Fair Work Act 2009

s.739 - Dispute resolution

Application to deal with a dispute - jurisdictional objection - applicant not an employee at time of filing dispute - where right only crystallised after end of employment relationship - jurisdictional objection upheld - application dismissed.

[1] An application was made by Ting Xi (the Applicant) under s 739 of the Fair Work Act 2009 (the Act) to deal with a dispute. The Applicant asserted that Ironfish Pty Ltd (the Respondent) owed commissions under her contract of employment.

[2] A notice of listing was issued on 17 June 2020 and the Applicant provided her submissions on 18 June 2020. On 30 June 2020, the Respondent made a jurisdictional objection to the dispute.

[3] On 3 July 2020, I held a conference where the jurisdictional objection was asserted by the Respondent. I then directed the Respondent to provide a written submission on the objection by 10 July 2020.

[4] The parties agreed to have the matter of the jurisdictional objection determined on the papers.

[5] The Applicant was employed as a Property Strategist on 17 April 2015. Prior to filing this dispute, the Applicant had resigned from her employment. The Applicant resigned on 12 December 2016. Her role was to principally sell off the plan property. As part of her remuneration, when a property was sold the Applicant was paid a bonus. This was structured as 50% due immediately and the remaining 50% being paid upon settlement.

[6] The Applicant received the first instalment which was included in her December 2015 payslip. The second instalment, which was due upon settlement, was delayed due to the project having being finalised much later than planned: the original completion time was mid-2017, however did not occur until February 2020.

[7] The second instalment fell due a considerable period after the Applicant left her employment. The Applicant has been paid a number of trailing commissions for other sales post-employment, however for a particular reason not revealed to either the Applicant, nor the Commission, the Respondent has not paid the second instalment.

[8] For the purpose of this Decision, the question is a jurisdictional one: where a right to an entitlement only crystallises post-employment, does the Commission have jurisdiction to hear an application under s 739?

[9] Sections 738 and 739 provide the scope of Part 6-2, Division 2 of the Act, which deals with disputes before the Commission. The sections are extracted below:

1. a modern award includes a term that provides a procedure for dealing with disputes, including a term in accordance with section 146; or

2. an enterprise agreement includes a term that provides a procedure for dealing with disputes, including a term referred to in subsection 186(6); or

1. a contract of employment or other written agreement includes a term that provides a procedure for dealing with disputes between the employer and the employee, to the extent that the dispute is about any matters in relation to the National Employment Standards or a safety net contractual entitlement; or

1. a determination under the Public Service Act 1999 includes a term that provides a procedure for dealing with disputes arising under the determination or in relation to the National Employment Standards.

(1) This section applies if a term referred to in section 738 requires or allows the FWC to deal with a dispute.

(2) The FWC must not deal with a dispute to the extent that the dispute is about whether an employer had reasonable business grounds under subsection 65(5) or 76(4), unless:

• (a) the parties have agreed in a contract of employment, enterprise agreement or other written agreement to the FWC dealing with the matter; or

(b) a determination under the Public Service Act 1999 authorises the FWC to deal with the matter.

Note: This does not prevent the FWC from dealing with a dispute relating to a term of an enterprise agreement that has the same (or substantially the same) effect as subsection 65(5) or 76(4) (see also subsection 55(5)).

(3) In dealing with a dispute, the FWC must not exercise any powers limited by the term.

(4) If, in accordance with the term, the parties have agreed that the FWC may arbitrate (however described) the dispute, the FWC may do so.

Note: The FWC may also deal with a dispute by mediation or conciliation, or by making a recommendation or expressing an opinion (see subsection 595(2)).

(5) Despite subsection (4), the FWC must not make a decision that is inconsistent with this Act, or a fair work instrument that applies to the parties.

(6) The FWC may deal with a dispute only on application by a party to the dispute.

[10] The Real Estate Award 2020 (the Award) does have provision in 16.4 for payments such as incentives or commissions that fall due post-employment. Relevant provisions of the Award are extracted below:

4.1 This industry award covers employers in Australia engaged in the real estate industry in respect to their employees engaged in classifications in clause 14_ - _Minimum rates to the exclusion of any other modern award

(a) Following cessation of employment, the employee is entitled to be credited with a portion of the commission, incentive payments or bonuses calculated in accordance with the terms of the written agreement made pursuant to clauses 16.1 or 16.7 of the award, but only in the following circumstances:

(i) where the employee's employment is terminated for reason of the employee's serious misconduct, there was a legally enforceable contract in place for the sale or lease of the property before the cessation date of the employee's employment; or

(ii) where the employee's employment terminates for any other reason, there was a legally enforceable contract in place for the sale or lease of the property prior to the expiration date of the exclusive agency period.

(b) For the purpose of clause 16.4, "exclusive agency period" means the period for which the employer has the exclusive right to sell or lease a property under the executed and valid agency agreement that was in effect at the time the employee's employment ceased. There is no entitlement under clause 16.4 where the property for sale or lease has been listed other than on an exclusive agency basis.

(c) Unless the written agreement made either under clauses 16.1 or 16.7 specifies otherwise, the portion of the commission, incentive payments or bonuses referred to in clause 16.4(a) must be the same as that with which the employee would have been entitled to be credited if their employment had continued.

(d) Any entitlement to commission, incentive payments or bonuses calculated under clause 16.4 only arises once the employer is paid commission by the client in respect of the sale or lease of the property to which the legally enforceable contract relates and the commission payment is cleared into the employer's bank account.

If there is a dispute between the employer and the employee as to whether all or any part of the commission is due to an employee pursuant to clauses 16.1 or 16.7, the matter will be dealt with in accordance with clause 28_ - Dispute resolution._

28.1 Clause 28 sets out the procedures to be followed if a dispute arises about a matter under this award or in relation to the NES.

28.2 The parties to the dispute must first try to resolve the dispute at the workplace through discussion between the employee or employees concerned and the relevant supervisor.

28.3 If the dispute is not resolved through discussion as mentioned in clause 28.2, the parties to the dispute must then try to resolve it in a timely manner at the workplace through discussion between the employee or employees concerned and more senior levels of management, as appropriate.

28.4 If the dispute is unable to be resolved at the workplace and all appropriate steps have been taken under clauses 28.2 and 28.3, a party to the dispute may refer it to the Fair Work Commission.

28.5 The parties may agree on the process to be followed by the Fair Work Commission in dealing with the dispute, including mediation, conciliation and consent arbitration.

28.6 If the dispute remains unresolved, the Fair Work Commission may use any method of dispute resolution that it is permitted by the Act to use and that it considers appropriate for resolving the dispute.

28.7 A party to the dispute may appoint a person, organisation or association to support and/or represent them in any discussion or process under clause 28.

28.8 While procedures are being followed under clause 28 in relation to a dispute:

(a) work must continue in accordance with this award and the Act; and

(b) an employee must not unreasonably fail to comply with any direction given by the employer about performing work, whether at the same or another workplace, that is safe and appropriate for the employee to perform.

28.9 Clause 28.8 is subject to any applicable work health and safety legislation.

[11] It is not disputed by the Respondent that the Commission has the power to deal with a dispute in accordance with the dispute resolution process detailed in clause 28 of the Real Estate Industry Award 2020. This occurs through the operation of s 739(1), which is enlivened - in the current case - by s 738(a) of the Act.

[12] The Respondent asserted that the Applicant was not a "party" to the Award at the time of making the application, as required by s 739(6) of the Act. This was purported on an ordinary reading of the coverage clause of the Award, which expressly stipulates application to "employees".[1] This was for the resolution of a dispute then the dispute cannot concern a matter arising under the Award. In which case the Applicant is unable to prosecute her case post-employment.

[13] The held position is that a dispute brought post-employment cannot be heard under Part 6-2. This has been considered in numerous cases.[2] What is unique in this matter is that under the provisions of the Award, it would have been quite literally impossible for the Applicant to bring a claim while still employed. The question to answer if whether a person should be able to bring a claim, where they exercise the right as soon as is practical after the right crystallises, even if they are no longer an employee.

[14] In Shields, Senior Deputy President Kaufman made reference to the decision of the Full Bench in ING:[3]

[15] Consequently, it concluded that "a single person dispute which arises for the first time after the termination of employment is not a dispute between an employer and an employee. However, many disputes will arise while employment exists and continue after the termination of employment. In such a case, when the dispute arises, it is a dispute between an employee and an employer." In the opinion of the Full Bench "the dispute settlement process should be viewed as a single process agreed by the parties to resolve disputes, rather than a series of separate rights and obligations which should be viewed conjunctively. That being so, an employee who had commenced to deal with a grievance or dispute while employed is not precluded, in our view, from continuing to progress that matter if it remains unresolved, notwithstanding that in the interim period they may have ceased to be employed by the employer."

[16] The Full Bench doubted that a former employee could initiate a dispute under the dispute settling clause with which it was dealing after the employee's employment had ceased...

[15] More recently, Commissioner Johns in Grabovsky v United Protestant Association NSW Ltd T/A UPA [2019] FWC 3718 reinforced that:[4]

In order for the Applicant to make an application under section 739, she must be a current employee at the time of making the application or otherwise, in the case of a former employee, the dispute must have arisen during the employment and continued after the termination.

[16] The Applicant asserted that clause 16.4 of the Award provides the Commission with the power to resolve the dispute. I find that if the dispute does not relate to the relationship between an employee and an employer then the dispute does not concern a matter that I have power to arbitrate under s 739.

[17] I do not consider, simply because the right was not enforceable while the Applicant was an employee, that the Applicant should be able to make an application under s 739 post-employment.

[18] In making this finding, I make note of s 595(1) of the Act, which states "the FWC may deal with a dispute only if the FWC is expressly authorised to do so under or in accordance with another provision of this Act." The Act does not provide me with express authority to deal with this dispute and therefore it must be dismissed for want of jurisdiction.

[19] It seems unfortunate this pending entitlement cannot be addressed by the Commission, but this does not preclude the Applicant from pursuing her contractual right in the correct venue. While I am sympathetic to the inconvenience caused to the Applicant, the Commission "is not the proper forum in which to pursue such a claim."[5]

[20] The application is dismissed. I Order accordingly.

[1] The Clothing Trades Award [1950] CthArbRp 524; (1950) 68 CAR 597, as cited in City v Wanneroo v Homes [1989] FCA 369, [43].

[2] Shields v Alfred Health [2012] FWA 162 (Shields); Fairall v St George & Sutherland Community College Inc [2012] FWA 8847.

[3] ING Administration Pty Ltd v Jajoo (2006) 158 IR 239; PR974301 (ING).

[4] Grabovsky v United Protestant Association NSW Ltd T/A UPA [2019] FWC 3718 (Grabovsky).

[5] Fairall v St George & Sutherland Community College Inc [2012] FWA 8847, [25].

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