Fair Work Act 2009

s.739 - Dispute resolution

Metro Trains Melbourne Pty Ltd T/A Metro Trains

Application to deal with a dispute - whether to exercise discretion to arbitrate the dispute -matter adjourned.

[1] In this matter, Metro Trains Melbourne Pty Ltd T/A Metro Trains (the Applicant) seeks that the Fair Work Commission (the Commission) exercise its powers to conduct an arbitration of a dispute that it has notified to the Commission pursuant to s.739 of the Fair Work Act 2009 (the Act). Essentially, the Australian Rail, Tram and Bus Industry Union (the Respondent) objects to an arbitration being conducted in circumstances where the same disputed matters of construction of the terms of the Agreement, central to the dispute, are to be litigated in the Federal Court of Australia. Accordingly, this decision deals with whether it is appropriate to set directions and proceed to an arbitration of the application or to adjourn the proceedings pending the resolution of the matter in the Federal Court of Australia.

[2] The Applicant has made an application pursuant to s.739 of the Act for the Commission to deal with a dispute in accordance with a dispute settlement procedure. The relevant agreement is the Metro Trains Melbourne Pty Ltd Rail Operations Enterprise Agreement 2015-2019 (the Agreement).[1] According to the Form F10 - Application for the Commission to deal with a dispute in accordance with a dispute settlement procedure (Form F10), the dispute relates to a number of clauses of the Agreement including clause 1.9.1, clause 1.12, clause 4.1, Schedule 1 clause 3 and Schedule B Classifications and Rates of Pay.

[3] The Form F10 noted the various steps that had been taken under the terms of the dispute settlement procedure to escalate the dispute to the point of it being notified to the Commission. This included the Respondent formally notifying the Applicant of a dispute on 19 May 2017 and an outline of the discussions and exchanges of correspondence that ensued. The Form F10 also notes that on 28 June 2017, Mr Chrysostomou of the Respondent advised the Applicant that it would be progressing with legal proceedings in the Federal Court of Australia on the same matter.

[4] The dispute application was lodged with the Commission on 4 August 2017. The Respondent made application to the Federal Court of Australia 10 days later on 14 August 2017. On 22 August 2017 the matter was before the Federal Court of Australia, pursuant to an interlocutory application by the Respondent for the Court to make orders expediting the hearing of the application. The proposed orders reflecting what the Respondent was seeking sought a hearing date in mid-October and an accelerated timetable to lead up to that. The Applicant opposed that application on the basis that there is an available, appropriate and agreed dispute resolution mechanism that has already been invoked and it should be allowed to run its course, that is, this application before me. Ultimately the matter was listed in the Federal Court of Australia for hearing on 30 November 2017 and in light of that, the Respondent did not press its application for an expedited hearing.[2]

[5] In summary, the dispute concerns the amount of driver training that is required to be given to train drivers. The Agreement has a provision that provides for a training scheme for drivers, the Metro Driver Training Scheme. The scheme provides for training for a particular number of weeks and for particular training content to be included in it. The Applicant contends that, based on their construction of the terms of the Agreement that the terms of the Metro Driver Training Scheme do not apply to "conversion drivers". Conversion drivers can best be described as drivers who already have some driver training and experience of varying levels. While the Applicant intends to train conversion drivers they argue that the terms of the Agreement do not require them to apply the Metro Driver Training Scheme to them as they are already qualified drivers. The Respondent argues that the Metro Driver Training Scheme applies to all drivers. The Metro Driver Training Scheme requires 41-50 weeks training whereas the Conversion Driver Training contemplated by the Applicant is 23 weeks training. There is also a related issue as to whether the training needs to be focused on one geographic area, Metro North or Metro South.

[6] The Commission as presently constituted listed the matter for a conciliation conference, consistent with the requirement in the dispute settlement clause. That conference was conducted on 15 August 2017. At the conference, I sought to resolve the dispute by conciliation and expressing opinion, both options contemplated within the terms of the dispute settlement clause. However, the conference failed to resolve the dispute. During the conference, the Respondent tabled the application that had been made to the Federal Court of Australia. The dispute concluded with the Applicant to consider whether it sought an arbitration of the matter and to advise the Commission and the Respondent. Subsequently, the Applicant wrote seeking an arbitration of the dispute. The Applicant has set out a proposed question or questions to be answered to resolve the dispute and a proposed timetable. The Respondent opposes any arbitration of the dispute by the Commission with respect to Conversion Driver Training. The matter was listed for Mention before me on 28 August 2017. Mr Dalton was granted permission to appear for the Applicant and Ms Levine was granted permission to appear for the Respondent as I was satisfied that granting permission would enable the matter to be dealt with more efficiently, taking into account the complexity of the matter.

[7] The dispute settlement clause in the Agreement is clause 1.12 and is in the following terms:

(a) a matter arising under the Agreement (excluding a matter relating to occupational health and safety); or

(b) the National Employment Standards; or

(c) a matter pertaining to the employment relationship;

1.12.2 An Employee who is a party to the dispute may be represented at all stages for the purposes of the procedures in this clause, by their representative, which may include the union.

1.12.3 In the first instance, the parties to the dispute must try to resolve the dispute at the workplace level, by discussions between the Employee or Employees and relevant supervisors and/or management. in good faith.

1.12.4 If discussions at the workplace level do not resolve the dispute, a party to the dispute may refer the matter to the Fair Work Commission.

1.12.5 The Fair Work Commission may deal with the dispute in two (2) stages:

(a) The Fair Work Commission will first attempt to resolve the dispute as it considers appropriate, including by mediation, conciliation, expressing an opinion or making a recommendation; and

(b) For matters arising under 1.12.1 (a) and (b), if the Fair Work Commission is unable to resolve the dispute at the first stage, the Fair Work Commission may then:

ii. make a determination that is binding on the parties.

Note: if the Fair Work Commission arbitrates the dispute, it may also use the powers that are available to it under the Fair Work Act 2009 (Cth).

A decision that the Fair Work Commission makes when arbitrating a dispute is a decision for the purpose of Div 3 of Part 5.1 of the Fair Work Act 2009 (Cth). Therefore, an appeal may be made against the decision.

1.12.6 The parties to the dispute and their representatives must genuinely attempt to resolve the dispute through the processes set out in this clause and must cooperate to ensure these processes are carried out expeditiously.

1.12.7 In the event of a clause 1.12.1 (a) or (b) dispute, while the parties are trying the resolve the dispute using the procedure in this clause, work must continue in accordance with the usual practice existing prior to the matter that is the subject of the dispute (status quo), pending the resolution of the dispute unless:

(a) there is a reasonable concern about an imminent risk to health and safety associated with the status quo (in which case status quo will not apply): or

(b) the status quo has a direct impact on service delivery or Government related initiatives (in which case the status quo will only apply up to the conclusion of the steps in clause 1.12.5 (a)).

For the avoidance of doubt, the state of affairs as it existed prior to the matter that is the subject of the dispute will remain in place. For example, if the dispute is about a change to work, the status quo represents the position before the change.

1.12.8 In the event of a clause 1.12.1 (c) dispute, the status quo will not apply, pending the resolution of the dispute.

1.12.9 The parties to the dispute agree to be bound by a decision made by the Fair Work Commission in accordance with this clause. For the avoidance of doubt, this excludes matters arising under 1.12.1 (c).

1.12.10 For ease of reference, various rights under this clause 1.12 are summarised as follows:

FWC Mediation, Conciliation, Opinion, Recommendation, etc

[8] The Respondent asserted and the Applicant did not take issue, that the terms of the dispute settlement procedure allows within its terms discretion for the Commission to arbitrate the dispute. So much is apparent from the terms of clause 1.12.5 of the Agreement.[3] The Commission is only able to arbitrate the dispute if the various steps in the dispute settlement procedure have been completed. I do not understand either party to contend that those steps have not been completed. Further, the Commission can only arbitrate if the Commission is unable to resolve the dispute "at the first stage" that stage being clause 1.12.5(a). That stage having been completed and the Commission satisfied it was unable to resolve the dispute at that first stage, the FWC "...may then: (i) arbitrate the dispute and (ii) make a determination that is binding on the parties" (emphasis added). Taking all this into account it is apparent that the Commission has the necessary jurisdiction to arbitrate the dispute about how much training conversion drivers should receive. The question is, in circumstances where there are Federal Court proceedings already programmed which will deal with the same issue in dispute, is it appropriate for the Commission to exercise the discretion to arbitrate the dispute?

[9] There is an inherent desirability in giving effect to the requirements of dispute settlement clauses that the parties themselves have agreed to and seen fit to include in their enterprise agreement. Relevantly in this case, the Respondent having notified a dispute to the Applicant deliberately set in course the steps in the dispute settlement procedure. However, in this case the Respondent has determined that its preference is to litigate the matter in the Federal Court of Australia. I agree with the Applicant that the Commission is the agreed forum to resolve disputes.[4] Further at least part of the remedy sought by the Respondent, that being a permanent injunction on the Applicant from training drivers in the manner disputed can be effectively achieved in the Commission by way of the question being framed answered in the manner sought by the Respondent. The determination would be binding on the parties. However, I note that the imposition of pecuniary penalties on the Applicant, sought by the Respondent, is not a remedy available in this jurisdiction.

[10] I was referred by Counsel to a number of decisions of the Federal Court of Australia which provide some guidance on the matter. It is clear that the Commission when acting as private arbitrator under the enterprise agreement has power to decide a question of law, such as the construction of fair work instruments in a way that bound the parties in the resolution of the dispute.[5] In Linfox Australia Pty Ltd v Transport Workers' Union of Australia[6] his Honour Justice Rares was dealing with an application by Linfox for judicial review of a decision made by a Full Bench of the Commission which was an appeal decision arising from a determination of a dispute made by a single member of the Commission at first instance. The application was rejected and part of the reasoning of his Honour was to reject the argument that an arbitrator could not construe a fair work instrument in a way that was inconsistent with the construction that a Court might give it as to accept that argument, "...would render illusory the concept of dispute resolution intended to be achieved by s.186(6) and the mechanism it required every enterprise agreement to contain".[7] I respectfully agree, and this weighs in favour of proceeding to arbitrate the matter in dispute before me.

[11] I was also referred to the matter of Clermont Coal Pty Ltd v Brown.[8] In that matter, the Court was asked to exercise its jurisdiction to make a declaration upon the meaning of section 389(2). The circumstances of that case were that the parties in the Commission had already presented their cases and the Commission had reserved its decision.[9] Further, the Court noted that the declaration sought was "...four square within the matters upon which the Commission must deliberate, and with reference to which it must make a determination".[10] In that context, the Court dismissed the application for a declaration. The circumstances in this matter differ as the Commission has not exercised powers to resolve this dispute beyond undertaking a conciliation conference. On the other hand, matters have progressed somewhat in the Federal Court proceeding.

[12] The circumstances in this matter are more akin to the circumstances in Teys Australia Beenleigh Pty Ltd v The Australasian Meat Industry Employees Union (Teys)[11]. In Teys, his Honour Justice Bromberg was asked to determine an interlocutory application. The matter involved a dispute over the interpretation of an enterprise agreement, in particular, whether a particular document formed part of the enterprise agreement. The Union claimed it did and this was disputed by the company. The Union sought to have that matter dealt with by the Commission and made an application for the Commission to deal with the dispute.[12] Some two weeks later, the company filed an application for a declaration that the particular document did not form part of the enterprise agreement and also sought an interlocutory injunction, the effect of which would stop the Commission from dealing with the matter until a time that the Court would determine.[13]

[13] Importantly, it was accepted by his Honour that "...the substantive question necessarily arises for determination in both this proceeding and the proceeding in the FWC".[14] The analogous situation applies here.[15] In Teys, his Honour ultimately did not make the interlocutory order sought but did determine that, on balance, the interests of justice were best served by the substantive question being first determined by the Court. In considering the exercise of his discretion his Honour referred to six matters relevant to the exercise of the discretion. In summary these are:

1. The Court's specialist function is the final determination of the legal rights of the parties under the Act;

2. The Commission is an inferior tribunal and will be assisted by the reasons of the Court;

3. Complex legal issues were evident in the matter before his Honour which deserved the attention of a superior Court;

4. The issues raised are of general importance including that it may impact on other similar enterprise agreements;

5. If the substantive question continues to determination in private arbitration and at the same time in the Court, there is the potential for the answers to be inconsistent. If the Court first determines the issue, the potential for inconsistent results are minimised. His Honour referred to this as the most important matter; and

6. The potential for delay. In the matter before his Honour, the Commission had listed the matter for hearing within days of the proceedings before his Honour.[16]

[14] These matters are helpful in providing some guidance as to whether or not I should exercise the discretion to arbitrate the dispute. Having regard to these matters it is evident that the matters in 1, 2 and 5 exist here. I agree with his Honour that the matter considered at 5 is an important matter. In respect to matter 3, there is some complexity in the matter as there is in most matters requiring construction of terms in an enterprise agreement. Whilst the complexity is not on the level of the matter before his Honour in Teys there is clearly considerable complexity that arises from the competing approaches to the proper construction of the Agreement. The matters in dispute are not of general importance in the manner that they were in Teys where many other enterprise agreements in the industry had similar provisions. However, it is clear that this matter is important in its own right, with the Applicant making clear that its resolution could impact on its ability to provide services if there is an inability to train conversion train drivers within the time frame that they seek. This leads me to the sixth matter, the potential for delay. It is likely that the Commission could deal with this matter within a slightly shorter time frame than is currently set down before the Court. However, this has to be balanced against the other matters, in particular the important matter at 5, the potential for inconsistent results. The Court has set down a date for hearing on 30 November 2017 and the parties are working towards that timeframe. The timetable that the Court has set may be cutting it fine for the Applicant to have some certainty however I am not satisfied that the Commission proceeding to arbitrate the matter now would make a dramatic difference to the timetable for resolution.

[15] Having regard to the consideration above, I decline to exercise the discretion to arbitrate the dispute at this time and the matter will be adjourned, pending the outcome of the proceedings in the Federal Court of Australia.

[5] Linfox Australia Pty Ltd v Transport Workers' Union of Australia and Another [2013] FCA 659, [31]

[6] [2013] FCA 659

[7] [2013] FCA 659, [33]

[8] Clermont Coal Pty Ltd v Brown [2015] FCAFC 136

[9] [2015] FCAFC 136, [7]

[10] [2015] FCAFC 136, [11]

[11] Teys Australia Beenleigh Pty Ltd v The Australasian Meat Industry Employees Union [2015] FCA 1033

[12] [2015] FCA 1033, [9]

[13] [2015] FCA 1033, [13]

[14] [2015] FCA 1033, [22]

[16] [2015] FCA 1033, [31] - [38]

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