United Workers Union v Coles Group Supply Chain Pty Ltd

[2021] FWC 4188

[2021] FWC 4188

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739 – Application to deal with a dispute

United Workers Union
v
Coles Group Supply Chain Pty Ltd
(C2021/742)

DEPUTY PRESIDENT LAKE BRISBANE, 16 JULY 2021

Application to deal with a dispute – whether alleged failure of the Respondent to ensure that indirectly employed casual labour hire agency workers received a backdated wage increase upon an Agreement approval – jurisdictional objection – non-employees unable to utilise disputes procedure, not party to agreement

[1] The Untied Workers Union (the UWU/Applicant) and Coles Group Supply Chain Pty Ltd (the Respondent) are in dispute about the payment of a backdated increase following an Agreement approval to external agency casuals. The relevant Agreement is the Coles Parkinson CDC and UWU Enterprise Agreement 2020 (the Agreement).

[2] On 15 February 2021, the Applicant filed an application pursuant to s 739 of the Fair Work Act2009 (Cth) (the Act) in the Fair Work Commission (the Commission) for the Commission to deal with the Dispute.

[3] On Tuesday 2 March 2021, I held a conference at which no resolution was reached. Accordingly, I issued directions directing the parties to provide an agreed list of questions for arbitration. The parties consented to arrange for an agreed statement of facts to be provided.

[4] The Respondent raised a jurisdictional objection and the parties agreed for that matter to be heard and determined prior to the questions for arbitration. The parties filed their material and the final submissions by 14 June 2021. It was agreed that the jurisdictional objection would be determined on the papers.

Background

[5] This decision is to resolve a jurisdictional question however for completeness I will provide a brief summary of the substantive dispute. The dispute relates to agency workers who are employed by Australian Personnel Solutions Pty Ltd (APS) who work at the site covered by the Agreement. The Agreement’s first pay rise was due on 1 August 2020 and Coles employees were backdated to that date. The agency employees received the increase from 25 January 2021, the operative date of the Agreement. The Applicant asserts that as a result of the Agreement and through the effect of the disputes procedure they are able to bring the matter of backpay for arbitration.

[6] I will not expand further on the substantive application as the first matter to be dealt with is the Respondent’s jurisdictional objection.

Jurisdictional Objection

[7] In short, the Respondent submits that the Application is without jurisdiction because:

(a) the Application is brought in relation to or on behalf of agency workers who are not covered by the Agreement and are therefore unable to access the disputes clause (the Disputes Clause); and/or

(b) if the Application is brought in the UWU’s own name, this is not permitted by the Disputes Clause; and/or

(c) even if the Disputes Clause can be enlivened by the Agency Workers or the UWU (which Coles expressly denies), neither the Agency Workers nor the UWU have complied with steps set out in the Disputes Clause required to be completed before referring the dispute to the Commission.

[8] Accordingly, the Respondent asserts that the Commission not authorised under any provision contained in the Act to deal with the dispute 1 and should be dismissed pursuant to s.587(1)(a) of the Act.

[9] The Applicant contends that:

(a) Coles employees covered under the Agreement have initiated a dispute which arises about a matter under the Agreement;

(b) all steps of the Dispute Clause required to be completed prior to a dispute being referred to the Commission have been complied with; and

(c) pursuant to the Dispute Clause, the Commission is now empowered to hear the dispute and if necessary, exercise its arbitral powers.

The Respondent’s submissions

The Agency Workers are not covered by the Agreement

[10] The Respondent firstly argues that the Application has been brought by the Union on behalf of agency employees in circumstances where the Agreement does not have a mechanism for the Union to represent Agency employees. There are two clauses that the Applicant raises regarding job security and an attempt to undercut the ‘site rates’ under the Agreement, that the Respondent says is a way to ‘fit the dispute’ into the current circumstances. The Respondent argues that the Agency employees are not able to utilise the Disputes Clause and, although the UWU may be able to represent the workers in another forum, they do not have that power through the Agreement.

[11] It is not in dispute that the affected workers are not employees of Coles, they are Agency casuals employed by APS who work at the site where the Agreement has effect.

[12] Section 50 of the Act provides that an employee is covered by an Agreement if the Agreement states that the Agreement covers the employee. An Agreement can only be entered into with employees of the Employer. 2 It is therefore not possible for the Agreement to cover employees of an employer who is not covered by the Agreement. It follows that the APS employees, and the UWU as their representative, have no capacity to make a claim under the Disputes Clause, or otherwise to enforce a term of the Agreement.

[13] The Respondent further submits that clause 1 of the Agreement states that it covers “all wages-paid Team Members as described in clause 6 of this Agreement, whether members of the Union or not, whose employment is at any time when the Agreement is in operation subject to this Agreement”. In light of ss.50 and 172(2) of the Act, an employee of APS cannot be covered or subject to the Agreement and therefore cannot be considered to meet the definition of “Team Member(s)”, which is defined in the Agreement as, “operational wages-paid Team Members employed by Coles at the Parkinson CDC…”.

[14] The APS employees located on the Coles site in question are governed by a separate Industrial Agreement and if there was a dispute the relevant procedure in the Disputes Clause would then apply. It is not possible for an Agency casual to comply with the Disputes Clause in the Coles Agreement as the escalation levels are through Coles employees and supervisors and managers.

[15] Furthermore, if an APS employee wished to raise a dispute in relation to their employment, the appropriate method for doing so would be through the dispute procedure that APS employees are subject to in the industrial instrument that governs their employment. They are not subject to the Agreement simply by virtue of working at the Coles site.

The UWU is unable to bring a dispute in its own name

[16] The Respondent further asserts that the Disputes Clause does not permit the UWU to bring disputes in its own right or as a ‘party principal’. The fact that the UWU is covered by the Agreement does not mean it has an automatic right to access the Disputes Clause in its own capacity. It will only have the right to bring a dispute if the Disputes Clause so provides.

[17] The power of the Commission to deal with a dispute is confined by ss.595 and 739 of the Act, to the terms of the Disputes Clause. The Disputes Clause in the relevant Agreement does not expressly identify the parties who may be a party to a dispute within the meaning of the clause. However, cl.13.2 and 13.3 identify the relevant people for the “Team Member” to address initially in a dispute being the “Team Manager” or “Shift Manager”.

[18] Those clauses provided:

13.2. Any grievance or dispute which arises about a matter under this Agreement and/or the NES (‘the dispute’) shall, where possible, be settled by discussion on the job between the Team Member and the Team Manager with the joint intention of achieving a satisfactory outcome. The Team Member may appoint a representative, including a Union Delegate, to represent them.

13.3. If the dispute remains unresolved, the Team Member and the Shift Manager, or alternatively their nominated representative, shall discuss the issue within 24 hours, wherever practicable.

[19] The disputes procedure of the Agreement clearly contemplates a dispute being brought by a “Team Member” against Coles. The Team Member is to discuss their grievance or dispute with their Team Manager, and if this does not resolve the dispute, then the Team Member is to discuss the dispute with the Shift Manager. Whilst the Team Member can appoint the UWU (or anyone else) as their nominated representative in any discussions, the dispute must relate to the Team Member.

[20] If the dispute is not resolved, the escalation process applies as outlined in the clauses following. There is no identified entry point to the disputes procedure without commencing at cl.13.2 and all the following steps occur as a result of the dispute not being resolved. There is no capacity for a dispute to be commenced at later stages of the disputes procedure.

[21] The UWU may be referred to in cl.1 of the Agreement as one of the “parties covered by this Agreement”, however this does not give the UWU status as a party within the meaning of the Disputes Clause.

[22] In CFMEU v North Goonyella the Full Bench of the Commission considered a similar dispute procedure clause, which contained several steps referring to an “employee” raising a dispute with their employer, followed by a clause referring to a “party” making an application to the Commission. 3 The relevant clauses there provided:

“41.1 In the event of any dispute arising as to the interpretation or application of this Agreement, including matters in relation to the NES and disputes that are expressly authorised to be dealt with under this clause by another term of the Agreement, the following procedure will apply.

41.2 The employee may choose to be represented at any stage in this procedure by a representative/s of their choosing.

STEP 1 The matter will in the first instance be discussed between the employee/s and the immediate supervisor involved. The supervisor and the employee shall make every reasonable effort to resolve the matter between themselves. An agreed time limit will allow the immediate supervisor to investigate the grievance and respond. If an agreement is reached it shall be recorded in writing.

STEP 2 If the matter remains unresolved, it will be referred for discussion between the employee and/or the employee's representative/s at the Mine or CHPP and the relevant Department Manager or their representative.

STEP 3 If the matter remains unresolved, it will be referred for discussion between the employee and/or the employee's representative/s and senior Company representatives.

STEP 4 If the matter remains unresolved, it will be referred to FWA for conciliation and, if the dispute remains unresolved, arbitration. In exercising its powers under this clause FWA may exercise all powers and functions incidental or associated with the exercise of conciliation or arbitration.

41.3 By agreement between the respective representatives, any or all of the above steps may be bypassed in the interest of speedy resolution of the dispute. Either party may make an application to FWA for a determination that steps 1 to 3 be bypassed and the matter proceed directly to conciliation and or arbitration.

Such determination will be by reference to what is fair as between the parties and the extent of any prejudice to a party that will be caused unless those steps are bypassed and on the basis that ordinarily the steps should only be bypassed where a failure to do so will sound in material prejudice to the Company or affected employees.”  4

[23] In that case, the Full Bench stated:

“There was therefore no capacity under clause 41 for a former employee, or a representative acting on a former employee’s behalf, to initiate a dispute resolution process under clause 41. Nor does clause 41 contemplate that the dispute resolution procedure could have application to disputes between North Goonyella and the CFMEU in its own right - that is, as a party principal to a dispute and not as a representative of employees. For the reasons already stated, clause 41 only deals with disputes between current employees and North Goonyella, in relation to which the CFMEU may act as a representative. The references in clause 41.3 to a “party” and “parties” are, we consider, to be understood as referring to the parties to the instant dispute - that is, North Goonyella and the relevant employee(s) - and not to the definition of “The parties” in clause 3 of the Agreement.”  5

[24] The Dispute Clause in the Agreement is in a substantially similar form to that considered by the Full Bench in CFMEU v North Goonyella, in that the first steps require the raising of a dispute by an employee or “Team Member”. The Respondent argues that the Commission should follow the reasoning as set out in that case.

[25] To further this argument the Respondent notes in AMWU v Southcorp Wines Pty Limited, Commissioner Bissett considered the application of the decision in CFMEU v North Goonyella to another DSP Term. 6 The relevant parts of the Dispute Procedure in that case is set out below:

“Step 1 The employee/s concerned will first meet and confer with their immediate supervisor. A party to the dispute may appoint another person, organisation or association (including the union) to accompany or represent them in relation to the dispute.

Step 2 If the matter is not resolved at Step 1 the parties will arrange further discussions involving more senior site management, which may involve management representatives from other Company offices.

Step 3 In the event of a dispute between the union covered by this Agreement and the employer/company, in the first instance the parties will attempt to resolve the matter at the workplace by discussions between a union representative(s) concerned and the relevant management personnel and, if such discussions do not resolve the dispute, by discussions between union representative(s) and more senior levels of management as appropriate. This union representative(s) may be delegate/shop steward or other official at any stage of the dispute.

Step 4 If a dispute is unable to be resolved at the workplace under Step 2 or Step 3 as appropriate, the dispute may be referred to FWA for resolution by mediation and/or conciliation and, where the matter in dispute remains unresolved, arbitration. If arbitration is necessary FWA may exercise procedural

powers in relation to hearings, witnesses, evidence and submissions which are necessary to make arbitration effective.”(my emphasis)

[26] In that case, Commissioner Bissett held that:

“I am satisfied that the matter before me can be distinguished from the circumstances in North Goonyella. The dispute settlement procedure in this matter does explicitly allow for disputes between Southcorp Wines and the AMWU – this is explicit at Step 3 of the dispute settlement procedure set out above. In North Goonyella it is evident that the CFMEU could not, under the agreement, raise a dispute in its own right.”  7

[27] The decision of Commissioner Bissett is consistent with the principles expressed in CFMEU v North Goonyella and supports the proposition that a union will not be able to bring a dispute in its own capacity unless the dispute resolution term expressly provides for that.

[28] There is no reference in the Disputes Clause to the UWU having the capacity to be in dispute with Coles. Any references to the UWU are confined to occasions where an employee requires representation.

[29] Accordingly, as the UWU is not able to bring a dispute under the Disputes Clause in its own capacity. The Respondent argues that UWU cannot validly bring this dispute under s.739 of the Act and should therefore be dismissed for lack of jurisdiction.

Non-compliance with the required steps in the Disputes Clause

[30] The Respondent alternatively contends that in the event the UWU were found to have jurisdiction, the Disputes Clause (cl.13) must still be followed. That clause sets out a specific process for dealing with a dispute, including a number of steps that must be taken before a dispute can be referred to the Commission, namely:

“13.2 Any grievance or dispute which arises about a matter under this Agreement and/or the NES (‘the dispute’) shall, where possible, be settled by discussion on the job between the Team Member and the Team Manager with the joint intention of achieving a satisfactory outcome. The Team Member may appoint a representative, including a Union Delegate, to represent them.

13.3 If the dispute remains unresolved, the Team Member and the Shift Manager, or alternatively their nominated representative, shall discuss the issue within 24 hours, wherever practicable.

13.4 If the dispute remains unresolved the dispute will be escalated to the Operations Manager, in consultation with the CDC Manager and People and Culture Manager. The issue must be discussed between the parties within three (3) business days, wherever practicable.

13.5 If the matter is not resolved either party may seek the assistance of a representative, including, in the case of a Team Member, a more senior Union Official.

13.6 If the dispute cannot be resolved within a reasonable time period, either party may refer the matter to the FWC for resolution through conciliation and where necessary, arbitration.”

[31] The disputes procedures set out that resolution of disputes should in the first instance be dealt with at the workplace level and if that is not possible then the process escalates through to more senior management. Only once this is done, is the matter capable of referral to the FWC. The Respondent asserts that these steps have not been complied with.

[32] To that end, the Respondent pointed my attention to the decision of AWU v MC Labour Services Pty Ltd, where the Full Bench held that the Commission does not have jurisdiction to deal with a dispute where the required steps in a Disputes Clause have not been complied with. 8 There the Full Bench held that:

“However, the parties to an enterprise agreement are free to impose limitations on the role afforded to the body that is to settle disputes about matters arising under the agreement. Where these limitations are not observed, the Commission (or other persons) has no discretion to deal with a dispute referred to it under the agreement, unless one is conferred on it under the terms of the agreement.”  9

[33] In the Respondent’s submission, it is not possible for the agency workers to comply with such a clause, given that the appropriate management personnel for them to raise a grievance with is the relevant APS manager at the Site. The fact that the agency workers are unable to comply with the requirements of the Disputes Clause further reinforces the view that it is not intended to apply to them. Rather, where APS personnel have a dispute or grievance, they can raise this with the appropriate APS manager, and comply with any other requirements of the APS dispute resolution procedure.

[34] Even if the Respondent is wrong about who APS personnel should raise a dispute with, in this instance no attempt has been made by the agency workers to raise the dispute with a “team manager” or “shift manager”. The Union initiated the dispute by writing to the senior managers and not commencing the dispute at a workplace level as required by the clause. By attempting to raise the dispute directly with Ms Bateman and/or Mr Savage, and to then bring the Application, the Respondent submits that the UWU is effectively seeking to circumvent the applicable dispute resolution procedure under the Agreement.

[35] Accordingly, the Respondent submits that the dispute has not progressed through the requisite steps and thus is incapable of being dealt with until all the steps have been followed. On that basis, they seek that the Commission dismiss the Application.

The Applicant’s submissions

[36] The Applicant alleges that the application relates directly to the enforcement of terms contained in the agreement, specifically:

(a) to conditions or requirements about engaging labour; and

(b) to the job security of the Respondent’s employees.

[37] Clause 14.3.6 requires that labour hire must not be engaged on terms or conditions that would undercut the enterprise agreement. It states:

“A casual Team Member, whether directly or indirectly employed, shall be paid for the work performed at the applicable Base Rate set out in this Agreement, plus any other applicable casual loading and/or penalties or loadings as prescribed in this Agreement.”

[38] The dispute relates to an alleged contravention of cl.22.5, which contains a schedule of wage increases to the Agreement’s Standard Base Rate. The clause requires the Standard Base Rate be payable to “any Team Member (whether employed directly by the Company or engaged by an Agency) who has completed six (6) months regular and systematic service.”

[39] Clauses 14.3.6 and 22.5 operate to enhance job security of directly employed Coles employees by ensuring labour hire cannot be engaged on terms less favourable than the Agreement. In the Explanatory Memorandum to the Act, the legislature recognised the non-monetary benefit such clauses provided employees and expressed a clear intention that such clauses are enforceable and permissible within the meaning of s.172(1)(a). The Explanatory Memorandum expressly states that it is intended that “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” would be within the scope of permitted matters for the purpose of s.172(1)(a) of the Act.

[40] The Applicant claims that the disputes procedure was followed by the Team Member and submitted statements from two employees, being Casey Spencer and Casey Whelan.

[41] In summary, the Applicant submits that:

“(a) Coles employees Casey Spencer and Joe Noble met with Coles Team Manager Jordan Mataira and Shift Manager Kylie Johnson on 26 January 2021 to attempt to resolve the dispute in accordance with clause 13.2 and 13.32;

(b) accompanied by UWU Official Casey Whelan, Ms Spencer met with Operations Manager Justin Elms on 29 January 2021 to attempt to resolve the dispute in accordance with clause 13.43; and

(c) accompanied by Mr Whelan, Ms Spencer met with the site Distribution Centre Manager Kieran Savage on 5 February 2021 to attempt to resolve the dispute in accordance with clause 13.4.4

… Coles had made its position unequivocally clear in all three meetings. As the dispute remained unresolved following the meetings, UWU in its capacity as a representative of the affected Coles employee(s) is entitled to refer the dispute to the Commission in accordance with clause 13.6”.

[42] The Applicant submits that an employee of the Respondent engaged under the Agreement, and the UWU in its capacity as their representative, have completed the steps set out in the Disputes Clause before referring the dispute to the Commission. Consequently, the Commission is authorised to hear the matter.

Consideration

[43] The Applicant argues they are representing employees concerns and, through the sites rate clause and the disputes procedure, have access to the Commission to assist in the resolution of the dispute. I am not persuaded by the Applicant’s submissions in respect of the jurisdictional matter. In short, the dispute is raised on behalf of non-employees (agency contractors) who are not a party to the Agreement and the UWU is not capable of bringing the dispute on its own behalf under this Agreement. I am not persuaded by the statements of the two employees submitted by the Applicant which attempt to show that they followed the disputes procedure required of them.

[44] The UWU has sought to bring this application in circumstances where they cannot be a party to the dispute. The affected workers are employees who have a different employer and their conditions are not established by the Agreement that operates at the site. The sites rates clause acts to ensure parity with the Respondent’s employees and, to some extent, protect the Respondent’s employees’ job security. I am satisfied that for the reasons outlined above by the Respondent, the UWU is not able to become a party to this matter and cannot bring a matter on its own behalf. The UWU is therefore unable to access the disputes clause in the Agreement.

[45] Accordingly, I determine that the Commission does not have jurisdiction to deal with the dispute under the terms of cl.13 of the Agreement. I order that the application be dismissed.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

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 1   Fair Work Act 2009 (Cth) s.595(1).

 2   Fair Work Act 2009 (Cth) s.172(2).

 3   CFMEU v North Goonyella Coal Mines Pty Ltd[2015] FWCFB 5619.

 4   CFMEU v North Goonyella Coal Mines Pty Ltd[2015] FWCFB 5619.

 5   CFMEU v North Goonyella Coal Mines Pty Ltd[2015] FWCFB 5619.

 6   AMWU v Southcorp Wines Pty Limited [2016] FWC 586.

 7   AMWU v Southcorp Wines Pty Limited [2016] FWC 586 at [34].

 8   AWU v MC Labour Services Pty Ltd [2017] FWCFB 5032. See also the decision in Ponczek v Serco Group Pty Ltd [2013] FWC 3773.

 9   AWU v MC Labour Services Pty Ltd [2017] FWCFB 5032 at [39].