United Voice v Ambulance Victoria

[2013] FWC 8356

[2013] FWC 8356

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739—Dispute resolution

United Voice
v
Ambulance Victoria
(C2013/1321)

COMMISSIONER JOHNS MELBOURNE, 20 DECEMBER 2013

Jurisdiction.

[1] This decision concerns whether the Fair Work Commission (Commission) has jurisdiction to deal with a dispute between United Voice (Applicant) and Ambulance Victoria (Respondent) about whether the Respondent’s employees accrue annual leave when they are in receipt of workers’ compensation payments (Substantive Issue).

[2] The application was made under section 739 of the Fair Work Act 2009 (FW Act). The dispute is said to arise under the Ambulance Victoria Enterprise Agreement 2009 (Agreement). However, the Respondent says the Commission has no jurisdiction to deal with the dispute (Jurisdiction Issue).

[3] The Applicant consented to the Commission, as presently constituted, dealing with both the Jurisdiction Issue and the Substantive Issue. However, the Respondent only consented to the Commission, as presently constituted, dealing with the Jurisdiction Issue.

[4] Consequently, the Jurisdiction Issue only was listed for hearing on 21 October 2013. At that hearing:

● the Applicant was represented by Mr Sunil Kemppi who called:

○ Mr Anthony Davis; and
○ Mr Allister Briggs,

to give evidence, and

● the Respondent was represented, with permission of the Commission having regard to the complexity of the jurisdictional question, by a solicitor, Mr Colin Broadbent, who called Ms Allison Peters to give evidence.

The Issue to be Decided

[5] Section 595 of the FW Act invests the Commission with the power to “deal with a dispute only if [the Commission] is expressly authorised to do so under or in accordance with another provision of the [FW Act].” The present application has been made under section 739.

[6] However, section 739 only “applies if a term referred to in section 738 requires or allows [the Commission] to deal with the dispute”. Relevantly for present purposes, section 738 states:

“738 Application of this Division

This Division applies if:

...

(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

...

[7] The Applicant relies upon section 738(b) and says that clause 8 of the Agreement provides for a procedure for dealing with disputes. Clause 8 of the Agreement provides as follows:

Unless otherwise provided for in this Agreement, a dispute between the Employer and employees … about a matter arising under this Agreement or the National Employment Standards … must be dealt with in accordance with this clause.

[8] The Substantive Issue does not arise under the National Employment Standards. 1 Therefore, the Applicant relies entirely on the dispute being “about a matter arising under [the] Agreement.” In doing so it points to clause 47 of the Agreement (which deals with Annual Leave).

[9] Therefore, the Jurisdiction Issue to be determined is whether a necessary nexus has been established between the Substantive Issue and the Agreement. If the necessary nexus is established then the Commission is invested with jurisdiction to deal with the Substantive Issue under clause 8 of the Agreement.

Chronology of events

[10] By letter dated 8 August 2011, the Applicant wrote to the Respondent about the issue of the “Accrual of annual leave while on WorkCover”. The author of the letter wrote,

It has come to the Union’s attention that members are not accruing annual leave on WorkCover and I am seeking an explanation as to why that is the case.

There is nothing in clause 47 that prevents the accrual of annual leave while on WorkCover and I would like to know what authority Ambulance Victoria is relying on in the non-payment of this entitlement. 2

[11] By letter dated 16 August 2011 the Respondent’s Employee Relations Team Leader, Ms Peters, advised that she was “looking into [the issue] and will provide a response shortly.” 3 By email dated 1 September 2011 Ms Peters advised that she had “been looking through the history of the table that shows accrual rules on different types of leave.” She said she would “be in touch over the coming couple of weeks about it all and we can take it from there.”4

[12] Through its Deputy President, Steve McGhie, the Applicant responded to Ms Peters by email on 5 September 2011. Mr McGhie wrote,

“... there is nothing in the 2009 EBA nor the Accident Compensation Act that prevents employees accruing annual leave while on workcover.

This needs to be dealt with reasonably quickly as some employees have little or no annual leave accruals left.” 5

[13] It is apparent that Ms Peters and Mr McGhie spoke about the issue on 26 September 2011. The following morning Ms Peters wrote to Mr McGhie in the following terms, “... as per our brief conversation last night, this is the section in the [Fair Work Act] regarding accrual of leave while on workers comp.” 6 Ms Peters then copied section 130 of the FW Act into the body of her email.

[14] After the email of 26 September 2011, there were no further discussions between the Applicant and the Respondent about the issue until about May 2013 when the Applicant started to represent the interests of two of its members affected by non-accural of leave while those members, Anthony Davis and Allister Briggs, were in receipt of workers’ compensation payments.

[15] On or around 20 May 2013 one of the Applicant’s Industrial Officers, Sunil Kemppi, exercised his right of entry to access information including the annual leave records of Messrs Davis and Briggs. Documents were provided to Mr Kemppi on 29 May 2013. Mr Kemppi then raised a query about the accuracy of those records with the Respondent’s Employee Relations Specialist, John Bradbury. On 3 July 2013 the Respondent’s Payroll Manager, Ray Swanson, provided Mr Kemppi with updated versions of the records. 7

[16] By letter dated 22 July 2013 (Notification of Dispute Letter), the Applicant, for and on behalf of Messrs Davis and Briggs, wrote to the Respondent about the annual leave accruals of its members. The correspondence was addressed to Ms Peters. 8 The letter of 22 July 2013 asserted that the Respondent had incorrectly accrued the annual leave of Messrs Davis and Briggs. On behalf of their members the Applicant then made a demand for the crediting of annual leave. Further, it advised the Respondent that if it failed to credit the annual leave the Applicant would “refer this dispute to the Fair Work Commission.” In this regard the Applicant’s correspondence of 22 July 2013 was a step in the dispute process about the annual leave accruals of Messrs Davis and Briggs.

[17] By letter dated 1 August 2013, the Respondent’s Mr Bradbury replied to the Notification of Dispute Letter. He wrote,

The Fair Work Act 2009 expressly prohibits the accrual of Leave when an employee is in receipt of Workers Compensation payments. The exception to this is if such accruals are permitted by a relevant Compensation law.

The (Victorian) Accident Compensation Act 1985 makes no provision for such accruals and accordingly employees in Victoria (Ambulance Victoria) are prohibited, by reason of the Fair Work Act 2009 from accruing the annual leave you are requesting on behalf of [Messrs Davis and Briggs].

With regard to your suggestion that these two employees have a contractual entitlement to accrue annual leave whilst in receipt of workers compensation payments we fail to understand. Such an entitlement does not exist under either the Fair Work Act 2009 or the Accident Compensation Act 1985.

Given that under the two aforementioned Acts, AV is prohibited from accruing annual leave for employees in receipt of workers compensation payments we are not in a position to accede to your demand

[18] Because the Respondent refused to make credits to the annual leave entitlements of its members, on 23 August 2013, the Applicant commenced these proceedings.

The relevant terms in the Agreement, FW Act and Accident Compensation Act

[19] Clause 47.2 of the Agreement deals with the entitlement to annual leave and the period of leave. It provides that,

An employee is entitled to four weeks annual leave on ordinary pay for each twelve months of service. Annual leave accrues on a pro rata basis based on an employee's ordinary hours of work, and is cumulative.

[20] Section 130 of the FW Act provides for a restriction on the taking or accruing of leave or absence while receiving workers’ compensation. It provides that,

(1)  An employee is not entitled to take or accrue any leave or absence (whether paid or unpaid) under this Part during a period (a compensation period) when the employee is absent from work because of a personal illness, or a personal injury, for which the employee is receiving compensation payable under a law (a compensation law) of the Commonwealth, a State or a Territory that is about workers’ compensation.

(2)  Subsection (1) does not prevent an employee from taking or accruing leave during a compensation period if the taking or accruing of the leave is permitted by a compensation law.

(3)  Subsection (1) does not prevent an employee from taking unpaid parental leave during a compensation period.

[21] The Accident Compensation Act 1985 (Vic) (ACA) is the relevant state based legislation.

The Submissions and Evidence

[22] Because the Respondent objected to the Commission dealing with the Substantive Issue on the basis that, it says, the Commission lacks jurisdiction, it presented its evidence and made its submissions first.

[23] The Respondent submits the Commission does not have jurisdiction to deal with the matter on the following two grounds:

a) First, it says the dispute is not “about a matter arising under [the] Agreement.” (and, as a result, not within the scope of clause 8 of the Agreement) because, while clause 47 of the Agreement deals annual leave, it makes no reference to the accrual of annual leave during periods when employees are in receipt of compensation (Subject Matter Objection); 9

b) Secondly, it says that, if the dispute is about a matter arising under the Agreement, the Applicant has not followed the procedure set out in clause 8 of the Applicant (Procedure Objection). 10 The Respondent argues the Applicant did not follow the procedures contained in clause 8 of the Agreement. The Respondent argues that the Applicant did not raise the dispute with the Respondent. It argues the letter of demand sent by the Applicant in July 2013 was not worded in terms of ‘let’s discuss’ and therefore the dispute resolution procedure was not commenced.11

[24] The Respondent relies on the evidence on Ms Allison Peters, Employee Relations Manager of the Respondent. Without setting out in detail all of the evidence of Ms Peters, in brief terms, her evidence traversed the history of the correspondence between the parties and was also to the following effect:

a) Since commencing her employment with the Respondent in May 2011 there have been a number of employees who have been absent on workers compensation; 12
b) It is her understanding that:

i. Under the Workplace Relations Act 2009 “employees were entitled to accrue annual leave during periods of compensable absence”; 13
ii. When the Fair Work Act 2009 “became operative it had the effect of specifically excluding leave accrual during periods of workers compensation where employees were incapacitated unless the provisions of state laws expressed that it did accrue”; 14

c) Her predecessor, Damian Ryan, had “concluded that there was no longer any entitlement for employees to accrue leave during periods covered by workers compensation”; 15
d) When the Notification of Dispute Letter was received, she and Mr Bradbury, “concluded that there was not entitlement because:

i. The Agreement does not provide any entitlement in respect of accrual when incapacitated and in receipt of workers compensation;
ii. Section 130 of the [FW] Act precludes the accrual unless state legislation allowed it;
iii. The ACA is the state legislation in Victoria and that does not provide for accrual;
iv. [the Respondent] had ceased accruing leave during periods of compensable injury in 2010. 16

[25] Under cross-examination, and in response to questions from the Commission, Ms Peters conceded that:

a) the Respondent’s payroll team would have to comply with any direction from her about the accrual of leave during periods of workers compensation; 17

b) none of the Respondent’s Station Managers (nor the management level above them) could make a decision to accrue leave while an employee is in receipt of workers compensation; 18

c) however, she, the Respondent’s executive or its CEO could make a decision to accrue leave while an employee is in receipt of workers compensation; 19

d) her opposition to accruing leave while an employee is in receipt of workers compensation has not changed since September 2011; 20

e) in his correspondence of 1 August 2013 (where he rejected the Applicant’s demands made on behalf of its members) Mr Bradbury was not inviting further conversation on the issue; 21

f) the letter dated 1 August 2013 conveyed the Respondent’s view that the “case [was] closed in regards to the accrual of leave entitlements”; 22

g) she had viewed Mr Bradbury’s correspondence before it was sent and agreed with it; 23

h) it is no longer the Respondent’s position that the accrual of leave is prohibited by the FW Act, but that it is not a requirement. That is to say, Ms Peters conceded that the Respondent could make the accrual if it wanted to do so. 24

[26] The Applicant submits the Respondent advances a narrow and technical argument. 25 In response to the Procedure Objection, the Applicant submits that, in respect of the dispute resolution process required to be followed by clause 8 of the Agreement, the only mandatory step is contained in clause 8.6(a). It says clause 8.6(a) requires that the dispute of grievance must first be discussed by the aggrieved employee with the employee’s immediate supervisor. The Applicant then says that much more than this has occurred in the current matter and as such the requirements of clause 8 have been met. In the alternative the Applicant submits that the steps to be taken by clause 8 should be read with respect to the overall purpose of clause 8, that is, the resolution of disputes at a workplace level.

[27] The Applicant submits that on proper construction of the Agreement the Substantive Issue arises under the Agreement. The Applicant submits that the dispute concerns a matter arising under clause 47 of the Agreement because it provides for the accrual of annual leave. It further submits that the Agreement deals with exclusions from accruals expressly in clause 47.10. As a consequence it says periods of time where an employee is on workers compensation payments and has no work capacity are not absences excluded by the operation of clause 47.10.

[28] The Applicant relies on the evidence on Messrs Davis and Briggs. Without setting out in detail all of the evidence of Messrs Davis and Briggs, in brief terms, their evidence was to the following effect:

Mr Briggs

a) During or around October 2009 he sustained a workplace injury for which a claim for workers compensation was later accepted; 26
b) Between around October 2009 and February 2010 he was unable to perform any duties due to his workplace injury. He accrued annual leave during this time; 27
c) Between February 2011 and about April 2012 he did not work due to his participation in a rehabilitation program and noticed he was not accruing annual leave; 28
d) He raised this matter with personnel at the Respondent’s Head Office in Doncaster. 29

Mr Davis

e) During or around 2010 he sustained a workplace injury, for which a claim for workers compensation was later accepted; 30
f) He did not work at various times between his injury and around the middle of March 2011; 31
g) After around October 2011 he “checked [his] pay slips for the relevant period and was surprised to discover that [he] hadn’t accrued annual leave for the period [he] was off work; 32
h) He spoke to his “Station Officer, Paul Dickason about the non-accrual.” 33
i) On or around “17 October 2011 [he] emailed the payroll department of [the Respondent about the issue] and he was “advised ... that [he] did not accrue annual leave during the period in question” 34
j) Subsequently he has spoken to his “current group manager Paul James and [his] current team manager, Bruce Wallace about the issue.” 35

[29] Mr Broadbent for the Respondent declined to cross-examine either of the Applicant’s witnesses. 36 Their evidence about the steps they had each taken to discuss the issue of leave accruals with representatives of the Respondent went unchallenged.

Consideration

[30] Because the Respondent has objected to the Commission, as presently constituted, deciding the Substantive Issue it is not necessary for me to express a view about the strength, merits or otherwise of the arguments about whether the Agreement gives rise to the accrual of leave when employees are in receipt of workers compensation. The only matter to be decided at this point is whether the dispute is about a “matter arising under [the] Agreement.”

[31] Under the provisions of sections 738 and 739 of the FW Act the powers of arbitration exercised by the Commission depend on the powers conferred on it by the agreement of the parties. Under the scheme of the FW Act there is no broad unfettered power of private arbitration that otherwise exists to resolve disputes between parties. Those arbitral powers instead depend on the agreement of the parties and any decision made by the Commission is not binding of its own force but derives from that agreement, which effectively authorises that exercise of power. The exercise of that arbitral power, and what it involves, has been considered in a number of decisions of this Commission and its predecessors.

[32] In considering this matter the Commission has had regard to the decision of Commissioner Lewin in Skurnik v Australian Broadcasting Commission. 37 In that decision, the Commissioner usefully set out the principles of statutory construction relating to the exercise of dispute resolution procedures, and draws upon the authority in the Construction, Forestry, Mining and Energy Union v Australian Industrial Relations Commission (Gordonstone) matter.38 Although Gordonstone concerned the operation of the predecessor provisions of section 739 of the FW Act (which were contained in the Workplace Relations Act 1996) I accept and agree with Lewin C that there is no reason to believe that the conceptual basis of private arbitration pursuant to the provision of a dispute settlement procedure proscribed in an enterprise agreement made under the FW Act is any different than that determined by the High Court in Gordonstone. The Commissioner went on to say:

“Therefore the nature of the jurisdiction and power to determine a dispute by arbitration, where performed by the tribunal, is derived from the terms of the dispute settlement procedure agreed between the parties to the enterprise agreement.” 39

[33] In the Skurnik decision the Commissioner then quoted an extract from the Full Bench in Shop, Distributive and Allied Employees Association v Big W Discount Department Stores 40 where it was said:

“...what comprises a dispute over the application of the agreement should not be narrowly construed; to do so would be contrary to the notion that certified agreements are intended to facilitate the harmonious working relationship of the parties during the operation of the agreement.”

[34] I adopt this approach.

The Subject Matter Objection

[35] Clause 8.1 of the Agreement is set out at paragraph [7] above. Only whether the matter arises under the Agreement is relevant because the Applicant does not argue that the dispute arises under the NES. 41

[36] Neither party referred the Commission to authorities about the nexus that needs to be established between the subject matter of a dispute and the terms in an enterprise agreement. Consequently, the Commission adopts the usual course and has determined whether there is a meaningful relationship 42 between the facts relied upon and the terms of the agreement said to be in dispute. The Applicant need only establish a rational nexus and no higher than that.

[37] There are arguments both ways about whether clause 47 in the Agreement gives rise to an accrual of leave while employees are in receipt of workers compensation payments. Importantly Ms Peters conceded that there was no prohibition in the FW Act on the making of such accruals and that the Respondent could, if it decided to, agree to make an accrual when employees were in receipt of workers compensation payments. Therefore, in order to determine whether the parties to the Agreement agreed to an accrual in these circumstances it would be necessary to consider the words of the Agreement and interpret the Agreement consistent with the relevant authorities. 43 But, this is not the task presently before the Commission.

[38] In relation the Subject Matter Objection to jurisdiction, all the Commission has to be satisfied of is that there is a head of power (in the form of a possible relevant clause in the Agreement) that could support the argument advanced by the Applicant. It is enough that the Commission is satisfied that the Applicant has an arguable case. In the course of submissions Mr Broadbent conceded that the Applicant could lead evidence that supported the Applicant’s interpretation of the Agreement. 44 He further conceded that it would be open to the Applicant to put their arguments about how clause 47.2 of the Agreement operates; “I don’t think that I could really suggest it isn’t [open to them to put their arguments]” he said.45

[39] The concessions were properly made by Mr Broadbent because, in the present matter (and without expressing a view about the merits of the Applicant’s argument or its chances of success), the Applicant has, at least, an arguable case. That is enough to invoke the jurisdiction of the Commission.

[40] Consequently, the Subject Matter Objection to jurisdiction must fail.

The Process Objection

[41] So too must the Process Objection to jurisdiction fail.

[42] This is because the uncontested evidence is that before the Applicant (on behalf of its members Messrs Davis and Briggs) wrote the Notification of Dispute Letter on 22 July 2013, both Messrs Davis and Briggs had taken steps to deal with their concern about the non-accrual of leave while they were in receipt of workers compensation. Variously they had raised it with the Respondent’s Head Office in Doncaster, a Station Officer, the Payroll Department, a Group Manager and a Team Manager.

[43] To accept an argument (that the Respondent appears to make) that these attempts to resolve their concern about the non-accrual of leave were not strictly consistent with clause 8.6(a) of the Agreement and consequently Messrs Davis and Briggs failed to follow the mandated process (and thus should be denied the opportunity to pursue their dispute in the Commission) would be a triumph of form over substance. It is pedantry that the Commission should not accede to.

[44] Faced with Mr Bradbury’s unequivocal statement that,

Given that under the two aforementioned Acts, AV is prohibited from accruing annual leave employees in receipt of workers compensation payments we are not in a position to accede to your demand,

it cannot seriously be expected that Messrs Davis and Briggs should have gone back and discussed the dispute with their “immediate supervisor” (who, it is conceded by Ms Peters, could not have made a decision inconsistent with hers).

[45] The uncontested facts are that Messrs Davis and Briggs raised their concerns with many people within the Respondent’s operations. On each and every occasion they were told that the Respondent’s policy was not to accrue leave during periods when employees are in receipt of workers compensation. The responses they received were consistent with Ms Peters’ evidence that only she, the Respondent’s executive and its CEO are invested with the authority to change the Respondent’s policy.

[46] Faced with these consistent rejections Messrs Davis and Briggs enlisted the assistance of their union as they were entitled to do under clause 8.3 of the Agreement which provides that,

“a party to a dispute or grievance may choose to be represented at any stage by a representative, including a union representative...”

[47] On 22 July 2013 the Applicant, on behalf of its members, wrote a letter of demand. Expressly, the letter referred to the matter being a “dispute”. The Notification of Dispute Letter was a step taken consistent with the escalation point described in clause 8.6(b) of the Agreement. That too failed to resolve the dispute and consequently, one month later the Applicant commenced these proceedings.

[48] In all the circumstances of this matter and considering the industrial realities there was no defect in the procedure followed by Messrs Davis and Briggs or their union on their behalf.

[49] Accordingly, the Commission is properly invested with jurisdiction to hear and determine the Substantive Issue. As such the matter will now be referred to another member of the Commission for that purpose.

COMMISSIONER

Appearances:

Mr S. Kemppi representing United Voice.

Mr C. Broadbent representing Ambulance Victoria.

Hearing details:

2013.

21 October.

Melbourne.

 1   This concession was made during the course of hearing by the Applicant’s Mr Kemppi, see transcript PN 95 - 96.

 2   Exhibit “AV1”, witness statement of Allison Peters, attachment 1.

 3   Exhibit “AV1”, attachment 2.

 4   Ibid.

 5   Ibid.

 6   Ibid.

 7   These events are recorded Exhibit “AV1”, attachment 3, page 2.

 8   Exhibit “AV1”, attachment 3.

 9   Respondent’s Outline of Submissions filed on 29 September 2013, para 7b. See also transcript from PN 102.

 10   Respondent’s Outline of Submissions filed on 29 September 2013, para 7a.

 11   Transcript of Hearing at PN 155

 12 Exhibit “AV1”, para [4].

 13 Exhibit “AV1”, para [5].

 14 Exhibit “AV1”, para [6].

 15 Exhibit “AV1”, para [11].

 16 Exhibit “AV1”, para [19].

 17   Transcript PN 24 - 25.

 18   Transcript PN 26 - 27.

 19   Transcript PN 36 - 37.

 20   Transcript PN 38.

 21   Transcript PN 43.

 22   Transcript of Hearing at PN48

 23   Transcript PN 49 - 51.

 24   Transcript PN 52 - 54.

 25 Applicant’s Outline of Submissions on Jurisdiction filed on 7 October 2013 at [15].

 26 Exhibit “UV1”, para [3].

 27 Exhibit “UV1”, para [4].

 28 Exhibit “UV1”, para [6].

 29   Ibid.

 30 Exhibit “UV2”, para [5].

 31 Exhibit “UV2”, para [6].

 32 Exhibit “UV2”, para [8].

 33 Exhibit “UV2”, para [9].

 34   Exhibit “UV2”, para [10] - [11].

 35 Exhibit “UV2”, para [12].

 36   Transcript PN 71 and PN 85.

 37   [2011] FWA 8069

 38 [2001] HCA 16

 39   [2011] FWA 8069 at [9]

 40   [2002] AIRC 1376 at [23]

 41   Transcript PN 95 - 96.

 42   Skurnik v ABC [2011] FWA 8069, [31].

 43   Including, Amcor Ltd v Construction, Forestry, Mining and Energy Union [2005] HCA 10, Kucks v CSR Ltd (1996) 66 IR 182, Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165, City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union [2006] FCA 813, Short v FW Hercus Pty Ltd [1993] FCA 51.

 44   Transcript PN 135 - 136.

 45   Transcript PN 143.

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