Fair Work Act 2009
s.604 - Appeal of decisions

Appeal against decision [2015] FWC 1138 of Commissioner Lewin at Melbourne on 15 May 2015 in matter numbers C2013/1697 and C2013/5463.

Introduction

[1] The Construction, Forestry, Mining and Energy Union (CFMEU) has applied for permission to appeal and appealed a decision of Commissioner Lewin issued on 15 May 2015 1 (Decision). In the Decision the Commissioner determined that he had no jurisdiction to further deal with an application lodged by the CFMEU on 25 October 20132 pursuant to s.739 of the Fair Work Act 2009 (FW Act) for the Commission to deal with a dispute with North Goonyella Coal Mines Pty Ltd (North Goonyella) under the dispute resolution procedure in the North Goonyella Underground Mine Collective Enterprise Agreement 2012 (Agreement).3 Consequently the Commissioner dismissed the application (October 2013 application). However, in the Decision the Commissioner indicated he would list a related s.739 application lodged by the CFMEU on 6 August 20134 (August 2013 application) for the Commission to deal with a dispute with North Goonyella for further hearing. The CFMEU in this appeal contends that the Commissioner erred in determining that there was no jurisdiction to continue to deal with the October 2013 application. The August 2013 application has not at this time proceeded to the further hearing foreshadowed in the Decision since, subsequent to the lodgement of this appeal, the Commissioner determined on 28 July 2015 that he should await the outcome of the appeal.

[2] The background to this appeal is that North Goonyella, which operates an underground coal mine in the Bowen Basin in Queensland, determined in July 2013 that it would be necessary to make a number of its employees, who were members of the CFMEU, redundant. The CFMEU, through its local Lodge President, Mr Luke Ludlow, disputed the redundancies. Nonetheless in July and August 2013 North Goonyella proceeded to undertake consultation with the CFMEU concerning the redundancies under clause 38 of the Agreement and, after there proved to be insufficient volunteers for the number of redundancies required, engaged in a selection process to determine who would be made compulsorily redundant.

[3] The August 2013 application lodged by the CFMEU alleged that the following matters were in dispute with North Goonyella:

(1) North Goonyella had failed to comply with its obligations in clause 38 of the Agreement in that it had not genuinely consulted with the CFMEU about the redundancies, in particular with respect to measures to avoid or minimise the terminations;

(2) North Goonyella had agreed, in consultation with the CFMEU, to a process and then failed to follow that process in respect of voluntary redundancies; and

(3) North Goonyella had discussed the selection criteria for compulsory redundancies with the CFMEU, had agreed to make alterations to the criteria, and then advised the CFMEU that the ratings of employees had already been completed against the criteria.

[4] On 8 August 2013, the August 2013 application was the subject of a conciliation conference before Deputy President Asbury. The following day the Deputy President issued a “Statement and Recommendation” in which she recommended that the parties implement an annexed “Timetable for Redundancy Process and Consultation”; that they continue to consult early in the week commencing 12 August 2013 about the details of contractors who would remain following the redundancies; cost saving suggestions by the CFMEU and other matters relating to mitigation of the effects of the redundancies on employees; and that the parties continue to meet over the course of the Timetable to discuss matters about which consultation was required under the terms of the Agreement. The Timetable identified that voluntary redundancies would be processed and take effect by 23 August 2013, that the selection process for involuntary redundancies would be completed by the same date in accordance with the selection criteria discussed and agreed with the CFMEU on or about 29 July 2013, and that the involuntary redundancies would be notified progressively from 26 August 2013 and take effect by 30 August 2013.

[5] The CFMEU has subsequently alleged that North Goonyella did not comply with the Deputy President’s Recommendation.

[6] North Goonyella selected 36 persons for compulsory redundancy. Three of the persons selected were Mr Ludlow (as earlier noted, the Lodge President), Mr Barry Elliott, the Lodge Secretary, and Mr Brendon Woods, an elected site safety and health representative. The termination of their employment occurred on 27 August 2013. The other redundancies also took effect on or about this date.

[7] Subsequent to the compulsory redundancies taking effect, the CFMEU instituted proceedings in the Federal Court of Australia in which it contended that North Goonyella had dismissed Mr Ludlow, Mr Elliott and Mr Woods in contravention of the general protections provisions in ss.341, 346, and 347 of the FW Act and clause 38.5(c) of the Agreement (thus contravening s.50 of the FW Act). After the CFMEU sought interlocutory relief, agreement was reached to restrain on an interlocutory basis the dismissals of Mr Ludlow, Mr Elliott and Mr Woods.

[8] The October 2013 application described the matters about which it was said there was a dispute in the following terms:

“1. The manner in which the Company applied clause 38 of the North Goonyella Underground Mine Collective Enterprise Agreement 2012 ... in relation to the redundancies effected between 27 August to 29 August 2013.

In selecting employees to be made redundant the Company has not correctly applied the selection criteria requirements in the Agreement.

The selection criteria applied was inconsistent with the Agreement and irrelevant considerations were taken into account in selecting employees for redundancy.

2. Specifically, the dispute is in relation to the formulation of the selection process and/or its application.”

[9] The October 2013 application went on to state that the following relief was sought:

“1. The Fair Work Commission exercise any and all powers and functions incidental or associated with the exercise of conciliation or arbitration, in accordance with step 4 of clause 41 of the Agreement;

2. Restoration of the status quo before the implementation of the involuntary redundancies;

3. Reinstatement without loss; and

4. Compensation.”

[10] In answer to the inquiry in the October 2013 application as to “Steps already taken under dispute settlement procedure”, the following was stated:

“1. The applicant sought consent from the respondent to bypass Steps 1-3 of this dispute via correspondence between representatives on 25 September 2013. A copy of the correspondence is attached and marked “D”.

2. The parties have sought to hold a discussion in relation to the dispute, “akin to a step 3” of the dispute procedure. A copy of the bundle of correspondence is attached and marked “E”.

3. No discussions in relation to the dispute have taken place.”

[11] The letter dated 25 September 2013 attached to the application was sent by lawyers acting for the CFMEU and relevant members to the lawyers acting for North Goonyella. Omitting formal parts, the letter read as follows:

“We refer to the above matter, and advise that we represent the Construction, Forestry, Mining and Energy Union and its members in relation to the redundancies effected at North Goonyella from 27 August 2013.

We write to advise that our clients have instructed us to dispute the selection process undertaken for those redundancies.

As your firm is instructed in relation to the matter QUD596 CFMEU v North Goonyella Coal Mines Pty Ltd, we assume you will hold instructions in relation to the proposed dispute. If we are wrong in our assumption, please advise us as a matter of urgency.

The dispute will be in the following terms:

“We place in dispute the manner in which the Company applied clause 38 of the North Goonyella Underground Mine Collective Enterprise Agreement 2012 (the Agreement) in relation to the redundancies effected between 27 August to 29 August 2013.

It is clearly apparent that in selecting employees to be made redundant the Company has not correctly applied the selection criteria requirements contained in the Agreement. It is apparent that the selection criteria applied was inconsistent with the Agreement and that irrelevant considerations were taken into account in selecting employees for redundancy.

We seek the review and correction of the manifestly unfair and non-compliant application of the Agreement.”

As you are aware, the dispute procedure is found in clause 41 of the Agreement. We write to request your client’s consent to bypass steps 1 to 3, and for the CFMEU to apply directly to the Fair Work Commission in the interests of a speedy resolution to the dispute. Should your client withhold such consent, our client will apply to the Fair Work Commission for a determination to bypass the procedural steps, as is provided by clause 41.3 of the Agreement.

We request that you provide your client’s view in relation to the above passage as soon as possible, but no later than close of business Thursday 26 September 2013.”

[12] There was an initial conference conducted by the Deputy President in relation to the October 2013 application on 4 November 2013. The Deputy President recommended that the parties meet to discuss the matter and then attend a further conference on 13 December 2013.

[13] The trial of the CFMEU’s Federal Court application concerning the dismissals of Mr Ludlow, Mr Elliott and Mr Woods was listed to commence on 2 December 2013 and run for five days. On the first day, North Goonyella admitted multiple contraventions of ss.50, 341, 346 and 347 of the FW Act in respect of the three employees. In a judgment issued on 10 December 2013 5, the Court (Logan J) made declarations concerning the admitted contraventions, ordered the reinstatement of Mr Ludlow, Mr Elliott and Mr Woods (together with consequential orders), and ordered that North Goonyella pay monetary penalties totalling $120,000 and pay part of the CFMEU’s costs.

[14] The October 2013 application was the subject of a further conference before the the Deputy President on 13 December 2013. An agreement was reached that there should be State-level discussions about the matters in dispute. These discussions occurred on 18 December 2013 and 28 January 2014, but no resolution was reached. There were subsequent conferences conducted by the Deputy President, but again no resolution was reached.

[15] The CFMEU at this stage requested that the matter be arbitrated, but North Goonyella objected to this and applied for the Commission to exercise the discretion which it contended existed not to exercise its powers of arbitration under clause 41.2 of the Agreement and to dismiss the application. North Goonyella’s objection in this respect was not based on jurisdictional grounds but rather on discretionary considerations. In a decision issued on 26 September 2014 6 the Deputy President accepted that there was a discretion not to arbitrate the matter, but declined to exercise that discretion. The Deputy President also declined to summarily dismiss the October 2013 application, stating that “I am also of the view that it would be inappropriate to summarily dismiss an application which the Commission has jurisdiction to deal with”.7 The Deputy President declined to arbitrate the matter herself because of her involvement in the conciliation of the matter, which had made her privy to offers and counter offers of settlement, and sent the file to the Panel Head for the purpose of allocation to another member of the Commission for arbitration.

[16] The October 2013 application was then allocated to the Commissioner. He conducted a further conference in relation to the matter on 5 November 2014. At this conference North Goonyella foreshadowed that it would advance a jurisdictional objection to the Commission further dealing with the application, namely that because the persons the subject of the application represented by the CFMEU were no longer employed by North Goonyella at the time the October 2013 application was lodged (having been made redundant in August 2013), they were no longer covered by the Agreement and thus no longer had the benefit of its disputes resolution procedure.

[17] It was agreed at this conference that the matter would be decided on the papers on the basis of written submissions to be filed and served by the parties. However, after the written submissions had been filed on 26 November 2014 in accordance with the timetable directed by the Commissioner, there was further delay occasioned by what the Commissioner characterised as “prevarication” on the part of the CFMEU. 8 A delay of about six months followed, apparently in connection with the CFMEU’s desire to adduce evidence in relation to the jurisdictional objections. The CFMEU filed two statements of evidence, and the matter was the subject of a hearing before the Commissioner on 8 May 2015. The ensuing Decision, the subject of this appeal, was issued on 15 May 2015.

The Decision

[18] In the Decision the Commissioner referred to the Full Bench decisions of the Australian Industrial Relations Commission and Fair Work Australia in ING Administration Pty Ltd v Jajoo 9, Telstra Corporation Limited v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia10 and Deakin University v Rametta11 as authority for the proposition that there is no jurisdiction for the Commission to deal with a dispute pursuant to a dispute resolution procedure in an enterprise agreement if the dispute is initiated under the procedure at a time when the persons who are said to be in dispute with the employer are in fact no longer employed.12 The Commissioner then considered whether the October 2013 application on its proper characterisation was a dispute that fell into this category. In undertaking this consideration, the Commissioner accepted in principle the proposition advanced by the CFMEU that the employees remaining at the North Goonyella Mine after the August 2013 redundancies had an ongoing interest in the proper application of the redundancy provisions. However, he rejected the submission that this allowed the dispute to be characterised as one involving employees who remained employed by North Goonyella as follows:

“[48] On the CFMEU’s submission, employees who were in the employment of North Goonyella at the time that the former employees were made redundant in late August 2013 who remain employed by North Goonyella (and persons employed since, one would think) have an interest in the proper application of the terms of clause 38 the Agreement. For this reason the subject matter of the application, so the submission goes, may be dealt with pursuant to the provisions of s.738 and s.739 of the Act, in accordance with the terms of the dispute settlement procedure. By this means, the observation in ING, and the other decisions referred to above, is overcome in relation to the application.

[49] On the CFMEU’s submission in this respect, the relevant “employees” for the purposes of the application (who it represents), and for the purposes of clause 41 of the Agreement, include those persons identified earlier who remain in the employment of North Goonyella.

[50] I consider this answer to the apparent obstacle to the application arising from the decisions in ING, Telstra and Deakin University to be wrong and reject it accordingly. I do so because, in my view, the express terms of the dispute settlement procedure prescribed by clause 41 of the Agreement evidently apply to the settlement of disputes between persons who are in employment — employees — when access to the dispute settlement procedure commences. Persons who were once employees (former employees) who did not seek to access the dispute settlement procedure in relation to a dispute whilst in employment do not have standing to apply to the Commission to deal with a dispute in accordance with the dispute settlement procedures prescribed by the Agreement. I explain my reasons for this conclusion below, having regard to the characterisation of the dispute and the operation of clause 41 of the Agreement.

[51] I consider that the proper characterisation of the dispute to which the application refers does not concern the future application of the redundancy provisions of clause 38 of the Agreement, as submitted by the CFMEU. Rather, the controversy which comprises the subject matter of the application is the particulars of the application of the redundancy provisions of the Agreement to the persons whose employment was terminated between 27 and 29 August 2013, whom the CFMEU represents for the purposes of the application to the Commission. That is, former employees of North Goonyella whose employment was terminated in late August 2013 in a redundancy situation.”

[19] The Commissioner then considered the effect of the disputes resolution procedure in clause 41 of the Agreement. The Commissioner concluded as follows:

“[54] However, the express terms of the dispute settlement procedure, read as a whole, strongly suggest that an employee (who may be represented) or the employer will be the persons the subject of, and the procedural interlocutors in relation to, any dispute to which the dispute settlement procedure prescribed by clause 41 applies. That is to say, the persons who may have access to the dispute settlement procedure of the Agreement are those persons identified in clause 41 or another term of the Agreement. It is telling that the dispute settlement procedure is to be commenced by an employee, who may be represented for that purpose. In my view it is such a person(s) or their representative(s) who may make an application to the Commission for a dispute of the requisite kind to be dealt with by conciliation or arbitration.

[55] Consistent with the observations in ING and the other decisions referred to above, and in accordance with the terms of the dispute settlement procedure of the Agreement, once the dispute settlement procedure is commenced by a person to whom it applies, relevantly, an employee or their representative, the procedures set out in clause 41 will have application to the dispute. Moreover, the procedures as such will not lapse in the event the person’s employment is terminated during the prescribed process. This is because when the procedures are commenced the person on whose part the procedure has commenced has a right under the Agreement to have the whole of the procedure, as specified by the terms of the Agreement, completed.”

[20] The Commissioner rejected submissions made by the CFMEU that clauses 39.6 and 38.5(e) had the effect that former employees could initiate disputes pursuant to the disputes resolution procedure in clause 41 of the Agreement. 13 The Commissioner also rejected a submission that the CFMEU acting in its own right, as distinct from acting in the capacity of representative of persons currently employed by North Goonyella, could initiate a dispute resolution process under the disputes resolution procedure in the Agreement. The Commissioner said in this respect:

“[78] Accordingly, I find that the jurisdiction of the Commission to deal with a dispute under s.739 of the Act, by reason of s.738(b) of the Act, is derived from the terms of the dispute settlement procedure of the Agreement. Any role of the CFMEU as an organisation in relation to such dispute resolution procedures must emanate from the express terms of the Agreement. Those terms do not envisage the CFMEU as able to access the dispute settlement procedures of the Agreement, except as a representative of an employee or employees. I therefore conclude that the CFMEU does not have standing to make the application by right as an organisation covered by the Agreement.”

[21] The Commissioner concluded on these bases that the Commission did not have jurisdiction to deal with the October 2013 application. However he distinguished the position of the August 2013 application in the following terms:

“[83] The recommendations made by Deputy President Asbury in relation to the dispute subject to the earlier application, made under Step 4 of the dispute settlement procedure of the Agreement, refer to and recommend the application of “selection criteria as discussed with and agreed by the CFMEU on or about 29 July 2013 to all possible involuntary redundancies”. (see Appendix A - Friday 23 August 2013)

[84] It seems clear that the scope of the dispute before Deputy President Asbury included reference to selection criteria for the redundancies of late August 2013 and identified discussions which led to an agreed set of such criteria which formed part of the Deputy President’s recommendation. If that recommendation was adopted by North Goonyella and applied in accordance with the content of the discussions held on or about 29 July 2013 (as referred to in the document annexed to the recommendation titled “Timeframe for Redundancy Process and Consultation”) that would indicate settlement of that aspect of the dispute subject of the earlier application in accordance with Step 4 of the dispute settlement procedure in the Agreement.

[85] If it should be established that the agreed selection procedure, as referred to by Deputy President Asbury as part of the application of the dispute settlement procedure, and recommended by Deputy President Asbury, was not applied it may be that the subject matter which formed part of the dispute subject of the earlier application concerning selection for redundancy remains unresolved by the Deputy President’s recommendation. If so, it may be that there is an unresolved aspect of the dispute subject to the earlier application dealt with by Deputy President Asbury, which remains to be dealt with in accordance with the steps prescribed by clause 41, including further involvement of the Commission.”

Submissions

[22] The CFMEU submitted that the Decision, insofar as it determined that the October 2013 application should be dismissed, was in error for the following reasons:

• the Commissioner failed to engage with and address submissions made by the CFMEU which went to the capacity under the Agreement for the Commission to deal with disputes involving former employees;



• clause 38.5(e) permitted the arbitration and resolution of disputes involving the selection of former employees for redundancy, and the Commissioner erred in interpreting the provision otherwise;



• the inclusion of clause 38.5(e) in the Agreement was authorised by s.172(1)(a) of the FW Act, which allowed enterprise agreement provisions to be about “matters pertaining to the relationship between an employer that will be covered by the agreement and that employer’s employees who will be covered by the agreement”;



• the jurisprudence concerning the “matters pertaining …” formulation demonstrates that a genuine dispute may exist between employees generally and their employer concerning the mode of selection of former employees for redundancy, the termination of former employees on the ground of redundancy and the reinstatement of such employees, since these are matters which have a direct impact upon the legitimate industrial interests of employees in their security of employment and the attitude in practice adopted by an employer to the termination of employment;



• that jurisprudence should have been preferred to the decisions in ING Administration Pty Ltd v Jajoo, Telstra Corporation Limited v CEPU and Deakin University v Rametta;



• the uncontested evidence of Mr Ludlow that was before the Commissioner demonstrated that his characterisation of the dispute was incorrect and that it substantially concerned the interests of the employees remaining after the August 2013 redundancies;



• the “bypass” procedure in clause 41.3 of the Agreement allowed the initial steps in the disputes resolution procedure requiring direct discussions at the workplace level to be avoided, thus permitting a dispute of the type referred to in clause 38.5(e) involving former employees to be dealt with; and



• the determination that the CFMEU did not have standing in its own right to make the October 2013 application was erroneous because the CFMEU, being defined as a “party” in clause 3 of the Agreement, could exercise the rights conferred on “parties” in clause 41 and elsewhere in the Agreement.

[23] The CFMEU submitted that permission to appeal should be granted because it raised issues of importance and general application concerning s.172 of the FW Act, including what is a pertaining matter under s.172 of the FW Act, and s.186 of the FW Act; because it raised whether the approaches of the Commission appear disharmonious with that of the Federal Court; because the Decision manifested substantial injustice in respect of employees at the North Goonyella Mine (both before and after the August 2013 redundancies); and because the Decision was attended by jurisdictional error.

[24] North Goonyella submitted that:

• the Commissioner correctly determined that there was no jurisdiction for the Commission to deal with the October 2013 application, and in doing so properly considered the submissions made before him;



• there was no finding that any clause in the Agreement was not authorised by s.172(1)(a), so there was no need to explore the theoretical limits of what jurisdiction might be bestowed under an enterprise agreement, only to consider what jurisdiction was actually conferred by the specific provisions of the Agreement;



• the Commissioner correctly characterised the October 2013 application as concerned with the interests of former employees only, and the CFMEU’s retrospective attempt to characterise the dispute in a different way should be rejected;



• the Commissioner correctly concluded that clause 41, on its proper interpretation, did not allow for former employees to access the disputes resolution procedure, and the correct characterisation of the October 2013 application was that it was made by and in respect of former employees;



• clause 38.5(e) of the Agreement did not confer a right upon former employees to access the disputes resolution procedure in relation to redundancies, in contrast with clause 39.6, which did so in express terms in respect of recruitment issues;



• clause 41 did not provide the CFMEU with an entitlement to bring a dispute application other than as a representative of individual members;



• permission to appeal should be refused because the Decision was correctly founded upon a straightforward interpretation of the relevant provisions of the Agreement, was harmonious with relevant case authority and did not raise any issue of general application; and



• if permission to appeal was granted, the appeal should be dismissed because it has not been shown to be in error.

Relevant provisions of the Agreement

[25] Clause 2.1 and 2.2 of the Agreement identify who is bound by the Agreement, and covered by it, in the following terms:

“2.1 This Agreement is binding on:

a) the Company; and

b) employees of the Company employed at the North Goonyella Underground Mine (Mine) and the North Goonyella Mine Coal Handling and Preparation Plant (CHPP) who are engaged in the classes of work contained in Schedule A of the Black Coal Mining Industry Award 2010.

2.2 The Union was the bargaining representative of employees covered by the Agreement. The Agreement will cover the Union if the Union applies to FWA to be covered by the Agreement and FWA approves such application.”

[26] Clause 3, Definitions, contains the following definition of “The parties”:

“The parties shall mean the Company, North Goonyella Coal Mines Pty Ltd. (The Company) the Union (CFMEU Mining and Energy) and the employees of the Company who are bound by this Agreement.”

[27] Clause 38 deals with the subject matter of redundancy. After clause 38.5 appears a separate provision, unnumbered, which deals with the selection criteria for involuntary redundancies as follows:

“Involuntary redundancies - Selection Criteria

a) Subject to paragraphs (b) and (c), the Company will select employees for involuntary redundancy on reverse merit utilising selection criteria reasonably chosen by the Company based on its business needs, including but not limited to an employee's skills/competencies, experience and aptitudes. To remove doubt, the Company may utilise performance, attitude, absenteeism record and disciplinary history as selection criteria.

b) In making a selection pursuant to paragraph (a), the Company must also give material weight to an employee's length of service at the Mine and/or CHPP to the intent that an employee with a long period of service should not be selected for redundancy unless they are reasonably assessed against the other selection criteria as materially worse than other employees with a materially lesser period of service in the relevant class or classes of employees from among whom the selection is being made.

c) To the extent that performance and/or attitude are utilised as selection criteria, the Company must not make a materially adverse assessment of an employee against either or both of those criteria as an individual (as distinct from assessment as part of a group eg. a crew) unless the employee has been informed (either verbally or in writing) by a supervisor or manager of relevant concerns about his or her performance and/or attitude. The intent of this paragraph is that an employee should not be assessed adversely on the basis of poor performance and/or poor attitude as an individual unless the employee is aware of management concerns in that regard and has had a reasonable opportunity to consider and if necessary address those concerns.

d) To the extent that, as at the time this Agreement commences to operate, the Company has material concerns about the performance and/or attitude of an employee it must, within three months of such commencement, give that employee written notice, expressed to be in accordance with this paragraph, broadly outlining those concerns and provide such employee with an opportunity (if the employee so wishes) to discuss those concerns with a supervisor or manager. No dispute can be raised over the issuing of a notice under this paragraph. Rather, the occasion for an employee to dispute the issuing or contents of such a notice will be if and when a matter adverted to in the notice is sought to be relied upon by the Company in connection with a process for involuntary redundancies, disciplinary action or performance management.

e) In the event of any dispute about a selection process the Disputes Clause under Sect 42 shall apply.”

[28] Clause 39, Recruitment, confers preference in recruitment, in certain circumstances, to former employees who have been made involuntarily redundant. It provides:

“39.1 Subject to this clause, the selection of people for employment with the Company will be entirely at the discretion of the Company.

39.2 Where the Company decides to fill a vacant position internally, the Company will fill that position on the basis of merit through a selection process with selection criteria reasonably chosen by the Company based on its business needs. To remove doubt selection criteria may include, but are not be limited to, required or desired skills/competencies, experience, aptitude, performance, attitude, absenteeism record and disciplinary history. An existing employee covered by this Agreement and who has relevant experience may participate in the interview stage of the recruitment process for new employees covered by this Agreement. The final decision on selection of the successful applicant rests with the Company.

39.3 Where the Company decides to expand its operator and/or tradesperson workforce and such decision is made before 3 months after operator and/or trade employees have been made involuntarily redundant, the Company must, when filling the new positions, give preference to those former employees on the basis of their previous length of service at the Mine and/or CHPP save that the Company is not obliged to reemploy a former employee under this subclause if the Company, after consultation with the Lodge, reasonably regards the former employee as unsuitable having regard to the his or her performance, attitude, absenteeism record and/or disciplinary history.

39.4 Where the Company makes a number of operators and/or tradespersons involuntarily redundant and subsequently decides to expand its operator or tradesperson workforce and a reasonable person appraised of the relevant circumstances would reasonably conclude that such redundancies were a sham undertaken substantially for the purpose of replacing some or all of such employees, the Company must, when filling the new positions, give preference to such employees on the basis of their previous length of service at the Mine and or CHPP.

39.5 Notwithstanding any other provision of this clause, if a former employee offered employment pursuant to a provision of this clause refuses that offer of employment the Company has no further obligation to reemploy that person pursuant to a provision of this clause.

39.6 To remove any doubt as to the jurisdiction of FWA to deal with a dispute in relation to whether the Company has met its obligations under this clause (and without intending otherwise to affect, one way or the other, the proper construction of this Agreement), in relation to such a dispute, a former employee is deemed to be an employee for the purposes of the dispute resolution procedure.”

[29] Clause 41, Dispute Resolution Procedure, provides:

“41.1 In the event of any dispute arising as to the interpretation or application of this Agreement, including matters in relation to the NES and disputes that are expressly authorised to be dealt with under this clause by another term of the Agreement, the following procedure will apply.

41.2 The employee may choose to be represented at any stage in this procedure by a representative/s of their choosing.

STEP 1 The matter will in the first instance be discussed between the employee/s and the immediate supervisor involved. The supervisor and the employee shall make every reasonable effort to resolve the matter between themselves. An agreed time limit will allow the immediate supervisor to investigate the grievance and respond. If an agreement is reached it shall be recorded in writing.

STEP 2 If the matter remains unresolved, it will be referred for discussion between the employee and/or the employee's representative/s at the Mine or CHPP and the relevant Department Manager or their representative.

STEP 3 If the matter remains unresolved, it will be referred for discussion between the employee and/or the employee's representative/s and senior Company representatives.

STEP 4 If the matter remains unresolved, it will be referred to FWA for conciliation and, if the dispute remains unresolved, arbitration. In exercising its powers under this clause FWA may exercise all powers and functions incidental or associated with the exercise of conciliation or arbitration.

41.3 By agreement between the respective representatives, any or all of the above steps may be bypassed in the interest of speedy resolution of the dispute. Either party may make an application to FWA for a determination that steps 1 to 3 be bypassed and the matter proceed directly to conciliation and or arbitration. Such determination will be by reference to what is fair as between the parties and the extent of any prejudice to a party that will be caused unless those steps are bypassed and on the basis that ordinarily the steps should only be bypassed where a failure to do so will sound in material prejudice to the Company or affected employees.

41.4 While the steps are being followed, work will proceed in accordance with the reasonable and lawful directions of the Company and in accordance with the employees' skills, competence, and training and safe work practices.”

Statutory framework

[30] The matters which may be included in an enterprise agreement are identified in s.172(1) of the FW Act as follows:

172 Making an enterprise agreement

Enterprise agreements may be made about permitted matters

(1) An agreement (an enterprise agreement) that is about one or more of the following matters (the permitted matters) may be made in accordance with this Part:

(a) matters pertaining to the relationship between an employer that will be covered by the agreement and that employer’s employees who will be covered by the agreement;

(b) matters pertaining to the relationship between the employer or employers, and the employee organisation or employee organisations, that will be covered by the agreement;

(c) deductions from wages for any purpose authorised by an employee who will be covered by the agreement;

(d) how the agreement will operate.

[31] Section 186(6) establishes as a requirement for the approval of enterprise agreements that they contain a disputes resolution procedure as follows:

Requirement for a term about settling disputes

(6) The FWC must be satisfied that the agreement includes a term:

(a) that provides a procedure that requires or allows the FWC, or another person who is independent of the employers, employees or employee organisations covered by the agreement, to settle disputes:

(i) about any matters arising under the agreement; and

(ii) in relation to the National Employment Standards; and

(b) that allows for the representation of employees covered by the agreement for the purposes of that procedure.

[32] The jurisdiction of the Commission to deal with disputes pursuant to disputes resolution procedures in (relevantly) enterprise agreements is provided for in ss.738 and 739:

738 Application of this Division

This Division applies if:

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

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

(c) 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

(d) 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.

739 Disputes dealt with by the FWC

(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.

Consideration

[33] We have determined to refuse permission to appeal for two reasons: first, we are satisfied that the Commissioner’s conclusion on the issue of jurisdiction was correct and, second, we consider that in any event the appeal lacks practical utility.

[34] The issue of jurisdiction was one capable of determination in a straightforward way by reference to the relevant provisions of the Agreement. The Commission’s powers under s.739 to deal with disputes derive, in the case of an enterprise agreement, from the terms of the disputes resolution procedure contained in the enterprise agreement. The Commission may deal with a dispute only on application by a party to the dispute (s.739(6)), is prohibited from exercising any powers limited by the disputes resolution procedure (s.739(3)), may arbitrate only if the agreed disputes resolution procedure permits it to do so (s.739(4)), and must not make a decision that is inconsistent with the FW Act, the enterprise agreement and any other applicable fair work instrument (s.739(5)).

[35] It was not contended by any party, or concluded by the Commissioner, that the provisions of the Agreement upon which the CFMEU relied upon to found jurisdiction for the Commission to deal with the October 2013 application - in particular clauses 38.5(e) and 41 - were provisions which were not permitted to be included in an enterprise agreement under s.172 of the FW Act. It was not therefore relevant for the Commissioner (or us) to consider the outer limits of the powers that might theoretically be conferred upon the Commission by a dispute resolution procedure in an enterprise agreement by reference to the jurisprudence concerning the “matters pertaining to the relationship between an employer … and that employer’s employees…” formulation that is used in s.172(1)(a). Nor was it contended by either party, or found to be the case by the Commissioner, that the disputes resolution procedure in clause 41 of the Agreement was to be read as if confined by the requirements of s.186(6) of the FW Act. It is well established that s.186(6) does not prescribe the content of all disputes resolution procedures in enterprise agreements but establishes a minimum standard only, and that an enterprise agreement may contain a disputes resolution procedure which is broader in scope than the minimum requirement provided that it is a permissible matter under s.172(1). 14 The relevant task was therefore to identify the powers actually conferred upon the Commission by the Agreement and the limits upon those powers. This involved a straightforward process of interpretation of the relevant provisions of the Agreement.

[36] Clause 41 of the Agreement does not in express terms identify who may be party to a dispute of the type referred to in clause 41.1 - that is, a dispute that arises as to the interpretation or application of the Agreement, is about matters in relation to the NES, or is one that another provision of the Agreement authorises to be dealt with under clause 41. However there are a number of indications in the language and structure of clause 41 which make it reasonably clear that what is contemplated is a dispute between a current employee or employees covered by the Agreement and the employer, North Goonyella:

(1) The first sentence of clause 41.2 refers to “[t]he employee” choosing representation.

(2) Step 1 requires that the dispute be discussed in the first instance between the employee(s) and the immediate supervisor, and requires them to make every available effort to resolve the matter.

(3) Steps 2 and 3 then require discussion between the employee(s) and/or the representative of the employee(s) and, respectively, the relevant Department Manager or his representative and senior Company representatives.

(4) Clause 41.4 requires that while the steps in the procedure are being followed, work must proceed in accordance with North Goonyella’s reasonable and lawful directions and in accordance with the skills, competence and training of the employee(s) and safe work practices.

[37] That the “employee(s)” referred to in the clause refers to current employees and not former employees is apparent for three reasons. Firstly, the word “employee” on its ordinary meaning and without qualification is entirely inapt to refer to a former employee. Secondly, clause 2.1(b) of the Agreement provides that it binds, relevantly, employees of North Goonyella at the Mine “who are engaged in the classes of work contained in Schedule A of the Black Coal Mining Industry Award 2010”. The Agreement therefore does not bind persons who are no longer so employed. Clause 41 could not be read as conferring rights on persons who are not bound by the Agreement. Thirdly, the requirements for workplace discussions and for work to continue as normal could only be complied with by persons in current employment. The fact that clause 41.3 allows for the requirements for workplace discussions in Steps 1-3 to be bypassed by agreement or by determination of the Commission in specified circumstances does not vitiate the proposition that clause 41 is constructed on the basis that such workplace discussions are capable of taking place.

[38] There is nothing in the language of clause 38.5(e), having regard to its context including its historical and industrial context, that extends the application of clause 41 with respect to disputes about the selection process for voluntary redundancies to former employees. Clause 41 is capable of practical application to such a selection process, in that a dispute about the selection process for involuntary redundancy may be initiated whilst the process is underway if there is a concern that the process is not being conducted in accordance with clause 38.5, or once the affected employee has been notified of selection but before being terminated. Clause 38.5 is to be contrasted with clause 39.6 which, in respect of the requirements in clause 39 concerning the preference to be afforded in recruitment to former employees made involuntarily redundant in certain prescribed circumstances, expressly provides that in relation to a dispute about this “a former employee is deemed to be an employee for the purposes of the dispute resolution procedure”. The use of this deeming device in clause 39.6 strongly indicates that elsewhere in the Agreement a reference to “employee” is not to be understood as including a former employee.

[39] There was therefore no capacity under clause 41 for a former employee, or a representative acting on a former employee’s behalf, to initiate a dispute resolution process under clause 41. Nor does clause 41 contemplate that the dispute resolution procedure could have application to disputes between North Goonyella and the CFMEU in its own right - that is, as a party principal to a dispute and not as a representative of employees. For the reasons already stated, clause 41 only deals with disputes between current employees and North Goonyella, in relation to which the CFMEU may act as a representative. The references in clause 41.3 to a “party” and “parties” are, we consider, to be understood as referring to the parties to the instant dispute - that is, North Goonyella and the relevant employee(s) - and not to the definition of “The parties” in clause 3 of the Agreement.

[40] We accept (as did the Commissioner) that clause 41 may potentially have application to a dispute between current employees and North Goonyella concerning the application of the Agreement and selection criteria for involuntary redundancy to former employees. For example, current employees who are facing an upcoming round of redundancies may have legitimate concerns for their own future treatment based on the way in which their employer has treated former employees in a previous round of redundancies. The question here is whether the dispute identified in the October 2013 application was a dispute of that nature, as distinct from a dispute about former employees.

[41] In relation to that question, we agree with the way in which the Commissioner characterised the dispute identified in the October 2013 application in paragraph [51] of the Decision. It is apparent from the application itself and the attached correspondence of 25 September 2013 that the dispute which the CFMEU sought that the Commission deal with was entirely concerned with the interests of the employees who had been made involuntarily redundant in the period 27-29 August 2013 and who, the CFMEU contended, had been selected for involuntary redundancy in a manner inconsistent with the Agreement. There is no indication in the application that the dispute engaged the interests of current employees. The remedies sought were for the benefit of the specific former employees. We do not consider that the character of the dispute as objectively disclosed by the October 2013 application is altered by the after-the-event and essentially subjective evidence of Mr Ludlow.

[42] Although, as a general proposition, it might be said that the enforcement of the Agreement with respect to past employees would be likely to benefit current employees in that it would tend to ensure future compliance with the Agreement, in this particular instance it is far from clear that the October 2013 application would necessarily result in a benefit to current employees. The reinstatement of the former employees made redundant, as sought in the October 2013 application, would presumably require North Goonyella to undertake the selection process for involuntary redundancy a second time, with the result that current employees might be exposed to potential selection for involuntary redundancy. For that reason we do not consider that the October 2013 application is to be presumed, contrary to its terms, as engaging the interests of current as well as former employees.

[43] The CFMEU’s correspondence of 25 September 2013, attached to the October 2013 application, makes it clear that there had been no attempt to engage the provisions of clause 41 in relation to the identified dispute prior to that date. The position here is distinguishable from that considered in ING Administration Pty Ltd v Jajoo 15, Telstra Corporation Limited v CEPU16 and Deakin University v Rametta17, where in each case the dispute resolution procedure had been initiated by or on behalf of the relevant employee before the employee’s employment had been terminated even though the procedure had not been completed prior to termination. In each of those matters it was determined that arbitration under the disputes resolution procedure could proceed notwithstanding that the employment of the relevant employee/s had terminated. Here, it is apparent that there was no attempt to engage the procedures in clause 41 in respect of the dispute identified in the October 2013 application at a time when any of the employee parties to the dispute were actually employed by North Goonyella. In that circumstance, clause 41 had no application, and consequently there was no power for the Commission to deal with the dispute under s.739 of the FW Act.

[44] The appeal’s lack of practical utility lies in the fact that, as stated in the Decision, it remains open to the CFMEU to re-agitate the August 2013 application on the basis of its contention that North Goonyella failed to comply with the Deputy President’s Recommendation of 9 August 2013. That application squarely raised the issue of the selection process adopted by North Goonyella in respect of involuntary redundancies. We consider if that application is demonstrated not to have been resolved by the Deputy President’s Recommendation (a matter about which we express no view), the Commission would in proceeding to deal with it be entitled to take into account developments in the selection process after the application was made and, in particular, any contention that the process did not comply with clause 38 of the Agreement. There is nothing in s.739 of the FW Act, or in clause 41 of the Agreement, which would prevent the Commission from dealing with any development or evolution in a dispute which occurs after application is made to the Commission to deal with the dispute. The CFMEU can therefore agitate its members’ concerns about the selection process for the August 2013 involuntary redundancies in the August 2013 application, subject to it demonstrating that the application was not settled by the Deputy President’s Recommendation.

[45] We would also observe that, to the extent the CFMEU contends that there is an extant dispute between current employees and North Goonyella about selection procedures for involuntary redundancies by reference to the events of August 2013, it is not apparent that anything would prevent the procedure in clause 41 now being engaged with respect to such a dispute.

[46] In those circumstances, there would seem to be little that would be achieved by us granting permission to appeal. Because the Commissioner has, since the Decision was issued, reached the statutory age of retirement and left the Commission, it will be necessary for the Panel Head to arrange for the August 2013 application to be re-listed to deal with the outstanding matters.

Conclusion

[47] Permission to appeal is refused.

VICE PRESIDENT

Appearances:

B. Docking of counsel for the Construction, Forestry, Mining and Energy Union.

D. Williams and L. Sandeman solicitors for North Goonyella Coal Mines Pty Ltd.

Hearing details:

2015.

Brisbane:

24 August 2015.

 1   [2015] FWC 1138

 2   C2013/1697

 3   AE894043

 4   C2013/5463

 5   [2013] FCA 1444

 6   [2014] FWC 6731

 7   Ibid at [44]

 8   Decision at [7]

 9   PR974301

 10   [2007] AIRCFB 374

 11   [2010] FWAFB 4387

 12   Decision at [29]-[34]

 13   Decision at [56]-[63]

 14   Boral Resources (NSW) Pty Ltd v Transport Workers’ Union of Australia [2010] FWAFB 8437, (2010) 202 IR 135; Metropolitan Fire and Emergency Services Board v United Firefighters’ Union of Australia (Victorian Branch) [2012] FWAFB 9555, (2012) 223 IR 448; United Firefighters’ Union of Australia v Country Fire Authority [2015] FCAFC 1

 15   PR974301

 16   [2007] AIRCFB 374

 17   [2010] FWAFB 4387

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