[2016] FWCFB 8120

The attached document replaces the document previously issued with the above code on 10 November 2016.

The reference to paragraph [80] of Commissioner Wilson’s decision in paragraph [64] of this decision is corrected to paragraph [84].

Associate to Vice President Watson.

Dated 11 November 2016.

Fair Work Act 2009
s.604—Appeal of decision

Appeal against decision [[2016] FWC 5028]] of Commissioner Wilson at Melbourne on 3 August 2016 and orders [PR584680] issued on 25 August 2016 – Termination of employment in accordance with the disputes procedure under an enterprise agreement - Whether the Commissioner acted ultra vires – Whether the Commissioner denied the MFB procedural fairness – Unlawful restriction of a permissible basis for termination of employment – Cross-appeal – Interaction between an enterprise agreement and State legislation – Provision of a “health service” – Power of the Commission to make orders – Fair Work Act, ss.739 and 604.

Introduction

[1] This decision concerns an appeal against a decision of Commissioner Wilson handed down on 3 August 2016 and subsequent orders issued by the Commissioner on 25 August 2016. The decision of the Commissioner arose from an application by the Metropolitan Fire and Emergency Services Board (MFB) for the Fair Work Commission to deal with a dispute pursuant to the provisions of the Fair Work Act 2009 (the Act).

[2] The issue determined by the Commissioner concerned the question of whether the MFB was restricted from implementing a decision to terminate the employment of Garth Duggan by the operation of the Metropolitan Fire and Emergency Services Board, United Firefighters’ Union of Australia, Operational Staff Agreement 2010 (the Agreement). The MFB sought to terminate the employment of Mr Duggan, a recruit firefighter, after learning of conduct which occurred prior to his employment. The Commissioner ultimately determined that it could not.

[3] In the hearing of the appeal and cross-appeal in this matter Mr J Bourke QC and Mr P Wheelahan of counsel appeared for the MFB. Mr M Pearce SC and Mr D Langmead of counsel appeared for Mr Duggan and the United Firefighters’ Union of Australia (UFU).

Background

[4] Mr Duggan commenced employment with the MFB on 9 February 2016. Mr Duggan’s employment was governed by the Agreement which contains terms relating to termination of employment (clause 27), introduction of change (clause 15), a consultative process (clause 13) and dispute resolution (clause 19).

[5] Mr Duggan was offered employment with the MFB by letter dated 23 December 2015. The terms of the letter provided for a three-month probationary period effective from the date of commencement, 9 February 2016. The letter stated that in addition to the Agreement, Mr Duggan’s employment was subject to the Metropolitan Fire Brigades Act 1958 (Vic) (the MFB Act) and “MFB policies and procedures (i.e. the MFB Workplace Behaviour Policy)”. Mr Duggan accepted the offer of employment.

[6] As part of the recruitment process, Mr Duggan was required to provide to the MFB a National Police Certificate issued by Victoria Police in accordance with the MFB’s Police Check Policy. The certificate dated 16 September 2015 states, “[a]t the time of issue there are no disclosable court outcomes recorded”. Additionally, the Commissioner at first instance heard that during the recruitment process Mr Duggan acknowledged that since the age of 18, he had been arrested and charged by the police with committing a crime, but the MFB had no record of any further enquiries into these events. 1

[7] Following commencement of his employment with MFB, Mr Duggan was the subject of adverse findings by the NSW Civil and Administrative Tribunal (the NCAT decision). The NCAT decision concerned complaints of unprofessional conduct and professional misconduct arising from his practice as an osteopath in late 2009 and early 2010. Mr Duggan attended directions hearings in these proceedings in January 2016. The substantive proceedings were conducted in Mr Duggan’s absence on 18 and 19 February 2016, subsequent to the commencement of his employment with MFB. The NCAT decision was published on 17 March 2016.

[8] Mr Duggan did not bring the NCAT decision to the MFB’s attention. The MFB was eventually notified of the decision after it was discovered by a group of recruit firefighters on or about 29 April 2016. 2

[9] On 30 April 2016, the UFU notified the MFB that it was in dispute regarding Mr Duggan “including but not limited to the failure to undertake the proper process in the enterprise agreement, consultation, change, policy and termination.” The UFU requested Mr Duggan be retained in employment, pursuant to the status quo provision of the dispute settlement clause of the Agreement, pending the resolution of the dispute.

[10] On 5 May 2016, the MFB informed Mr Duggan it did not believe it was appropriate for the probationary period of his employment to extend beyond 9 May 2016, at which time it expired and he was stood down until further notice.

[11] After receiving a written response to the 5 May letter from Mr Duggan, MFB wrote to Mr Duggan on 24 May 2016 advising him that it did not consider that Mr Duggan was a person in which it can have the level of trust and confidence that is required of a firefighter or that he met the standard of personal integrity that is an inherent requirement of an MFB firefighter.

[12] Also on 24 May, the MFB notified the Commission of a dispute and sought a determination that it had not failed to follow any process mandated under the Agreement with respect to the termination of Mr Duggan’s employment. The notification was made in order to enable it to proceed to implement its decision to terminate Mr Duggan’s employment.

[13] The Commissioner heard the dispute on 11 July 2016 and handed down his decision on 3 August 2016. He subsequently issued orders 3 on 25 August 2016 (Orders) as follows:

“1. Garth Duggan will remain a probationary employee until 5:00 PM on 19 December 2016 or until he completes a recruitment training course, whichever is the later.

2. The Metropolitan Fire and Emergency Services Board (MFB) be permitted to request in writing to Mr Duggan that he disclose all charges and arrests he has been subject to since turning 18 years of age, whether or not such charges were withdrawn or he was acquitted.

3. Mr Duggan must answer by way of a statutory declaration within seven days of any request made pursuant to (2).

4. The MFB be permitted to provide Mr Duggan with a first and final warning, with such warning to state that any future misconduct by Mr Duggan may lead to his dismissal. Any such warning will be kept on file for 12 months from the date it is issued to him.

5. The MFB is not permitted to terminate the employment of Garth Duggan by reason of any matter the subject of my decision of 3 August 2016.

6. The MFB's application for the Commission to deal with a dispute in accordance with the dispute settlement procedure dated 24 May 2016 is otherwise dismissed.”

[14] The MFB filed a Notice of Appeal (in matter C2016/5027) on 23 August 2016 (the Substantive Appeal). Mr Duggan and the UFU filed a Notice of Appeal (in matter C2016/5571) on 15 September 2016 (the Cross-Appeal). The Substantive Appeal and the Cross-Appeal were heard before the Full Bench in Melbourne on 19 October 2016. The parties filed supplementary submissions following the hearing on 21 October 2016.

The Decision under Appeal

[15] In tracing the background of the dispute and in his consideration of the character of the dispute the Commissioner noted the UFU’s characterisation of the dispute as being about a “failure to undertake the proper process in the enterprise agreement, consultation, change, policy and determination”. 4

[16] The Commissioner continued:

“[43] On the basis of the foregoing, and having regard to the contentions of both parties, as well as the MFB’s Draft Determination, I consider that the proper characterisation of the dispute before me is as set out below;

1. Whether or not there was a failure by the MFB to follow any process mandated by the Agreement with respect to the termination of Mr Duggan’s employment;
2. Whether the dispute the subject of this proceeding is resolved; and
3. Whether the decision to terminate the employee’s employment can therefore now be implemented by the MFB.”

[17] In answering question 1, the Commissioner said:

“[50] The nature of the evidence requires consideration of whether the MFB has complied with the mandated processes in respect of a desired change to the Police Check Policy and whether it has followed its obligations in relation to Mr Duggan, being on ‘probation’ and a ‘probationary employee’.”

[18] The central submissions of the MFB in this regard were that there was neither change to the Police Check Policy nor any breach of it, that there was no relevant mandated process under the Agreement that had not been followed and as such, the dispute must be at an end.

[19] The UFU submitted that by considering the NCAT decision in deciding to terminate Mr Duggan’s employment, the MFB unilaterally amended the relevant considerations under the Police Check Policy. The Commissioner rejected the UFU’s position. 5

[20] The Commissioner then undertook an analysis of the terms “probation” and “probationary employee” in order to determine whether the MFB had fulfilled its obligations to this class of employee under the Agreement, 6 concluding:

“[83] A desire on the part of the MFB to depart from the accepted meaning of probation is a matter pertaining to the employment relationship. A matter will pertain to the relationship of employers and employees if it directly affects the conditions of employees, and, in relation to whether consultation is required, it is not the changes themselves which must pertain, but the matters the subject of the change. In this case, a desire to dismiss an employee during probation for conduct prior to employment and discovered after employment commenced is a matter over which clauses 15 and 13 of the Agreement will require consultation to be undertaken prior to any decision.

[84] On the basis of the foregoing analysis, I would answer the first element of the dispute as characterised by me in the following way;

Q1: Whether or not there was a failure by the MFB to follow any process mandated by the Agreement with respect to the termination of Mr Duggan’s employment;

A: Yes; in respect of changes to the MFB’s application of policies in relation to ‘probation’ and ‘probationary employee’.

No; in respect of a change to the Police Check Policy.” (references omitted)

[21] Addressing question 2, the Commissioner said:

“[86] I consider that the dispute is not resolved, with there being a need either for consultation over changes to the MFB’s use of ‘probation’ and ‘probationary employee’ or, if that is considered not appropriate, for appropriate action to deal with Mr Duggan’s conduct after employment commenced.

[87] A threshold issue is whether Mr Duggan’s conduct, at any stage, warrants dismissal. I consider not. Dismissal at this time, for reason of him being under ‘probation’ or a ‘probationary employee’, would not be consistent with the well accepted meanings of the terms. While perhaps he should not have been employed in the first place, no warrant exists from his pre-employment conduct to now dismiss him. Mr Duggan’s conduct after employment commenced, while not to be condoned, is not sufficient to dismiss him, for the reason it does not undermine his suitability for ongoing employment or the viability of continuing the employment relationship.”

[22] Following this finding, the Commissioner considered that while Mr Duggan’s “failure to notify the MFB of the NCAT decision is to be deprecated”, it was “likely misconduct”, as opposed to “serious misconduct” justifying dismissal. 7

[23] The orders arising from the NCAT decision, the MFB submitted, prevented Mr Duggan from providing “health services” in Victoria as a result of the relevant national legislative framework and application of the orders nationally. The Commissioner accepted this submission, holding that the orders have application to Mr Duggan in Victoria. 8 The resulting finding was that Mr Duggan is prevented from performing Emergency Medical Response (EMR) work in Victoria, a core function of the MFB.9

[24] Further, the Commissioner considered that “Mr Duggan can and should be sanctioned for failing to have brought the decision and Orders to the MFB’s attention. The MFB has that right under the Agreement and the Respondents should accept that sanctions ought be applied.” 10

[25] Ultimately, the Commissioner answered questions 2 and 3 in the following terms:

“Q2: Whether the dispute the subject of this proceeding is resolved.

A: No. The dispute is not resolved and will not be resolved until either the Commission issues, by consent, an order consistent with the matters set out above, or the Commission determines the dispute following a further hearing.

Q3: Whether the decision to terminate the employee’s employment can therefore now be implemented by the MFB.

A: No. Mr Duggan remains a probationary employee until the resolution expressed in answer to Q2 is determined.” 11

[26] On 25 August 2016, the Commissioner made the Orders, noting he was satisfied there is no impediment to providing orders which are “permissively drafted”. 12 The UFU had argued that the permissive drafting of MFB’s proposed orders amounted to a “backdoor stay order process.”13

Grounds of Appeal and Cross-Appeal

[27] The MFB alleged a number of errors in the Commissioner’s consideration of the issue of whether the Commissioner could, via the dispute resolution procedure under the Agreement, prevent the MFB exercising its statutory powers of dismissal. In its written outline of submissions in support of the Substantive Appeal, the MFB contended:

1. MFB’s submissions that a merits review would be contrary to s.194(c) of the Act – ignored by the Commissioner – should have been upheld (Grounds 1 and 2).

2. Clause 27 of the Agreement does not contemplate a merits review of a pending dismissal (Ground 2A).

3. The Commissioner acted beyond power by acting outside the scope of the dispute (Grounds 3, 4, 6 and 9(b)).

4. Probationary employees are given special protection not enjoyed by full-time employees (Ground 5).

5. There were no bases for the finding that the MFB failed to consult in respect of changes in policies (Grounds 7, 8 and 9(a)).

6. The determination that Mr Duggan cannot be dismissed because his misconduct occurred prior to his employment is contrary to other findings (Ground 10).

[28] Mr Duggan & the UFU notified four grounds of appeal in the Cross-Appeal. By its written submissions in respect of the Cross-Appeal, Mr Duggan & the UFU abandoned the fourth ground of appeal prior to hearing. The grounds of appeal relied upon by Mr Duggan & the UFU follow:

“1. The Commissioner erred in concluding that the MFB provides a ‘health service’ in Victoria and therefore that Mr Duggan may not perform Emergency Medical Response (EMR) work for the MFB.

2. The Commissioner erred in ordering by paragraph 1 of the order made on 25 August 2016 that Mr Duggan’s probationary period be extended notwithstanding s.25B(2) of the Metropolitan Fire Brigades Act 1958 (Vic).

3. The Commissioner erred in concluding that Mr Duggan’s conduct in not advising the MFB of the NCAT decision was ‘likely misconduct’ and that he should be sanctioned and paragraph 4 of his Order regarding the MFB being permitted to issue a warnings [sic] is accordingly in error.” (references omitted)

The Commission’s Role under Dispute Settlement Clauses of Agreements

[29] The role of the Commission in relation to disputes arising under a dispute settlement clause of an agreement was clarified by the High Court under corresponding predecessor legislation in 2001. In CFMEU v AIRC the High Court 14 said:

“29. … As already indicated, it is incidental to the conciliation and arbitration power for the Parliament to permit parties to an industrial situation to agree on the terms on which they will settle the matters in issue between them conditional upon their agreement having the same legal effect as an award. So, too, it is incidental to that power for the Parliament to give legal effect to agreed procedures for maintaining a settlement of that kind and, also, for it to authorise the Commission to participate in those procedures.

30. There is, however, a significant difference between agreed and arbitrated dispute settlement procedures. As already indicated, the Commission cannot, by arbitrated award, require the parties to submit to binding procedures for the determination of legal rights and liabilities under an award because Ch III of the Constitution commits power to make determinations of that kind exclusively to the courts. However, different considerations apply if the parties have agreed to submit disputes as to their legal rights and liabilities for resolution by a particular person or body and to accept the decision of that person as binding on them.

31. Where parties agree to submit their differences for decision by a third party, the decision maker does not exercise judicial power, but a power of private arbitration. Of its nature, judicial power is a power that is exercised independently of the consent of the person against whom the proceedings are brought and results in a judgment or order that is binding of its own force. In the case of private arbitration, however, the arbitrator's powers depend on the agreement of the parties, usually embodied in a contract, and the arbitrator's award is not binding of its own force. Rather, its effect, if any, depends on the law which operates with respect to it.

32. To the extent that s 170MH of the IR Act operates in conjunction with an agreed dispute resolution procedure to authorise the Commission to make decisions as to the legal rights and liabilities of the parties to the Agreement, it merely authorises the Commission to exercise a power of private arbitration. And procedures for the resolution of disputes over the application of an agreement made by parties to an industrial situation to prevent that situation from developing into an industrial dispute are clearly procedures for maintaining that agreement. Parliament may legislate to authorise the Commission to participate in procedures of that kind. Accordingly, s 170MH of the IR Act is valid.

33. …

34. The parties to an industrial situation are free to agree between themselves as to the terms on which they will conduct their affairs. Their agreement has effect according to the general law. If their agreement is certified, it also has effect as an award. To the extent that an agreement provides in a manner that exceeds what is permitted either by the Constitution or by the legislation which gives the agreement effect as an award, it cannot operate with that effect. But the underlying agreement remains and the validity of that agreement depends on the general law, not the legislative provisions which give it effect as an award.” (references omitted)

[30] It is necessary to apply this settled law to a number of issues that fall for determination in this case.

Permission to Appeal

[31] Both parties to the dispute submitted that notwithstanding s.604(1) of the Act, permission to appeal is not required because an independent right of appeal is conferred by cl.19.7 of the Agreement.

[32] Section 739 of the Act authorises the Commission to arbitrate a dispute in accordance with a term of an enterprise agreement that provides a procedure for dealing with disputes. Clause 19 is such a term. Step 5 of the procedure allows disputes that are not settled by earlier processes to be referred to the Commission. Clause 19.2.6 provides that the Commission may utilise all its powers in conciliation and arbitration to settle the dispute. Clause 19.7 provides that a decision of the Commission may be appealed.

[33] As the Commission is exercising powers of private arbitration conferred by the parties under the Agreement, the right of appeal arises from the agreement of the parties themselves. The power to hear and determine an appeal under the Act is not invoked by this appeal and there is no requirement to satisfy the Commission that permission to appeal should be granted. 15

The Characterisation of the Dispute

[34] In Maritime Union of Australia v Australian Plant Services Pty Ltd, Lacy SDP expressed the importance of characterising a dispute in this way: 16

“Parliament has authorised the Commission to exercise powers under the agreement to settle disputes over the application of the agreement and, accordingly, its powers are limited to disputes of that kind. Therefore it is necessary for the Commission, in each case where it is asked to deal with the matter arising under the disputes settling procedure in an agreement, to ascertain the character of the dispute before it in order to determine whether the matter is a dispute over the application of the agreement, and, importantly, the character of the dispute is distinguishable from the order that may be made in settlement of the dispute.” (references omitted)

[35] These observations have been approved by Full Bench decisions of the Commission including Goodman Fielder Consumer Foods Limited v CEPU, 17 Seven Network (Operations) Limited v CPSU,18 and United Firefighters’ Union v Metropolitan Fire and Emergency Services Board.19

[36] It is therefore necessary to have regard to the nature of a dispute said to arise under the terms of the agreement having regard to the original notification and the relevant factual circumstances as they evolve through the process of conciliation and arbitration of the dispute. Such a broad approach was endorsed by a Full Bench of the Australian Industrial Relations Commission in the case of Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Holden Limited where the following is stated:

“[45] A dispute referred to the Commission must be properly characterised before powers conferred by a dispute settlement provision in a certified agreement are exercised. This is necessary in order to determine whether the dispute is ‘over the application of the agreement’ within the meaning of s.170LW of the WR Act. As noted by a majority of the Full Bench in Automated Reading Services (AMRS) v ASU, this expression has not been judicially considered. The majority went on to observe that:

“A relationship between the provisions of the relevant agreement and the subject matters in dispute would appear to be an essential element in the identification of any dispute over the application of the agreement. ...”

[46] We adopt these observations. Further, in our view the expression should not be narrowly construed. In this context we agree with the observation of the Full Bench in Shop, Distributive and Allied Employees Association v Big W Discount Department Stores that:

“...what comprises a dispute over the application of the agreement should not be narrowly construed; to do so would be contrary to the notion that certified agreements are intended to facilitate the harmonious working relationship of the parties during the operation of the agreement.”

[47] In characterising the nature of the dispute in this matter the Commission is not confined to the dispute notification document. The entire factual background is relevant, including matters such as the submissions advanced. In this context we note that in TWU v Mayne Nickless Ltd the Full Court of the Federal Court held that in determining whether an application calls on the Commission to exercise judicial, as opposed to arbitral, power ‘a court should review the entire factual background to properly characterise the claim and the power sought to be invoked’” 20 (references omitted)

[37] In the United Firefighters’ Union case, referred to above, a Full Bench considered the scope of a dispute over a consultation provision. It said:

“Policies which are not dealt with in the Agreement are subject to the consultation processes in clause 9. Although the consultation processes end with a disputes resolution clause, we are of the view that on its proper construction, that clause concerns disputes over the consultation process under the clause, rather than disputes over matters which are subject to consultation.” 21

[38] There is no longer a legislative limitation on disputes that arise under the Agreement and the above statements should be modified accordingly. The Act now permits arbitration of disputes that the parties allow to be arbitrated under an enterprise agreement, limited only by the dispute settlement clause itself 22 and the provisions of the enterprise agreement23.

[39] As the exercise of the Commission’s powers of arbitration depend on the agreement of the parties and is essentially the exercise of a power of private arbitration conferred by the parties, it is critical to the exercise of such a power that there is a proper characterisation of the dispute and the arbitration is confined to the arbitration of the dispute that arises for determination.

[40] In clause 19 of the Agreement the parties have identified the types of disputes that will be dealt with under the Dispute Resolution procedure. The following types of disputes are expressly included:

● All matters for which express provision is made in the agreement,

● All matters pertaining to the employment relationship, whether or not express provision for any such matter is made in the agreement, and

● All matters pertaining to the relationship between the MFB and the UFU whether or not express provision for any such matter is made in the agreement.

[41] These types of disputes go far beyond the scope of disputes over the application of the agreement. Nevertheless, the power conferred on the Commission by the parties is a power with respect to the dispute in question. This requires a proper characterisation of the dispute and confining the arbitration power to that dispute.

[42] MFB contends that the Commissioner travelled beyond the dispute been the parties and ruled on matters that were not part of the dispute before the Commission. More specifically, it contends that the dispute was confined to an allegation of a failure to consult over changes to the Police Check Policy and having concluded that there was not, that should have been the end of the dispute. It further contends that issues of probationary employment policies were not subject to debate before the Commissioner and were not part of the relevant dispute. Hence they should not have been the subject of consideration by the Commissioner. Insofar as the decision deals with such matters the MFB contends that it travels beyond the dispute between the parties and is beyond the power of arbitration provided by the parties.

[43] The dispute between the parties originated in a notice from the UFU which identified the dispute as a “failure to undertake the proper process in the enterprise agreement, consultation, change, policy and determination.” The UFU submissions before the Commissioner stated the dispute was as follows:

“13. The dispute notified by the UFU is about whether the MFB was entitled to terminate Mr Duggan’s employment for the reasons stated by the MFB in their letter of termination dated 24 May 2016 (see above). The UFU contends that the MFB was not entitled to terminate on those grounds because it is contrary to the policy of the MFB Recruitment Police Criminal History Check.

14. The MFB Recruitment Police Criminal History Check is a code and policy which applies to recruits. It requires recruits to notify whether they have been convicted of, or charged with, any criminal offence. Mr Duggan made full disclosure of the charges brought against him and the court proceedings and satisfied the MFB’s requirement in this regard. The MFB has unilaterally altered this. It has introduced a new and additional criterion that adverse findings by an occupational tribunal can render a person unsuitable for employment as a firefighter. It has thus altered the policy and practice in relation to employment. There has been no consultation with the UFU about this change of policy. Such a departure from the policy is all the more surprising because the current policy states that only a guilty finding or finding of charge proven in respect of serious offences such as murder, armed robbery, sexual assault etc are considered grounds for disqualification from consideration as an employee.

15. Further, there has never been a previous contention by the MFB that an adverse decision by an occupational tribunal in relation to an employee’s conduct preceding his/her employment by the MFB could constitute a reason for termination. This is a change to the employment relationship between the MFB and its employees and is subject to the consultation provisions of clause 13 of the Agreement, which have not been complied with.

16. There is accordingly a dispute between the MFB the UFU and Mr Duggan about the termination of Mr Duggan’s employment within cl 27. Clause 27.1.3 provides that there cannot be a termination until that dispute is resolved. Under cl 19.2.6 the FWC may utilise all its powers to arbitrate this dispute. The reference to the FWC under cl 19.2.6 is of the ‘matter’, that is to say the subject matter of the dispute. The ‘matter’ is not the process of dispute resolution but rather the substance or merits of the dispute. The FWC has jurisdiction to arbitrate the dispute of this ‘matter’ under ss 595 and 739(4) of the Act.

Resolution of the dispute

17. The UFU submits that the FWC should proceed to resolve the subject matter of the dispute by arbitration. It should find that the MFB had no power to terminate Mr Duggan’s employment on the grounds stated in its letter of 24 May 2016 because those grounds did not comply with the Recruitment Police Criminal History Check policy. That is because the policy requires a conviction or at least a finding of charge proven before a person can be disqualified from employment. There has been no such finding in the present case. There is no basis within the policy to disqualify a person from employment by the MFB as a firefighter because of an adverse decision of an occupational tribunal.

18. Furthermore, even if the findings of an occupational tribunal, by analogy or by some other reasoning process, could properly be considered under the Recruitment Police Criminal History Check policy, the findings in the present case do not provide a sufficient basis for disqualification for the following reasons.

19. First, the findings by NCAT were inconsistent with the acquittals at the criminal trial in the NSW District Court.

20. Secondly, the NCAT findings were made in the absence of a contradictor or of any witness giving evidence viva voce. Mr Duggan did not contest the hearing at NCAT because it clashed with his training with the MFB and because he had given an undertaking that he would not practise again as an osteopath. Had he realised the far-reaching effects the NCAT decision would have for him he would have endeavoured to contest the hearing.

21. Thirdly, Mr Duggan has now applied to NCAT to set aside its decision and rehear the matter. The MFB termination is therefore premature and should await the outcome of Mr Duggan’s application to set aside the NCAT decision. A directions hearing at NCAT is scheduled for 8 July.

22. Fourthly, the reasoning of NCAT was defective in many respects and is not likely to survive scrutiny at a contested hearing. In particular, NCAT based its findings substantially on credit findings though no witness was cross examined or even gave viva voce evidence. It also found the complainants had not given “informed consent” to the examinations conducted by Mr Duggan, without any analysis of what “informed consent” comprised in the particular context and in the face of evidence that they did give consent to the examinations and expert evidence that such examinations are routinely conducted by osteopaths.

23. Fifthly, the NCAT proceeding was conducted 3 years after the trial of the criminal charges though no explanation was provided for why there was such a long delay.

24. Sixthly, even assuming that the NCAT decision stands, it does not supply a proper basis for the MFB to terminate Mr Duggan’s employment. The MFB’s contention that the professions of osteopath and firefighter have a number of common features is spurious. An osteopath is a health professional who routinely undertakes intimate physical examinations of patients in private. There is nothing even remotely analogous to that in firefighting. The first aid rendered by firefighters and the physical contact they have with members of the public in performance of their duties are in no way comparable to what health professionals do.

25. Similarly, the supervision argument of the MFB is unsustainable. Any contact by a firefighter with a member of the public is typically in an emergency (often life-threatening) situation, in public, and under supervision, not at all comparable to that of an osteopath in a private consultation.

26. Finally, the events that NCAT was dealing with occurred 6 years ago. Mr Duggan was acquitted of criminal charges. The Health Care Complaints Commission brought proceedings in NCAT some 3 years after the acquittals. Its delay has not been explained. In circumstances where the events took place so long ago in such a different occupational context they have no bearing on a present consideration of Mr Duggan’s employment. The conclusion of the MFB that the NCAT findings led it to conclude that it cannot have the level of trust and confidence in Mr Duggan is therefore unsustainable.

27. For the forgoing reasons the FWC should determine that the MFB’s purported termination of Mr Duggan’s employment by its letter of 24 May 2016 was contrary to the Recruitment Police Criminal Check policy and therefore contrary to the Agreement.

28. Further, the MFB proffered reasons for the proposed termination. As those reasons are spurious, unsustainable and unmeritorious the termination should not proceed.”

[44] The Commissioner discussed the issue of the Police Check policy and said:

“[60] These questions, and a decision to exclude Mr Duggan from further consideration for employment, were entirely open to the MFB under the Agreement, and inquiries to elicit further information or the making of a decision to preclude him from employment would have been entirely consistent with the Agreement and the Police Check Policy. No criticism under the Agreement could attach to the MFB for seeking information of this type, or a consequential decision not to employ him. By undertaking insufficient enquiries into Mr Duggan’s suitability as a firefighter, the MFB offered him employment, but essentially now wants to find a way to end the contract into which it has entered.

[61] The evidence does not lead to a finding that the MFB sought to unilaterally amend its Police Check Policy by introducing a new and additional criterion that adverse findings by an occupational tribunal can render a person unsuitable for employment as a firefighter. Instead, the evidence leads to findings that Mr Duggan was asked to supply information consistent with the Policy, which he did; that the MFB considered the information he provided and, notwithstanding what it received, made no election to exercise its discretion not to employ Mr Duggan.”

[45] The Commissioner then went on to say:

“[62] Instead, the evidence leads to a finding that, when the MFB characterises Mr Duggan as not being ‘a person in which it can have the level of trust and confidence that is required of a firefighter’ and that he should thereby be dismissed, it seeks to dismiss him because information it only learned of after he commenced employment calls into question his ongoing employment beyond the probation period.” (references omitted)

[46] The Commissioner discussed this issue in the ensuing paragraphs and reached the following conclusions in relation to the first question he identified:

“[84] On the basis of the foregoing analysis, I would answer the first element of the dispute as characterised by me in the following way;

Q1: Whether or not there was a failure by the MFB to follow any process mandated by the Agreement with respect to the termination of Mr Duggan’s employment;

A: Yes; in respect of changes to the MFB’s application of policies in relation to ‘probation’ and ‘probationary employee’.

No; in respect of a change to the Police Check Policy.”

[47] In relation to the second and third questions identified by the Commissioner, these proceeded on the basis of the answers to the first question. The Commissioner said:

“[86] I consider that the dispute is not resolved, with there being a need either for consultation over changes to the MFB’s use of “probation” and “probationary employee” or, if that is considered not appropriate, for appropriate action to deal with Mr Duggan’s conduct after employment commenced.”

[48] The remainder of the decision deals with matters arising from this conclusion.

[49] We consider that there is substance to this ground of appeal. The dispute over changes in policy related specifically to the Police Check Policy. The UFU made no allegation about breach of any probation policy and the matter was not subject to evidence or submissions by the parties. The UFU did raise general merit issues relating to the basis for the decision to terminate. These concerned the appropriateness of relying on the NCAT decision. However, we are unable to discern any basis in the material before the Commissioner to suggest that the dispute between the parties included a dispute about the extent of consultation over a change to a policy regarding probation and probationary employee. In purporting to determine such a dispute the Commissioner ventured beyond the dispute between the parties, made findings on matters that the parties were not given an opportunity to address and exceeded the power of private arbitration conferred by the agreement.

[50] It follows from this conclusion that the elements of the decision of the Commissioner that relate to, or flow from, the consideration of the issue of an alleged failure to consult over a change of policy regarding probation cannot stand. 24

The Availability of a Merits Review of the Decision to Terminate

[51] An issue remains as to whether the Commissioner could have dealt with other issues relating to the decision to terminate Mr Duggan’s employment by reference to the matters raised by the UFU concerning the appropriateness of relying on the NCAT decision. As the dispute evolved in the arbitration before the Commissioner, it can be said that these matters were the subject of a dispute.

[52] The parties have agreed in the Agreement that a wide range of disputes can be progressed and resolved under the disputes procedure. It would appear that a decision to terminate employment of an employee is a matter pertaining to the employment relationship. The MFB contends that it is improbable that the MFB would have agreed to dismissal disputes being included in disputes capable of determination by private arbitration because this undermines the statutory power vested in the CEO under the Metropolitan Fire Brigades Act 1958 (Vic).

[53] As improbable and as undesirable as it may seem, we do not see the basis for such a limited reading of the provision in the Agreement. The parties have agreed to mechanisms for dispute resolution in their agreement. By expressly including a reference to disputes pertaining to the employment relationship, the net has been cast very broadly. In our view a dismissal dispute falls within this broad class of disputes. This conclusion is consistent with the conclusion of a Full Bench in relation to a different matter under the same agreement. 25

[54] Such a finding brings s.194(c) of the Act into play. This provides:

“194 Meaning of unlawful term

A term of an enterprise agreement is an unlawful term if it is:

…

(c) if a particular employee would be protected from unfair dismissal under Part 3‑2 after completing a period of employment of at least the minimum employment period—a term that confers an entitlement or remedy in relation to a termination of the employee’s employment that is unfair (however described) before the employee has completed that period; …”

[55] Section 253 of the Act provides that a term of an enterprise agreement has no effect to the extent that it is an unlawful term.

[56] The UFU submits that these provisions have no relevance because the MFB made the application to the Commission itself and the decision to terminate was not a termination of employment itself.

[57] Permitting the dispute settlement clause to be a vehicle for determining the fairness of the decision to terminate Mr Duggan’s employment within the six month qualifying period for an unfair dismissal remedy in ss.383-4 of the Act confers a remedy in relation to the termination of the employee’s employment. Hence such a use of the dispute settlement clause renders the term to be an unlawful term under the Act and of no effect to that extent. It is of no consequence that the MFB sought the imprimatur of the Commission under the disputes procedure over what it considered to be an unfounded allegation of breach of a consultation obligation. Further, a remedy that purports to result in an order or determination not to terminate the employment of an employee pursuant to a decision to do so is clearly a remedy in relation to termination of the employee’s employment.

[58] The argument that s.194(c) is a relevant limitation on power of the Commission was raised by MFB in the proceedings before the Commissioner but was not addressed in his decision. That may be because of the alternative way he decided to define the dispute by reference to a failure to consult over the issue of probation.

[59] The general issues of fairness of the decision to terminate Mr Duggan’s employment are not capable of agitation under the dispute settlement procedure.

The Power to make Orders in Private Arbitrations

[60] In the extract of the High Court decision in CFMEU v AIRC above it is made clear that the exercise of judicial power results in an order that is binding of its own force. So too is an order made under the Act pursuant to a specific power to make orders of binding force. In the case of private arbitration, however, the arbitrator's powers depend on the agreement of the parties, usually embodied in a contract, and the arbitrator's award is not binding of its own force. An arbitrator’s decision in a private arbitration should be expressed as a determination because it cannot be enforced under the Act as an order.

[61] In submitting to the contrary the MFB seeks to conflate the terms of ss.595 and 739 of the Act. Such reliance is misplaced. Section 595(3) is a limitation on arbitration powers and the issuing of orders in the absence of express authority to do so. Section 739 permits the Commission to arbitrate a dispute if the parties have authorised it to do so under a term of an enterprise agreement. The parties cannot confer a statutory power to make orders of a binding force on the Commission. All they can do is agree, as a matter of contract, to accept the outcome of arbitration. The power to arbitrate is created by the parties’ agreement and is enforceable as a matter of contract. The decision of the Full Bench in Victoria University v National Tertiary Education Industry Union [2015] FWCFB 2892 is not inconsistent with these principles.

[62] It was therefore inappropriate for the Commissioner to purport to make orders in arbitrating the dispute and it is inappropriate that any of the orders survive this appeal.

Conclusions and Determination

[63] For the reasons above we allow the appeal, quash the decision of the Commissioner and quash the orders made by the Commission.

[64] The dispute before the Commission is determined by our confirmation of the determination by the Commissioner at [84] of his decision that there has not been a failure by the MFB to follow any process mandated by the Agreement with respect to termination of Mr Duggan’s employment in respect to a change in the Police Check Policy.

VICE PRESIDENT

Appearances:

Mr J Bourke QC and Mr P Wheelahan of counsel, with Mr C Hartigan and Ms E Tuffy on behalf of MFB.

Mr M Pearce SC with Mr D Langmead of counsel, on behalf of Mr Duggan & UFU.

Hearing details:

2016.

Melbourne.

19 October.

Final written submissions:

MFB on 17 October 2016.

Mr Duggan & UFUA on 7 October 2016.

 1   [2016] FWC 5028, [17].

 2   Ibid [22].

 3   PR584680.

 4  [2016] FWC 5028, [42].

 5   Ibid [61].

 6   Ibid [72]-[77].

 7   Ibid [90].

 8   Ibid [99].

 9   Ibid [102]-[104].

 10   Ibid [122].

 11   Ibid [128].

 12   [2016] FWC 6053, [14].

 13   Ibid [9].

 14   Construction, Forestry, Mining and Energy Union v Australian Industrial Relations Commission (2001) 203 CLR 645; see also Endeavour Energy v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia [2016] FCAFC 82.

 15   “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) v Silcar Pty Ltd [2011] FWAFB 2555, [26]-[28].

 16   PR908236.

 17   PR921688.

 18   PR933766.

 19   PR973884.

 20   PR940366.

 21   PR973884, [26].

 22   s.739(3).

 23   s.739(5).

 24   See eg Re Australian Railways Union and Ors; Ex parte Public Transport Corporation (1993) 51 IR 22.

 25   United Firefighters' Union of Australia v Metropolitan Fire & Emergency Services Board [2016] FWCFB 2894.

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