[2016] FWC 1523
FAIR WORK COMMISSION

DECISION


Fair Work Act 2009
s.739 - Application to deal with a dispute

Harry Green
v
Energy Resources of Australia Ltd T/A ERA
(C2015/6126)

COMMISSIONER WILSON

MELBOURNE, 11 MARCH 2016

Application to deal with a dispute in relation to a terminated agreement - jurisdiction of the Fair Work Commission to determine the matter.

Introduction

[1] An application for the Fair Work Commission to deal with an alleged dispute was made by Harry Green relating to his employment with Energy Resources of Australia Ltd (ERA).

[2] The alleged dispute is in relation to whether Mr Green is entitled to receive consumer price increase (CPI) wage increases to his base salary since the date of termination of the collective agreement-based transition instrument. The application is made pursuant to s.739 of the Fair Work Act 2009 (the Act), which allows the Commission to deal with a dispute if a term referred to in s.738 of the Act requires or allows the Commission to do so.

[3] Although the alleged dispute was the subject of a conciliation conducted by me in October 2015, the matter was not settled at that time. Mr Green subsequently sought the Commission determine the matter and directions were given to the parties for that purpose, with ERA identifying it wished to first raise a jurisdictional objection to the matter, which is the matter dealt with in this decision. The jurisdictional matter raised by ERA is that the Commission has no power to deal with the alleged dispute since it does not arise under any of the heads of power within s.738, and that the matter is therefore, for the purposes of s.739, not one that the Commission is required or allowed to deal with.

[4] This decision has been prepared by me on the basis of written submissions and material provided by the parties. Although the parties were given an opportunity to be heard in oral proceedings, they did not seek that for that to occur, and I did not consider it necessary for a hearing to be convened.

[5] For the reasons set out below, I have found that the Commission has no jurisdiction to deal with and determine the alleged dispute pursuant to the provisions of s.739 of the Act.

Background to the dispute

[6] ERA operates a mine site out of Jabiru in the Northern Territory. Mr Harry Green has been employed at that site by ERA for around 18 years. 1

[7] Mr Green’s employment was subject to the Energy Resources of Australia Ltd Enterprise Agreement 1996 2 (the ERA Agreement) which was, in the context of the current legislation, a Collective Agreement-Based Transition Instrument, holding that status pursuant to the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009.3 The agreement came into force on 20 December 1996 and was stated to remain in force until 1 July 2000.

[8] The ERA Agreement contained a provision assigning employees a salary level, which was specified in clause 3.2, with there to be adjustments to the rates indicated in the Agreement at the time of approval, through a mechanism set out in clause 3.3, which was in the following terms;

[9] Appendix D to the Agreement is a Performance Review and Feedback System permitting, but apparently not requiring, wage increases contingent upon the achievement of certain employee performance ratings.

[10] The ERA Agreement was terminated by Vice President Watson in a decision dated 25 March 2010, 4 (referred to as the “Termination Decision”).

[11] Termination of the ERA Agreement was opposed by the union appearing in the matter, the LHMU. The Termination Decision noted the following about the purpose of ERA’s application, the LHMU’s opposition to termination and the Commission’s views about those matters;

[12] The context of the ERA Agreement taken into account by Vice President Watson in his decision included that it had marginal relevance at the workplace level, applying only to 3 employees at the time, indeed he recorded it affected less than 1% of the total of more than 450 employees then employed. 6 In the course of the termination proceedings ERA gave certain undertakings to the Commission, which the Termination Decision recorded as follows;

[13] In deciding termination was appropriate, the Commission expressed the following views;

[14] Mr Green’s circumstances since termination of the agreement include assertions that his pay has not been adjusted, expressed in the following way in correspondence sent on his behalf by his representative, Mr Lucio Matarazzo, to the ERA Chief Executive on 18 August 2015;

[15] Correspondence from ERA to Mr Green’s representative in September 2015, responding to the claims above, does not appear to dispute this factual base. In the correspondence, ERA makes the following points;

[16] ERA contests the Commission’s jurisdiction to deal with the dispute alleged by Mr Green, arguing that there is no agreement in place that would enliven the requisite jurisdictional fact within s.738, being the section that empowers the Commission’s role to deal with disputes, in turn set out within s.739. The two provisions provide as follows.

[17] ERA’s submissions on the provisions include the following;

[18] In finality, ERA argue that since Mr Green’s circumstances do not satisfy the provisions of s.738, there is no power for the Commission to arbitrate the dispute under s.739 of the Act. 15

[19] It is noted that since this is not a dispute about public service employment, s.738(d) has no relevance to these proceedings.

[20] For the purposes of context, it is noted that the Modern Award clause provides the following about the resolution of disputes;

Consideration

[21] The question of jurisdiction of the Commission to deal with the matter advanced by Mr Green is a significant one, and one that I am persuaded impedes the progress of Mr Green’s application.

[22] The Respondent properly draws the Commission’s attention to the provisions of s.595 of the Act, which sets out the powers of the Commission to deal with disputes. That section is in the following terms;

[23] It is the case that once terminated, an agreement ceases to operate and can never operate again. 16

[24] This dispute expressly relates to what has happened to Mr Green’s pay after termination of the ERA Agreement. As a result, there is no need for me to consider whether a dispute about things that happened within the time period the Agreement applied, that is between 1996 – 2010, might be within the Commission’s jurisdiction to hear and determine.

[25] This dispute is not about whether ERA complied with its wage adjustments obligations in relation to Mr Green in the time that the agreement applied to him. Instead, it is a dispute about what should be done about his pay after the Agreement ceased to have any force.

Is this a dispute arising under s.738(a) because of a term in a modern award?

[26] Mr Green’s submissions about these matters do not appear to include reliance upon this matter being a dispute arising under the terms of the Modern Award. In any event I am not satisfied that this is such a dispute. Accordingly this is not a dispute raised under s.738(a).

Is this a dispute arising under s.738(b) because of a term in an enterprise agreement?

[27] However, Mr Green strongly relies upon this being a dispute arising under the ERA Agreement, which is potentially a dispute arising under s.738(b).

[28] His argument includes that such jurisdiction arises since the ERA Agreement incorporates the terms of a legacy award, the Uranium Mining and Processing (N.T.) Award 1992 which includes clause 53, the Disputes and Grievance Procedure, which permits grievances to be referred to the Australian Industrial Relations Commission if either of the parties deem fit to do so. Mr Green argues about the ERA Agreement that the undertakings made by ERA in the hearings associated with the Termination Decision “have kept alive the disputes resolution procedure in the Energy Resources of Australia Ltd Enterprise Agreement 1996”; 17 further,

[29] Mr Green further asserts that, through its undertakings to the Commission in the Agreement Termination case that ERA “consented unambiguously” to keep the ERA Agreement alive for Mr Green. 19 In support of this contention, Mr Green refers to submissions that were made to the Agreement Termination case by Counsel for ERA, advising that a matter then in contention between the parties, being the question of a CPI increase to wages, including for Mr Green, “can be dealt with by Fair Work Australia under the dispute settlement procedure for the past”.20

[30] As a result, Mr Green argues that ERA has failed to observe the undertakings it gave to the Commission when the enterprise agreement was terminated. This is advanced as a dispute arising under an enterprise agreement, and thereby pursuant to s.738(b), rather than it being advanced as a matter of ERA’s failure to comply with its contractual obligations, which might be a contention that s.738(c) was enlivened. In this regard, Mr Green submitted that this matter does not involve terms in his contract of employment but rather deals with the application of the clause in the terminated agreement. 21

[31] Mr Green also draws to the Commission’s attention that s.186(6) requires an enterprise agreement to contain a dispute resolution term that provides procedures for the resolution of any matters arising under the Agreement or NES. 22 It is unclear from Mr Green’s submissions about what he considers to be the import of the provision, however it appears to be advanced in support of his contention that the ERA Agreement’s dispute resolution provisions survive and continue to apply for the reason that no new agreement has been approved, which necessarily would have to be compliant with s.186(6).

[32] Mr Green also advances a similar proposition about s.739(4), which allows the arbitration of matters by the Commission in accordance with a term referred to in s.738. His submissions on this matter include the following;

[33] I disagree with the proposition about s.186(6) or s.739(4).

[34] The former section is in relation to the matters which the Commission must consider before approving an enterprise agreement and has nothing to do with the rights that might arise under an agreement once approved and, in this case, since terminated. The latter provision is relevant only insofar as it refers to that which the FWC may do once the jurisdictional facts within s.738 have been established.

[35] Mr Green endeavours to draw into this argument the contention that the dispute provisions of the ERA Agreement have not been extinguished for the purposes of his continued employment at ERA, because of the effect of the undertakings given by ERA to the Commission, as well as to Mr Green, in the course of the Agreement Termination hearing. 24

[36] The effect of the termination of an enterprise agreement, including one permitted to be terminated under the Fair Work (Transitional Provisions and Consequential Arrangements) Act 2009, is to end the application of the agreement to the continuing employment arrangements for those covered by the agreement from that point onward. It is accepted that termination of an agreement will result in an alteration of terms and conditions of employment. 25 In relation to undertakings given in the course of a proposal to terminate an enterprise agreement after it has passed its nominal expiry date, the Full Bench has held that the undertakings are to an employee, not to the Commission, and has not seen the necessity to determine the contractual status of undertakings so given;

[37] The same Full Bench, in the matter of Re Aurizon Operations Limited and Others, also considered the question of what happens to an employee’s terms and conditions once an agreement has been terminated;

[38] With the ERA Agreement having been terminated, no terms have continued and there is presently no enterprise agreement in operation in relation to Mr Green’s employment. As a result, he is unable to advance a dispute pursuant to s.738(b).

Is this a dispute arising under s.738(c) because of a contractual term?

[39] s.738(c) allows disputes to arise under a contract of employment or other written agreement that provides a procedure for dealing with disputes, to the extent that a dispute is about any matters in relation to the NES or a safety net contractual entitlement.

[40] As noted earlier, Mr Green submitted that this matter does not involves terms in his contract of employment but rather that the matter deals with the application of the clause in the terminated agreement. 28 I concur with that assessment. Accordingly, the question of whether this is a dispute arising under s.738(c) because of a contractual or other written term does not require further consideration.

s.738(d) not applicable

[41] As noted earlier since this is not a dispute about public service employment, s.738(d) has no relevance to these proceedings.

Conclusion

[42] In all, the agreement termination provisions of the Act do not include any reference to certain rights of a terminated agreement continuing. Further, Part 6-2 (Dealing with disputes), which includes ss.738 – 739 make no reference to disputes being dealt with that arise under an enterprise agreement that was once operative but has since been terminated.

[43] At the time at which the enterprise agreement is terminated, Mr Green’s employment rights and obligations reverted to the minimum provisions of the National Employment Standards, the modern award and any private contract terms that may apply and which are not inconsistent either with the legislation or the Modern Award.

[44] Because of this I cannot be satisfied there is jurisdiction to proceed to determine Mr Green’s application. In particular, I am not satisfied that the alleged dispute arises under a term referred to in s.738. Accordingly s.739 cannot apply, since s.739(1) limits the work of that section only to matters arising under a term referred to in s.738 that requires or allows the Commission to deal with a dispute. The remaining parts of that section are consistent with, and do not add to, the power created in s.739(1).

[45] As a result, Mr Green’s application must fail and an order has been issued by me on the same date as this decision dismissing his application.


COMMISSIONER

 1   Form F10 – Application for the Commission to Deal with a Dispute, 17 September 2015, Attachment 1, Applicant representative’s correspondence of 18 August 2015, 1.

 2   See Print N8026.

 3   Respondent’s Outline of Submissions, 18 December 2015, [3].

 4   [2010] FWA 2434.

 5   Ibid [12]-[14].

 6   Ibid, see [2] and [28].

 7   Ibid [7].

 8   Ibid [29]–[31].

 9   Form F10, Attachment 1, 3.

 10   Form F10, Attachment 5, ERA correspondence to Applicant’s representative, 15 September 2015.

 11   Respondent’s Outline of Submissions [16].

 12   Ibid [17]-[19].

 13   Ibid [21].

 14   Ibid [22]-[23].

 15   Ibid [25]-[26].

 16   Fair Work Act 2009 (Cth) s 54.

 17   Applicant’s Outline of Submissions, 12 January 2016, [11].

 18   Ibid [12].

 19   Ibid [17].

 20   Agreement Termination proceedings, Transcript PN116.

 21   Applicant’s Outline of Submissions [43].

 22   Ibid [4], [17].

 23   Ibid [38]-[39].

 24   Ibid [11]-[12].

 25   Re Aurizon Operations Limited and Others [2015] FWCFB 540, [162].

 26   Ibid [111].

 27   Ibid [176].

 28   Applicant’s Outline of Submissions [43].

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