THE SYDNEY FERRIES CORPORATION MARITIME OFFICERS ENTERPRISE AGREEMENT 2006-2008

Appeal - dispute resolution procedure - construction of enterprise agreement - whether Commission had power to arbitrate - meaning of "matters arising" under the agreement- Workplace Relations Act 1996 - ss.709,710, 711 and 712.

[1] On 24 May 2007 the Sydney Ferries Corporation (SFC) made an application to the Commission to conduct a dispute resolution process pursuant to Division 5 of Part 13 of the Workplace Relations Act 1996 (the Act). Part 13 concerns dispute resolution generally. Division 5 concerns dispute resolution under the terms of a workplace agreement. SFC is a party to The Sydney Ferries Corporation Maritime Officers Enterprise Agreement 2006-2008 (the Agreement) which applies to maritime officers employed by SFC. The Australian Maritime Officers Union (AMOU) is the other party to the Agreement. The Agreement was lodged in July 2006 and provides for new rosters to be agreed between SFC and the AMOU as soon as possible, but at the latest by 1 October 2006. The contemplated agreement was not reached and SFC sought the Commission's assistance under Division 5, invoking the operation of the dispute settlement procedure in the Agreement.

[2] The application came before Commissioner Raffaelli who attempted conciliation. When conciliation did not produce an agreement SFC sought arbitration. The AMOU submitted that the proceedings should be dismissed because the Commission had no power to arbitrate new rosters under the terms of the Agreement. Commissioner Raffaelli upheld that submission and dismissed the application. The SFC has lodged an appeal pursuant to s.120 of the Act.

[3] At the outset we refer to some of the statutory limitations upon the Commission in the conduct of a dispute resolution process. When conducting a dispute resolution process pursuant to Division 5 of Part 13 the Commission is required by the terms of s.712(1) to conduct the process in private. We are satisfied that the appeal in this case, being brought under s.120, is not a dispute resolution process under Division 5 and s.712(1) does not apply. We reserve for future consideration the applicability of s.712(1) to an appeal brought pursuant to terms in the Agreement and not under s.120.

[4] Section 712(2) provides that the Commission must not disclose any information or documents given to it in the course of conducting a dispute resolution process, save in specified circumstances. It is not clear whether s.712(2) has any application when the Commission is hearing an appeal arising from the conduct of a dispute resolution process. If the section does apply there might be implications for the hearing of the appeal. In particular the Commission might be required to conduct the whole or part of the appeal in private. Out of an abundance of caution the parties have given their consent, pursuant to s.712(2)(b), to the disclosure of information and documents to the extent necessary to determine the appeal. We note that in the case of the AMOU consent was given on a without prejudice basis because it contends that as a matter of law there was no dispute properly before the Commissioner and accordingly s.712(2) has no application.

[5] In order to deal with the appeal it will be necessary to set out the relevant statutory provisions, some of the terms of the Agreement and the substance of the Commissioner's decision.

[6] The Commission's jurisdiction to conduct a dispute resolution process under Division 5 is set out in s.709(1) of the Act which reads:

"(1) A person may apply to the Commission to have a dispute resolution process conducted by the Commission under this Division in relation to a matter or matters in dispute if:

(a) the dispute is one that, under the terms of a workplace agreement, may be resolved using a dispute resolution process conducted by the Commission; and

(b) any steps that, under the terms of agreement, must be taken before the matter is referred to the Commission have been taken."

[7] In this case attention was focussed on the terms of s.709(1)(a) in particular. Section 710 is also relevant, in particular s.710(a). We set out the whole of the section for completeness:

"710 Grounds on which Commission must refuse application

The Commission must refuse to conduct a dispute resolution process under this Division in relation to a matter in dispute if:

(a) the dispute is not one that, under the terms of the workplace agreement, may be resolved using a dispute resolution process conducted by the Commission; or

(b) any of the steps that, under the terms of agreement, must be taken before the matter is referred to the Commission have not been taken; or

(c) the matter is the subject of proceedings or has already been settled as a result of proceedings, whether before a court or another body, under a law of the Commonwealth or of a State or Territory relating to the prevention of discrimination or to equal opportunity."

[8] Section 711 deals with the powers the Commission may exercise and the functions it may perform under Division 5. It is desirable to set out s.711(1):

"(1) In conducting the dispute resolution process under this Division, the Commission

has, subject to subsection (2), the functions and powers:

(a) given to it under the workplace agreement; or

[9] Turning now to the Agreement, we note first that cl.4 contains a procedure for resolving a dispute in relation to a matter arising under the Agreement. The clause is entitled Grievance and Dispute Resolution Procedure. It is only necessary to set out part of the clause:

"4.3 If a dispute in relation to a matter arising under the agreement is unable to be resolved at the workplace, and all agreed steps for resolving it have been taken, the dispute may be referred to the Australian Industrial Relations Commission (the Commission) for resolution by mediation and/or conciliation and, where the matter in dispute remains unresolved, arbitration. If arbitration is necessary the Commission may exercise the procedural powers in relation to hearings, witnesses, evidence and submissions which are necessary to make the arbitration effective."

[10] This provision enables a party to notify the Commission of a dispute and, ultimately, the Commission may deal with the matter in dispute by arbitration. There are a number of provisions in the Agreement which deal directly with the question of rosters. It is necessary to set some of those provisions out. First there is provision for the payment of an annual salary to officers in conjunction with the introduction of new rosters. Clause 6.2 reads where relevant:

6.2.1.1 Upon the introduction of the new agreed hours of work and roster arrangements referred to in clauses 7 and 8 of this Agreement SFC shall pay Maritime Officers an annual salary. The annual salary covers all aspects of employment with the exception of those matters identified in clause 6.2.2.2 below. Salaries shall be increased over the duration of the Agreement as set out in Annexure A to this Agreement."

[11] Clause 7.1 deals with consultation in relation to rostering and in particular the principles to be applied in negotiating new rosters. It reads:

7.1.1 The Parties are committed to working together to establish and reach agreement as soon as possible on new rosters for the purpose of introducing the Maritime Officer Annual Salary. Those rosters shall meet the operational needs in relation to timetables and services and offer SFC Maritime Officers adequate time off to enjoy their life outside their work with SFC and effectively manage fatigue.

7.1.2 The hours of work, rosters and overtime entitlements applying at the time of signing of the Agreement are set out in Annexure C to this Agreement. These arrangements are based on a 38 hour ordinary working week. The provisions set out in Annexure C shall continue until the new agreed rosters and annual salaries are put into operation.

7.1.3 SFC is committed to reviewing rosters on a regular basis and to meet with the Workplace Delegates Council to reach agreement on any proposed changes to the rosters.

7.1.4 The Parties agree that rosters shall be developed to provide equity amongst the Maritime Officers.

7.1.5 The Parties are committed to developing team-based rosters."

[12] It can be seen from cl.7.1.1 that the parties committed themselves to reaching agreement on new rosters as soon as possible. Clause 7 makes provision for disputes in relation to implementation of the new rosters to be dealt with under the dispute settlement provision. Clause 7.4.1 provides:

"7.4.1 Following the implementation of the new agreed rosters (referred to in

Clause 7.1 above) in the event that a dispute arises between the Parties concerning the implementation or proposed implementation of a roster, the dispute shall be progressed in accordance with the provisions roster change of the Dispute Settlement Procedure set out in this Agreement."

[13] It should be observed that cl.7.4.1 is confined to disputes concerning implementation or proposed implementation of a roster and does not in terms extend to disputes about rosters themselves. Clause 8.1.1 is also relevant. It provides that new agreed rosters were to be finalised by 1 October 2006.

"8.1.1 The hours of duty shall be set out in the agreed rosters. The AMOU and the

employees are committed to finalizing the agreed rosters by 1 October 2006 in the interests of SFC operations requirements. Upon the introduction of the agreed rosters SFC shall introduce the annual salary and notional superable salary for SASS Employees as contained in Annexure A."

[14] The Commissioner's decision had two distinct bases. The first flowed from his interpretation of the term "matter arising" in cl.4.3. He expressed the view that the concept of a "matter arising" goes beyond the idea of a mere dispute over a provision in a workplace agreement. The agreement itself or a particular provision must throw up a controversy. His view is encapsulated in the following passage:

"[20] A dispute in relation to a "matter arising" cannot be a dispute about the provision or clause per se (reference omitted). It must be something more, and in most cases will be referable to how a provision or clause is to be applied."

[15] The Commissioner found that the task of arbitrating new rosters was not a matter arising under the Agreement because no controversy had arisen concerning the existing provision, such as the construction of the provision, how the agreed rosters were to be applied or what the agreed rosters were.

[16] Secondly the Commissioner concluded that if the Commission were to arbitrate it would in substance be varying the Agreement. Under the terms of the Agreement the parties had made a commitment to reaching agreement on new rosters and there was no evidence of an intention that if they were unable to reach agreement the Commission could arbitrate the new rosters. He found that the term "agreed rosters" could not be applied to rosters that were arbitrated by the Commission. Consistent with this finding he concluded, based on the terms of cl.7.4.1, that the parties had assigned to the Commission the more limited role of resolving disputes about implementation of the rosters once they had reached agreement about what the rosters were to be.

[17] On the appeal SFC's primary submission was that the failure of the parties to agree on new rosters gave rise to a dispute relating to a matter arising under the Agreement for the purpose of cl.4 of the Agreement. In that connection it alleged that the failure to reach agreement was the result of the AMOU's conduct in negotiations and that the AMOU was in breach of its obligation to reach agreement. This failure should be seen as part of the matter in relation to which a dispute had arisen. SFC further submitted that cl.4.3 conferred a power of arbitration on the Commission in relation to unresolved disputes and that the failure to reach agreement on new rosters was such a dispute. SFC submitted that the power to resolve such disputes by arbitration was unconfined and the Commissioner erred in not so finding.

[18] The substance of the matter which was notified to the Commission was the parties' inability to reach agreement on new rosters. Section 709(1)(a) provides that the Commission may only conduct a dispute resolution process in relation to a matter it can deal with under a workplace agreement. Whether there is such a matter is a question of characterization and perhaps also of interpretation of the agreement. By the time conciliation had ended, however, it was clear that SFC sought arbitration of new rosters. Whether the Commission can arbitrate in relation to a particular dispute is a question of power rather than of subject matter. Such a question arises not under s.709(1)(a) but under s.711(1). Section 711(1) provides that the Commission can only exercise powers given to it under the workplace agreement or otherwise agreed by the parties. The critical question in this case is whether the Agreement permits the Commission to exercise a power of arbitration in relation to the roster issue. In other words, did the parties intend that if they were unable to reach agreement on new rosters the Commission could arbitrate? The intention of the parties is to be determined objectively having regard to the terms of the Agreement and any understandings common to the parties at the time the agreement was made.

[19] Clause 4.3 provides that a matter arising under the Agreement may be resolved by arbitration if mediation or arbitration have been unsuccessful. In our view it would be wrong to interpret cl.4.3 as applying to any dispute about the Agreement. As the Commissioner pointed out, a disagreement about the amount of a wage rate would not be a matter arising under the Agreement and the Commission could not deal with a dispute about a new wage rate (in the absence of a specific authorisation to do so). [1] In this case, however, it is unnecessary to fully explore the concept of a dispute in relation to a matter arising under the agreement. The more important issue is whether the Agreement confers a power of arbitration on the Commission.

[20] While cl.4.3 confers a power of arbitration, the agreement must be interpreted as a whole. The power to arbitrate conferred in general terms by cl.4.3 must be interpreted in light of the specific provisions dealing with rosters. There are a number of indications in the roster provisions that the parties did not intend that the Commission could exercise a power of arbitration if they failed to reach agreement on new rosters. First, there is no provision expressly giving the Commission the power of arbitrating new rosters. Secondly, the Agreement provides for the manner in which new rosters will be reached - by agreement between the parties. Thirdly, as the Commissioner pointed out, the Agreement provides a dispute resolution role for the Commission in relation to the implementation or proposed implementation of new rosters, by implication excluding the Commission from the role of arbitrating the rosters themselves. These specific indications of the parties' intention lead us to conclude that, determined objectively, the parties did not intend the power of arbitration conferred on the Commission by cl.4.3 to extend to arbitrating the new rosters if they were not agreed.

[21] Having concluded that, properly construed, the Agreement does not confer power on the Commission to arbitrate new rosters, the Commissioner did not have the power to deal with the matter before him, at least to the extent that SFC sought the introduction of new rosters by arbitration.

[22] Much of the argument before us concerned the proper characterization of the matter before the Commissioner. SFC submitted that at the relevant time the matter before the Commissioner was the failure of the parties to reach agreement on rosters and the AMOU's breach of its obligations in relating to reaching agreement. If it be accepted that SFC's characterization of the dispute is correct, absent cl.7.4 it might have been within the Commission's power to arbitrate new rosters in settlement of that dispute. But the effect of cl.7.4, in conjunction with the other matters to which we have referred, cannot be ignored. The effect was to deprive the Commission of any arbitral power it might otherwise have had in relation to the fixation of new rosters. For that reason it is not necessary that we finally decide the correct characterization of the dispute. By the time the Commissioner made the decision under appeal, the substance of the case was whether the Commission had a power to arbitrate. We are satisfied it did not. Therefore the appeal cannot succeed.

[23] The grounds of the appeal, as amended by leave during the hearing, invoke ss.120(1)(a), (b) and (f) of the Act. It is unnecessary to consider whether an appeal may properly be brought under any of those provisions because, for the reasons we have given, the appeal would be bound to fail. The question of leave to appeal was not dealt with separately from the appeal which was fully argued. In the circumstances we shall grant leave to appeal but dismiss the appeal and confirm the Commissioner's decision.

H Dixon SC with T Saunder of counsel for Sydney Ferries Corporation.

S Crawshaw SC and J Wydell for The Australian Maritime Officers' Union.

[1] See Ansett Pilots' Association v Ansett Australia Limited. Print R8525, 30 August 1999 (Ross VP);

Print S1467, 2 December 1999 (Full Bench).

Printed by authority of the Commonwealth Government Printer