[2012] FWA 162

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FAIR WORK AUSTRALIA

REASONS FOR DECISION

Fair Work Act 2009
s.739—Dispute resolution

Dr Candice Shields; Dr Kymble Spriggs
v
Alfred Health
(C2011/3996)

SENIOR DEPUTY PRESIDENT KAUFMAN

MELBOURNE, 12 JANUARY 2012

Section 739 - whether former employee can lodge a dispute under dispute settlement procedure - ING Administration Pty Ltd v Jajoo - matters pertaining - employment relationship - requirement to deal with dispute in accordance with dispute resolution provision.

[1] Doctors Candice Shields and Kymble Spriggs (the applicants) were offered, and accepted, “the appointment of Basic Physician Trainee (Year 3), The Alfred, a part of Alfred Health.” The appointments were for a period of one year commencing on 8 February 2010 and ending on 6 February 2011. Their letters of appointment referred to the AMA HM0 Certified Agreement 2002 (the Agreement) and to the Australian Medical Association/Victorian Hospitals’ Industrial Association/Department of Human Services Heads of Agreement December 2008 to November 2012. There is no contest that these industrial instruments governed the terms and conditions of employment of the applicants. Dr Shields was classified as a registrar, first year of experience and Dr Spriggs was classified as a registrar, fourth year of experience. Apparently, trainee doctors are known as Hospital Medical Officers (HMOs) or doctors in training (DITs). They are defined in clause 10.15 of the Agreement.

[2] Typically doctors such as the applicants, who are employed on a one-year contract from the first week of February, are directed, at some time during that period, to work at another hospital to meet the requirements of a structured training program or to meet service demands. The Agreement recognises such arrangements in the definitions clause – clause 10. Relevantly:

[3] The applicants were directed to, and worked at, a Rotation Hospital, the Mildura Base Hospital, from 8 November 2010 until 6 February 2011. The latter being the date at which their employment contract with Alfred Health ended.

[4] Alfred Health has a salary packaging program whereby doctors are able to salary package part of their salaries. A salary packaging program enables doctors to have a public benevolent institution use its Fringe Benefits Tax (FBT) exemption to provide doctors a ‘range of benefits up to a pre-set capping threshold (a grossed up taxable value of $17,000.00, or about $9095 without grossing up and excluding GST) once in each FBT year” 1; and further, divert part of their pre-tax earnings to a fund from which they draw for specified purposes such as work related self education, professional subscriptions, additional superannuation contributions, meals, lap top computer, entertainment and venue hire.2 Doctors who participate in the Alfred Health’s salary packaging program are also able to pay a novated car lease through the deduction of a nominated amount from pre tax and post tax income.3 Upon the provision of receipts to the administrator of the fund, the administrator will reimburse the doctor concerned for money spent on those items.

[5] Because Alfred Health is a Public Benevolent Institution within the meaning of section 57A of the Fringe Benefits Tax Assessment Act 1986, participants in its salary packaging program are able to allocate pre-tax earnings to a wider range of purposes than would be the case were they employed by non-public benevolent institution employers.

[6] Whilst they were working at Alfred Health the applicants were able to, and did, participate in its salary packaging program. This enabled them to nominate, on a monthly basis, the amounts and purposes for which they wished to divert their pre-tax earnings.

[7] When the applicants rotated to the Mildura Base Hospital, Alfred Health ceased their participation in its salary packaging program. Although the Mildura Base Hospital provides a salary packaging program, not being a public benevolent institution, it is not able to provide salary packaging in respect of as wide a range of matters as is the case with Alfred Health.

[8] The applicants assert that, as they were unable to access the Alfred Health’s salary packaging program whilst they were rotated to Mildura, they have suffered financial loss. The loss is said to be the amount of tax they were required to pay on that portion of their salary that they would otherwise have salary packaged. The respondent contends that they could have made arrangements to have had deductions from their pre-tax salaries made to the full extent permitted by law or desired by them, in the nine months prior to their rotation to the Mildura Base Hospital. To that the applicants reply, first, they were not aware that the respondent would cease their participation in its salary packaging scheme until not long before their rotations were due to commence. Secondly, budgetary constraints prevented them from making payments of that magnitude in advance; they would have had to make 12 months’ worth of salary sacrifice in a nine month period.

[9] The applicants contend that under the terms of the Agreement the respondent should have provided them with access to its salary packaging program for the entire time that they were employed by it, including the period of their rotation to the Mildura Base Hospital. On 12 April 2011, pursuant to section 739 of the Fair Work Act 2009, they filed an application for Fair Work Australia to deal with a dispute in accordance with a dispute settlement procedure. Conciliation was unsuccessful and the matter was referred to me for arbitration.

[10] At the hearing Mr A Lewis from the AMA Victoria, the Australian Salaried Medical Officers Federation Victoria Branch, appeared for the applicants and Mr M Rinaldi, of counsel, appeared for the respondent.

[11] Mr Rinaldi took three objections to the jurisdiction of Fair Work Australia to deal with the application. First he submitted that as the applicants were no longer employed by the respondent on 12 April 2011, the date on which the application was lodged, they were not able to apply to have their dispute resolved under section 739 of the Act. Secondly, he submitted that the dispute was not a dispute about a matter arising under the Agreement in accordance with the requirements of section 186(6)(a)(i) and clause 61 of the Agreement. Thirdly, he submitted that the applicants had not taken all of the steps required to have been taken pursuant to clause 61 prior to the matter being referred for arbitration and that, accordingly, arbitration could not take place.

Employment at Time of Lodgement of Dispute

[12] Although there was no direct evidence led, or cross examination, as to when the Applicants ceased to be employed by the respondent, I infer that their employment with the respondent ended on 6 February 2011 in accordance with their contracts of employment. There was no dispute that the Applicants were not employed by the respondent at the time of the lodgement of the section 739 application. At the time of the hearing Dr Shields was employed by Eastern Health and Dr Spriggs was employed by Melbourne Health.

[13] Mr Rinaldi submitted that resort to the dispute settling procedure in the Agreement could only be had by a doctor who was a current employee of the hospital with which he or she had a dispute. In doing so he relied on the decision of a Full Bench of the Australian Industrial Relations Commission in ING Administration Pty Ltd v Jajoo. 4

[14] It should be noted that ING was decided in relation to the provisions dealing with dispute settling procedures contained in the Workplace Relations Act 1996 (the WR Act) and specifically section 170LW of that Act. In that case it was held by the majority that the Commission had jurisdiction to deal with a dispute between an employer and a former employee provided that the dispute had arisen during the course of the employment and the employee had commenced to deal with the grievance whilst employed. In ING the Full Bench carefully analyzed earlier cases that had dealt with the jurisdiction of the Commission to determine disputes between an employer and a former employee. I note, as did the Full Bench, that care should be exercised in considering earlier decisions given changes to the legislative provisions, the constitutional head of power underpinning the relevant legislative provisions and the differences in the wording of dispute settling clauses in relevant instruments. I believe that this is the first occasion upon which Fair Work Australia has been called upon to consider whether a former employee may agitate a dispute with his former employer under a dispute settling procedure in an industrial instrument made pursuant to the Act.

[15] ING held that section 170LW of the WR Act, in providing that the parties to certified agreements could include procedures in the agreement for preventing and settling disputes between the employer and employees who will be subject to the agreement, allowed the parties to empower the Commission to settle disputes over the application of the agreement. 5 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.”6 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.”7

[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. It noted that the notion of an employee raising the matter with the immediate manager or supervisor in the first instance, as contemplated by the relevant provision of the certified agreement, told against jurisdiction in such a case. 8

[17] Here, the Agreement is made under the provisions of the Fair Work Act 2009 (the Act). It is immediately apparent that there is no section the precise equivalent of section 170LW of the WR Act. However, section 172 of the Act, which deals with the making of enterprise agreements, provides that an enterprise agreement that is about one or more of the matters specified in the section may be made in accordance with Part 2 of the Act. The supplementary submissions of the applicants, contending that, having regard to the legislative changes since ING was decided, it should not be followed, did not refer to section 172.

[18] Section 172 of the Act reads:

[19] As was the case under the WR Act, the Parliament in authorising the making of enterprise agreements under the Act, limited their content to the matters referred to in section 172. Relevantly, the requirement that an enterprise agreement be about matters pertaining to the relationship between employers and employees covered by the agreement, connotes the existence of an employer/employee relationship. A person who is no longer an employee is not covered by the agreement.

[20] Section 186(6) of the Act requires that when Fair Work Australia approves an enterprise agreement it must be satisfied that the agreement includes a term that, relevantly, requires Fair Work Australia to settle disputes about any matters arising under the agreement and that allows for the representation of employees covered by the agreement for the purposes of that procedure. It follows that the matters arising under the agreement must pertain to the relationship between the employer and the employee of the employer who are in dispute.

[21] It also follows that if the dispute does not pertain to the relationship between the employer and the employee, then the dispute cannot concern a matter arising under the agreement.

[22] The reasoning in ING is apposite. Disputes about any matters arising under the agreement are disputes between employees covered by the agreement and their employer. A dispute that arises post the employment relationship is not such a dispute.

[23] As was the case in ING the dispute settling procedure in the Agreement requires that the dispute or grievance must first be discussed by the aggrieved doctor with the immediate supervisor of the doctor. 9 This can only occur during the existence of the employment relationship.

[24] Mr Lewis submits that the dispute in this matter arose while the applicants were still employed by the respondent and that the first step in the dispute settling procedure was taken at that time. To make good this contention he referred me to correspondence between the AMA and Alfred Health in December 2010 and January 2011. On 15 December 2010 Mr Lewis wrote to Mark Quirk, the Executive Director, Workforce of the respondent, stating: “Having informally raised this matter with Mr Andrew Hansen and yourself, I write to clarify what we assert to be a compliance error by The Alfred Health in that its DITs, when on rotation to Mildura, do not receive the benefit of unrestricted packaging arising under clause 30 of the AMA DIT Agreement 2008.” He sought confirmation that affected doctors in training would receive compensation equal to their accrued loss (inclusive of a reasonable estimate of meals and entertainment that would have been claimed if not prohibited). 10 Mr Quirk replied on 17 January 2011 asserting that the respondent was not obliged to provide its doctors in training with access to its salary packaging whilst they were on secondment to a another hospital and pointing out that they all have an opportunity to salary package their full entitlement whilst at the Alfred, prior to and after their rotation to Mildura.11 There was no mention of the applicants, nor was there any communication between the applicants and Alfred Health on this matter.

[25] Both applicants had made an enquiry, during the course of their employment with Alfred Health, as to the effect of the Mildura rotation on their salary packaging. In each instance, Alfred Health responded to the enquiry. This was the extent of the interaction which, in my view, amounts to no more than the mere asking of a question and receipt of an answer. There is no evidence of either applicant agitating a grievance with the respondent before the time the employment relationship ended. As already mentioned above, the AMA letter dated 15 December 2010 does not make specific reference to either applicant. The letter refers to informal discussions between the AMA and Alfred Health, however, the evidence of Mr Hansen was that these discussions did not identify any particular employee. 12

[26] Clause 61 of the Agreement contains the dispute settling procedures. As I pointed out earlier, clause 61.4.1 requires that the dispute or grievance must first be discussed by the aggrieved doctor or doctors with the immediate supervisor of the doctor or doctors.

[27] Clause 61.6 deals with disputes of a collective character and by clause 61.6.1 the parties acknowledge that “disputes of a collective character concerning more than one Doctor may be dealt with more expeditiously by an early reference to FWA.” However, clause 61.6.2 reads: “no dispute of a collective character may be referred to FWA directly unless there has been a genuine attempt to resolve the dispute at the workplace level prior to it being referred to FWA.”

[28] There appears to have been no other communication between the AMA and Alfred Health regarding this issue prior to the filing of this application for Fair Work Australia to deal with a dispute on 12 April 2011. There is no evidence that any doctor, other than the applicants, employed by Alfred Health is or was aggrieved by the manner in which Alfred Health deals with salary packaging. Mr Lewis’ letter of 15 December 2010 does not refer to any particular doctor.

[29] I accept Mr Rinaldi’s submission that the dispute between the applicants and the respondent did not arise, or at the very least was not agitated, until after their employment with Alfred Health had come to an end.

[30] Mr Lewis submits that nevertheless, because the applicants are, and at the time of filing the application were, employed by other hospitals respondent to the Agreement there was at that time a dispute between each applicant and an employer covered by the Agreement. This is because the Agreement is a multi-enterprise agreement covering a number of hospitals. I do not accept this submission because there is clearly no dispute between either of the applicants and his or her employer relating to the manner in which Alfred Health administers its salary packaging policy.

[31] It follows that Fair Work Australia lacks jurisdiction to deal with this matter.

[32] I am also of the view that the processes required to be followed by clause 61 have not been followed and that, accordingly, Fair Work Australia may not determine the dispute or grievance by arbitration. This is so because clause 61.1.1 makes it clear that unless otherwise provided for in the Agreement, a dispute or grievance arising under it must be dealt with in accordance with the clause. Clause 61.2.1 requires that the parties to the dispute or grievance, and their representatives, must genuinely attempt to resolve the dispute or grievance through the processes set out in the clause and must cooperate to ensure that these processes are carried out promptly. I do not think the writing of one letter, to which a responsive, but dismissive reply was received, and nothing more, constitutes a genuine attempt to resolve the matter. Alfred Health was entitled to conclude after Mr Quirk sent the letter of 17 January 2011 and received no reply that the AMA accepted the position of Alfred Health. Mr Rinaldi conceded that the dispute is of a collective character. However, clause 61.6.2 prevents such a dispute being referred to Fair Work Australia unless there has been a genuine attempt to resolve the dispute at the workplace level prior to it being referred to Fair Work Australia.

[33] The applicants submitted that as the respondent had participated in a conciliation conference it had effectively waived the requirements of the preceding steps in the dispute settling process. I do not accept that argument. It is often the case that a party will participate in conciliation proceedings in an attempt to resolve a matter despite it maintaining its position that the steps set out in the dispute resolution clause have not been properly followed. Although it is not clear whether the respondent reserved its position in relation to this issue at the conciliation, it is desirable that such conferences take place without the risk that submissions about the ability of Fair Work Australia to arbitrate are precluded, should the matter not be resolved at conciliation.

[34] Apart from the manifest public interest in parties abiding by the dispute resolution processes upon which they have agreed, 13 Fair Work Australia in dealing with a dispute pursuant to a term in an enterprise agreement may not exercise any powers limited by the term.14 Here the term precludes Fair Work Australia from dealing with dispute unless there has been a genuine attempt by the parties to resolve the dispute.

[35] The application must be dismissed for want of jurisdiction.

SENIOR DEPUTY PRESIDENT

Appearances:

Mr A Lewis, Senior Industrial Relations Advisor for the Applicants

Mr M Rinaldi, of counsel, for the Respondent

Hearing details:

Melbourne
17 October
2011

Further written submissions:

Applicants -

22 December 2011

Respondent -

23 December 2011

 1   Ex R4, paragraph 19

 2   Ex R3, paragraph 10

 3   Ex R3, paragraph 9

 4   (2006) 158 IR 239; PR974301

 5   Ibid at [11]

 6   Ibid at [38]

 7   Ibid at [58]

 8   Ibid at[53]

 9   Clause 61.4.1

 10   Exhibit R5

 11   Exhibit R6

 12   Transcript PN978 to PN986

 13   Boral Cement Ltd v Australian Workers’ Union [2012] FWAFB 350 at [6]

 14   Section 739(3)

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