WARAS v Tagteam Australia Pty Ltd

[2016] FCCA 1978

FEDERAL CIRCUIT COURT OF AUSTRALIA

WARAS v TAGTEAM AUSTRALIA PTY LTD [2016] FCCA 1978

Catchwords:
INDUSTRIAL LAW – Whether the Court has jurisdiction to make a declaration that the Applicant and Respondent had settled a dispute dealt with under s.368 of the Fair Work Act 2009 (Cth) (“the Act”) – consideration of meaning of “matter arising under the this Act” – consideration of the scheme of Div 8 – Compliance, Part 3-1 of the Act – application dismissed for want of jurisdiction.

Legislation:

Fair Work Act 2009 (Cth), ss.365, 368, 370, 566, 567, 570, 592, Div.3, 4, 5, Pt.3-1

Federal Circuit Court of Australia Act 1999 (Cth), ss.16, 79

Cases cited:

Yum! Restaurants Australia Pty Ltd v Full Bench of Fair Work Australia and Another (No 2) (2012) 203 FCR 550

Applicant: ALEXANDER WARAS

Respondent: TAGTEAM AUSTRALIA PTY LTD

File Number: MLG 436 of 2016

Judgment of: Judge Jones

Hearing date: 10 May 2016

Date of Last Submission: 7 June 2016

Delivered at: Melbourne

Delivered on: 2 August 2016

REPRESENTATION

Counsel for the Applicant: Mr Stirling

Solicitors for the Applicant: AHIG Legal

Counsel for the Respondent: Mr Minucci

Solicitors for the Respondent: BlandsLaw

ORDERS

1. The application filed on 4 March 2016 is dismissed.

2. The proceeding be listed for Hearing on 6 September 2016 at 2.15pm (half day) in relation to the question of costs.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLG 436 of 2016

ALEXANDER WARAS

Applicant

And

TAGTEAM AUSTRALIA PTY LTD

Respondent

REASONS FOR JUDGMENT

Introduction and Background

1. This decision concerns an application filed by the Applicant on 4 March 2016 for Orders which include the following:

   1.  A declaration that on 16 November 2015 the Applicant and Respondent had settled the General Protections dispute, which the Applicant had commenced under the Fair Work Act 2009 in the Fair Work Commission and which was assigned matter number C2015/7030, for the amount of $8,799.10.

   2. An order requiring the Respondent to pay the Applicant $8799.10.

2. The Applicant also seeks interests be paid on this amount, and an Order requiring the Respondent pay the Applicant’s legal costs.

3. The Respondent argues that the application is misconceived and should be struck out for want of jurisdiction. The Respondent also seeks costs against the Applicant pursuant to s.79 of the Federal Circuit Court of Australia Act 1999 (Cth) (“the FCCA Act”).

4. The Respondent raised its jurisdictional objection at the first Court return date. Orders were made for filing of written submissions by the parties, and for the question of the Court’s jurisdiction to be determined on the papers.

5. On 19 October 2015, the Applicant lodged an application with the Fair Work Commission (“the FWC”) pursuant to s.365 of the Fair Work Act 2009 (Cth) (“the FW Act”). Section 365 of the FW Act provides as follows:

   365   Application for the FWC to deal with a dismissal dispute

   If:

   (a) a person has been dismissed; and

   (b) the person, or an industrial association that is entitled to represent the industrial interests of the person, alleges that the person was dismissed in contravention of this Part;

   the person, or the industrial association, may apply to the FWC for the FWC to deal with the dispute.

6. Section 368 of the FW Act provides:

   368   Dealing with a dismissal dispute (other than by arbitration)

   (1) If an application is made under section 365, the FWC must deal with the dispute (other than by arbitration).

   Note: The FWC may deal with a dispute by mediation or conciliation, or by making a recommendation or expressing an opinion (see subsection 595(2)). One of the recommendations that the FWC might make is that an application be made under Part 3-2 (which deals with unfair dismissal) in relation to the dispute.

   (2) Any conference conducted for the purposes of dealing with the dispute (other than by arbitration) must be conducted in private, despite subsection 592(3).

   Note: For conferences, see section 592.

   (3) If the FWC is satisfied that all reasonable attempts to resolve the dispute (other than by arbitration) have been, or are likely to be, unsuccessful, then:

   (a) the FWC must issue a certificate to that effect; and

   (b) if the FWC considers, taking into account all the materials before it, that arbitration under section 369, or a general protections court application, in relation to the dispute would not have a reasonable prospect of success, the FWC must advise the parties accordingly.

   (4) A general protections court application is an application to a court under Division 2 of Part 4-1 for orders in relation to a contravention of this Part.

7. Sections 365 and 368 are located in Div 8 - Compliance - of Part 3-1 of the FW Act. The contraventions referred to in sub-s.365(b) are contraventions of provisions found in Div.3 to Div.5, Part 3-1 of the FW Act. These provisions are generally referred to as the General Protection provisions of the FW Act.

8. Section 370 of the FW Act provides:

   370   Taking a dismissal dispute to court

   A person who is entitled to apply under section 365 for the FWC to deal with a dispute must not make a general protections court application in relation to the dispute unless:

   (a) both of the following apply:

   (i) the FWC has issued a certificate under paragraph 368(3)(a) in relation to the dispute;

   (ii) the general protections court application is made within 14 days after the day the certificate is issued, or within such period as the court allows on an application made during or after those 14 days; or

   (b) the general protections court application includes an application for an interim injunction.

9. Thus, it can be said, that the scheme of the compliance provisions in relation to disputes regarding contraventions of the General Protection provisions of the FW Act, which involve dismissal, contemplates that any dispute must first be referred to the FWC to be dealt with, including by way of mediation, conciliation, the making of recommendations or the expression of opinions. It is apparent that the purpose of this scheme is to provide a mechanism by which these disputes can be resolved with the assistance of the FWC, before the dispute or controversy proceeds to litigation in a Court having jurisdiction under the FW Act. It is apparent that s.368 of the FW Act contemplates that the parties may not reach an agreed settlement. So much can be said because the provisions require the issuing of the certificate by the person conducting the conference, to the effect that all reasonable attempts to resolve the dispute have been made, or are likely to be unsuccessful: sub-s.368(3) of the FW Act.

10. Section 566 of the FW Act provides as follows:

    “Jurisdiction is conferred on the Federal Circuit Court in relation to any civil matter arising under this Act.”

11. On 16 November 2015, the parties participated in a telephone conciliation conference with a Conciliator, who is delegated the powers of conducting a conciliation: see sub-s.592(2) of the FW Act.

12. There is no dispute that a certificate pursuant to sub-s.368(3) of the FW Act has not yet been issued by the Conciliator. The consequences of this, is that the Applicant may not yet make a General Protection provisions application to this Court.

13. The Applicant alleges that during the conference held on 16 November 2015, the parties reached a verbal settlement agreement that the Respondent would pay him a fixed sum and that, in return, he would discontinue the matter. By the Applicant’s affidavit filed on 4 March 2016, that he relies on:[1]

    a)a General Protections Dispute Conference Outcome form issued by the Conciliator in which it is stated, “I confirm that the matter has settled with the substantive elements of the agreement being … A draft agreement reflecting the agreed terms containing the standard terms for such agreement is attached”.

    b)a document headed “Terms of Settlement” sent by the Conciliator and signed by the Applicant on 17 November 2015;

    an email dated 26 November 2015 to the Applicant by the Respondent’s solicitor stating in part that, “[o]ur client has instructed us to inform you that it has decided to withdraw from further negotiations and intends to dispute your claim in its entirety.”

    [1] Annexures AW1 to AW 5, to the Applicant’s affidavit

Issue in dispute

1. Section 567 of the FW Act relevantly provides as follows:

   Jurisdiction conferred on the Federal Circuit Court under section 566 is to be exercised in the Fair Work Division of the Federal Circuit Court if:

   …

   (c) a declaration is sought under section 16 of the Federal Circuit Court of Australia Act 1999 in relation to a matter arising under this Act;

2. Sub-section 16(1) of the FCCA Act relevantly provides:

   The Federal Circuit Court of Australia may, in relation to a matter in which it has original jurisdiction, make binding declarations of right, whether or not any consequential relief is or could be claimed.

3. As noted earlier this Court has original jurisdiction in relation to any civil matter arising under the FW Act: s.566 of the FW Act.

4. Although not expressly dealt with by the Applicant, I am satisfied that the Applicant relies on the Court having original jurisdiction by reason of the express provisions of the FW act. The provision of the Act the Applicant relies on is sub-s.368(1) of the FW Act. In particular, the Applicant argues that the Court must first determine that there has been compliance with that section, before making ancillary Orders to enforce the agreement between the parties. Consequently, the Applicant submits that the question of jurisdiction is, in fact, a question as to whether the Court has the power to determine and declare whether there has been compliance with sub-s.368(1) of the FW Act.[2] As will become apparent later in his judgment, I have some difficulty with the way in which the Applicant characterises the declaration sought in the application filed on 4 March 2016.

   [2] Applicant's Written Submissions at [8] to [9].

5. There is no dispute that the matter before the Court is a civil matter. Consequently, the issue in dispute is whether the declaration sought by the application can be said to be one that is “in relation to a matter arising under” the FW Act: s.567 of the FW Act.

Legal principles

1. The legal principles which apply in respect of construing the phrase “in relation to a matter arising under” under the FW the Act are settled, and I can find no dispute between the parties as to those principles. As the Respondent has pointed out in its Written Submissions, these were helpfully summarised by Cowdroy J in Yum! Restaurants Australia Pty Ltd v Full Bench of Fair Work Australia and Another (No 2) (2012) 203 FCR 550 (“Yum!”). The Respondent has set out in its written submissions, the relevant extracts from his Honour’s decision as follows, at [15] to [16]:

   15.    In considering whether the proceeding was a “matter arising” under the FW Act, Cowdroy J observed as follows:[3]

   The question whether the application before the Court for prerogative relief should be characterised as one falling within the Judiciary Act or the FW Act can be resolved by reference to established principle. In R v Commonwealth Court of Conciliation and Arbitration; Ex parte Barrett (1945) 70 CLR 141, Latham CJ said at 154:

   The relevant inquiry is whether the matter arises under the law. Thus one is compelled to the conclusion that a matter may properly be said to arise under a Federal law if the right or duty in question in the matter owes its existence to Federal law or depends upon Federal law for its enforcement, whether or not the determination of the controversy involves the interpretation (or validity) of the law. In either of these cases the matter arises under the Federal law.

   [3] Yum! at [24] – [29].

   …

   Subsequently, in Re McJannet; Ex parte Australian Workers’ Union of Employees (Qld) (No 2) (1997) 189 CLR 654 an application was made for an order for prohibition addressed to judges of this Court on the basis that the Court had no jurisdiction. Their Honours Brennan CJ, McHugh and Gummow JJ said at 656:

   The question whether a proceeding is in a matter arising under the Act within the meaning of s 347(1) was considered by Re Polites; Ex parte Hoyts Corporation Pty Ltd where this Court made an order absolute for mandamus directing Mr Deputy President Polites to hear and determine a matter which was pending under the Act before him in the Industrial Relations Commission. That order enforced the statutory duty imposed upon the Deputy President by the Act. That was sufficient to make the proceeding in this Court itself a proceeding in a matter under the Act. By contrast, the proceeding in this case was to prohibit the continuance of the proceeding in the Federal Court on the ground that that Court had no jurisdiction under the Act to determine the matter in controversy between the parties as to their substantive rights.

   The test for determining whether a proceeding is in a matter arising under the Act for the purposes of s 347(1) is whether the right or the duty that is sought to be enforced owes its existence to a provision of the Act. Thereafter, their Honours cited the observations of Latham CJ as set out at [24] above.

   In Shanahan v Australian Industrial Relations Commission (No 3) (2007) 162 IR 116, the Full Court considered that costs could be awarded where constitutional writ relief was sought in respect of a decision of the Full Bench. That application was remitted to this Court. In respect of the costs application, the Court said at [25]:

   It is clear in the present case that the proceeding which was instituted by the applicant was in a “matter arising under” the Act. Whatever other “matters” may be inherent in the one legal controversy, the present case involved a proceeding in respect of a controversy which arose under the Act.

   16.    His Honour continued:[4]

   A further example of such principle is referred to in Construction, Forestry, Mining and Energy Union v Australian Industrial Relations Commission (2007) 157 FCR 260 in which the Full Court said at [80]:

   A matter arises under a Federal law “... if the right or duty in question in the matter owes its existence to Federal law or depends upon a Federal law for its enforcement whether or not the determination of the controversy involves the interpretation (or validity) of the law”: R v Commonwealth Court of Conciliation and Arbitration; Ex parte Barrett [1945] HCA 50; (1945) 70 CLR 141 at 154. The matter presently before the Court concerns the proper interpretation of an eligibility rule of a registered organisation under the [Workplace Relations Act]. It concerns its interpretation by the Full Bench of the Commission exercising the appellate function conferred upon it by the Act as it stood prior to the Work Choices Act. Part of the matter is said to involve the question whether the Full Bench has fulfilled its duty under the Act in determining whether [the Senior Deputy President of the Commission] was correct in her interpretation of the rule. The matter can therefore be said to be one which arises under the [Workplace Relations Act] and in respect of which this Court has jurisdiction by virtue of s 39B(1A)(c).

   [4] Yum! at [35].

2. Both parties concur[5] that a matter “may properly be said to arise under a Federal law if the right or duty in question in the matter owes its existence to Federal law or depends upon Federal law for its enforcement, whether or not the determination of the controversy involves the interpretation (or validity) of the law.”

   [5] Applicant’s Written Submission at [12] and Respondent’s Written Submissions at [17].

The submissions

1. The Respondent submits that the Court has no jurisdiction in this matter for the following reasons:

   18.    The ‘right or duty’ in question in the current proceeding is the enforcement of an alleged Terms of Settlement Agreement. This is the matter that is in dispute between the parties. For it to ‘arise’ under Federal law, the Agreement must “owe its existence to Federal law or depend upon Federal law for its enforcement”. In this case the relevant Federal law is the FW Act.

   19. The Agreement does not rely on any provision of the FW Act for its existence. The Agreement does not rely on any provision of the FW Act for its enforcement. It is not made pursuant to any section of the FW Act. In fact, the Applicant does not even suggest that there is any provision in the FW Act that even permits such an agreement to be entered into.

   20.    The ability for parties to litigation to settle a dispute rests in the principles of contract law. The Agreement, if it had been executed by the parties, would have amounted to an ‘accord and conditional satisfaction’. If the Applicant wished to enforce the Agreement, he would be asking the court to resolve a common law dispute; not a dispute that arises under Federal legislation.

   (footnotes omitted)

2. The Applicant submits that:

   13. … he has a right under section 368 of the FW Act (that right being to have the Fair Work Commission deal with his dispute) and the determination and ultimately the declaration of whether he has enjoyed the benefit of that right is a “civil matter arising under this Act” and is within the jurisdiction of the Federal Circuit Court as the Applicant is seeking a declaration under section 16 of the Federal Circuit Court of Australia Act 1999 (FCCA Act) pursuant to section 567 of the FW Act.

   14. ... he is seeking a declaration that he has had the benefit of a right under the FW Act and ancillary orders to give effect to the benefit of that right.

   15. The Applicant submits that the Court does have jurisdiction to hear the matter as the Applicant is seeking confirmation from the Court that his right to have his original general protections dispute dealt with by the Fair Work Commission has been honoured and the basis of that right originates from a federal law – the FW Act.

   16. The Applicant further submits that it is essential for the Court to determine if section 368(1) of the FW has been complied with in order to conclude or advance his general protections application made under section 365 of the FW Act as the Court’s decision will provide certainty to the parties with respect to whether the Applicant has a continuing course of action in the Fair Work Commission under Part 3-1 of the FW Act given that the Fair Work Commission has not issued a certificate pursuant to section 368(3) of the FW Act and the Applicant has not filed a notice of discontinuance with the Fair Work Commission. Failure of the Court to make a declaration with respect to whether there has been compliance with section 368(1) of the FW Act would render the Applicant’s general protections application to remain open and unresolved, potentially indefinitely, and deprive the Applicant of an opportunity to enjoy the dispute resolution provisions of the FW Act.

Consideration

1. In considering whether a duty or right arises from the provisions of s.368 of the FW act, those provisions must be given their ordinary meaning and read in the context of the relevant division in the FW Act.

2. Section 365 of the FW Act is expressed in permissive terms; namely, if a person has been dismissed and alleges contraventions of the General Protection provisions of the FW act, the person may apply to the FWC for the FWC to deal with the dispute.

3. Section 368 of the FW Act imposes an obligation to deal with the dispute. The section does not prescribe how the FWC is to deal with the dispute, save to say that the use of the heading “(other than by arbitration)”, makes it clear that the dispute is not to be dealt with by arbitration. The “Note” to sub-s.368(1) of the FW Act gives an indication of the way the FWC may deal with the dispute; namely by way of mediation, conciliation, making a recommendation or expressing an opinion.

4. The ordinary meaning of the word “arbitration” can be ascertained by reference to dictionary definitions. The Macquarie dictionary (on-line) defines “arbitration” as follows:

   noun 1. Law the hearing or determining of a dispute between parties by a person or persons chosen, agreed between them, or appointed by virtue of a statutory obligation.

   2. Industrial Law the presentation of legal argument by parties (for whom conciliation has failed), before a government-appointed arbitrator who is empowered to make a binding decision. Compare conciliation (def. 3).

1. The Oxford English dictionary (on-line) defines “arbitration” as follows:

   2.

   a. The settlement of a dispute or question at issue by one to whom the conflicting parties agree to refer their claims in order to obtain an equitable decision.

2. It follows, therefore, that the FWC may not make a binding decision regarding the parties’ rights. Likewise, there is no duty imposed on the FWC to ensure the dispute is dealt with by settlement between the parties. Indeed, the provisions of s.368 of the FW Act contemplate that there may be no resolution or settlement of the dispute: sub-s.368(3) of the FW Act.

3. The only obligations on the FWC under s.368 of the FW Act are to:

   a)deal with the dispute (except by binding determination);

   b)conduct the proceedings in private;

   c)issue a certificate where the matter has been resolved or could not be resolved despite all reasonable attempts to settle the matter.

4. There is no dispute that the FWC has not issued a certificate pursuant to sub-s.368(3) of the FW Act. However there are two things that can be said about this factual circumstance. Firstly, it is not clear, on the material before the Court, that the parties have informed the Conciliator that the matter has not settled. Secondly, the Applicant does not seek an injunction compelling the FWC to issue such a certificate. That is, the Applicant is not seeking a writ of mandamus in these proceedings. What the Applicant is seeking is a declaration that the parties have settled the dispute.

5. There is no obligation on the FWC to deal with the dispute by settlement. Nor is there a commensurate right of a party to have the dispute dealt with by settlement.

6. I agree with the Respondent that:

   a)if there was a settlement it can only have been a common-law agreement; and

   b)by its terms, the declaration asks the Court to declare the existence of such a common-law agreement.

7. For these reasons, I find that there is no right or duty which arises from the FW Act to make a declaration as to the existence of, or enforceability of, a settlement purportedly reached during or because of the dispute being dealt with by the FWC pursuant to s.368 of the FW Act. The reaching of a settlement or agreement does not owe its existence to the provisions of s.368 of the FW Act.

Conclusion

1. Accordingly, for the reasons set out in this judgment, I find that I do not have jurisdiction to make the declaration and Order sought by the Applicant, as they are not matters arising under the FW Act. Orders will be made that the application filed by the Applicant on 4 March 2016 be dismissed.

Costs

1. There can be no doubt that, were the Court to find that the application for declaratory, and other Orders, are not a matter arising under the FW Act, then the provisions of s.79 of the FCCA Act apply.

   Section 79 of the FCCA Act relevantly provides:

   (1)  This section does not apply to family law or child support proceedings or proceedings in relation to a matter arising under the Fair Work Act 2009 or section 14, 15 or 16 of the Public Interest Disclosure Act 2013.

   Note: See section 117 of the Family Law Act 1975 in relation to family law or child support proceedings. See section 570 of the Fair Work Act 2009 for proceedings in relation to matters arising under that Act. See section 18 of the Public Interest Disclosure Act 2013 for proceedings in relation to matters arising under section 14, 15 or 16 of that Act.

   (2)  The Federal Circuit Court of Australia or a Judge has jurisdiction to award costs in all proceedings before the Federal Circuit Court of Australia (including proceedings dismissed for want of jurisdiction) other than proceedings in respect of which any other Act provides that costs must not be awarded.

   (3)  Except as provided by the Rules of Court or any other Act, the award of costs is in the discretion of the Federal Circuit Court of Australia or Judge.

2. On the other hand, if the Court found that the application was a matter arising under the FW Act, the provisions of s.570 of the FW Act apply. Section 570 of the FW Act provides:

   570   Costs only if proceedings instituted vexatiously etc.

   (1) A party to proceedings (including an appeal) in a court (including a court of a State or Territory) in relation to a matter arising under this Act may be ordered by the court to pay costs incurred by another party to the proceedings only in accordance with subsection (2) or section 569 or 569A.

   Note: The Commonwealth might be ordered to pay costs under section 569. A State or Territory might be ordered to pay costs under section 569A.

   (2) The party may be ordered to pay the costs only if:

   (a) the court is satisfied that the party instituted the proceedings vexatiously or without reasonable cause; or

   (b) the court is satisfied that the party’s unreasonable act or omission caused the other party to incur the costs; or

   (c) the court is satisfied of both of the following:

   (i) the party unreasonably refused to participate in a matter before the FWC;

   (ii) the matter arose from the same facts as the proceedings.

3. As I have found that the application for declaratory and other Orders are not a matter arising under the FW Act, the provisions of s.79 of the FCCA Act apply.

4. In his written submissions, the Applicant requested that the question of costs be reserved until Judgment. I am satisfied that this is the appropriate course to take. I will list this matter for Directions to consider the Respondent’s application for costs.

I certify that the preceding thirty-eight (38) paragraphs are a true copy of the reasons for judgment of Judge Jones

Date: 2 August 2016