Fair Work Act 2009
s.739—Dispute resolution

Inna Grabovsky
v
United Protestant Association of NSW Ltd T/A UPA
(C2014/3313)

Application to deal with a dispute - jurisdictional objection - dispute settlement procedure.

[1] Mrs Inna Grabovsky lodged an application pursuant to s.739 of the Fair Work Act (the Act) with the Fair Work Commission (“the Commission”) to deal with a dispute in accordance with a dispute settlement procedure in relation to her employment with United Protestant Association of NSW Ltd T/A UPA (“UPA”) on 5 March 2014. The dispute concerns Mrs Grabovsky’s classification, payment for undertaking higher duties, workload and alleged adverse action taken by UPA towards Mrs Grabovsky.

The matter came before me on 31 March and 28 April 2014 for conciliation and when conciliation failed to resolve the dispute, I listed the matter for directions on 30 June 2014.

[2] Mrs Grabovsky was represented by her husband Mr Grabovsky. Mrs Grabovsky has not appeared before the Commission on any of these occasions. Mr Grabovsky submits that this is due to her illness. Mr Grabovsky has supplied the Commission with documents headed Power of Attorney dated 6 August 2013 and 7 July 2014 authorising her husband to represent her.

[3] UPA was represented, by permission pursuant to s.596 of the Act, by Jane McConville Employee Relations Specialist, performHR and Mr Stuart Laverton Regional Manager Sydney North and South, UPA.

[4] UPA is a not for profit operator of residential aged care facilities.

Mrs Grabovsky is a part-time care service employee at a UPA facility, the Thomas and Rosetta Agst Aged Care Service Wahroonga, NSW. She is classified as Grade II and has a Certificate III in Care Support Services. She commenced on 30 March 2004 and when she completed her three month probationary period on 22 June 2004 she was employed for 75 hours per fortnight working 7am to 3pm each week day. Since 27 August 2013 she has been absent from work. The parties are in dispute about her entitlement to sick leave and workers compensation payments however that is not a matter that is before the Commission.

[5] Mrs Grabovsky is covered by the Aged and Home Care, NSWNA and HSU East Multi-Enterprise Agreement 2011-2014 (“the Agreement”).

[6] Mr Grabovsky has asked the Commission to arbitrate to resolve the dispute between Mrs Grabovsky and UPA in accordance with clause 42 Grievance and Dispute Resolution Procedures which reads as follows:

42. GRIEVANCE AND DISPUTE RESOLUTION PROCEDURES

42.1 Unless otherwise stated the terms “party” or “parties” referred to in this clause means the employer and/or the employees, as the context requires.

42.2 This dispute resolution procedure will apply to disputes about:

(a) any matters arising in the employment relationship, except matters relating to the actual termination of employment of an employee;

(b) threatened termination, with the exception that the arbitration provisions in subclause 42.6 do not apply unless the parties agree. Further, the parties rights are reserved during this process and the employer may exercise their right to terminate the employee in accordance with the agreement;

(c) matters in relation to the NES;

(d) matters arising under the agreement; and

(e) whether an employer had reasonable business grounds under subsection 65(5) of the Act - (requests for flexible working arrangements) or 76(4) of the Act - (requests for extending unpaid parental leave).

42.3 An employer or employee may appoint another person, organisation or association (e.g. Union or the Aged & Community Services Association of NSW & ACT Inc.) to accompany and/or represent them for the purposes of this clause.

42.4 In the event of a dispute the parties will initially attempt to resolve the matter at the workplace level, including, but not limited to:

(a) the employee and his or her supervisor discussing the matter; and

(b) if the matter is still not resolved the parties arranging further discussions involving more senior levels of management (as appropriate).

42.5 If a dispute is unable to be resolved at the workplace, in accordance with subclause 42.4, a party to the dispute may refer the matter to FWA or other appropriate statutory tribunal.

42.6 The parties agree that FWA shall have the power to do all such things as are necessary for the just resolution of the dispute including:

(a) mediation, conciliation and, with the exception of disputes arising under clause 33 – Workload Management, arbitration; and

(b) arbitration, for disputes arising under clause 33 – Workload management, only with the agreement of the parties.

42.7 While the dispute resolution procedure is being conducted, work must continue in accordance with this agreement and the Act. Subject to applicable occupational health and safety legislation, an employee must not unreasonably fail to comply with a direction by the employer to perform work, whether at the same or another workplace that is safe and appropriate for the employee to perform.

[7] UPA objects to the exercise of the Commission’s powers on the grounds that the Agreement does not provide the Commission with power to arbitrate with respect to workloads other than by agreement between the parties.

[8] On 30 June 2014 I issued directions to the parties to lodge submissions in relation to this jurisdictional objection.

[9] In correspondence dated 7 June 2014, Mr Grabovsky made submissions objecting to the representation of UPA by Ms Jane McConville. This correspondence was received by my Chambers on 8 July 2014 and I conclude that it should have been dated 7 July 2014. I have not considered this submission as I ruled on this matter on 30 June 2014 when both UPA and Mr Grabovsky were heard on the matter. Ms McConville was granted permission to appear pursuant to s.596 of the Act largely because her company provides outsourced human resource management services to UPA which has no in house capability and I considered that the matter would be dealt with more efficiently if I granted Ms McConville permission to appear. I did so in the knowledge that Mr Grabovsky is legally qualified, albeit not admitted as a solicitor in New South Wales, and therefore I considered that no unfairness would arise.

[10] This decision concerns the jurisdictional objection by UPA and is based on the submissions lodged by UPA on 14 July 2014, Mrs Grabovsky on 23 July 2014 and UPA in reply on 4 August 2014.

[11] In UPA’s submissions exception is taken to the exercise of the Commission’s jurisdiction in relation the dispute concerning alleged overwork due to understaffing. The objection is on the basis that the Agreement deals with those matters relating to workload management issues at clause 33 and provides that the arbitration of workload management issues may only occur by agreement of all parties. Likewise clause 42.6 (a) of the Agreement includes the limitation that Fair Work Australia shall arbitrate disputes arising under clause 33 only with the agreement of the parties. UPA indicate that they do not agree or consent to the arbitration of a dispute or disputes concerning workload management and consequently the Commission has no jurisdiction to arbitrate in relation to this dispute.

[12] Mrs Grabovsky opposes the jurisdictional objection on the grounds that clause 33 Workload Management of the Agreement has not been complied with by the UPA. Clause 33 reads as follows:

33. WORKLOAD MANAGEMENT

33.1 The parties to this agreement acknowledge that employees and management have a responsibility to maintain a balanced workload and recognise the adverse effects that excessive workloads may have on employee/s and the quality of resident/client care.

33.2 To ensure that employee concerns involving excessive workloads are effectively dealt with by Management the following procedures should be applied:

(a) In the first instance, employee/s should discuss the issue with their immediate supervisor and, where appropriate, explore solutions.

(b) If a solution cannot be identified and implemented, the matter should be referred to an appropriate senior manager for further discussion.

(c) If a solution still cannot be identified and implemented, the matter should be referred to the Facility Manager for further discussion.

(d) The outcome of the discussions at each level and any proposed solutions should be recorded in writing and fed back to the effected employees.

33.3 Workload management must be an agenda item at staff meetings on at least a quarterly basis. Items in relation to workloads must be recorded in the minutes of the staff meeting, as well as actions to be taken to resolve the workloads issue/s.

Resolution of workload issues should be based on the following criteria including but not limited to:

(a) Clinical assessment of residents’ needs;

(b) The demand of the environment such as facility layout;

(c) Statutory obligation, (including, but not limited to, workplace health and safety legislation;

(d) The requirements of nurse regulatory legislation;

(e) Reasonable workloads;

(f) Accreditation standards;

(g) Replacement of employees on leave; and

(h) Budgetary considerations.

33.4 If the issue is still unresolved, the employee/s may advance the matter through Clause 42 - Grievance and Disputes Resolution Procedures. Arbitration of workload management issues may only occur by agreement of all parties.

[13] Mrs Grabovsky also says, in effect, that due to the operation of s.739 of the Act, clause 33 of the Agreement is rendered nugatory and that s.186 of the Act means that to be approved by the Commission an enterprise agreement must contain a term that provides a dispute resolution procedure that provides for the settlement of disputes about any matter arising under the Agreement. She further submits that:

“The issue of Workload management (excessive workload) greatly effects the health and wellbeing of the employees. In this particular case the excessive workload already caused the serious illness of the Worker that the Respondent has failed to report to the WorkCover authority as prescribed by the Work Health and Safety Act 2011.” 1

[14] In addressing the parties’ submissions it is necessary for me to interpret the Agreement.

[15] The principals of interpretation are well-known and oft stated.

[16] In Amcor Limited v CFMEU (2005) 222 CLR 241, the interpretative process is described by Gleeson CJ and McHugh J (at 246[2]) as:

“The resolution of the issue turns upon the language of particular grammar, understood in the light of its industrial context and purpose….”

[17] And by Kirby J (at 262[67]) as:

“Interpretation is always a text based activity.”

[18] This approach is reflective of the oft-quoted statement of Madgwick J in Kucks v CSR Limited (1996) 66 IR 182 at 184:

“But the task remains one of interpreting a document produced by another or others. A Court is not free to give effect to some anteriorly derived notion of what would be fair or just, regardless of what has been written into the award. Deciding what an existing award means is a process quite different from deciding, as an arbitral body does, what might fairly be put into an award. So, for example, ordinary or well understood words are in general to be accorded their ordinary or usual meaning.”

[19] A further step in the process is to attempt to identify what the common intention of the parties is, as that intention is expressed in the terms of the Agreement.

[20] In Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165, the High Court, when dealing with the interpretation of a commercial contract, stated (at 179[40]):-

“It is not the subjective beliefs or understandings of the parties about their rights and liabilities that govern their contractual relations. What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe. References to the common intention of the parties to a contract are to be understood as referring to what a reasonable person would understand by the language in which the parties have expressed their agreement. The meaning of the terms of a contractual document is to be determined by what a reasonable person would have understood them to mean. That, normally, requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction.”

[21] I consider that it is patently clear from the wording of clause 33 and clause 42 that the Agreement does not provide for the Commission to arbitrate in relation to a dispute about workloads other than with the consent of both parties. Clause 33 makes this clear when it states:

33.4 If the issue is still unresolved, the employee/s may advance the matter through Clause 42 - Grievance and Disputes Resolution Procedures. Arbitration of workload management issues may only occur by agreement of all parties. (my emphasis)

[22] And clause 42.6 is also unambiguous. It states:

42.6 The parties agree that FWA shall have the power to do all such things as are necessary for the just resolution of the dispute including:

(a) mediation, conciliation and, with the exception of disputes arising under clause 33 – Workload Management, arbitration; (my emphasis) and

(b) arbitration, for disputes arising under clause 33 – Workload management, only with the agreement of the parties. (my emphasis)

[23] The submissions made on behalf of Mrs Grabovsky concerning the effect of s.739 and s.185 of the Act are, as submitted by UPA, misconceived.

[24] In any matter before the Commission the Tribunal Member is required to consider, implicitly or explicitly, whether they have the jurisdiction to deal with the matter. The source of the Commission’s jurisdiction is the Act.

[25] A Full Bench of FWA, as it then was, in the case Woolworths Ltd trading as Produce and Recycling Distribution Centre  2 (the Woolworths case) provided a cogent explanation of the source of the Commission’s jurisdiction in relation to dispute resolution procedures. This decision answers both points of Mrs Grabovsky’s submission. The Full Bench was addressing whether an enterprise agreement could be approved when the dispute resolution procedure contained in the agreement required the parties’ agreement to arbitrate a dispute on a case by case basis and they found that it could.

[26] Their outline and comments on the relevant sections of the Act provide guidance in this matter.

[27] At paragraphs 17 - 23 they say:

“[17] We turn first to some important elements of the statutory scheme which provide the context in which s.186(6) must be interpreted. Section 595 sets out Fair Work Australia’s power to deal with disputes generally and ss.738 and 739 set out Fair Work Australia’s powers to deal with dispute resolution terms in, relevantly, enterprise agreements.

[18] Section 595 of the Fair Work Act reads:

“595 FWA’s power to deal with disputes

(1) FWA may deal with a dispute only if FWA is expressly authorised to do so under or in accordance with another provision of this Act.

(2) FWA may deal with a dispute (other than by arbitration) as it considers appropriate, including in the following ways:

(a) by mediation or conciliation;

(b) by making a recommendation or expressing an opinion.

(3) FWA may deal with a dispute by arbitration (including by making any orders it considers appropriate) only if FWA is expressly authorised to do so under or in accordance with another provision of this Act.

Example: Parties may consent to FWA arbitrating a bargaining dispute (see subsection 240(4)).

(4) In dealing with a dispute, FWA may exercise any powers it has under this Subdivision.

Example: FWA could direct a person to attend a conference under section 592.

(5) To avoid doubt, FWA must not exercise any of the powers referred to in subsection (2) or (3) in relation to a matter before FWA except as authorised by this section.”

[19] The section is concerned with the powers the tribunal may exercise in dealing with disputes. Section 595(1) provides that Fair Work Australia may only deal with a dispute if it is expressly authorised to do so. Section 595(2) provides that the tribunal may deal with a dispute by mediation, conciliation, making a recommendation or expressing an opinion subject to the qualification that it may not deal with the dispute by arbitration. Section 595(3) permits the tribunal to arbitrate if it is expressly authorised to do so. Section 595(4) operates to confer procedural powers. It seems to us clear enough from the text of these provisions that the legislature intended that Fair Work Australia can deploy voluntary methods of dispute resolution without the consent of the parties to the dispute, provided the dispute is one with which it is authorised to deal, but can only arbitrate if it has been specifically empowered to do so.

[20] Sections 738 and 739 are also directly relevant. They provide:

“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 FWA

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

(2) FWA 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 FWA dealing with the matter; or

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

Note: This does not prevent FWA 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, FWA must not exercise any powers limited by the term.

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

Note: FWA 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), FWA must not make a decision that is inconsistent with this Act, or a fair work instrument that applies to the parties.

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

[21] Section 738 specifies the type of dispute resolution terms to which the division applies. Section 738(b) makes it clear that the division applies in relation to a dispute resolution procedure of the kind described in s.186(6). Section 739(1) provides that the section applies if a term in s.738 requires or allows Fair Work Australia to deal with a dispute. Section 739(2) is not relevant. Section 739(3) provides that a dispute resolution term can limit the powers available to Fair Work Australia to settle a dispute. Section 739(4) sets out the circumstances in which Fair Work Australia may arbitrate a dispute, providing that if the parties have agreed that Fair Work Australia may arbitrate, Fair Work Australia may do so. It appears to us that s.739(4) strongly implies the negative stipulation that if the parties have not agreed, Fair Work Australia has no power to arbitrate.

[22] The operation of these provisions in relation to dispute resolution terms in enterprise agreements is specifically referred to in the Explanatory Memorandum to the Fair Work Bill 2008. We refer first to paragraph 2290. That paragraph deals with the relationship between s.595 and s.739. It reads:

“2290. Subclause 595(4) ensures that, when FWA is dealing with any of these disputes, FWA can exercise any of its powers under Subdivision B. For example, FWA could direct a person to attend a conference under clause 592. However, there is an exception for Part 6-2 disputes. The procedure in the modern award, enterprise agreement, workplace determination or contract of employment can limit the powers that FWA can exercise in dealing with the dispute (see subclause 739(3)).”

[23] This paragraph repeats the direct indication in s.739(3) that a dispute resolution term might limit the powers otherwise available to Fair Work Australia. It appears from the reference to s.595(4) that the paragraph is primarily referring to the procedural powers conferred by Subdivision B rather than the power to arbitrate Relevantly, (sic) however, the concluding sentence of the paragraph supports the implication in the words of s.739(4) that in the absence of agreement Fair Work Australia has no power to arbitrate. If the legislature has specifically provided for limits upon the use of arbitral power pursuant to dispute resolution procedures, it is difficult to see how the conclusion could be sustained that “arbitration is a prerequisite to the approval of an agreement.”

[28] This case is authority for the proposition that to be approved, although an enterprise agreement must contain a procedure to settle disputes (s.186), the terms of the procedure are defined by the agreement. In exercising the power of arbitration s.739 of the Act empowers the Commission to act only in accordance with the terms of the procedure.

[29] The decision of the Full Bench of the Commission in Warkworth Mining Limited v Construction, Forestry, Mining and Energy Union 3 is also authority for this proposition.

[30] In this decision the Full Bench at paragraphs 19 and 23 said:

“[19] In our opinion the starting point for Commissioner Wilks should have been a consideration of the terms of the dispute settlement procedure and a decision about what it “empowered” the Commission to do. In this consideration one does not commence with a presumption that the Commission will have been empowered to undertake any particular role, be it conciliation and/or arbitration. The question is what the parties to the agreement have decided the role of the Commission will be, which role ideally will have made clear in the words used in the relevant clause.”

“[23] The appellant submitted the Commissioner should have found that whatever may have been the agreed role for the Commission, it was not arbitration. It submits that was the only enquiry that needed to have been undertaken and only the words used in clause 16 were relevant to that enquiry. It is of course appropriate when construing a provision in an agreement to do so together with a consideration of the other provisions of the agreement and the structure of the agreement. This approach is referred to as construing a particular clause in the context of the agreement as a whole. It was permissible for the Commissioner, when interpreting the provisions of clause 16, to consider the agreement as a whole.....”

These decisions of the Commission have made it clear that the Commission may only exercise the powers given to it by the parties to the agreement and that an enterprise agreement can be approved by the Commission notwithstanding the agreement requires consent for the Commission to settle some or all matters by arbitration. The submissions made on behalf of Mrs Grabovsky’s are at odds with both of these propositions and accordingly must fail.

[31] UPA’s jurisdictional objection to the Commission arbitrating in respect to workloads is upheld.

[32] UPA do not object, and I am satisfied, that clause 42 of the Agreement provides for arbitration in respect to the other matters raised by Mrs Grabovsky, notwithstanding that the remedies sought may be beyond power. This is a matter to be addressed in the hearing of the issues. The caveat on this conclusion is that depending on what Mrs Grabovsky asserts in relation to adverse action, it may be that a more appropriate cause of action is that found in s.372 of the Act, however I will comment upon that once I hear the submissions of the parties.

[33] I will now list the balance of the dispute for arbitration and issue directions for submissions, witness statements and any other material upon which the parties seek to rely to be filed with the Commission and served on the parties.

DEPUTY PRESIDENT

Final written submissions:

2014

Respondent’s Submissions dated 14 July 2014

Applicant’s Submissions in Response dated 23 July 2014

Respondent’s Submissions in Reply dated 4 August 2014

 1   Submissions Mrs Grabovsky 23 July 2014

 2   [2010] FWAFB 1464

 3   [PR916526]

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