for Fair Work Commission to arbitrate allowances. Objection by Respondent to determination for the reason of legal uncertainty requires resolution; claims are better pursued through bargaining; and that Commission has insufficient jurisdiction to proceed.
Introduction
[1] This decision considers whether an application by the United Firefighters’ Union of Australia (UFU) for the arbitration for allowances should be scheduled for hearing, or whether it should be adjourned indefinitely or, in the further alternative, whether it should be dismissed.
[2] Through an application to the Fair Work Commission dated 20 December 2012, the UFU sought the Fair Work Commission utilise its powers to arbitrate the notified dispute, through which relates to the Country Fire Authority/United Firefighters’ Union of Australia Operational Staff Enterprise Agreement 2010 1 (the Operational Staff Agreement).
[3] As presently characterised by the union, the dispute refers to the capacity of the Commission to hear and determine four allowance claims. The UFU argued that in negotiations leading to the Operational Staff Agreement the parties reserved for later processes a number of matters about which they could not agree at the time. The union claims that the reserved matters were to be the subject of later discussion and if necessary private arbitration. As presently indicated, the claims relate to a Rope Rescue allowance, a Coast Guard Brigade allowance, an Incident Management Team Level 2 – 3 allowance and a Difficult to Fill Location allowance (collectively referred to as the “Allowance Claims”).
[4] In these proceedings, the Country Fire Authority (CFA) objects to the claims being heard and determined for four substantive grounds;
1. the Allowance Claims should not be heard and determined pending a decision of the Full Federal Court in the appeal of the judgment of Murphy J in United Firefighters’ Union of Australia v Country Fire Authority (UFU v CFA) 2,
2. since the UFU is also pursuing the Allowance Claims in bargaining for a new agreement that would replace the Operational Staff Agreement, the Allowance Claims should be pursued via bargaining, not via arbitration;
3. the Commission should find that it has no jurisdiction or power to make a determination which in practical effect would determine the inclusion of new allowances in the Operational Staff Agreement;
4. the Commission should conclude that it has no jurisdiction to determine the Allowance Claims, because they have not gone through the dispute resolution steps prescribed by clause 15 of the Operational Staff Agreement. 3
[5] For the reasons set out below, I find the application should not be scheduled for hearing at this time. I find in favour of the CFA in relation to Grounds 1 and 2; I do not determine Ground 3; and I find against the CFA on Ground 4.
The UFU Application
[6] The UFU made application to the Fair Work Commission on 20 December 2012 seeking “the assistance of Fair Work Australia to utilise its powers to arbitrate this dispute”. At that time, the dispute was characterised as being “about a changeover allowance”, and the application also indicated the following;
“8. Steps already taken under dispute settlement procedure:
This dispute has been the subject of discussion between the CPA and the UFU with a view to achieving resolution. The 'changeover allowance' is one of a number of reserved matters which the parties have agreed should be arbitrated by Fair Work Australia.” 4
[7] On 20 June 2013, Commissioner Roe issued a Recommendation recording that the parties had agreed to “note the preliminary view of FWC that the matters in dispute should not be subject to arbitration prior to determination by Murphy J of the jurisdictional matters before him, however, the matter should not be delayed further pending any appeal. The parties reserve their rights to argue that the matter be relisted or further adjourned.” 5
[8] A conference of the parties was held before me on 21 October 2013, which led to a Statement being issued by me on 29 October 2013. The Statement is in relation to two other matters being pursued by the UFU under s.739 as well as this one 6, and relevantly records;
[1] This statement refers to three applications by the United Firefighters’ Union of Australia (UFU) seeking for the Fair Work Commission (the Commission) to deal with a dispute arising under an enterprise agreement applying to the Country Fire Authority (CFA), namely, the Country Fire Authority/United Firefighters’ Union of Australia Operational Staff Agreement 2010 (the Agreement).
[2] The three matters are as follows:
• C2013/6673 – which has been the subject of proceedings before Commissioner Roe, most recently on 20 June 2013, following which Commissioner Roe issued a recommendation that included instructions (sic) for the parties write to each other in order to clarify the subject of the claim. In response to the recommendation, the UFU identified that they are seeking to pursue four allowances, namely:
• a Rope Rescue Allowance (Specialist Allowances);
• a Coastguard Brigade Allowance;
• a Member of Level 2 Incident Team and Level 3 Incident Management Team Allowance; and,
• a Difficult to Fill Location Allowance.
• C2013/1370 – in which the “UFU seeks to increase the allowances in the Agreement by movements in the CPI since September 2010 when the allowances last moved”.
• C2013/5718 – in which the UFU seeks a new allowance for Heavy Hazardous Materials Vehicles (“Heavy Hazmat Appliances”).
...
[4] In the course of the conference held by me with the parties on Monday, 21 October 2013, to discuss the forward progress of each of files, the CFA objected to the matters being dealt with by the Commission. The CFA argued the Commission lacks jurisdiction to grant the claims made by the UFU. The CFA drew the Commission’s attention to proceedings before the Federal Court of Australia (the Federal Court) in which both parties in these proceedings are agitating claims, including that various parts of the Agreement were beyond the power of the Commission to make and thus have no effect. The Federal Court proceedings are before Justice Murphy and include claims by the CFA about the validity of subclause 15.1.3 and subclause 38.3 of the Agreement.
...
[7] The recommendation issued by Commissioner Roe on 20 June 2013 made reference to the proceedings in the Federal Court and recommended following:
“1. The parties note the preliminary view of FWC that the matters in dispute should not be subject to arbitration prior to determination by Murphy J of the jurisdictional matters before him, however, the matter should not be delayed further pending any appeal. The parties reserve the right to argue that the matter be relisted or further adjourned.”
[8] The Federal Court proceedings have been reserved for judgement for some time and the parties are not aware of when the judgement can be expected, other than to believe it should be imminent.
[9] In view of the claims in the Federal Court, the CFA does not believe there is a necessity to involve itself in the resolution of the dispute claimed by the UFU in each matter, including in conciliation, other than in respect of the matter referred to in C2013/5718 – Heavy Hazmat Appliances Allowance, which is referred to in more detail below.
[10] The CFA argued that I should adopt the same reasoning as Commissioner Roe in relation to the reserved Federal Court proceedings and not list the matters for hearing until the outcome of the proceedings is known.
[11] The UFU argued in the conference that there was no impediment to proceeding at this time. The UFU believes that it is entitled to make the claims it has and, in the absence of a Court determination to the contrary, the Commission is entitled to proceed. In the alternative, the UFU argued that if I were disposed to adjourn the matter until the Federal Court outcome was known, the Commission should at least timetable hearings for the three matters so that a date for hearing is reserved and the parties can be directed to exchange and file materials relevant to future hearings.
[12] After considering the merits of the respective points of view put forward by the parties, I believe it is appropriate to adjourn those aspects of the UFU’s claims that would require arbitration, until such time as the Federal Court has delivered its judgement in relation to the Agreement’s contested clauses. The claims in the Federal Court go directly to the clauses under which the Commission would be invited to make a determination. In addition, I do not believe it to be a preferred course of action for the matters to be timetabled and the parties directed to prepare and file submissions and witness statements and the like. The claim before the Federal Court is obviously part of a much wider, very complex action and it is not for the Commission to guess at this distance whether the only alternative available to the Federal Court is to accept or reject the validity of clauses referred to above. There is a danger in progressing the matter before the Commission of creating confusion and of putting parties to the cost and expense of preparing for proceedings which may not be required or may be circumscribed, depending upon the outcome of the Federal Court case.
[9] It is to be noted from paragraph [2] of the 21 October Statement that, at the time of issuing the Statement, the UFU’s claim had shifted from that disclosed in its Application (a dispute “about a changeover allowance”) to one being about a Rope Rescue Allowance (Specialist Allowances); a Coastguard Brigade Allowance; a Member of Level 2 Incident Team and Level 3 Incident Management Team Allowance; and a Difficult to Fill Location Allowance. The UFU had notified this to Commissioner Roe on 10 July 2013 in response to his June 2013 Recommendation. 7
[10] On 10 January 2014, solicitors for the CFA wrote to the Commission and advised in relation to matter numbers C2012/6673 (the Allowance Claims that form this matter), C2013/1370 (a dispute about a general increase to all allowances) and C2013/5718 (a dispute about a new allowance for Heavy Hazardous Materials Vehicles) that the CFA continued to consider that it was inappropriate for the Commission to list the matters for arbitration because they are new claims and therefore matters for enterprise bargaining. The CFA drew attention to the fact that since the 21 October 2013 conference before me that the UFU has provided the CFA with its log of claims. Since that log includes claims for the allowances that are the subject of the Allowance Claims in this matter;
“CFA considers inclusion of these claims in the UFU's log constitutes a recognition on the part of the UFU that its claims the subject of the Proceedings are new claims and are claims that are more properly to be addressed in bargaining than in Commission proceedings.” 8
[11] On 4 February 2014, the UFU requested the Commission as follows;
“We refer to the Statement issued by you on 29 October 2013 concerning the above matters.
In relation to matter C2012/6673, the Statement provides for the adjournment of the United Firefighters’ Union reserved matters claims until such time as the Federal Court has delivered its judgment in relation to the Agreement’s contested clauses.
Murphy J’s decision in United Firefighters Union of Australia v Country Fire Authority [2014] FCA 17 was handed down on Friday, 31 January 2014. This decision confirms the validity of the dispute resolution and allowances clauses 15 and 38 of the Agreement respectively. A copy of Murphy J’s decision is attached for your reference.
The United Firefighters’ Union accordingly requests that matter C2012/6673 be listed for a Directions Hearing so as to enable timetabling for arbitration at the Commission’s earliest possible convenience.” 9
[12] The UFU argues that the Allowance Claims can be pursued by the union because the Operational Staff Agreement provides a right of arbitration to do so. This comes about for several reasons;
● In negotiations leading to the making of the Operational Staff Agreement, the parties discussed a list of reserved matters for private arbitration. On 13 August 2010, the CFA sent a letter to the UFU with the confirmed list of matters.
● The Operational Staff Agreement was approved by Commissioner Roe on 21 October 2010, and clause 38.3 of the agreement provides;
38.3. In accordance with existing practice the parties agree that any new allowance and/or variation to an existing allowances claim will be referred to FWA for determination. Both parties reserve their rights to put their respective positions.
● Following approval of the agreement, the parties unsuccessful endeavoured to resolve their differences on the matters on the reserved matters list, with meetings being held on the subject between November 2010 and May 2011. An application for the tribunal’s assistance with one matter was made on 4 October 2011, and another on 20 December 2012, which is this matter.
[13] The CFA’s letter to the UFU on 13 August 2010 is from the Authority’s Chief Executive Officer, Mr Mick Bourke, and opens;
“MATTERS TO BE REFERRED TO ARBITRATION
To avoid any doubt, please find attached the complete list of matters which the parties have agreed should be arbitrated by Fair Work Australia if they are not able to be otherwise agreed.” 10
[14] Attached to the letter is a list of “Matters for Arbitration”. The list includes, at item 1, “Difficult to Fill Location Allowance”; item 22 “Specialist Allowance” (which I understand may encompass the claim for a “Rope Rescue Allowance (Specialist Allowances)”; and item 25, “Coast Guard Brigade Allowance”.
[15] The UFU argue that the Operational Staff Agreement provides, through clause 38.3, for an explicit right of private arbitration on the subject of new or varied allowances, and it argues that the Federal Court’s judgement in UFU v CFA confirmed the validity both of clause 38 and clause 15, the dispute resolution clause 11. Both clauses, along with other issues, were in contest before the Court.
[16] The UFU argue that the Court’s judgement now reflects the law and that they are entitled to pursue their Allowance Claims irrespective of the fact that the decision in UFU v CFA is now under appeal.
Jurisdictional base
[17] The application to the Commission is made pursuant to s.739 of the Act which provides jurisdiction to deal with disputes in certain circumstances set out with in the section and s.738, namely where a “term” of a modern award, an agreement or a contract or Public Service Determination allows. Arbitration of a dispute may only be where the parties have agreed for that to occur, in accordance with the term. The Commission’s powers to deal with a dispute under the section are constrained in the ways set out in the section, and most particularly in the way set out in sub-section (5), such that the Commission may not make a decision that is inconsistent with the Act or a fair work instrument applicable to the parties.
[18] Sections 738 and 739 provide;
738 Application of this Division
This Division applies if:
(a) a modern award includes a term that provides a procedure for dealing with disputes, including a term in accordance with section 146; or
(b) an enterprise agreement includes a term that provides a procedure for dealing with disputes, including a term referred to in subsection 186(6); or
(c) a contract of employment or other written agreement includes a term that provides a procedure for dealing with disputes between the employer and the employee, to the extent that the dispute is about any matters in relation to the National Employment Standards or a safety net contractual entitlement; or
(d) a determination under the Public Service Act 1999 includes a term that provides a procedure for dealing with disputes arising under the determination or in relation to the National Employment Standards.
739 Disputes dealt with by the FWC
(1) This section applies if a term referred to in section 738 requires or allows the FWC to deal with a dispute.
(2) The FWC must not deal with a dispute to the extent that the dispute is about whether an employer had reasonable business grounds under subsection 65(5) or 76(4), unless:
(a) the parties have agreed in a contract of employment, enterprise agreement or other written agreement to the FWC dealing with the matter; or
(b) a determination under the Public Service Act 1999 authorises the FWC to deal with the matter.
Note: This does not prevent the FWC from dealing with a dispute relating to a term of an enterprise agreement that has the same (or substantially the same) effect as subsection 65(5) or 76(4) (see also subsection 55(5)).
(3) In dealing with a dispute, the FWC must not exercise any powers limited by the term.
(4) If, in accordance with the term, the parties have agreed that the FWC may arbitrate (however described) the dispute, the FWC may do so.
Note: The FWC may also deal with a dispute by mediation or conciliation, or by making a recommendation or expressing an opinion (see subsection 595(2)).
(5) Despite subsection (4), the FWC must not make a decision that is inconsistent with this Act, or a fair work instrument that applies to the parties.
(6) The FWC may deal with a dispute only on application by a party to the dispute.
The decision in UFU v CFA
[19] A central issue in the matter is the Federal Court’s judgement in the matter of UFU v CFA. The contest that was part of the hearing; the findings of the Court; and the forward direction of the matter on appeal have all impacted on the background to this matter and what the parties have to say about its disposition. It is appropriate therefore to record basic aspects of the judgement for the purposes of context to this matter.
[20] UFU v CFA considered, amongst other questions the validity of sub-clauses 15.1.2 and 15.1.3 (from the Dispute Resolution Clause) and sub-clause 38.3 (from the Allowances and Reimbursements General clause). The question arose on a cross-claim from the CFA in response to allegations made by the UFU that the CFA had breached clause 27 of the Operational Staff Agreement (Safe Staffing Levels). The contentions before the Court in relation to clauses 15 and 38 went to numerous issues, which are not repeated here.
[21] His Honour held in relation to clause 15, that;
● s.186(6) allowed approval of an agreement dispute resolution term that relates to matters pertaining to the employment relationship or to the relationship between the relevant union and employer, which is not required to be constrained by the matters covered in the agreement itself; 12
● s 739 confirms that the scope of any power in the Commission to resolve disputes pursuant to a dispute resolution term in an agreement is a matter for the parties; 13
● Clause 15 of the Agreement reflects the parties’ choice of a dispute resolution procedure which extends beyond the minimum requirement in s 186(6), although limited to the “permitted matters” in s 172(1) of the Act; 14
● by operation of ss 739(4) and (5) the Commission may arbitrate disputes which go beyond the matters expressly covered in the Agreement, although it has no power to make a decision inconsistent with the terms of the Agreement; 15
● the Reserved Matters list is a list of matters which could be raised later and if so raised were not to be treated as extra claims; 16
● Cl 15.1.3 is a permitted matter within s.172 of the Act; 17
[22] In relation to Clause 38.3, His Honour held that;
● cl 38.3 is nothing more than an exception to (or carve-out from) the no extra claims clause in cl 65; it is a recognition that the parties had not reached agreement as to some allowances and had reserved those matters to be either agreed later or privately arbitrated by the Commission 18;
● While the parties had concluded the Agreement they reserved various allowances in the Reserved Matters list, and any matter on that list could be advanced without offending cl 65 19;
● cl 38.3 does not allow any new allowance and/or allowance variation claim to be the subject of a private arbitration; that power resides in cl 15 and that clause only allows private arbitration of allowances not caught by the prohibition on extra claims. 20
● cl 38.3 is not a dispute resolution term as provided in ss 186(6), 739 and 738(b) of the Act; however it is not invalid because it is not a source of power for the Commission to privately arbitrate such matters; 21
● the dispute resolution procedure in cl 15 means that the numerous allowances included in the Reserved Matters list can be brought before the Commission for private arbitration. 22
The CFA Objections
[23] The CFA advance four significant grounds of objection to arbitration of the Allowance Claims referred to above.
[24] It argues that as a consequence, the Allowance Claims should be either adjourned pending the Full Federal Court decision; or alternatively dismissed, particularly in circumstances where the UFU is also pursuing the claims in bargaining.
[25] The CFA submits the following about each its grounds of objection.
Ground 1: The claims should be adjourned pending the decision of the Full Federal Court concerning the appeals from the decision of Murphy J
[26] UFU v CFA considered, amongst other questions the validity of sub-clauses 15.1.2 and 15.1.3 (from the Dispute Resolution Clause) and sub-clause 38.3 (from the Allowances and Reimbursements General clause). The question arose on a cross-claim from the CFA in response to allegations made by the UFU that the CFA had breached clause 27 of the Operational Staff Agreement (Safe Staffing Levels).
[27] The UFU has appealed the decision of Justice Murphy, as has the CFA, and the appeals will be heard later this year. The CFA summarises the UFU’s appeal as a challenge against the finding that the staffing/lateral entry clauses were invalid and unenforceable by reason of the implied limitation on the Commonwealth’s legislative power to make laws which operate to destroy or curtail the capacity of a State Government to function. 23 The CFA summarises its appeal as a challenge to the findings that the consultation clauses, the dispute resolution clauses and sub-clause 38.3 were valid and enforceable.24
[28] The CFA argues that if it succeeds on its cross-appeal, then “the Commission’s purported jurisdiction to arbitrate the claims would effectively ‘unravel’.” 25
[29] In support of its argument for adjournment pending the Full Court’s determination, the CFA points to the need for consistency in Commission decision-making. It refers to the Statement from me in October 2013 in which I adjourned the matters that are the subject of this claim, and in two other matters, until the Federal Court had delivered its judgement in the matter of UFU v CFA. The CFA also refers to a decision of the Full Bench in an appeal matter, C2012/5096 which was an appeal against a decision of Commissioner Roe 26 (referred to as the Additional Staffing Appeal). The Additional Staffing Appeal has been adjourned since October 2012 and has most recently been further adjourned, with the CFA submitting to the Full Bench the matter should be;
“adjourned until after the outcome of the Federal Court proceedings (on appeal) is determined. It is understood that the United Firefighters’ Union has no objection to this course.” 27
Ground 2: The allowance claims should not be arbitrated since the claims are also being pursued by the UFU in bargaining for a new agreement
[30] After noting that the Allowance Claims are included in the UFU’s bargaining logs, 28 the CFA raises the proposition that the claims would be better pursued within the context of enterprise bargaining currently taking place. This is because;
● the Act “places an emphasis on enterprise level collective bargaining underpinned by good faith bargaining obligations”; 29
● an arbitration by the Commission of the claims on their merits would “seriously undermine the scheme of Part 2-4 of the FW Act”; 30 and
● it would “be highly inappropriate for the CFA to have to contend with the allowance claims in two different forums, namely the arbitration forum and the good faith bargaining forum” and that this is occurring “has the character of an abuse of process”. 31
[31] The CFA also points out, with some technical accuracy, that any arbitrated determination would only operate until the Operational Staff Agreement is replaced. This, it is submitted, means there is “plainly no utility” in a merits arbitration taking place. 32
[32] The CFA refers to the decision of the Full Bench in the Metropolitan Fire and Emergency Services Board v United Firefighters’ Union of Australia – Victorian Branch 33 in which the Full Bench considered an appeal from a decision of Commissioner Roe requiring the Metropolitan Fire and Emergency Services Board (MFB) to contribute to a disability insurance policy34 (referred to as the Disability Insurance Policy Appeal). The Appeal concerned firefighters whose employment is covered by the Metropolitan, Fire and Emergency Services Board, United Firefighters’ Union of Australia Operational Staff Agreement 2010. In the course of the Disability Insurance Policy Appeal permission to appeal was granted and the matter proceeded by way of rehearing before the Full Bench.35 After considering a number of technicalities associated with the application and the jurisdiction of the Commission to hear the matter, the Full Bench found;
[42] We have outlined how the Scheme can potentially affect AXA Scheme covered firefighters who move to the Scheme. Further, it is apparent that should the premium increase beyond 0.8%, for whatever reason, after the first 12 months, there will no longer be any disability insurance scheme covering any firefighter, other than those who have remained in the AXA Scheme.
[43] The Commissioner was alive to the difficulties occasioned by the insurer being a third party, not a party to the Agreement, and therefore not amenable to the jurisdiction of Fair Work Australia. No order can bind the insurer. In addition to the potential consequences for all firefighters, and in particular the AXA Scheme employees, we consider this to be a powerful reason not to impose the Scheme, or indeed any disability insurance scheme upon the MFB.
[44] Likewise, for the reasons identified by the Commissioner, we do not consider, in the exercise of our discretion, that it is appropriate to impose the MFB’s leave bank proposal on the parties.
[45] Having come to the conclusion that we have, it is not necessary to decide whether the Order was beyond jurisdiction by providing that the UFU was to be the insured. The MFB contended that because it and its employees were the only contributors to the Scheme, the Order, insofar as it provides that the UFU is to be the insured, does not pertain to the relationship between the MFB and the UFU, and that neither section 172(1)(b) of the Act nor clause 19.1.3 of the Agreement founded a jurisdictional base for the making of the Order.
[46] We are not attracted to the suggestion of the UFU that we should draft an order that better reflects the Commissioner’s decisions because we are not of the view that any order should be made. We agree with the submissions of the MFB that the issue should be dealt with by the parties when they negotiate their next enterprise agreement. 36 (emphasis added)
[33] After its primary arguments that the Commission should adjourn the Allowance Claims until after the Full Federal Court has completed the appeals in the matter of UFU v CFA, and to allow bargaining to take primary course, the CFA submits two alternative arguments - that the Commission lacks power to arbitrate and that there has been non-compliance with the dispute resolution steps.
Ground 3: The Commission should find that it has no power to arbitrate the allowance claims
[34] The CFA submits s.739(5) prevents the Commission from granting the relief sought by the UFU. The section provides that the Commission in dealing with a dispute under a dispute resolution term, must not make a decision that is inconsistent with the Act, or a fair work instrument that applies to the parties. The CFA submits about this provision, that;
“It is the scheme of the FW Act that, with the exception of Part 2 - 5 which empowers the Commission to make workplace determinations, it is only the parties who can decide to include matters in an enterprise agreement” 37
“If some or all of the allowance claims were upheld by the Commission, the practical effect would be for the Commission to determine that those new and/or increased allowances should operate as if they are prescribed in the Agreement. The FW Act provides the exclusive method by which an enterprise agreement can be made and varied. Under those provisions the Commission may approve an agreed variation of an enterprise agreement (see Division 7 of Part 2-4 of the FW Act); the Commission has no power to vary the terms of an enterprise agreement via arbitration. This proposition is well established: see for example ABC v MEAA (2004) 136 IR 99 at [39], SDAEA v Woolworths Limited[2013] FWCFB 2814 at [12], and also UFUA v CFA[2014] FWCFB 410 at [36].” 38
[35] The CFA’s submissions in relation to this ground also noted, with reference to the Disability Insurance Policy Appeal, that;
“It would appear that the sole jurisdictional objection advanced by the MFB to Roe C arbitrating reserved matters, was that a reserved matters provision in an agreement does not pertain to the relationship between an employer and its employees: see the Full Bench decision in MFB v UFUA[2012] FWAFB 9555 at [19 - 20]. The additional objection set out above, that the FW Act does not confer power on the Commission to arbitrate reserved matters because to do so is inconsistent with the FW Act, was not determined by the Full Bench.” 39
Ground 4: There is no power to advance the dispute since there has been non-compliance with dispute resolution steps
[36] The CFA submits that the procedural steps for the advancement of a dispute to the FWC set out in sub-clause 15.2 have not been satisfied and that it is well-established that dispute resolution steps must be satisfied for the Commission to have jurisdiction to determine a dispute. 40
The UFU Case
[37] The UFU resists the CFA’s application for adjournment or dismissal, addressing each of the grounds put forward by the CFA.
Ground 1: The claims should be adjourned pending the decision of the Full Federal Court concerning the appeals from the decision of Murphy J
[38] In relation to the argument of waiting for the Federal Court of Australia determination and the appeal of UFU v CFA the UFU argues;
“For the reasons that follow, such a course of action, with respect, is entirely inappropriate:
(i) the Federal Court has now delivered its judgment and made a clear pronouncement on the state of the law as it relates to the clauses underpinning the Reserved Matters Claim;
(ii) Murphy J’s judgment cures any pre-existing risk of confusion about the jurisdiction and power of the Commission to hear and determine the Reserved Matters Claim;
(iii) the parties are entitled to rely on good law and the Commission should not be involved in effectively suspending its application, particularly where the party seeking the adjournment continues itself to harness such law to its advantage (see below*);
(iv) where the law is clear, the Commission should not set a precedent for continuing to adjourn matters, the outcome of which may be years of delay pending appeal to the High Court;
(v) the Reserved Matters Claim was lodged 15 months ago and any unnecessary delay would prejudice the UFU’s right (as negotiated back in 2010) to have this matter determined by the Commission under the current Agreement; and
(vi) the fact that the UFU has the ability to negotiate claims in bargaining does not remedy this prejudice – the uncertain and lengthy processes involved in bargaining are no substitute for the guaranteed outcome of arbitration in the Commission.
* The UFU refers specifically to the recent approach taken by the CFA in relation to the current Agreement and in bargaining for a new agreement. Open letters from the CFA to the UFU dated 13 February and 18 March are at Tab 5 of the UFU’s Folder of Materials.” 41
[39] With regards to the argument advanced by the CFA that the FWC as presently constituted should adjourn the current matter consistent with the approach taken by the Full Bench in the Additional Staffing Appeal, the UFU submits that such approach is not appropriate and that in any event the matter before the Full Bench is distinguishable from the one before me;
“The CFA further invites the Commission to adjourn the Reserved Matters Claim on the basis that this would be consistent with the approach taken by the CFA in its appeal from the decision of Roe C in UFU v CFA [2012] FWA 7155. No such consistency exists.
As the CFA acknowledges, in the case of its appeal from Roe C’s decision in UFU v CFA [2012] FWA 7155, Murphy J’s judgment falls in its favour. That is, the CFA’s appeal to the Full Bench would necessarily be upheld. An adjournment of that appeal is therefore of no benefit to the UFU or detriment to the CFA given that it enjoys the status quo.
To impose an adjournment on the UFU in the Reserved Matters Claim is to deny it the benefit of enjoying the equivalent status quo by positively enforcing its right to go to arbitration where Murphy J’s decision on the validity of clauses 15 and 38.3 of the Agreement allows it to do so. Here, the CFA has something to lose if the matter proceeds.” 42
Ground 2: The allowance claims should not be arbitrated since the claims are also being pursued by the UFU in bargaining for a new agreement
[40] The UFU resists the proposition that the matters should be adjourned because an arbitration of the allowance claims would undermine enterprise bargaining. Having noted that the dispute which underpins this matter was first notified to the commission on 20 December 2012, the union makes the point that such notification was well in advance of the time by which the parties were due to commence negotiations for a replacement agreement. 43
[41] UFU also does not resile from the fact that the allowance claims are also part of its log of claims before the CFA in enterprise bargaining. In this regard, the union submits that dismissing the allowance claims at this time because the allowances could be dealt with through a process of good faith bargaining “with no guaranteed outcome, would be to deny the UFU its right to the certainty of arbitration under the current Agreement. The fact that any arbitral outcome would only operate until such Agreement is replaced, takes the argument no further. In any event, there is no evidence that approval of a new Agreement is imminent.” 44
[42] The union also submits in respect of the argument that the pursuit of the allowance claims through arbitration undermines collective bargaining;
“By arbitrating under the current Agreement, the Commission does not undermine the scheme of Part 2-4 of the FW Act in bargaining for a new agreement. The Commission’s capacity to facilitate good faith bargaining remains unencumbered, as do the parties’ obligations to adhere to its requirements. Further, a Commission order which determines claims under the current Agreement cannot be said to have the effect of requiring particular content for a new agreement as the CFA appears to suggest.
Further, the CFA’s submission that the UFU’s Reserved Matters Claim has the character of an abuse of process is misconceived. Both parties regularly arbitrate claims before the Commission under the current Agreement while bargaining for a new Agreement is in process. The Commission should not be asked to engage in the dismissal of claims properly before it under the current Agreement simply because such claims are being pursued in bargaining for a new agreement.” 45
Ground 3: The Commission should find that it has no power to arbitrate the allowance claims
[43] The UFU submits that each of the CFA’s arguments about the Commission’s power to arbitrate the allowances claim were before Murphy J in UFU v CFA and that;
“In his judgment, Murphy J rejects these arguments, upholding the validity of clauses 15 and 38.3 of the Agreement and finding that the Commission does have power to determine the Reserved Matters listed in the CFA’s letter of 13 August 2010.14 46 The Commission should apply Murphy J’s judgment in proceeding to arbitrate the Reserved Matters Claim, not disregard it by finding that it has no power to do so.”47
Ground 4: There is no power to advance the dispute since there has been non-compliance with dispute resolution steps
[44] The UFU argues in relation to the submission made by the CFA that the union has not complied with the dispute resolution steps set out in the operational staff agreement that there has been effective consultation with a view to achieving satisfactory resolution of the allowance claims and that such consultation took place over a seven month period following approval of the agreement. In this regard, the union refers to the materials it provided to the Commission including the minutes of the “Arbitration Subcommittee” and the witness statement of Mr Paul Mullet, the union’s Industrial Relations Bargaining Consultant 48. These documents refer to the Arbitration Subcommittee being formed by the CFA and the UFU “with the objective of resolving the Reserved Matters”, and provide an indication of the progress of discussion of various reserved matters over the period of November 2010 to May 2011.
Consideration
[45] The primary submissions advanced by the CFA are that the Allowance Claims should be adjourned until after the Full Federal Court has completed the appeals in the matter of UFU v CFA, and to allow bargaining to take primary course. It is convenient to deal with these submissions jointly.
Ground 1: The claims should be adjourned pending the decision of the Full Federal Court concerning the appeals from the decision of Murphy J
Ground 2: The allowance claims should not be arbitrated since the claims are also being pursued by the UFU in bargaining for a new agreement
[46] No party to these proceedings has pointed to a firm rule (at least in respect of these heads of argument) that would require the Commission to adopt or reject the propositions.
[47] The Federal Court proceedings have been on foot since June 2012 when the UFU commenced proceedings 49 and are, amongst many things, a challenge directly to the capacity of the tribunal to have formed the Operational Staff Agreement and for important parts of it to operate as its content purports.
[48] If the UFU wins the proceedings entirely, the entirety of the agreement is confirmed, which has important implications not only in respect of whether the present agreement is being complied with by the CFA, but also for the content of a replacement agreement. On the other hand, if the CFA wins the proceedings entirely significant parts of the agreement are invalidated.
[49] This might arise because the rule of the implied constitutional limitation in Re: AEU 50 did not allow the tribunal to approve an agreement, or at least parts of it, in the form of the Operational Staff Agreement since it fettered the operation of a State (in the form of the Country Fire Authority). Alternatively, and particularly relevant to the provisions of clause 15 and 38.3, it might be because content of the agreement is not a permitted matter within the meaning of the Act or is inconsistent with the Act.
[50] The implied constitutional limitation is not argued as a factor invalidating or restricting the operation of clauses 15 and 38.3. However the argument is pursued that the provisions are not permitted matters within the meaning of the Act or are inconsistent with the Act. Despite not relying upon the implied constitutional limitation, this aspect of the argument has high significance to the parties.
[51] The UFU submits that the good law to be observed by the Commission is that both clauses operate and that the union is entitled to the relief it seeks. The union argues there is no case for the Commission to wait for the decision of the Full Federal Court.
[52] The first ground of the CFA’s objections to proceeding - that these proceedings be adjourned pending the Full Court appeal - has two sub-grounds; firstly that it is appropriate to wait for the law to be clarified and there is potential prejudice to the CFA in not waiting, and secondly that since the Full Bench in the Additional Staffing Appeal, has seen fit to adjourn their consideration of an appeal matter, there should be a consistency of approach with this matter as well.
[53] The argument of consistency with the Full Bench proceedings in the Additional Staffing Appeal is not a sufficient ground for adjournment or dismissal of these proceedings. While the first adjournment in 18 October 2012 was contested, it was not a vigorous or extensive opposition that required a deliberative determination by the Full Bench. Instead the question appears to have been first raised with the parties by the bench itself; was then supported by the CFA’s counsel and ultimately agreed to by the UFU counsel. 51 The second adjournment in March 2014 was by the consent of the parties52.
[54] The subject matter before the Full Bench is markedly different to this matter, even though it involves the same parties and the same enterprise agreement.
[55] The Additional Staffing Appeal seeks to overturn a decision of Commissioner Roe given in August 2012. He characterised the dispute he was charged with resolving thus;
[5] The dispute is about the application of Clause 27.4 and the implementation of additional staffing. I am satisfied that this is within the scope of matters with which Clause 15, Dispute Resolution, of the Agreement is able to deal. FWA is empowered to resolve the dispute by private arbitration. 53
[56] The findings made by the Commissioner include;
● that the CFA is a trading or constitutional corporation; 54
● that clause 27.4.7 is not unenforceable the order invalid because of the implied limitation on the power of the Commonwealth in Re AEU; 55
● that he was satisfied clause 27 relates to permitted matters and that he is satisfied that its contents are matters pertaining pursuant to s.172(1)(a); and that accordingly the clause is not unenforceable for reason of s.253(1)(a) of the Act; 56
● There is no prohibition on the tribunal from making a determination due to the operation of s.255. Such determination is not contrary to the scheme and objects of the Act; 57
● The CFA is required to implement clause 27.4.7. 58
[57] Relevantly, the judgement by the Federal Court in UFU v CFA held that the CFA is a trading corporation 59 and that clause 27.4 is invalid and of no effect60. One of the orders sought from the Court by the UFU was a declaration that the CFA had breached clause 27.4 or in the alternative, injunctive relief requiring the CFA’s compliance with clause 27.4.7.61 The Court referred to clause 27 as being one of the clauses impugned by the CFA and that;
“Central to the proceeding is the regime contained in this clause ... Which prescribes the number of new CFA employees to be recruited and the timing of their recruitment and training.” 62
[58] The Court subsequently held on this issue;
“The implied limitation is a recognition that the Constitution is concerned with the federal structure of government in Australia. Whether by legislation or some other voluntary act the States cannot disturb the federal structure created by the Constitution. The focus must be on the effect of a Commonwealth law upon the capacity of a state to function as a government, and it is of little relevance whether the state agrees to the imposition of any such limitation. Any curtailment or impairment of the capacity of a state to perform functions critical to its capacity to govern cannot be overcome by the exercise of a specific legislative or executive power.
I have some difficulty in treating the implied constitutional limitation as applicable to industrial agreements that are bona fide voluntarily entered into by a state party and which may therefore have no practical impact on a State’s capacity to govern. However, in my view the Melbourne Corporation principle as expressed in Re AEU appliesto an enterprise agreement approved by the Commission, whether or not it is voluntarily entered into by the state party. Given the UFU’s concessions that cll 26, 27, 28 and 122 of the Agreement are terms of the type described in Re AEU¸ they areinvalid and cannot be enforced.” 63
[59] The situation is to be distinguished from the matter before me, in which the clauses said to act as a vehicle for the UFU’s claims (clauses 15 and 38.3) have been held by Murphy J in UFU v CFA to be valid. The circumstance faced by the Full Bench in the Additional Staffing Appeal is one in which the clause at the centre of the appeal is invalid and unenforceable. Progression of the appeal possibly has no point at this time. On the other hand, determination or withdrawal of the appeal at this time potentially creates an injustice in the event the Full Court overturns the decision in UFU v CFA in relation to clause 27. In the event the clause is valid, the CFA would likely wish to continue to argue to the Full Bench that Commissioner Roe’s decision is wrong in relation to its merits, if not in respect of its jurisdictional base.
[60] In this matter, the relevant clauses continue, having been affirmed as valid. In relation to these clauses it is not a matter of me being unable to continue to hear and determine the UFU’s application, however it is an issue of whether it is desirable that I should continue.
[61] The CFA argues three types of prejudice in the event the Commission proceeds to hear and determine the Allowance Claims;
● The first is the prejudice that would accrue to the CFA in the event the matter proceeded is the cost of increased allowances that might be payable only for a time in the event a determination of the Allowance Claims was followed by a Full Court finding clauses 15 and 38.3 were invalid and had no effect.
● The second is the prejudice to the CFA in having the Allowance Claims arbitrated when it might prefer to agree an outcome through enterprise bargaining. This is coupled with the likelihood that a determination by the Commission on the allowances will impact on the bargaining, at least to the extent of the allowances themselves. The CFA disbelieves the UFU’s argument that an arbitrated outcome has effect only to the time of the next agreement as “the parties remain entirely free to determine whether or not any or all of the allowances concerned will form part of a new agreement” 64, saying that the submission;
“has, with respect, an air of unreality about it. If the Commission was to approve (or reject) any or all of the claims in arbitration, this would significantly undermine the capacity of the CFA (and/or the UFU) to bargain concerning them. In short the Commission would provide a view concerning the merits of claims which are the subject of bargaining. This would, realistically, seriously undermine the capacity of the parties to bargain concerning the merits of the claims.” 65
● The third type is the prejudice of being required to deal with claims for adjustments to the allowances in arbitral proceedings and in the course of bargaining. The CFA refers to this third form of prejudice as having “the character of an abuse of process”. 66
[62] Taken together, the potential for an outcome arbitrated by the Fair Work Commission to later be adversely affected by a later determination of the Federal Court, and the fact that the parties are presently in negotiation for matters including the Allowance Claims, means there are persuasive reasons to not proceed with the hearing of the claims.
[63] In relation to the alternative of enterprise bargaining, I note that the Operational Staff Agreement’s nominal expiry date was 30 September 2013 67 and that bargaining for a replacement to the Operational Staff Agreement is regulated by the agreement itself, with clause 5 providing;
5. RENEGOTIATION AND REVIEW
The parties to this agreement agree to commence negotiations on a new agreement six months prior to the expiry date of this agreement.
[64] This application was commenced on 20 December 2012, however it made no reference to the four allowances that are now part of the Allowance Claim. The application when made referred to the dispute as being “about a changeover allowance”, and there was only a subtle reference in the application to the dispute being possibly broader, contained in the application’s description of the “steps already taken under dispute settlement procedure”, where it was said that;
“This dispute has been the subject of discussion between the CPA and the UFU with a view to achieving resolution. The 'changeover allowance' is one of a number of reserved matters which the parties have agreed should be arbitrated by Fair Work Australia.”
[65] It appears that even in the course of proceedings before Commissioner Roe that continued until June 2013 there had not been a detailing of what was actually claimed. Part of the Recommendation issued by Commissioner Roe on 20 June 2013 was a request for the parties to write to each other in order to clarify the subject of the claim. This was subsequently done with the UFU submitting in this regard;
“Contrary to what the CFA appears to contend, the dispute relating to the Reserved Matters Claim the subject of the current proceedings before the Commission (Matter No C2012/6673) was notified on 20 December 2012. Such notification was well in advance of both the requirement for the parties to commence negotiations on a new agreement and to provide their respective Log of Claims.
On 10 July 2013, the UFU particularised the dispute notified in Matter No C2012/6673 as consisting of claims for a Rope Rescue Allowance, a Coast Guard Brigade Allowance, a Member of Level 2 and 3 Incident Management Team Allowance and a Difficult to Fill Location Allowance. The Changeover Allowance was no longer pressed. ...” 68
[66] While the UFU submits that the dispute notification was “well in advance of both the requirement for the parties to commence negotiations on a new agreement and to provide their respective Log of Claims” 69 this is not accurate in the scheme of the timeframes of the dispute. While the dispute was commenced in December 2012, in March 2013, the parties were obligated to commence replacement agreement negotiations. The particulars of the matters in dispute were not provided until July 2013 and the UFU’s replacement agreement Log of Claims was served at the end of November 2013.
[67] While it is said, with justification, the law to be applied by the Commission is that clauses 15 and 38.3 are operable, it is necessary also to take account of the fact that there is a contest in the Federal Court over the validity of clause 38.3, with the CFA arguing that “both the UFU and CFA have accordingly challenged all of His Honour’s findings which were adverse (respectively) to them” 70. As a result, it is possible the very issue to be determined by the Commission, after being persuaded it was meritorious to do so, is made inoperable by a decision of the Full Court later this year. The possibility that allowances granted by the Commission are then revoked, does not sit comfortably with the desirability of the alternative of a more certain outcome achieved through an agreed position between the parties about what should be the future allowances.
[68] Bargaining for a replacement enterprise agreement is subject to a process that sits under interim bargaining orders established by Deputy President Smith in February 2014. 71 In making the order, the Deputy President observed;
[9] It is inherent in this that the bargaining representatives must know the proposals of each of the bargaining representatives to enable a response and reasons for such a response. It would appear to me that it is axiomatic that, to respond with reasons, there must be some specificity in the bargaining process.
[10] I agree with the CFA that it is important to have at an early stage what the parties believe to be the scope of bargaining which is to occur. This does not mean that the agenda for bargaining cannot change. In most cases, it will, as parties seek an agreement and strive for consensus. Without necessarily being critical of the UFU, I find that its current approach does not constitute good faith bargaining. This is particularly so against the background of the recommendation of Commissioner Roe on 21 May 2013.
[11] In bargaining, each side seeks a tactical advantage to produce a substantive advantage in the outcome of bargaining. However, there does come a time when the parties must commit themselves to the substance of bargaining with the objective of seeking to reach an agreement. Whilst I appreciate the undertaking given at the beginning of the proceedings today, there has been some uncertainty in the past. In my view, it is time for greater certainty to exist. Therefore, I shall issue an order which seeks to put the process between the parties on a more productive footing. 72 (emphasis added)
[69] The process established by the Interim Order requires the exchange of logs of claim and other documents and requires bargaining meetings between the parties. There is nothing before me that would indicate the process established by either the Interim Orders or the Act is inoperative or has ended.
[70] After considering the submissions and evidence in this matter, and for the reasons set out above, I find;
● That there is potential prejudice to the CFA if the matter proceeds to arbitration, and the subsequent Full Court decision invalidates the basis on which the arbitration progressed. It would be undesirable for the Commission to determine an outcome on the basis of legally contested agreement provisions, when such determination itself would have the taint that any order subsequently made could not have been made, or should not have been made.
● There is prejudice to the CFA in having to address the Allowance Claims both in arbitration and in enterprise bargaining. The Allowance Claims are part of a well advanced bargaining process that ought be permitted to take its course unimpeded by the externality that arbitration by the Fair Work Commission would represent;
● Because the agreement is beyond the date on which negotiations on a new agreement were to commence (and because the detail of the claims were only particularised after that date), as well as now being beyond its nominal expiry date, it is more desirable for the Allowance Claims to be resolved through enterprise bargaining.
[71] Taken together, I find these are sufficient reasons for the UFU Allowance Claims to not be listed for arbitration. The fact that each of the above exists compels an exercise of the Commission’s discretion to not proceed with the application.
[72] As previously referred to, the CFA raises two alternative arguments
● The Commission should find that it has no power to arbitrate the allowance claims, with the CFA submitting that s.739(5) prevents the Commission from granting the relief sought by the UFU.
● There has not been compliance with the dispute resolution steps.
Ground 3: The Commission should find that it has no power to arbitrate the allowance claims
[73] The contention that the Commission has no power to arbitrate the Allowance Claims concerns s.739(5) of the Act and specifically the contention of the CFA that determination of the UFU’s claims in the union’s favour would result in an outcome that is inconsistent with the Act.
[74] As set out previously, s.739(5) allows the Commission to deal with a dispute if a term in a modern award, enterprise agreement or other prescribed document referred to in section 738 requires or allows the FWC to deal with a dispute. The section provides for the Commission to arbitrate a dispute if a term referred to in s.738 allows that step, however it provides the following about inconsistency of decisions with the term;
“(5) Despite subsection (4), the FWC must not make a decision that is inconsistent with this Act, or a fair work instrument that applies to the parties.”
[75] The CFA’s argument in this regard is brief and has not been developed as fully as would be required for a final decision on the point. The CFA argues 73;
● Firstly that if the Allowance Claims were determined in the UFU’s favour, the practical effect would be for the Commission to determine the allowances should operate “as if they are prescribed in the Agreement”;
● Secondly, that the Act provides the “exclusive method by which an enterprise agreement can be made and varied”, namely Pt 2—4, Div 7 of the Act, which allows agreed variations to an agreement;
● Thirdly, there was a jurisdictional objection in the Disability Insurance Policy Appeal 74, unresolved by the Full Bench, that went to the capacity of the Commission to “arbitrate reserved matters because to do so is inconsistent” with the Act.
[76] In support of its submissions in relation to this ground, the CFA referred to several Full Bench decisions that it said confirmed the Commission has no power to vary the terms of an enterprise agreement via arbitration. The first of these, ABC v MEAA 75, concerned determinations made under s.170LW of the Workplace Relations Act 1996, and the Full Bench found that the Commissioner at first instance was obliged to exercise the dispute settling powers in accordance with the certified agreement and that, in particular, there was no authority to make a decision inconsistent with the terms of the agreement; in the instant case, in deciding whether or not an employee was redundant, the definition of redundancy in the agreement had to be applied.76 The matter of SDAEA v Woolworths Limited77 examined the interpretation of an enterprise agreement, and in particular whether the number of public holidays was limited to 10 per year for permanent employees. At the paragraph referenced by the CFA, the Full Bench examined the matters it is permissible to take into account in resolving a dispute, holding it is permissible to take into account the industrial context and purpose of an agreement subject to the principles set out in Amcor Ltd v CFMEU78 and Kucks v CSR Ltd.79 The matter of UFUA v CFA80 held that a resolution of a dispute purporting to remove an abbreviation exceeded jurisdiction, having regard to s.739(5) or the provisions of the Act establishing requirements in respect of the variation of an enterprise agreement.
[77] The UFU’s response is that the factors that form the CFA’s submission on this ground were dealt with by Murphy J in the hearings that led to the decision in UFU v CFA and that he rejected the arguments, upholding the validity of clauses 15 and 38.3 81.
[78] The decision in UFU v CFA considered at some length the validity of clause 38.3 and its interaction with the Fair Work Act, including whether the clause was a “permitted matter”, with Murphy J holding the following;
242 On the basis that, properly construed, cl 38.3 does not stand alone as a provision conferring power to grant new allowances or vary existing allowances, I do not see the Agreement as inconsistent with the FW Act. It was open to the parties to agree upon a dispute resolution procedure that related only to matters arising under the Agreement, just as it was open to the parties to refuse to set aside any Reserved Matters capable of being later arbitrated. The parties chose a different course, and that course was available to them.
243 On the basis that cl 38.3 does no more than invoke the dispute resolution power in cl 15 I do not consider that it falls outside the “permitted matters” in s 172. I accept the CFA’s contention that cl 38.3 is not a dispute resolution term as provided in ss 186(6), 739 and 738(b) of the FW Act. But it is not invalid because, properly construed, it is not a source of power for the Commission to privately arbitrate such matters.
244 As I have said, the Agreement is not as uncertain as the CFA contends just because it allows a number of matters to be the subject of private arbitration by the Commission. The power to privately arbitrate disputes at all only arises because the parties specifically agreed to a dispute resolution term that contemplated that. The broad scope of the power of private arbitration under cl 15 is also the result of the parties’ specific agreement. The Private Arbitration Case is authority for the proposition that the parties to an industrial agreement are able to create a broad power of private arbitration in the Commission.
245 In this context I note that any debate about the validity of cl 38.3 is essentially arid. Even if I accept the CFA’s contention that the clause is invalid, the dispute resolution procedure in cl 15 means that the numerous allowances included in the Reserved Matters list can be brought before the Commission for private arbitration. 82
[79] The brevity of the submissions of both parties on these points, and whether the judgement of the Federal Court is determinative of the subjects advanced by the CFA before me, do not allow me to conclusively determine the CFA’s objection, which is put as a submission in the alternative to its two primary submissions. If the matter were to proceed, then these arguments would need to be more comprehensively addressed in order to finally determine the objection.
[80] I therefore do not determine this aspect of the CFA’s objection.
Ground 4: There is no power to advance the dispute since there has been non-compliance with dispute resolution steps
[81] The CFA’s objection on this head of argument is that the UFU has demonstrated insufficient compliance with the steps set out in sub-clause 15.2 for the advancement of a dispute, and its subsequent referral to the Fair Work Commission to deal with a dispute under s.739 of the Act. The UFU resists the objection, tabling Minutes of its “Arbitration Sub-Committee” and the witness statement of Mr Paul Mullett. These documents are said by the union to show that “effective consultation with a view to achieving a satisfactory resolution of the Reserved Matters took place over a 7-month period following approval of the Agreement. Consultation about the four allowances the subject of the Reserved Matters Claim was included in this process” 83.
[82] In relation to this objection, the CFA submits it is well established that dispute resolution steps must be satisfied for the Commission to have jurisdiction to determine a dispute, citing the matters of Alcoa Australia v AWU & Ors 84 and TWUA v Torrens Transit Services Pty Ltd85. The first of the matters, Alcoa Australia v AWU, looked for explicit reasoning that Commissioner had decided he actually had jurisidiction to deal with the notified disputes; instead he appeared to have decided that he had jurisdiction, without explicitly considering the requirements of jurisdictional fact set out in the Act, some of which might have led to a refusal of the application.86 The second of the matters, TWUA v Torrens Transit Services confirmed the need to have followed the dispute resolution process set out in an enterprise agreement in order to make an application to the Commission under s.739, which reasoning is consistent with that set out by me in UFU v CFA/CFA v UFU87.
[83] The Operational Staff Agreement’s Clause 15 provides the following process for the advancement of disputes;
“15. DISPUTE RESOLUTION
15.1. This dispute resolution process applies to all matters arising under this agreement, which the parties have agreed includes:
15.1.1. all matters for which express provision is made in this agreement; and
15.1.2. all matters pertaining to the employment relationship, whether or not express provision for any such matter is made in this agreement; and
15.1.3. all matters pertaining to the relationship between the CFA and UFU, whether or not express provision for any such matter is made in this agreement, and
15.1.4. all matters arising under the National Employment Standards.
The parties agree that disputes about any such matters shall be dealt with by using the provisions in this clause.
15.2. To ensure effective consultation between the employer, its employee(s) and the union on all matters, the following procedure shall be followed in an effort to achieve a satisfactory resolution of any dispute or grievance:
15.2.1. Step 1 The dispute shall be submitted by the union and/or employee(s) to the employee’s immediate supervisor.
15.2.2. Step 2 If not settled at Step 1, the matter shall be submitted to the appropriate senior officer.
15.2.3. Step 3 If not settled at Step 2, the matter shall be recorded. The matter shall be submitted to the appropriate delegated Industrial Representative of the employer for consultation.
15.2.4. Steps 1 - 3 Must be concluded within a period of ten (10) consecutive days. Disputes are to be resolved at a local level wherever possible.
15.2.5. Step 4 If the matter is not settled at Step 3, the dispute shall be formally submitted in writing to the Manager Employee Relations, setting out details of the dispute and, where appropriate, with supporting documentation. The Manager Employee Relations shall convene a meeting of the employer, employee(s) and the union within a period of one week (7 days) of receipt of such submissions and endeavour to reach a satisfactory settlement.
15.2.6. Step 5 If the matter is not settled following progression through the disputes procedure it may be referred by the union or the employer to FWA. FWA may utilise all its powers in conciliation and arbitration to settle the dispute.
15.3. Notwithstanding the words contained in the above sub-clause, the steps of the procedure apply equally to a dispute raised by an employee, the union or Officer in Charge.
15.4. While the above procedures are being followed, including the resolution of any dispute by FWA pursuant to clause 15.2.6, work must continue and the status quo must apply in accordance with the existing situation or practice that existed immediately prior to the subject matter of the grievance or dispute occurring.
No party shall be prejudiced as to the final settlement by the continuance of work in accordance with this sub-clause.
15.5. This clause shall not apply to a dispute on a Health and Safety issue.
15.6. A dispute may be submitted, notified or referred under this clause by the UFU.
15.7. A decision of FWA under this clause may be appealed. A dispute is not resolved until any such appeal is determined.”
[84] In the matter of UFU v CFA/CFA v UFU 88, I found that on the correct construction of the clause meant under the Step 5 set out in paragraph 15.2.6, a referral to the Fair Work Commission may only be AFTER the matter has not settled AND it has progressed through the disputes procedure. Even then, referral to the Commission is not automatic, merely that a party MAY refer the dispute.89 Consideration of the procedural steps followed by a dispute notifier is relevant to the question of whether there is jurisdiction for the Commission to exercise determinative powers.90
[85] There is very limited material before me in relation to compliance with the sub-clause for the making and advancement of the Allowance Claims. Such material as is before me includes witness evidence of Mr Mullett, that was introduced uncontested and without him being required to give oral evidence. The documents are not extensive, however they do support the conclusion that there has most likely been compliance with the sub-clause and that therefore the claims have been validly advanced and brought before the Fair Work Commission.
[86] As a result, this aspect of the CFA’s objections must be rejected.
Conclusion
[87] For the reasons set above, I determine the CFA’s objections to the hearing and determination of the UFU’s Allowances Claims as follows;
Ground 1: The claims should be adjourned pending the decision of the Full Federal Court concerning the appeals from the decision of Murphy J
Ground 2: The allowance claims should not be arbitrated since the claims are also being pursued by the UFU in bargaining for a new agreement
● I find in favour of the CFA’s objections. The Allowance Claims will be adjourned until resolution of the legal contest that forms the substance of Ground 1 and for the duration of bargaining for a new agreement to replace the Operational Staff Agreement
Ground 3: The Commission should find that it has no power to arbitrate the allowance claims
● I make no determination of this aspect of the CFA’s objection.
Ground 4: There is no power to advance the dispute since there has been non-compliance with dispute resolution steps
● I reject this aspect of the CFA’s objection.
COMMISSIONER
Appearances:
Ms A Forsyth, of Counsel for Applicant
Mr T Jacobs, of Counsel for Respondent
Hearing details:
2014.
Melbourne:
March, 27
1 AE881690.
2 [2014] FCA 17.
3 Exhibit CFA1, para 2.
4 UFU Application, Form F10, 20 December 2012, para 8.
5 Recommendation, Roe C, 20 June 2013, para 1.
6 Refers also to C2013/1370 (General increase to all allowances; filed 30 August 2013); and C2013/5718 (New allowance for Heavy Hazardous Materials Vehicles; filed 23 August 2013).
7 Exhibit CFA3, tab 6.
8 Correspondence from solicitors for the CFA, 10 January 2014.
9 Correspondence from UFU, 4 February 2014.
10 Exhibit UFU2, tab 1.
11 Ibid.
12 [2014] FCA 17, at [197].
13 Ibid, at [201].
14 Ibid, at [209].
15 Ibid, at [209].
16 Ibid, at [217].
17 Ibid, at [221].
18 Ibid, at [241].
19 Ibid.
20 Ibid.
21 Ibid, at [243].
22 Ibid, at [245].
23 Exhibit CFA1, para 9.
24 Exhibit CFA1, para 10.
25 Ibid, para 17.
26 [2012] FWA 7155.
27 Exhibit CFA2, Attachment A.
28 Exhibit CFA1, para 31.
29 Ibid, para 37.
30 Ibid, para 38.
31 Ibid, para 40.
32 Ibid, para 35.
33 [2012] FWAFB 9555.
34 [2012] FWA 1085.
35 [2012] FWAFB 9555, at 39 – 40.
36 Ibid, at 42 – 46.
37 Ibid, para 44.
38 Ibid, para 45.
39 Ibid, para 46.
40 Ibid, para 51 – 52.
41 Exhibit UFU4, para 12.
42 Ibid, paras 13 – 15.
43 Ibid, para 18.
44 Ibid, para 21.
45 Ibid, para 22 – 23.
46 Exhibit UFU4, para 26 cites UFU v CFA [2014] FCA 17, at [223]-[249] and more generally at [177]-[222].
47 Ibid, para 26.
48 Exhibit UFU 1.
49 [2014] FCA 17, at [4].
50 (1995) 184 CLR 188; see finding of Murphy J in UFU v CFA [2014] FCA 17, at [133]
51 Additional Staffing Appeal Transcript, PN 426 – 498.
52 Exhibit CFA2, Attachment A.
53 [2012] FWA 7155, at 5.
54 Ibid, at 82.
55 Ibid, at 110.
56 Ibid at 118.
57 Ibid at 128.
58 Ibid at 129.
59 [2014] FCA 17, at 102.
60 Ibid, at 250.
61 Ibid, at 4.
62 Ibid, at 107.
63 Ibid, at 132 – 133.
64 Exhibit UFU4, para 20.
65 Exhibit CFA2, para 14.
66 Ibid, para 40.
67 Operational Staff Agreement, clause 4.1; [2010] FWAA 8164, at [5].
68 Exhibit UFU4, para 16 – 17.
69 Ibid.
70 Exhibit CFA1, para 10 – 11.
71 [2014] FWC 1293 and PR548014.
72 [2014] FWC 1293, at [9] - [11].
73 Exhibit CFA1, para 45 – 46.
74 [2012] FWAFB 9555.
75 (2004) 136 IR 99 at [39].
76 Ibid, at [36].
77 [2013] FWCFB 2814 at [12].
78 (2005) 222 CLR 241.
79 (1996) 66 IR 182.
80 [2014] FWCFB 410 at [36].
81 Exhibit UFU4, para 25 – 26.
82 [2014] FCA 17, at [242] – [245].
83 Ibid, para 27.
84 [2010] AIRCFB 9832.
85 [2013] FWC 7318.
86 Ibid, see [11], [16] and [22].
87 [2013] FWC 7013.
88 Ibid.
89 Ibid, at [38].
90 Ibid, at [61].
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