s.739 - Application to deal with a dispute

`NSW Electricity Networks Operations Pty Limited Trading AS TRANSGRID

Application to deal with a dispute - individual employment agreement - objections to Commission dealing with the dispute - discretionary incentive payment - proper characterisation of dispute - scope of dispute settlement procedure

[1] By an application dated 22 October 2025, Mr. Tariq Khalil has applied to the Fair Work Commission (Commission) under s.739 of the Fair Work Act 2009 (Cth) (Act) for the Commission to deal with a dispute under the dispute settlement procedure in an individual employment agreement dated 3 April 2024 (IEA) between the applicant and the applicant's former employer, NSW Electricity Networks Operations Pty Ltd trading as Transgrid (Transgrid).

[2] In the application as filed, the dispute is said to relate to the operation of clause 7.3 (Short Term Incentive Payment - variable remuneration) and item 11 of clause 27 of the IEA. Clause 7.3 provides for the payment of a discretionary incentive payment 'in accordance with the Company's policy and program, where such program is available.' Clause 27 provides that the incentive scheme, being a percentage of total fixed remuneration, may be changed from time to time and is at the absolute discretion of Transgrid. The relief sought in the application includes a determination that Transgrid be required to pay to the applicant a short-term incentive payment for the financial year 2024-25 calculated as a percentage of his total fixed remuneration or a pro-rated amount reflecting the work he had completed during the year, together with interest from 1 July 2025.

[3] It was common ground that that the applicant commenced employment with Transgrid in or about April 2024 and resigned his employment effective from 11 July 2025. At the commencement of his employment an enterprise agreement known as the Transgrid Employee Agreement 2020 (Transgrid EA) covered and applied to the applicant and Transgrid. The Transgrid EA provided at clause 42/Schedule B for employees such as the applicant to be engaged under the terms of individual employment agreements. In accordance with that provision, the applicant and Transgrid entered into the IEA.

• [4] On 27 May 2025 a workplace determination known as the Transgrid Workplace Determination 2025 (Determination) came into operation.[1] That Determination also covered and applied to the applicant and Transgrid and superseded the application of the Transgrid EA from that date.[2] As with the Transgrid EA that preceded it, the Determination also made provision for employees such as the applicant to be engaged under the terms of individual employment agreements.[3] Both the Transgrid EA and the Determination contain a disputes settlement term in similar though not identical terms, at clause 35 of each of those instruments.

[5] The dispute settlement term in the IEA entered into by the applicant and which is referred to in the originating application is set out at clause 19. It provides:

The Dispute Procedure in clause 35 of the Enterprise Agreement applies to any dispute the Employee has about matters arising under the Enterprise Agreement or the National Employment Standards in the Fair Work Act 2009.

[6] It is apparent from the above that clause 19 of the IEA provides that the parties agreed in that clause to the operation of a disputes settlement process for any dispute about matters arising under the Enterprise Agreement, that is the Transgrid EA, or the National Employment Standards (NES). However, the clause does not refer to the settlement of disputes in relation to other matters which do not fall into those categories, such as matters arising under the terms of the IEA itself. It is also clear that the parties intended that the rights and obligations provided for in the IEA are separate to those created by the Transgrid EA. Clause 9.3 of the IEA provides that '...the Enterprise Agreement is not incorporated into (the IEA)' and '(the IEA) only covers matters concerning the Employee's employment which are not already covered by the terms of the Enterprise Agreement.'

[7] Clause 35 of the Transgrid EA, referred to in clause 19 of the IEA, provided for a dispute procedure that applies to all disputed matters in relation to the following:

a) This Agreement;

b) The NES (including section 65 (Request for flexible working arrangements) and section 76 (Extending periods of unpaid parental leave));

c) Disciplinary Action;

d) Workplace Safety;

e) Consultation as per clause 5.

[8] The terms of clause 19 of the IEA and clause 35 of the Transgrid Agreement differ. The first refers to disputes about matters 'arising under' the agreement or the NES. The second refers to disputed matters 'in relation to' the agreement, the NES and three additional matters. Clause 35 sets out a detailed process or procedure to be followed in the resolution of disputes. Clause 19 simply references that procedure.

[9] Section 739(1) of the Act, which appears in Division 2 of Part 6-2, provides that the section applies if a term referred to in s.738 requires or allows the Commission to deal with a dispute. Section 738 provides that Division 2 of Part 6-2 applies where, amongst other things, an 'enterprise agreement' includes a term that provides a procedure for dealing with disputes, including a term referred to in subsection 186(6) (see section 738(b)), or a 'contract of employment or other written agreement' includes a term that provides a procedure for dealing with disputes '...to the extent that the dispute is about any matters in relation to the National Employment Standards or a safety net contractual entitlement' (see section 738(c)). Unless one or other of the subsections in s.738 apply, the Commission is unable to deal with a dispute under s.739.

[10] Section 739(3) provides the further limitation that in dealing with the dispute, the Commission must not exercise any powers limited by the dispute settlement term.

[11] The respondent has raised two preliminary objections to the Commission dealing with the present dispute. The first is that the applicant did not attempt to raise a dispute during his employment but rather had resigned his employment and was no longer an employee of Transgrid or a party to the Determination at the time the application was made. It followed, according to Transgrid, that the applicant was incapable of raising the dispute and the Commission was unable to deal with the alleged dispute in any substantive way. Secondly, the respondent said that the scope of the relevant dispute settlement provisions did not extend to a claim for the payment of a discretionary bonus payment under the incentive scheme. This was because the disputes clause in the IEA referred to disputes about matters 'arising under the Enterprise Agreement or the National Employment Standards' and the claim for payment of the bonus could not be properly characterised as either of those things since it arose by operation of the IEA and not the Transgrid EA.

[12] The applicant took issue with these objections. He said that the evidence showed that he first raised the issue of the payment, his performance rating and the internal dispute process with Transgrid on 19 June 2025 whilst he was still employed and that the dispute therefore arose whilst the employment relationship subsisted and he was covered by the Determination. Further, the applicant said that the respondent had attempted to incorrectly characterise the dispute as a claim for a short-term incentive payment when the real issue was Transgrid's refusal to follow clause 35 of the Determination and their failure to provide performance information grounding a 'below expectations' performance rating which was stated as a reason for the applicant's ineligibility for the payment. These were, according to the applicant, 'procedural and Determination-related matters falling squarely within clause 35' of the Determination and therefore the proper subject of an application for the Commission to deal with a dispute.

[13] I do not accept the applicant's argument that the dispute in substance concerns Transgrid's refusal to follow clause 35 of the Determination. This is not the dispute that was initiated by or referred to in the application. The application refers to a dispute relating to the operation of clauses 7.3 and 27 of the IEA and it invokes the operation of the disputes procedure set out in the IEA, not the Determination. The fact that clause 19 of the IEA refers to the disputes procedure in the Transgrid Agreement or that the Determination superseded the Transgrid Agreement does not alter that fact. The applicant is not seeking compliance with the dispute settlement processes in the Determination for its own sake but as a means by which he might achieve a favourable payment outcome in relation to the disputed incentive bonus. The attempt by the applicant to re-characterise the dispute as being about compliance with the dispute settlement term in the Determination is unconvincing and must be rejected.

[14] The Determination contains a term for the settling of disputes as required by s.273. But in any event, even if the applicant could properly characterise the dispute as involving the application of clause 35 - Dispute Procedure - of the Determination, the terms of that clause are of little assistance to him. The clause provides that the dispute resolution process:

'... applies to all disputed matters in relation to:

a) This Determination;

b) The NES (including section 65 (Request for flexible working arrangements) and section 76 (Extending periods of unpaid parental leave));

c) Disciplinary Action;

d) Workplace Safety;

e) Policies and procedures related to working from home arrangements;

f) Policies and procedures related to income protection insurance;

g) Consultation as per clause 5.'

• [15] Even assuming clause 35 of the Determination is a term referred to in s.738 because the Act applies to a workplace determination that is in operation as if it were an enterprise agreement[4] and the term can be considered an enterprise agreement dispute settlement term for the purpose of s.738(b) (or the Determination is a 'written agreement' for the purpose of s.739(c)), the term is one which provides a procedure for dealing with certain disputed subject matter only, none of which is relevant here. None of the matters referred to by clause 35 of the Determination relate to the dispute raised by the applicant.

• [16] In relation to the scope of the matters that can be dealt with under clause 19 of the IEA the terms of clause 19 of the applicant's IEA are clearly 'a contract of employment or other written agreement' that provides a term for dealing with a dispute for the purpose of s.738(c). In that case a dispute under this clause is one to which s.739 can apply and the Commission could deal with a dispute under that section. However, although the terms of clause 19, set out above, make reference to the procedure in clause 35 of 'the Enterprise Agreement' it goes on to say that the procedure in that clause applies to any dispute 'about matters arising under the Enterprise Agreement or the National Employment Standards'. Properly understood it is clause 19 of the IEA, not clause 35 of the Transgrid Agreement, or the Determination, that sets out the scope of the matters the Commission can deal with under that clause. These are, according to the clause, matters arising under the Enterprise Agreement or the National Employment Standards. Contrary to the applicant's assertions, the substance of the dispute before the Commission is about neither of those things. The dispute, as set out in the application, is about the operation of clause 7.3 and item 11 of clause 27 of the IEA, that is, whether the applicant is entitled to a payment under the terms of those clauses. It is clear enough that any such entitlement would arise not because of the Enterprise Agreement (or the Determination) or the National Employment Standards, but because of the IEA itself. The IEA provides for a variable rewards payment system at the discretion of the employer. Neither the Transgrid EA nor the Determination provide for that. As has been noted above, the IEA also expressly provides that the Enterprise Agreement is not incorporated into the IEA.[5]

[17] There is in any event a further limitation set out in s.738(c). That is that the term of the contract of employment or other written agreement can only be invoked under s.739 to the extent that the dispute is about any matters in relation to the National Employment Standards or a safety net contractual entitlement. The latter term is defined in s.12 to mean an entitlement under a contract between an employee and employer that relates to any of the subject matters described in subsections 61(2) or 139(1). Again, the subject matter of the dispute here is not about those things.

[18] The respondent's objection that the scope of the relevant dispute settlement clause does not extend to the resolution of the present matter must be upheld. The parties have not conferred a power of private arbitration on the Commission in relation to this matter. Because of the view I have come to about this objection it is unnecessary for me to deal with the further objection in relation to the applicant's capacity to bring an application in circumstances where he was not employed by the respondent at the time the application was made.

[1] [2025] FWCFB 109 and PR787701.

[2] See s.278(1A) and Clause 3.1 of the Determination.

Printed by authority of the Commonwealth Government Printer