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[2018] FWC 1339
General information, not legal advice.
Fair Work Commission
2018-03-08
Original judgment source is linked above.
s.739 - Application to deal with a dispute
Application to deal with a dispute - jurisdictional objection - whether enterprise agreement will apply at new site - whether requirements in the disputes procedure have been met - no jurisdiction - application dismissed
[1] This decision concerns an application made by the National Union of Workers (NUW) under s.739 of the Fair Work Act 2009 (Act) for the Commission to deal with a dispute in accordance with the disputes settlement procedure in clause 12 of the Stanley Black & Decker/NUW Distribution Centre Enterprise Agreement 2017 (Agreement).
[2] The Agreement is binding on Stanley Black & Decker Pty Ltd (the company) and applies to employees of the company at its distribution centre in Epping, Victoria. It sets out terms and conditions of employment for such employees. It also contains a provision prescribing minimum wages for employees of labour hire companies, and requiring company consultation with the union about their use. The NUW is covered by the Agreement.
[3] The company is in the process of constructing a new distribution centre at Keysborough, which is expected to be in operation in March or April 2018. The company's Epping distribution centre will close around the same time.
[4] The NUW considers that the Agreement will apply at the new distribution centre. It contends that the scope and application provision in clause 6 of the Agreement is not geographically confined, and that the Agreement will apply at Keysborough on its terms. Its application under s.739 sought a determination from the Commission that the Agreement will be binding on the company's employees at the new distribution centre at Keysborough.
[5] The company's position is that the Agreement will have no application to the new site. It objected to the NUW's application on jurisdictional grounds, and resisted the matter being listed for conference. It contended that the steps in the disputes procedure in clause 12 had not been followed. Further, it submitted that the dispute is hypothetical because all employees at Epping will be made redundant, and none will transfer to Keysborough; the new facility will be staffed by labour hire workers, and the only direct employees will be at management level.
[6] On 20 December 2017 I conducted a telephone mention, following which directions were issued for the filing and service of submissions and materials on jurisdiction.
[7] The parties complied with the directions and requested that I determine the matter on the papers. In addition to written submissions, the union filed a witness statement of Mr Christopher Calvert, an organiser responsible for union matters at the company's Epping distribution centre. The company filed witness statements from Mr Sandeep Nambiar, its Human Resources Director, Ms Rachel Cribb, HR Business Partner, and Mr Vic Guidolin, Epping Distribution Centre Manager. The latter two statements, together with a company reply submission, were filed with permission of the Commission in response to material raised in the union's submission and witness statement.
[8] It was evident from the materials filed that several points of fact were in contest between the parties. In particular, the evidence of Mr Calvert and Mr Guidolin conflicted as to whether an employee, Mr Chris Sands, had raised a dispute about the application of the Agreement with Mr Guidolin in early 2017. There were also conflicting witness perspectives of what occurred at a meeting on 12 May 2017 involving Mr Sands, Mr Calvert, Mr Guidolin and Ms Cribb. This evidence is relevant to the question of whether the requirements of the disputes procedure in clause 12 of the Agreement have been met.
[9] In light of the above, I relisted the matter for a further telephone mention, which took place on 5 March 2018. I asked the parties whether, in light of the contested points of fact, they sought the opportunity to file further evidence or wished for the matter to be listed for hearing. The parties advised me that they wanted the Commission to determine the matter on the papers, that no further evidence would be filed, and that they did not seek to cross examine each other's witnesses. Having regard to the wishes of the parties in this respect, I decided to determine the matter on the papers, and asked that the parties have their respective witness statements sworn and refiled.
[10] The Agreement was approved on 16 October 2017. Its nominal expiry date is 30 June 2018. Clause 6 states that it is binding on the company, the NUW and 'all distribution centre employees whose employment is, at any time when the Agreement is in operation, subject to the Agreement.' 'Employee' is defined in clause 3 to mean a person covered by the Agreement who is employed within the classifications in the Agreement. The classifications are set out in Schedule 1 of the Agreement.
[11] The dispute resolution procedure in clause 12 of the Agreement reads as follows:
'The Consultative Committee shall provide a mechanism to resolve disputes in the first instance.
If this is not able to resolve the dispute then the following dispute settlement procedure shall be followed:
[12] It was common ground that the Consultative Committee referred to in the first paragraph of clause 12 ceased to exist a number of years ago. The company conceded that it was not necessary for the Committee to deal with a dispute in the first instance, as contemplated by the clause. The parties' stance on the matter does not necessarily mean that the Commission must accept it; however, I note that the first paragraph of clause 12 states that the Consultative Committee shall 'provide a mechanism' for the dispute to be resolved in the first instance; it does not require that the mechanism be used. Further, the following paragraph states that if 'this (the Consultative Committee) is unable to resolve the dispute', the following procedure applies. If the Committee no longer exists, it is unable to resolve anything.
[13] The second paragraph establishes a procedure that 'shall be followed' in relation to 'the dispute'. Ten dot points follow. The first three of these are nominal sentences, each stating a particular activity: discussions between the employees concerned and the immediate supervisor, discussions with more senior managers, and discussions with nominated representatives. The fourth point states that, 'following' these earlier points, there will be an opportunity for either party to raise the matter at a higher level. The fifth point states that during the dispute settlement process, the parties will 'adhere to this procedure'. Further, the relevant party 'will give notice of the issue as early as possible.' The sixth point states that 'throughout all stages' of the procedure, the facts are to be 'clearly identified and recorded'. At least 7 days should be allowed for 'all stages of the discussions to be finalised.' Point 7 allows for referral of a dispute to the Commission 'at its final stage'.
[14] In my view, clause 12 establishes a sequential process that is to be observed by the parties, ending with the possibility of referral to the Commission. The first two points are in my view steps that had to be complied with as pre-requisites to the Commission's involvement: that is, the dispute had to be discussed between employees and the relevant supervisor, and then with more senior managers, before being referred to the Commission. Further, the provision in point 7 that 'all parties may jointly or individually refer the matter to the FWC' in my view contemplates a party to the relevant dispute referring the matter to the Commission; and disputes under the clause are between employees and their immediate supervisors. Of course, as provided for in point 10, a nominated employee representative may be involved in any of the steps in the process, and accordingly the union could act on behalf of an employee in relation to these steps, including point 7.
[15] The company advances three contentions in support of its jurisdictional objection. First, it submits that the dispute was raised and pursued by the union, not by an employee as required by clause 12.
[16] Secondly, it contends that other requirements of the disputes procedure have not been satisfied. In particular, it says that, in addition to the first point not being complied with (i.e. employees discussing the relevant dispute with their supervisor), the second point of the procedure was not satisfied, as the matter was never discussed with more senior managers. It further contends that a dispute may only be referred to the Commission by 'parties' to the dispute, jointly or individually, and that the NUW is not a party to a dispute under clause 12.
[17] Thirdly, the company contends that the Commission should decline to deal with the matter on the basis that clause 12 provides that the Commission 'may' arbitrate, thereby conferring a discretion. The company submits that the present dispute is hypothetical, as it will not be employing operational employees at Keysborough. It contends that there is no utility in the Commission proceeding to arbitrate the dispute.
[18] The union's position is that the relevant requirements of the disputes procedure have been satisfied, and that there is no impediment to the Commission proceeding now to arbitrate the dispute under point 7 of the procedure.
Were there discussions between Mr Sands and Mr Guidolin (point 1 of clause 12)?
[19] The NUW contends that it has pursued the present dispute on behalf of Mr Sands, an employee of the company employed under the Agreement at Epping, who is also a union delegate at the site.[1] It denies the company's contention that the union has brought the dispute to the Commission in its own right.
[20] In this regard, the NUW submits that the company was aware that Mr Sands was concerned about the application of the Agreement to the new Keysborough site, because Mr Sands raised the matter directly with Mr Guidolin. In his witness statement, Mr Calvert states that Mr Sands contacted him in 'early 2017' and told him about a conversation he had had with Mr Guidolin about whether the Agreement 'would carry over to the new Keysborough DC'. Mr Calvert states that, 'as Mr Guidolin did not respond directly to Mr Sands' question, he raised this conversation with me for follow up'. Mr Calvert states that he then proceeded to assist Mr Sands to try to resolve the dispute.[2]
[21] Mr Guidolin said in his witness statement that he did have a conversation with Mr Sands in early 2017, however it related to the future of the Epping site. Mr Sands said that he believed the Epping site should close and that all employees should be paid their redundancy entitlements. Mr Guidolin's evidence was that, neither in the conversation in early 2017 nor in any other conversation, did Mr Sands say that the Agreement should apply at any new site. Further, Mr Guidolin stated that the company's plan to establish a new Keysborough site was announced only on 11 May 2017.
[22] There was no witness statement filed from Mr Sands.
[23] There is a factual contest between the direct evidence of Mr Guidolin about his discussion with Mr Sands, and the account of Mr Calvert, who gives evidence about what Mr Sands told him of his discussion with Mr Guidolin. On this point, I consider the direct evidence of Mr Guidolin to be more reliable than the hearsay evidence of Mr Calvert. Mr Guidolin's account of events is first-hand, and convincing.
[24] I also accept Mr Guidolin's evidence that the establishment of the Keysborough site was first announced on 11 May 2017. This evidence is consistent with the statement of Ms Cribb.[3] It is therefore unlikely that there could have been a discussion in 'early 2017' between Mr Guidolin and Mr Sands about the potential application of the Agreement to the Keysborough facility. According to Mr Guidolin, there had been some earlier 'gossip' among employees that the Epping site would close. This makes plausible a discussion between Mr Sands and Mr Guidolin in 'early 2017' about the closure of Epping, but not a discussion at that time about whether the Agreement would apply to any new facility at Keysborough.[4]
[25] Accordingly, I find that Mr Sands did not raise a dispute with the company concerning the application of the Agreement to Keysborough in early 2017 and that the discussion between Mr Sands and Mr Guidolin in early 2017 did not satisfy point 1 of clause 12. I consider further below whether other discussions might have satisfied point 1.
[26] I note that, to the extent that there was any suggestion in the company's submissions that the NUW's application under s.739 was defective because it did not identify any relevant employees, I would agree with the union that it should be rejected. The disputes procedure in the present matter requires as its first point that an employee or employees discuss the dispute with relevant supervisors. Whether this has occurred is a question of fact. Merely omitting the name of the particular employee from the s.739 application would not be a jurisdictional barrier to the application, or fundamentally affect its validity. In Australian Rail, Tram and Bus Industry Union (RTBU) v Asciano Services Pty Ltd t/a Pacific National,[5] the union had incorrectly identified itself in the s.739 application as the applicant, rather than as the representative of its members. The argument that this error formed the basis for a jurisdictional objection was rejected. Any defect in formalities is amenable to redress through the exercise of the Commission's powers under s.586 of the FW Act.
Were there discussions with more senior managers (point 2 of clause 12)?
[27] The union contends that there was a meeting on 12 May 2017 involving Mr Calvert, Mr Sands, Mr Guidolin and Ms Cribb, at which it 'escalated' the dispute, satisfying the requirement of point 2 of clause 12.[6]
[28] In his witness statement, Mr Calvert acknowledged that he did not say at the meeting of 12 May 2017 that he was acting on Mr Sands' behalf, as he assumed this was implied. He stated that he 'raised the dispute about whether the Agreement should carry across' to Keysborough, and that 'from the perspective of the NUW, our firm belief was that the coverage of the Agreement did extend' to Keysborough.[7]
[29] The company contends that the meeting of 12 May 2017 concerned the closure of the Epping site, not any dispute raised by Mr Sands.[8] In her witness statement, Ms Cribb stated that the meeting of 12 May 2017 was a consultation meeting arranged by the company pursuant to its obligations under the Agreement in relation to its decision to close the Epping facility. It followed a meeting with affected employees the previous day which had been for the same purpose.[9] She stated that during the meeting of 12 May 2017, neither Mr Sands nor Mr Calvert mentioned any dispute having been raised earlier by Mr Sands, or that they were escalating any dispute.[10] She acknowledged that Mr Calvert raised questions about the coverage of the Agreement, but she understood that he was doing so on behalf of the union, not on behalf of Mr Sands. Mr Guidolin's evidence on this point was to the same effect.[11] Mr Nambiar also said that Mr Calvert did not purport to raise a dispute about the coverage of the Agreement.[12]
[30] It is common ground that the question of the coverage of the Agreement was raised by Mr Calvert at the meeting of 12 May 2017. It is clear that Mr Calvert believed the Agreement would apply at Keysborough, and that the company did not agree. However, this does not establish that the union raised or escalated a dispute about the application of the Agreement at Keysborough under the disputes procedure, either on its own behalf or on behalf of Mr Sands.
[31] The fact that the company's purpose in convening the meeting was to consult over the closure of Epping does not preclude a dispute over the application of the Agreement being raised or progressed. A meeting might serve multiple purposes. Further, I would not favour a narrow or pedantic approach to the question of whether a dispute has been formally raised, escalated or otherwise progressed under a disputes procedure. However, to my mind, if the disputes procedure is being invoked (raised, escalated or otherwise engaged), the other party to the dispute should be aware, or be made aware, that this is the case.
[32] The evidence of the company witnesses is that the company was not aware of any dispute being raised or progressed under clause 12. Nor does it appear from Mr Calvert's own evidence that he said or did anything that ought reasonably to have put the company on notice that a dispute was being raised or escalated. I note that clause 12 provides that, where there is a dispute the relevant party 'will give notice of the issue as early as possible' (point 5); and the facts are to be 'clearly identified and recorded' (point 6). It does not appear that any 'notice' was provided of the issue, or that the relevant facts were 'clearly identified' or 'recorded'.
[33] I have considered whether Mr Sands might have raised the dispute under point 1 of clause 12, or under both points 1 and 2, at the meeting of 12 May 2017. For the reasons set out above, the evidence does not support either conclusion. Further, even if the union could initiate and progress a dispute in its own right under clause 12, which in my view it cannot, I do not consider that it did raise or progress (or raise and progress) a dispute under clause 12 at the meeting of 12 May 2017.
[34] In my view, neither the first nor the second points in clause 12 has been satisfied in relation to the dispute that has been referred to the Commission. These conclusions are sufficient to determine the present matter by upholding the jurisdictional objection. However, for completeness, I will address the company's third jurisdictional objection.
[35] The company contended that the Commission should decline to deal with the matter on the grounds that the dispute is a hypothetical one and lacks utility. In this connection, it submitted that the Commission retains a discretion as to whether it will hear a dispute referred to it under an enterprise agreement, and refers to s.739(4), which states that the Commission 'may' arbitrate a dispute if the parties have agreed for it to do so in accordance with a term of the agreement.
[36] In my view, s.739(4) does not afford the Commission any general discretion to decline to deal with a dispute. In context, the word 'may' in this section connotes permission, not discretion. The role of the Commission under a disputes procedure, if any, depends on the terms of the enterprise agreement. In some cases it may be that a disputes procedure, properly construed, affords the Commission discretion to decide whether to arbitrate the matter. In other cases, the clause may require the Commission to determine the matter. In the latter case, the Commission could not refrain from determining the dispute, in purported reliance on s.739(4); to do so would be contrary to s.739(5), which states that the Commission must not make a decision that is contrary to a fair work instrument (such as an enterprise agreement).
[37] In the present matter, the role of the Commission is addressed at point 7 of clause 12, which states that 'all parties may jointly or individually refer the matter to the FWC for assistance in resolving disputes', and that this can 'include conciliation and, if necessary, arbitration, by the FWC at its final stage.' On one view, it is the Commission that determines whether arbitration is 'necessary', and if it is not - perhaps because the dispute lacks utility - it can legitimately decline to deal with the matter. In this regard, the company notes that point 7 states that referral to the Commission 'can' include arbitration, rather than 'will.' However, in my opinion, the better view is that the 'necessity' of recourse to arbitration is determined by one or all of the referring parties. Further, I consider that the word 'can' is facilitative; it does not in my view confer on the Commission the ability to decline to arbitrate a matter. It simply includes in the range of assistance that can be sought from the Commission both conciliation and arbitration.
[38] However, there remains a question as to whether there is any real dispute in existence, or whether any dispute is, as the company contends, 'hypothetical'. In my view, the significance of a dispute being hypothetical is not that the Commission can consider arbitration to be of no utility and decline to deal with it. Rather, a hypothetical dispute is not, in the ordinary meaning of the word, a 'dispute'.
[39] In the present case, the company will not be employing any employees at Keysborough who would fall within the coverage of the Agreement. The evidence of Mr Nambiar is that, as a result of the closure of the Epping DC, all employees covered by the Agreement will be redundant and will receive entitlements provided for under the Agreement. No employees will transfer to Keysborough.[13] There is no suggestion that any employees currently covered by the Agreement can or should be engaged by the company at Keysborough. There is no dispute about the circumstances of the termination of their employment at Epping for reason of redundancy, or the benefits they will receive upon termination. The first step in the disputes procedure in clause 12 contemplates discussions between 'employees concerned' and their supervisor; it is relevant to consider how Mr Sands or other employees could be affected by the subject matter of the alleged dispute.
[40] In its application to the Commission under s.739, the NUW stated that the dispute concerned the union's assertion that the Agreement 'should be binding on distribution centre employees at the Keysborough site as clause 6 does not apply a geographical limitation to the coverage of the Agreement,' and the company's contention that it will not be binding on distribution centre employees employed at Keysborough.[14] In my view there is no actual dispute about the application of the Agreement to employees at Keysborough. The company position is that there will simply be no 'distribution centre' employees at Keysborough; even if the Agreement expressly stated that it applied throughout Victoria, the company will not be employing anyone at Keysborough in any of the classifications covered by the Agreement. The union does not appear to dispute this; rather it contends that one day there might be such employees, and if there are, the Agreement would apply.
[41] In its written submissions, the union elaborated on the question of what the present dispute relates to. It contended that, although the company does not propose to employ any operational employees at Keysborough, it has indicated that it will be reviewing the staffing arrangements at Keysborough after the site has been operational for a reasonable period of time.[15] Accordingly, it remains possible that there will be employees falling within the classification structure of the Agreement at some point in the future.
[42] In my opinion, the mere possibility of employees being engaged in the future is not sufficient to enliven a real dispute. Mr Nambiar's witness statement is very clear: aside from management employees, 'all other staff at the Keysborough DC will be hired through labour hire companies.'[16] If as a result of a review in the future, there is any change to this position, a dispute might arise about whether the Agreement applies to those employees. However, this is not a real dispute at present. It is a hypothetical dispute.
[43] The union further contends that clause 15.8.5 of the Agreement is significant in considering the question of whether there is an actual, live dispute. This clause provides:
'The Employer agrees that work that is performed by persons who are not directly employed (i.e. labour hirers) by the Employer, and that would otherwise be covered by this agreement, shall only by accepted by the Employer if those persons who perform the work receive the following base hourly rate:
A casual loading of 33.33% shall be added to the above base hourly rate. The employer shall also consult with the union in relation to any agencies engaged.'
[44] The union submits that the company has confirmed that it will be using labour hire staff at the new facility, and that the requirements of clause 15.8.5 are live issues with significant ramifications for the labour hire employees concerned. It says that Mr Sands has a relevant interest in the matter and that he is entitled to raise a dispute about the 'operation of the Agreement' (see point 7 of clause 12). It says that Mr Sands has an interest in ensuring that the Agreement which he assisted in negotiating is 'properly executed' - in other words, complied with.
[45] It is doubtful in my view that an employee can raise a dispute under clause 12 about whether the Agreement will apply to contractors at a new site at which the company employs no relevant employees. Mr Sands himself will not be employed there. The only clause of the Agreement that would appear to have some work to do at Keysborough (if the Agreement applies, and leaving aside the hypothetical future employment of employees) is the contractor provision. Does the scope of the disputes procedure extend to a dispute over the future application of this clause in this context?
[46] Point 7 of clause 12 contemplates disputes 'as to the wages and conditions of Employees covered by the agreement, including disputes about the operation of the agreement'. The word 'including' suggests to me that a dispute over the operation of the Agreement must itself relate to the 'wages and conditions of Employees covered by the agreement'.
[47] It might be said that the contractor clause is a condition of employment of employees, in so far as it is directed at job security. Section 172 of the Act requires that the terms of an enterprise agreement be about permitted matters, which relevantly include matters pertaining to the relationship between an employer and employees. It is well-established that a term relating to conditions or requirements for engaging labour hire or contractors is permitted if the term is sufficiently related to employees' job security.[17] However, if there are to be no relevant direct employees of the company at Keysborough, the contractor clause will not have any connection to job security. In such circumstances, it is difficult to see how the clause pertains to the relationship between employer and employees. Although the clause might pertain to the employment relationship now at Epping, in the new setting of Keysborough it would likely cease to do so. The consequence of this would be that s.253 of the Act would operate upon it, and the term would have 'no effect'. However, it is not necessary for me to determine this issue.
[48] The Epping facility has not yet closed, and the distribution centre employees will remain employed there until around April 2018. The contractor clause continues to operate. However, the present dispute is said to concern the operation of the Agreement at a time in the future when the Keysborough facility is operational, but there are no operational employees covered by the Agreement; and the only clause of the Agreement that might have application at the site concerns contractors. Furthermore, those contractors are yet to be engaged. It is not known what their rates of pay will be. I do not understand there to be any present dispute about whether the company will pay the relevant rates or consult with the union about their engagement.
[49] Even if I had found that Mr Sands had raised and escalated the 'dispute' about the application of the Agreement at Keysborough in accordance with clause 12, I would have concluded that the matter at issue is not an actual dispute, but a hypothetical one: it concerns speculation about future operational employees at Keysborough, where none is planned; and the application of a contractor clause that may have no effect in the relevant circumstances, and which is yet to engage any factual controversy.
[50] I return to the union's contention that the company has not precluded the possibility of directly employing operational employees, given the evidence of Mr Nambiar that it will conduct a review of the staffing arrangements at Keysborough once the site has been operational for a reasonable period of time. Should such a review result in the company employing direct operational employees in the future, such an employee, perhaps with the assistance of the union, might seek to pursue a dispute under clause 12 at that time. There would also be other avenues to determine the legal position as to the scope and application of the Agreement, if the union wished to pursue them.
[51] In AWU v MC Labour Services, the Full Bench stated that s.739 'makes clear that the Commission's function (if any) in dealing with a dispute referred to it under an enterprise agreement depends on the terms of that agreement, and that the parties to the agreement may structure or limit the role of the Commission (or other person).'[18] Where these limitations are not observed, the Commission has no discretion to deal with a dispute referred to it under the agreement.[19]
[52] The dispute in this matter has not been the subject of the processes in points 1 and 2 of clause 12. It cannot now be brought directly to the Commission under the 'final stage' of the process in point 7 of the clause, because the Agreement does not authorise this. The union's application under s.739 therefore asks the Commission to act beyond jurisdiction by making a decision that is inconsistent with an enterprise agreement.[20]
[53] The company's jurisdictional objection is upheld.
[54] The NUW's application under s.739 is dismissed.
[1] Applicant's submission on jurisdiction, paragraph 16 and following
[4] Statement of Mr Guidolin, paragraph 6
[5] [2017] FWCFB 1702 at [15]- [17]
[6] NUW submissions, paragraphs 36 and 37
[7] Statement of Mr Calvert, paragraph 19
[8] Respondent's submissions in reply, paragraph 7
[9] Witness statement of Ms Cribb, paragraphs 6 and 7
[11] Witness statement of Mr Guidolin, paragraphs 9 to 11
[12] Witness statement of Mr Nambiar, paragraph 23
[13] Witness statement of Mr Nambiar, paragraphs 13 to 17
[14] See points 4 and 5, in section 2.1 of the s.739 application
[15] Applicant's submissions on jurisdiction, paragraph 50; witness statement of Mr Nambiar, paragraph 22
[16] Witness statement of Mr Nambiar, paragraphs 19 and 20
[17] See Explanatory Memorandum to the Fair Work Bill, paragraph 672. See generally Creighton and Stewart's Labour Law, at [14:37], for references to relevant case law and the 'substantial jurisprudence' cited in the Explanatory Memorandum
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National Union of Workers
Stanley Black & Decker Pty Ltd [2018] FWC 1339