United Firefighters' Union of Australia v Metropolitan Fire and Emergency Services Board
[2016] FWCFB 2894
•12 MAY 2016
| [2016] FWCFB 2894 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.739 - Application to deal with a dispute
v
Metropolitan Fire and Emergency Services Board
(C2016/2892)
VICE PRESIDENT HATCHER |
|
Alleged dispute under the enterprise agreement - whether matters pertaining to the employment relationship.
[1] On 8 March 2016 the United Firefighters’ Union of Australia (UFU) lodged an application for the Fair Work Commission (Commission) to deal with a dispute with the Metropolitan Fire and Emergency Services Board (MFB) in accordance with the dispute resolution procedure in clause 19 of the Metropolitan Fire and Emergency Services Board & United Firefighters Union Operational Staff Agreement 2010 (Agreement). The application described the dispute as concerning a failure by the MFB to consult in accordance with clause 13 of the Agreement in relation to a review being conducted by the MFB concerning recruitment procedures for firefighters (Review). Included in the application’s description of the subject matter of the dispute was the proposition that “Recruitment standards is a serious issue for UFU members who have a direct interest in the standards that apply to recruit firefighters due to the nature of the work they perform, including that it’s dangerous”.
[2] The MFB’s position in relation to the dispute was that the changes to its recruitment procedures were not a matter about which it was obliged to consult under the Agreement, and a dispute about the changes to its recruitment procedures was not a matter to which the dispute resolution procedure in the Agreement applied.
[3] On 10 March 2016, in correspondence addressed to the President (Ross J) of the Commission, the MFB applied for a direction that the UFU’s application be referred to a Full Bench for hearing and determination. It was contended that such a referral would be in the public interest for reasons which included the following:
“1 The MFB is a statutory body providing fire and emergency services to the community in the Metropolitan district.
2 The MFB is taking steps to improve the diversity of its workforce, in particular to increase the number of female firefighters. Presently, there is 3.4 percent of the MFB’s operational workforce is female and the MFB has a target to increase this representation to 5 percent by 2018.
3 To achieve the target the MFB intends to offer not less than 30 suitably qualified female candidates places on the next three recruit courses. The recruit courses are significant investments by the MFB in time and resources. They are also necessary to be conducted as scheduled in order for the MFB to meet its obligations to maintain minimum staffing commitments. There are two courses currently being conducted and only 4 females have been offered roles out of the 60 places.
4 The subject matter of the Application is significant. It is also very important to the MFB that this dispute be determined finally and in a timely manner as the recruit courses in July 2016 require numerous steps to be taken between now and the commencement.
5 The outcome of the Application and second dispute will have a significant effect on how the MFB, as a statutory body and emergency service, improves the number of suitably qualified female candidates for its recruit course and therefore the number of recruit positions able to be offered to women.
...
8 The matter is complex and includes consideration of legal uncertainties in relation to whether the UFU can raise a dispute in respect to prospective employees as described in the Application and second dispute. The following issues arise:
(a) Whether or not the Application or second dispute are disputes within the meaning of clause 19 of the MFB 2010 EBA and whether or not the status quo provision in clause 19.4 of the MFB 2010 EBA is enlivened.
(b) For a dispute to fall within the meaning of cl.19 it must either relate to matters for which express provision is made in the agreement (19.1.1); matters pertaining to the employment relationship (19.1.2); or matters pertaining to the relationship between the MFB and the union (19.1.3).
(c) There is a strong difference of view between the MFB and UFU as to whether the dispute does or does not fall within clause 19.1.1, as the Agreement makes no express provision for any matter related to recruitment, other than in cl. 70.2 which addressed a review of the recruit procedure that was to have occurred in the first year of the MFB 2010 EBA’s operation (i.e. between September 2013 and September 2014).
(d) There is a strong difference of view between the MFB and UFU as to whether the dispute does or does not fall within clause 19.1.2, in particular whether as Application and second dispute as described pertain to the employment relationship. This question involves consideration of the High Court of Australia’s decisions in Re Cram; ex parte NSW Colliery Proprietors’ Association Limited (1987) 163 CLR 117; Electrolux Home Products Pty Ltd v Australian Workers’ Union (2004) 221 CLR 309 and R v Portus; ex parte ANZ Banking Group Ltd (1972) 127 CLR 353 and how they apply to the provisions in s.172 of the FW Act.
...”
[4] In an email to the President’s chambers dated 11 March 2016, the UFU indicated that it consented to the reference to a Full Bench on the following basis:
“(a) That the question to be determined by the Full Bench is whether, in the circumstances, the terms of clause 13 of the Metropolitan Fire and Emergency Services Board, United Firefighters Union of Australia, Operational Staff Agreement 2010 are attracted?; and
(b) That the status quo be maintained until the hearing and determination of the matter.”
[5] After conducting a short hearing about the issue on 15 March 2016, the President issued a direction the relevant part of which stated: “Pursuant to ss.582 and 615A of the Fair Work Act 2009, I direct that this matter be dealt with by a Full Bench”. The “matter” was the UFU’s dispute resolution application, which had been assigned the matter number C2016/2892.
[6] After the direction was made, a dispute arose between the parties as to whether the whole of the UFU’s application had been referred to the Full Bench, or merely the determination of the legal questions identified in the MFB’s correspondence of 10 March 2016 and the UFU’s correspondence of 11 March 2016. We took the view that there had been a referral of the entirety of the matter, but that the legal questions identified would be determined by us as a preliminary issue. That preliminary issue may be stated in the following way: are the changes which the MFB proposes to implement arising out of the Review matters about which the MFB was required to consult about under clause 13 of the Agreement and which could be the subject of the dispute resolution procedure in clause 19 of the Agreement?
[7] Under s.739 of the Fair Work Act 2009 (FW Act), the Commission may only deal with a dispute arising under the dispute resolution procedure of an enterprise agreement to the extent that it is authorised to do so by the terms of that procedure. If the dispute identified in the UFU’s application is not one to which clause 19 of the Agreement applies, it follows that the Commission has no jurisdiction to deal with the dispute and the application must be dismissed as incompetent.
The proposed changes
[8] The evidence before us gave greater particularity as to the changes which the MFB wishes to implement arising out of the Review. The pre-existing position was relevantly as follows:
• Applications for employment as a firefighter are received without consideration as to gender.
• Applicants must undergo a rigorous selection process which involves a number of different stages: a written test which has various components including one concerning mechanical reasoning, a group assessment, a shuttle run or “beep test”, a physical aptitude test, a selection interview; and a psychological profile questionnaire.
• All stages of the selection process must be passed in order for an applicant to progress to the next stage. However there is a “three-strikes” policy whereby an applicant is given three opportunities to pass each stage.
• Three stages - the written test, the group assessment and the interview - involve a score being assigned to the applicant. Those who pass all stages of the selection process are ranked on an “Order of Merit” on the basis of their total score for these three stages.
• Persons who have passed the selection process may then be offered a place in the MFB’s recruit training course. This course is the gateway to a career as a firefighter. All recruits must achieve all of the required competencies in the training course before they can commence employment as an operational firefighter.
• Available places in the recruit training course are offered in order of the applicants’ ranking on the Order of Merit.
[9] The MFB now proposes the following specific changes to the above system:
(1) When the MFB invites applications for employment as firefighters, there will be quotas for the number of persons who will be considered for employment via the selection process: only the first 350 applications from males and the first 350 applications from females will be progressed to the selection process.
(2) The cut-off score for each component of the written test will be changed from 50 to 45.
(3) The “three-strikes” policy will be abolished, so that applicants will have only one opportunity to pass each stage of the selection process.
(4) The MFB will not strictly follow the Order of Merit in offering places in the recruit training course, but will take into account its target of achieving a 5% female workforce and also the desirability of achieving greater cultural and linguistic diversity. For the next three recruit courses (each involving 30 places), the MFB will select a minimum of ten females for each course (assuming that a sufficient number have passed the selection process) regardless of their position on the Order of Merit.
[10] The MFB has already implemented some of these changes with respect to the processing of the current round of applicants. The gender quotas of 350 male and 350 female applicants were applied. The applicants who were then progressed are currently undergoing the selection process, and have not been given the benefit of the “three-strikes” policy in doing so. The applicants have already completed the written test, and the changed cut-off mark was applied in respect of those tests. The remaining stages of the selection process, namely the psychological profile questionnaire and the interview, are anticipated to be completed by the end of the first week in June 2016. The MFB then intends to select those to be offered places in the next recruit training course, which is scheduled to commence on 18 July 2016, on the changed basis we have identified.
[11] The MFB originally proposed a further change to the selection process, namely the abolition of the mechanical reasoning component of the written test. However that change was not implemented in respect of the current intake of applicants, who have accordingly undergone the existing mechanical reasoning test. The MFB’s current position is that it has not yet made any decision to remove the mechanical reasoning component of the written test from future selection processes.
[12] We will therefore determine the preliminary question we have earlier identified by reference to the four specific proposed changes set out above.
Relevant provisions of the Agreement
[13] Clause 15 of the Agreement establishes an obligation to consult concerning the introduction of change in the following terms:
“15. INTRODUCTION OF CHANGE
Where the employer wishes to implement change in matters pertaining to employment relationship in any of the workplaces covered by this agreement, the provisions of clause 13 will apply.”
[14] Clause 30 also requires that the consultation procedures in clause 13 be followed in respect of changes to policies which affect employees:
“30. MFESB POLICIES
The MFESB currently has a range of policies that affect employees covered by this agreement. Policy that is dealt with elsewhere in the agreement may only be varied by agreement. Should the MFESB elect to modify, delete or add to existing policy that affects employees then any change or addition will be subject of consultation pursuant to clause 13 of this agreement. Should any policy be inconsistent with a term of this Agreement, then it will be invalid to the extent of any inconsistency.”
[15] The substantive consultation provisions are set out in clause 13. It is not necessary for present purposes to reproduce the full clause. It is sufficient to note that clause 13.1 requires “... the full, meaningful and frank discussion of issues/proposals and the consideration of each party's views, prior to any decision...” and clause 13.2 establishes a “MFB/UFU Consultative Committee” as the mechanism by which the required consultation is to occur.
[16] Clause 20.1 provides that “Any dispute from either party regarding consultation and change shall be dealt with in accordance with this clause and the dispute resolution clause of this agreement”. The dispute resolution procedure is set out in clause 19. Clause 19.1 prescribes the scope of operation of the procedure in the following terms:
“19.1. This dispute resolution process applies to all matters arising under this agreement, which the parties have agreed includes:
19.1.1. all matters for which express provision is made in this agreement; and
19.1.2. all matters pertaining to the employment relationship, whether or not express provision for any such matter is made in this agreement; and
19.1.3. all matters pertaining to the relationship between the MFESB and UFU, whether or not express provision for any such matter is made in this agreement.
The parties agree that disputes about any such matters shall be dealt with by using the provisions in this clause.”
[17] The procedure set out in the remainder of clause 19 requires various steps to be taken by the parties to resolve any dispute to which the clause applies between themselves, and ultimately empowers the Commission to “utilise all its powers in conciliation and arbitration to settle the dispute” (clause 19.2.6). Clause 19.4 provides that while the procedures are being followed, “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”.
[18] The submissions of the parties raised two questions concerning the interpretation and application of the above provisions:
(1) Did the proposed changes involve “matters pertaining to the employment relationship” to which the consultation requirement in clause 15 and the dispute resolution procedure in clause 19 applied?
(2) Did the proposed changes involve a change of policy to which the consultation requirement in clause 30 applied?
Matters pertaining to the employment relationship?
[19] The phrase “matters pertaining to the employment relationship” used in clauses 15 and 19.1.2 of the Agreement was clearly not an original formulation of those who negotiated and drafted the Agreement. As was stated in Electrolux Home Products Pty Limited v Australian Workers’ Union 1 in relation to a phrase to the same effect appearing in the Workplace Relations Act 1996, “This phrase has a long history in the industrial relations law of this country, and in the decisions of this Court...”, and elsewhere in that decision it was described as a “pivotal definition” in the field of industrial relations legislation.2
[20] Of immediate relevance in the interpretation and application of the phrase as it appears in the Agreement is the statutory context in which the Agreement was made. 3 Section 172(1) of the FW Act set out the matters which may be regulated by an enterprise agreement as follows:
Enterprise agreements may be made about permitted matters
(1) An agreement (an enterprise agreement) that is about one or more of the following matters (the permitted matters) may be made in accordance with this Part:
(a) matters pertaining to the relationship between an employer that will be covered by the agreement and that employer’s employees who will be covered by the agreement;
(b) matters pertaining to the relationship between the employer or employers, and the employee organisation or employee organisations, that will be covered by the agreement;
(c) deductions from wages for any purpose authorised by an employee who will be covered by the agreement;
(d) how the agreement will operate.
[21] The use of the “matters pertaining to the relationship” formulation in s.172(1)(a) echoed statutory formulations used to describe the scope of matters falling within the jurisdiction of industrial arbitration tribunals ever since the enactment of the Conciliation and Arbitration Act 1904 (which defined “industrial matters” which could be the subject of an industrial dispute as including “all matters pertaining to the relations of employers and employees”). The Explanatory Memorandum for the Fair Work Bill 2009 explained the use of this formulation in s.172(1) in the following way:
“668. Paragraph 172(1)(a) refers to 'matters pertaining to the relationship between an employer that will be covered by the agreement and that employer's employees who will be covered by the agreement', referred to after this as 'matters pertaining to the employment relationship'.
669. The matters pertaining to the employment relationship formulation is of long standing. Under both the Industrial Relations Act 1988 and the WR Act prior to 27 March 2006, collective agreements had to be about matters pertaining to the employment relationship. Since 27 March 2006, a term of a workplace agreement that was not about such matters was 'prohibited content'. Between 1904 and 2006, the formula was also used in the definition of 'industrial dispute' under successive Commonwealth industrial relations statutes.
670. Although the precise words used have changed from time to time, the courts have construed each manifestation of the formula in a similar way. There is substantial jurisprudence about what the phrase means. It is intended that paragraph 172(1)(a) should be read in line with that jurisprudence. The courts' interpretation of the formulation has evolved over time in line with changing community understandings and expectations about the kinds of matters that pertain to the employment relationship, and it is expected that this approach will continue.
671. Whether a particular term is about matters pertaining to the employment relationship will depend on its precise construction, as well as the circumstances surrounding the particular employment relationship. Frequently, it will be obvious that a term pertains to the employment relationship - e.g., a term about the payment of wages or a term about hours of work and shift patterns. However, there are some terms where it is not so immediately clear whether the terms are about matters pertaining to the employment relationship (see, e.g., the discussion in Re Schefenacker Vision Systems Australia Pty Ltd, AWU, AMWU Certified Agreement 2004[2004] AIRC 1064.
672. It is intended that the following terms would be within the scope of permitted matters for the purpose of paragraph 172(1)(a):
• terms relating to particular staffing levels (subject to any other applicable legislative requirements or limitations) particularly if those terms are aimed at ensuring the health, safety and well-being of employees;
• terms relating to conditions or requirements about employing casual employees or engaging labour hire or contractors if those terms sufficiently relate to employees' job security - e.g. a term which provided that contractors must not be engaged on terms and conditions that would undercut the enterprise agreement;
• terms that would provide that casual employees are converted to permanent employees after a set period of time;
• terms that would prevent an employer from seeking a contribution or indemnity from an employee in respect of personal injuries or losses suffered by that person where such injuries or losses were cause by the employee in the course of their employment.
673. The following terms would not be intended to be within the scope of permitted matters for the purpose of paragraph 172(1)(a):
• terms that would contain a general prohibition on the employer engaging labour hire employees or contractors;
• terms that would contain a general prohibition on the employer employing casual employees;
• terms that would require an employer or employee covered by to the enterprise agreement to make a donation to a political party or charity;
• terms that would require an employer to source only products from a particular supplier or Australian made products (unless, e.g., such a term was directly related to employees' job security);
• terms that would require an employer to engage or not engage particular clients, customers or suppliers who had agreed to commit to certain employment, environmental or ethical standards (unless, e.g., such a terms was directly related to employees' health and safety);
• terms that relate to corporate social responsibility, e.g., terms requiring an employer to participate in charity events or commit to climate change initiatives.”
[22] The inference we draw from the statutory context is that in using the “matters pertaining to the employment relationship” formulation in clauses 15 and 19.1.2 of the Agreement, the makers of the Agreement intended that the consultation and dispute resolution provisions operate to the full extent permitted by s.172(1)(a), and accordingly that it was intended that the formulation bear the same width of meaning that it did in s.172(1)(a). That being the case, the long line of authority, much of it consisting of decisions of the High Court, concerning the “matters pertaining to the relationship” formulation as it appeared in various industrial statutes must necessarily guide the proper interpretation of clause 15 and 19.1.2 of the Agreement.
[23] The most pertinent decision in this line of authority is Re Cram; Ex parte NSW Colliery Proprietors’ Association Limited. 4 It concerned a dispute which had arisen out of a decision by the relevant coal mining employer to abandon an arrangement whereby it had recruited labour from a register of unemployed union members and members seeking employment in the industry. The Local Coal Authority (Northern District), constituted pursuant to the Coal Industry Act 1946 (Cth) and the Coal Industry Act 1946 (NSW), directed the employer to abide by the existing arrangement, and this decision was confirmed on an interim basis on review by the Coal Industry Tribunal established by the same legislation. The jurisdiction of the Authority and the Tribunal to make these orders was challenged before the Court.
[24] The jurisdiction of the Authority and the Tribunal to make the orders in question turned upon whether they were made in settlement of a dispute about an “industrial matter”. That expression was defined in s.4 of both Acts as meaning, relevantly: “... all matters pertaining to the relations of employers and employees in the coal mining industry, and, without limiting the generality of the foregoing, includes, in respect of that industry ...”. What followed in the definition was a number of specifically identified dispute subject matters (set out in paragraphs (a)-(p) of s.4).
[25] It was contended by the employer interests challenging the jurisdiction of the Authority and the Tribunal that the dispute was not about an industrial matter “because a dispute about manning and mode of recruitment of labour does not directly affect the relations of employer and employees”. 5 That was rejected by the Court. The joint judgment of the entire seven member court said6:
“Accepting the major premise of the prosecutor's argument, we are nevertheless unable to accept the minor premise, namely that a dispute about manning and recruitment, in particular a dispute about mode of recruitment, as that is the correct characterization of the dispute here, is not directly connected with the relationship between employer and employee and is merely consequential. The essence of the prosecutor's argument on this point is that a dispute about manning and recruitment does not directly affect the relationship of existing employer and employee as such; it is a dispute about the policy and procedure to be adopted by the employer in the management of his business enterprise and thus falls within the scope of managerial prerogatives. The subject-matter of the dispute is non-industrial, just as a dispute about the opening and closing hours of shops was held to be non-industrial in Clancy and R v Kelly; Ex parte State of Victoria [1950] HCA 7; (1950) 81 CLR 64, at p 84.
Before dealing with the various strands of thought embedded in this argument, we should mention some aspects of the general words of the definition of "industrial matters" as established in the context of s.4 of the Conciliation and Arbitration Act 1904 (Cth). The words "pertaining to" mean "belonging to" or "within the sphere of" and the expression "the relations of employers and employees" refers to the relation of an employer as employer with an employee as employee: Kelly, at p.84. And, as Dixon CJ noted in The Queen v. Findlay; Ex parte The Commonwealth Steamship Owners' Association [1953] HCA 81; (1953) 90 CLR 621, at pp 629-630, although the possibility of an indirect and consequential effect is not enough, the conception of what arises out of or is connected with the relations of employers and employees includes much that is outside the contract of service, its incidents and the work done under it. The Chief Justice went on to say (at p.630):
"Conditions affecting the employee as a man who is called upon to work in the industry and who depends on the industry for his livelihood are ordinarily taken into account."
His Honour referred to the remarks of Isaacs and Rich JJ. in Australian Tramways Employes Association v Prahran and Malvern Tramway Trust [1913] HCA 53; (1913) 17 CLR 680. Their Honours, with reference to the equivalent of par.(h) of the definition of "industrial matters" in the Commonwealth and State Acts, said (at pp.693-694):
"The 'conditions' of employment include all the elements that constitute the necessary requisites, attributes, qualifications, environment or other circumstances affecting the employment.
And the words 'employers' and 'employes' are used in the Act not with reference to any given contract between specific individuals, but as indicating two distinct classes of persons co-operating in industry, proceeding harmoniously in time of peace, and contending with each other in time of dispute."
Then they referred to the extended definition of "employe" in s.4 of the Conciliation and Arbitration Act which includes "any person whose usual occupation is that of employe in any industry", asserting that it makes manifest the last point made in the passage already quoted. Although neither the Commonwealth nor the State Act contains any corresponding definition of "employee" or "employer", the point sufficiently emerges from the opening words of the definition of "industrial matters", reinforced by the particular paragraphs which follow. And the comments of Isaacs and Rich JJ. also apply to the opening words of the definition, notwithstanding that they were directed at par.(h). Dixon C.J. obviously read them as relating to the general conception of relations between employers and employees.
In the context of the issue which arises in the present case it makes no difference whether the comments apply to the general words of the definition, to par.(h) or even to pars(g), (i), (j) or (k). The comments apply with varying force to each of these paragraphs. And they apply with even greater force now than at the time when they were made. To make this point, we return to the statement already quoted by O'Connor J in Clancy, at p.207. That statement probably echoes in some respects what was received doctrine at an earlier time - that it was the prerogative of management to decide how a business enterprise should operate and whom it should employ, without the workforce having any stake in the making of such decisions. In that climate of opinion, disputes about the making of such decisions, despite their impact on working conditions and work to be done, might not necessarily be regarded as industrial matters susceptible of resolution by industrial arbitration. Over the years that climate of opinion has changed quite radically, perhaps partly as a result of the extended definition of "industrial matters" in s.4 of the Conciliation and Arbitration Act and partly a result of a change in community attitudes to the relationship between employer and employee. The judgment of Isaacs and Rich JJ. in Tramways Employes reflects the first of these factors. No doubt our traditional system of industrial conciliation and arbitration has itself contributed to a growing recognition that management and labour have a mutual interest in many aspects of the operation of a business enterprise. Many management decisions, once viewed as the sole prerogative of management, are now correctly seen as directly affecting the relationship of employer and employee and constituting an "industrial matter".
A dispute about the level of manning is a good example. It has a direct impact on the work to be done by employees; it affects the volume of work to be performed by each employee and the conditions in which he performs his work. So also with the mode of recruitment of the workforce. The competence and reliability of the workforce has a direct impact on the conditions of work, notably as they relate to occupational health and observance of safety standards. Employees, as well as management, have a legitimate interest in both these matters.
Why then is not the proposed employment of non-union labour or the refusal to abide by a system of recruitment which gives preference to union labour a matter directly affecting the relations of employer and employee? The decision in Reg v Gaudron; Ex parte Uniroyal Pty. Ltd.[1978] HCA 3; (1978) 141 CLR 204, shows that it is. There the Court held that a dispute about preference in employment for a particular class of members of a union was a dispute as to an "industrial matter" as defined by s.4 of the Conciliation and Arbitration Act: see also Waterside Workers' Federation of Australia v Gilchrist, Watt & Sanderson Ltd [1924] HCA 61; (1924) 34 CLR 482; Reg v Holmes; Ex parte Altona Petrochemical Co. Ltd[1972] HCA 20; (1972) 126 CLR 529. It is simply not to the point that the industrial matter related to prospective employment: see Uniroyal, at p.211. There was an actual dispute between existing employees and employers about that industrial matter.
The order made by the Authority in settlement of the dispute did not exceed the ambit of the dispute that arose from the employer's refusal to abide by the pre-existing arrangement for recruitment of labour from a register maintained by the Union, so long as there were sufficient or suitable persons on the register. The dispute was, accordingly, a dispute about a mode of recruitment of labour which involved a claim for preference for members of the Union enshrined in the pre-existing arrangement for recruitment. And the order made by the Authority required compliance with a detailed procedure embodied in the order which gave effect to that claim for preference. The order was valid on the ground that it was made in settlement of a dispute as to "industrial matters" as defined, the relevant matter falling within the opening words of the definition as well as pars. (h), (i) and (j). We have no need to decide whether the matter also fell within pars. (g), (k) and (l).”
[26] We derive two propositions from the above passage in Cram:
(1) A matter will pertain to the relationship of employers and employees if it directly affects the conditions of employees, which includes all the elements that constitute the necessary requisites, attributes, qualifications, environment or other circumstances affecting the employment.
(2) The “mode of recruitment” is a matter which has the necessary direct effect, because the competence and reliability of the workforce has a direct impact on the conditions of work, notably as they relate to occupational health and observance of safety standards.
[27] In using the expression “mode of recruitment”, we understand that the Court was referring to the standards and procedures used to select those who would be engaged in employment by the employer, because it is the competence and reliability of those selected which may have an effect on the working conditions of employees including their health and safety.
[28] We do not consider that any subsequent decision of the High Court has overturned or called into question the correctness of Cram or sought to confine or distinguish the propositions for which it stands. The most recent decision of the Court concerning the “matters pertaining to the relationship” formulation was Electrolux Home Products Pty Limited v AWU 7. That decision concerned the particular subject matter of “bargaining agent’s fees”, which was held not to be a matter pertaining, but there was no change in the general approach of the Court as to what constituted a “matter pertaining” - namely a matter directly affecting employers and employees in their relations as such.
[29] It was submitted by the MFB that Cram was handed down in a legislative context “which expressly permitted that the preferential employment of union members was a matter pertaining [and] it necessarily extended to the recruitment of future employees”, whereas under the current legislative framework “Recruitment can pertain only to the extent that it tangibly and directly affects current employees”. That submission must be rejected. It is sufficient to say that it involves a mischaracterisation of Cram, since the ratio of the Court’s decision was that the mode of recruitment was a matter pertaining because the competence and reliability of the workforce directly affected the workforce’s employment conditions including health and safety. That was an effect on current employees just as much as on future employees.
[30] The MFB also pointed to the absence of a reference to recruitment in the list of matters identified as “matters pertaining” in paragraph 672 of the Explanatory Memorandum for the Fair Work Bill as being significant. That submission must also be rejected. That list is only some examples. Paragraph 670 of the Explanatory Memorandum makes it clear that s.172(1) is to be read in line with the existing jurisprudence concerning the “matters pertaining to the relationship” formulation - which necessarily includes Cram. Additionally, the first item in paragraph 672 identifies “staffing levels” as a matter pertaining. That is evidently a proposition derived from Cram.
[31] We therefore consider that Cram is directly relevant to the interpretation of s.172(1) and therefore, for the reasons earlier stated, also relevant to the interpretation and application of the phrase “matters pertaining to the employment relationship” in clauses 15 and 19 of the Agreement. The question before us about those provisions must therefore be approached on the basis that the mode of recruitment is a matter pertaining to the employment relationship for the purposes of the Agreement.
[32] The MFB advanced its case on the basis that, notwithstanding Cram, we should approach the matter by analysing whether the specific changes it proposed were ones which would, once implemented, actually have any effect upon its existing employees. In that connection it adduced a significant amount of evidence concerning what may be characterised as the merits of its proposed changes with the objective of demonstrating the lack of potential for any detrimental effect on employees.
[33] We consider that this approach is, with respect, misconceived. The primary reason is that it is based on a misreading of the relevant provisions of the Agreement. Clause 15 requires the consultation provision in clause 13 to be applied in respect of “changes in matters pertaining to the employment relationship” which the MFB wishes to implement. Thus, on the ordinary meaning of the words used, it is not the changes themselves which must pertain, but the matters the subject of the change. If the subject matter of the relevant change in question is the mode of recruitment, then (on the authority of Cram) it is a matter pertaining to the employment relationship and clause 13 applies.
[34] The MFB’s approach would necessarily involve the Commission in effect undertaking a full merits consideration of the proposed changes at a stage where it had not yet satisfied itself that it had the jurisdiction to do so. That is not an approach authorised by the Agreement or the FW Act.
[35] The question to be determined therefore is whether the MFB’s proposed changes are to be characterised as changes to the mode of recruitment. In this respect the UFU submitted that we should look at the proposals for change as a whole, which were (at least initially) set out in a document entitled “MFB Recruit Firefighter Selection Process”, and not engage in “parsing and separate scrutiny of each sub-item” of the entire proposal. On that basis, it was submitted, the subject matter of the change proposal was the mode of recruitment, and the consultation requirement of clause 13 therefore applied to the proposal in its entirety.
[36] We do not accept that submission. The fact that any particular proposed change was set out in a document the title of which referred to the recruitment process and which contained other proposed changes to the recruitment process does not necessarily mean that the particular change was itself one which related to the recruitment process. It is necessary to properly characterise each particular change.
[37] It is clear that the proposed abolition of the three-strikes policy, the change to the cut-off score for the components of the written test and the abandonment of the strict use of the Order of Merit in selecting persons to undergo upcoming training courses are all changes to the mode of recruitment because they all concern the standards and procedures used by the MFB to select those who will be trained and engaged as employees. They are therefore matters about which the MFB was required by clause 15 to consult about in accordance with clause 13.
[38] However we have formed a different view about the quotas of 350 for male and female applicants. The potential effect of this change would only be to the gender mix of persons whose application for employment with the MFB will be the subject of consideration. It has nothing to do with the criteria and procedures by which applicants are actually selected for engagement as employees. Neither party submitted, nor could it reasonably be suggested, that any alteration to the gender mix of the pool of applicants to whom the recruitment selection tests and standards are to be applied could ever have any direct effect on the conditions of employees of the MFB. We do not consider that the introduction of the quotas for male and female applicants would, properly characterised, be a change to the mode of recruitment, and consequently the MFB was not required by clause 15 to consult with the UFU about this under clause 13.
[39] It follows from these conclusions that the three changes we have identified about which consultation was required could be the subject of a dispute to which clause 19 applies, because they are covered by clause 19.1.2 as “... matters pertaining to the employment relationship, whether or not express provision for any such matter is made in this agreement...”. Additionally, clause 19 would apply to the dispute the subject of the UFU’s application on two other bases. First, because the dispute is said to concern a failure to consult, the requirement in clause 20.1 that any dispute about consultation and change had to be dealt with under clause 20 and “the dispute resolution clause of this agreement” would apply. Second, clause 19.1.1 provides that the dispute resolution procedure applies, inter alia, to “all matters for which express provision is made in this agreement”. Consultation about matters pertaining to the employment relationship is expressly provided for in clauses 13 and 15.
[40] In respect of the quotas of 350 for male and female applicants, because that is not a change to a matter pertaining and is not a matter to which clauses 13 and 15 apply, it cannot be the subject of a dispute under clause 19.
A change in policy?
[41] Given the conclusion we have already stated, it is only necessary to consider the second question of whether there was any change in policy to which clause 30 applied in relation to the introduction of the quotas for male and female applicants. We consider that when clause 30 refers to “policies that affect employees covered by this agreement”, it is referring to formally promulgated written policies and not anything more informal. The evidence did not disclose that the introduction of the quotas involved any such policy being changed. Accordingly no requirement to consult arose under clause 30 in relation to the quotas.
Conclusion and directions
[42] The conclusions we have stated above resolve the preliminary issue before us. They obviously do not involve the expression of any view as to the merits of the proposed changes or whether the MFB has in fact already consulted about them in accordance with clause 13 of the Agreement.
[43] As earlier stated, we consider that the President’s direction has referred the whole of the dispute to us for resolution. We consider that we should expedite the finalisation of the dispute because of the desirability of the MFB being able to select, by mid-June 2016, the recruits for the training course due to commence on 18 July 2016. Having found that the dispute is, except for the one aspect identified, subject to the dispute resolution procedure in clause 19 of the Agreement, we do not consider that it would be appropriate for the MFB to be indefinitely constrained by the status quo provision in clause 19.4.
[44] The UFU opposed its application being the subject of an arbitral hearing on the basis that it has separately initiated proceedings against the MFB in the Federal Court of Australia for breach of the consultation requirements of the Agreement, and it would be prejudiced by having to deal with the same issues in two different forums, with the prospect of different outcomes. That contention cannot be accepted. The potential situation which the UFU complains of only arises because the UFU has chosen to litigate substantially the same issues in two different forums. If the UFU considers that the arbitration of its application before the Commission would prejudice its position in its Federal Court proceedings, or if it does not seek any relief from the Commission arising from that application, the appropriate course is for it to discontinue the application. However it cannot expect to keep the application on foot and obtain the benefit of clause 19.4 without having the application determined in the normal way.
[45] We therefore make the following directions:
(1) The MFB/UFU Consultative Committee is directed to meet in respect of the proposals for the abolition of the three-strikes policy, the change to the cut-off score for the components of the written test, and the abandonment of the strict use of the Order of Merit in selecting persons to undergo upcoming training courses, on a minimum of two occasions in the period from the date of this decision to 21 May 2016 inclusive. This direction is made without prejudice to the parties’ respective positions as to whether consultation in accordance with clause 13 has already occurred.
(2) The UFU shall file and serve a document setting out the final relief which it wishes to obtain in the proceedings, and any further evidence and submissions it wishes to rely upon at the final hearing of the matter, on or before 27 May 2016.
(3) The MFB shall file and serve any further evidence and submissions it wishes to rely upon at the final hearing of the matter on or before 6 June 2016.
(4) The matter is listed for the final hearing of all outstanding issues on 9 and 10 June 2016 in Melbourne.
(5) The evidence already adduced in the matter may be relied upon by the parties at the final hearing.
(6) If the parties consider that they would be assisted by any further conciliation in the matter prior to the final hearing, a member of the Commission will be made available for this purpose upon request.
(7) Liberty to apply is granted.
VICE PRESIDENT
Appearances:
R. Kenzie QC, T.J. Dixon of counsel, T. Davies and T. Sakkas solicitors for the United Firefighters’ Union of Australia.
M. Richards SC, R. Preston of counsel, S. Clarke and A. Loftus solicitors for the Metropolitan Fire and Emergency Services Board.
Hearing details:
2016.
Melbourne:
26 April and 6 May 2016.
1 [2004] HCA 40; (2004) 221 CLR 309 at [157] per Gummow, Hayne and Heydon JJ
2 Ibid at [162] per Gummow, Hayne and Heydon JJ
3 See AMIEU v Golden Cockerel Pty Limited [2014] FWCFB 7447, (2014) 245 IR 394 at [41] subpar 8(c)
4 [1987] HCA 28; (1987) 163 CLR 117
5 Ibid at 132
6 Ibid at 133-136
7 [2004] HCA 40; (2004) 221 CLR 309
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