DECISION

Fair Work Act 2009
s.604—Appeal of decision

United Firefighters’ Union of Australia
v
Metropolitan Fire and Emergency Services Board; Country Fire Authority
(C2018/5053)

Appeal against decision [2018] FWC 4920 and orders PR620031, PR620032 and PR620033 of Commissioner Wilson at Melbourne on 22 August 2018 in matter numbers C2017/5456, C2017/5457 and C2017/5458; whether power to arbitrate; consideration of s.739 and dispute resolution terms of agreements; whether Commissioner erred as to construction of dispute resolution term; whether Commissioner erred as to the jurisdiction to arbitrate; whether permission to appeal required to appeal; permission to appeal granted; appeal upheld; decision and orders quashed.

Introduction

[1] During September and October of 2010, three enterprise agreements commenced operation covering the United Firefighters’ Union of Australia (UFU), the Metropolitan Fire and Emergency Services Board (MFB) and the Country Fire Authority (CFA) and various firefighter employees employed by the services. The Agreements are titled the Metropolitan Fire and Emergency Services Board, United Firefighters Union of Australia, Operational Staff Agreement 2010 1 (MFB Agreement), the Metropolitan Fire and Emergency Services Board, United Firefighters Union of Australia, Assistant Chief Fire Officers Agreement 20102 (ACFO Agreement) and the Country Fire Authority/United Firefighters Union of Australia Operational Staff Enterprise Agreement 20103 (CFA Agreement) (collectively the “Agreements”). Each of the Agreements has a common nominal expiry date of 30 September 2013 which has long since passed. The Agreements continue in operation. The MFB has applied to the Fair Work Commission (Commission) to approve an enterprise agreement titled the Metropolitan Fire and Emergency Services Board, United Firefighters Union of Australia, Operational Staff Agreement 2016 (2016 MFB Agreement), which if approved would replace the MFB and ACFO Agreements.

[2] On 3 October 2017, the UFU lodged applications in the Commission under s.739 of the Fair Work Act 2009 (Cth) (Act) seeking conciliation and, if necessary, arbitration of claims relating to employees at certain managerial ranks employed by the MFB and CFA. The applications were allocated to Commissioner Wilson. The UFU posed the following questions for the Commission to determine by way of arbitration:

(a) The Rank Alignment Question: whether the wages of MFB Commanders should be increased so they match the wages paid to the CFA Commanders (formerly known as Operations Officers (OOs)), and whether the wages of the CFA Operations Managers (OMs) should be increased so they correspond with the wages paid to MFB Assistant Chief Fire Officers (ACFOs); and

(b) The Relativities Question: whether the wages of managerial employees should be increased, relative to the most experienced line firefighting rank, the Senior Leading Firefighter (SLF) position. For the MFB, the relevant “managerial employees” are the ranks of Station Officer (SO), Senior Station Officer (SSO), Commander and ACFO. For the CFA, the relevant ranks are SO, SSO, Commander and OM.

[3] In the case of the Rank Alignment Question, the UFU contended that the pay for most senior ranks should be aligned for reasons we need not presently discuss, and in the case of the Relativities Question, the UFU contended that there should be a wage increase for senior ranks and that the question of relativities should be determined by reference to the proposed senior leading firefighter position rather than the rank of qualified firefighter.

[4] The MFB and CFA raised a jurisdictional objection to the Commissioner dealing with the disputes. The objection was dealt with as a preliminary matter with the result that the Commissioner determined by a decision (Decision) issued on 22 August 2018 4 that he could not proceed to deal with the dispute on jurisdictional grounds and dismissed each application.

Permission to appeal

[5] The UFU has lodged an appeal pursuant to s.604 of the Act, for which permission to appeal is required, against that Decision and the consequential orders. 5 Although the UFU contends that permission to appeal is not required because the dispute resolution terms in each case confer a right of appeal, we disagree. Each of the dispute resolution terms at issue provides that a “decision of FWA under this clause may be appealed”.6 In Metropolitan Fire and Emergency Services Board v United Firefighters’ Union of Australia7 a Full Bench of the Commission determined that the dispute resolution term in the MFB Agreement conferred a right of appeal, that the power to hear and determine the appeal under the Act was not invoked but rather arose from the agreement of the parties and consequently permission to appeal was not required.8 As is apparent from that decision, the conclusion was arrived at in circumstances where the parties to the dispute submitted that the provision in the Agreements conferred a right of appeal and so permission was not required. We do not consider that the language that a decision “may be appealed” in the Agreement is apt to create a right of appeal so as to displace the requirement in s.604(1) of the Act for an appellant to obtain permission to appeal. This view is consistent with an earlier Full Bench decision in United Firefighters’ Union of Australia v Country Fire Authority9 concerning clause 15.7 of the CFA Agreement. It is, with respect to the Members deciding Metropolitan Fire and Emergency Services Board v United Firefighters’ Union of Australia, we think the better view.

[6] As the appeal raises important issues going to the Commission’s jurisdiction to deal with a dispute under s.739 of the Act, we have decided to grant permission to appeal.

Consideration

Grounds of appeal

[7] The grounds of appeal are many. They comprise 25 in number, two of which contain subgrounds or subparagraphs, and six are advanced as alternatives to other grounds. Grounds 2, 7(b), 17, 20, 23 are no longer pressed. The remaining grounds of appeal may be summarised and grouped as follows.

[8] The first, encompassing grounds 3, 4, 8, 15, 18, 21, 24 and 25 of the notice of appeal, is concerned with whether the Commissioner erred in concluding he had no jurisdiction to arbitrate under the MFB Agreement and under the CFA Agreement.

[9] The second, encompassing grounds 5, 6 and 7, concerns whether the Commissioner erred in concluding that clause 70.6 of the MFB Agreement did not confer any right to arbitration in respect of "a work value/anomaly type exercise", whether he denied the UFU procedural fairness in relation to the construction of clause 70.6, and whether clause 70.7 had any bearing on the Relativities Question.

[10] The third, encompassing grounds 1 and 16 of the notice of appeal, is concerned with whether the Commissioner erred in concluding that the Rank Alignment Question was a claim to alter “rank and promotional structures”.

[11] The fourth, which is raised by ground 19 of the notice of appeal, is concerned with whether the Commissioner erred by misconstruing a provision of schedule 13 of the CFA Agreement when he concluded that the provision required the CFA to give “formal agreement” before any changes were made to the relevant wages and so denied the Commission’s jurisdiction to impose changes by arbitration.

[12] The fifth, which is raised by ground 22 of the notice of appeal, is concerned with whether the Commissioner erred by misconstruing clause 68.4 of the CFA Agreement in concluding that clause 68.4 required wage changes to be achieved “through agreement”.

[13] The sixth, which is raised by ground 13 of the notice of appeal, is concerned with whether the Commissioner misconstrued clause 52 of the ACFO Agreement in concluding that the clause deprived the Commission of jurisdiction to arbitrate the Relativities Question for ACFOs.

[14] The final grouping involves the exercise of discretion, which is raised by grounds 9, 10, 11, 12 and 14, and is concerned with whether the Commissioner erred in concluding that in the event he had jurisdiction to arbitrate, he would decline to arbitrate as a matter of discretion.

The decision at first instance

[15] The Commissioner begins at [1] – [24] of the Decision with some background matters and the questions that he is asked to determine. At [25] – [28] of the Decision the Commissioner summarises the jurisdictional objections raised by the CFA and MFB. A more detailed exposition of these jurisdictional objections, by reference to each of the Agreements, is then set out at [29] – [50] of the Decision. At [51] – [56] of the Decision the Commissioner discusses certain principles pertaining to characterising a dispute before the Commission brought under a dispute resolution term and those applicable to the construction of an enterprise agreement. The Commissioner’s consideration of the jurisdictional objections and his conclusions are to be found at [57] – [116] of the Decision.

[16] Relevantly, the Commissioner concluded at [65] of the Decision that:

•  the no extra claims provisions in the Agreements limit the capacity to make extra claims before a certain period prior to the end of the nominal expiry date of the particular agreement, with the consequence that extra claims could not be raised as disputes under the relevant dispute resolution term; and

•  the Agreements limit the type of claims that can be made after that time.

[17] In relation to the MFB Agreement, the Commissioner:

•  reasoned at [70] of the Decision, that on a proper construction of clause 19 of the MFB Agreement, a particular dispute about a matter pertaining to the employment relationship or a matter pertaining to the relationship between the MFB and the UFU was on its own insufficient to be a dispute ‘arising under’ clause 19 if it was not first one “arising under the agreement”. At [71] of the Decision, the Commissioner reasoned that the no extra claims provision in the MFB Agreement operated to constrain arbitration under the dispute resolution term. The Commissioner observed at [72] - [73] of the Decision that extra claims could be made pursuant to clause 5 of the MFB Agreement when commencing negotiations for a replacement agreement within 6 months of the expiry date. Certain claims dealing with matters specified in the Agreement could also be the subject of claims or changes in accordance with its terms. Further, a variation could be agreed at any time, provided it was processed in accordance with the requirements of the Act;

•  in reaching his ultimate conclusion that the dispute resolution term in the MFB Agreement did not allow the Rank Alignment Question to be arbitrated, at [75]-[77] of the Decision, considered the effect of clause 70.7 “Appropriateness of ranks” and clause 22 “Bushfires Royal Commission Report”;

•  reasoned at [77]-[78] of the Decision that the combined effect of these provisions was to preclude arbitration of the subject matter of the Rank Alignment Question on the basis that it was not a matter arising under the MFB Agreement, because the parties agreed that rank and promotional structures would be maintained for the life of the Agreement; and

•  observed at [80] of the Decision as to the Relativities Question, that the CFA and MFB accepted that there was a limited right to pursue the Relativities Question because of clause 70.6 of the MFB Agreement. Despite that which appears to be the common position that clause 70.6 at least reserved a historical work value and/or anomaly for arbitration, at [82] of the Decision the Commissioner observed that it was difficult to see how within the scheme of the Act, that the “preserved entitlement” could found jurisdiction to arbitrate. The Commissioner reasoned that clause 70.6 of the MFB Agreement and its reference to work value/anomaly matter was unlikely to do more than enable future bargaining resulting in agreement.

[18] In relation to the CFA Agreement, the Commissioner:

•  applied the same process of reasoning to the dispute brought under the CFA Agreement, as is evident from [104] of the Decision. At [105] – [106] of the Decision the Commissioner discusses the import of the no extra claims provision at clause 65.1 of the CFA Agreement. The Commissioner then gives consideration to the effect of clause 68.4 “Relativities” and clause 68.5 and Schedule 13 “Classifications and Wages” at [107] – [115] of the Decision;

•  reasoned at [112] of the Decision, that the subject matter of the Rank Alignment Question and the subject matter of the Relativities Question were both so linked as to fall within the subject of “rank and promotional structures”, referring to clause 68.5 of the CFA Agreement. This was consistent with the conclusion of the Commissioner in relation to the same expression used in clause 70.7 of the MFB Agreement. At [113] the Commissioner concluded that the UFU’s application under the CFA Agreement fell for that reason alone; and

•  construed at [114] and [115] of the Decision, the preamble in Schedule 13 (read in conjunction with clauses 68.4 and 68.5 of the Agreement) as preventing changes to classifications and wages without agreement between the parties, as distinct from arbitration.

[19] In relation to the ACFO Agreement, the Commissioner:

•  noted at [94] of the Decision that the question for determination was confined to the Relativities Question;

•  reasoned at [95] of the Decision that the no extra claims clause in clause 52 of the ACFO Agreement, when read in conjunction with the dispute resolution term in clause 12, precluded arbitration of the Relativities Question. The Commissioner construed clause 52.3 as not extending to any extra claims, because compared with clauses 52.1 and 52.2, the prohibition of extra claims was not time limited; and

•  concluded at [102] that the Relativities Question was not a matter arising under the ACFO Agreement and there was no jurisdiction to deal with the dispute.

[20] In relation to the exercise of discretion, the Commissioner:

•  observed at [92] of the Decision that if he had jurisdiction to deal with the matters in dispute, he would decline to proceed with the dispute because it was more appropriately a matter for bargaining between the parties, and had now been the subject of bargaining. At [85]-[90] of the Decision, the Commissioner considered the 2016 MFB Agreement and the pending application for its approval. He noted agreement between the parties to conclude bargaining for the agreement while explicitly reserving the question of a process for resolving rank alignment and relativities issues. The Commissioner considered, as a matter of discretion, he would not arbitrate in those circumstances given the potential duplication of resources and that bargaining for a replacement agreement for the MFB Agreement had run its course; and

•  at [101] of the Decision, adopted essentially the same reasoning in relation to the ACFO Agreement in expressing the view that if there was jurisdiction to deal with the dispute, he would decline to do so on discretionary grounds.

Construction of the dispute resolution terms

[21] We begin by considering the Commissioner’s construction of the dispute resolution term in each of the Agreements. The relevant terms are in all material respects the same and so we need only refer to clause 19 of the MFB Agreement, which relevantly provides:

“19.1. This dispute resolution process applies to all matters arising under this agreement, which the parties have agreed includes:

19.1.1. all matters for which express provision is made in this agreement; and

19.1.2. all matters pertaining to the employment relationship, whether or not express provision for any such matter is made in this agreement; and

19.1.3. all matters pertaining to the relationship between the MFESB and UFU, whether or not express provision for any such matter is made in this agreement.

The parties agree that disputes about any such matters shall be dealt with by using the provisions in this clause.”

[22] As can be seen, the description of disputes that fall within its scope is expressed broadly. Though initially described as “all matters arising under this agreement” that phrase is given a more expansive meaning so that it includes, inter alia, “all matters pertaining to the employment relationship, whether or not express provision for any such matter is made in this agreement”. There was no contest before the Commissioner or before us that the dispute resolution terms were broad enough to capture the subject matter of both the Rank Alignment Question and the Relativities Question. The jurisdictional objection raised by the MFB and the CFA is about the effect of other terms of the Agreements upon the Commissioner’s capacity to arbitrate under the dispute resolution terms.

[23] As we have already noted, the Commissioner effectively read down the dispute resolution term by reference to other provisions in the Agreements which touch upon the Rank Alignment Question and the Relativities Question. He concluded that the Agreements required the parties to reach agreement in order for changes to be made on the subject matter of each. Absent agreement, he considered that it was not open to the Commission to arbitrate either question. In that way, the subject matter of each was not about “matters arising under” the Agreements.

[24] This construction is respectfully incorrect, because it conflates the question of jurisdiction with what can be done within jurisdiction, given the terms of each Agreement. A term expressly restricting or removing the power to arbitrate a particular dispute may be found in a term of an agreement other than a dispute resolution term. But there is a qualitative difference between a term that prohibits arbitration or restricts the subject matter of arbitration and one that affects the decision that may be made in the exercise of arbitral power.

[25] It is clear from the dispute resolution terms that the makers of the Agreements turned their minds expressly to what they considered should fall within the meaning of “matters arising under this agreement”. They decided that it would encompass, inter alia, all matters pertaining to the employment relationship, whether expressly dealt with in the Agreement or not. They agreed that disputes about all of those matters could be dealt with under the dispute resolution terms.

[26] The breadth of “matters arising” under the Agreements is not read down by reference to the no extra claims and other provisions of the Agreements for the purpose of engaging the dispute resolution terms. Those terms raise different questions, relevantly, about the nature of any decision that might be made in the exercise of arbitral power under the dispute resolution term. In our view, the subject matter of the Rank Alignment Question and the Relativities Question are plainly “matters arising under this agreement” as that phrase is understood in the context of each of the Agreements.

Jurisdiction to arbitrate the disputes?

[27] The UFU contends that the Commissioner was wrong in his conclusion as to the absence of jurisdiction to arbitrate. This was because the dispute resolution terms of each of the Agreements when read with s.739(4) of the Act conferred jurisdiction to arbitrate any matter “pertaining” to the employment relationship, the question submitted for arbitration pertained to that relationship and the provisions of the Agreements on which the Commissioner relied to reach his conclusion did not go to the question of whether the Commissioner could arbitrate in accordance with the dispute resolution terms.

[28] The MFB and CFA contend that this argument errects an artificial and meaningless distinction between jurisdiction and power and that the capacity of the Commissioner to arbitrate under s.739 of the Act depends upon the express conferral of that power by the terms of the enterprise agreement. That then requires consideration of the terms of the enterprise agreement, not limited to the scope of the dispute resolution term. As there were other terms in the Agreements which constrained the UFU from pursuing claims under s.739, the parties had not authorised the Commission to arbitrate the claims so constrained under the dispute resolution terms. They say this was the threshold issue the Commissioner was required to determine and he did so. They contend that to characterise the process by reference to jurisdiction, power and relief would consign the operation of the no extra claims and other provisions on which the Commissioner relied to the final step of the arbitrated process, based on a distinction that should not be adopted.

[29] In our view, the UFU is correct on the question of jurisdiction. The Commissioner was dealing with an application to deal with a dispute under s.739 of the Act. That section applies if “a term” referred to in s.738 requires or allows the Commission to deal with a dispute. Section 738 relevantly provides that Division 2 of Part 6 – 2, of which s.739 is a part, applies if an enterprise agreement includes “a term” that provides a procedure for dealing with disputes, including a term referred to in s.186(6).

[30] Section 186(6) of the Act is concerned with the content of an enterprise agreement and requires the Commission, when considering whether to approve an enterprise agreement, to 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.”

[31] Relevantly, s.186(6) does not confine the kinds of disputes that may be progressed through a dispute resolution term to those that are “about any matters arising under the agreement”. Rather it is concerned with ensuring that terms as a minimum allow for the settlement of such disputes. A dispute resolution term in an enterprise agreement may also make provision for dealing with other disputes about matters that pertain to the relationship between the employer covered by the agreement and the employer’s employees who are covered by the agreement, whether dealt with by a term of the agreement or not.

[32] That this is so, seems to us to be acknowledged in s.738(b) of the Act.

[33] The dispute resolution terms in the Agreements satisfy s.186(6) of the Act and also provide for a broader range of disputes to be dealt with, recognising the limits on agreement content in s.172. They are terms of the kind described in s.738(b).

[34] Each of the Agreements contained a term as described in s.738(b) of the Act. The questions raised by the disputes fall within the remit of each dispute resolution term. There is no contention that any of the preliminary steps required to be taken before the Commission can arbitrate have not been followed. Each dispute resolution term requires or allows the Commission to deal with the disputes. The result is that each dispute engaged s.739 and was properly before the Commission. The Commission had jurisdiction to deal with the dispute, including by arbitration.

What is the scope of that arbitral power?

[35] Section 739(3) of the Act provides that the Commission must not exercise any “powers” limited by “the term”. Section 739(4) provides that if in accordance with “the term”, the parties have agreed that the Commission may arbitrate the dispute, the Commission may do so.

[36] Both ss.739(3) and (4) are concerned with what the relevant dispute resolution term provides, in relation to any limits on the exercise of power, and whether there is consent to arbitration by the Commission. A dispute resolution term need not actually use the word “arbitrate” if on a proper reading, it is plain that the parties have agreed that the Commission may decide the dispute. So much is clear from the words “(however described)” immediately following the word “arbitrate” in s.739(4). The dispute resolution terms at issue here make clear that the Commission may “utilise all of its powers in conciliation and arbitration to settle the dispute”. That is, in accordance with “the term”, the parties have agreed that the Commission may arbitrate the dispute in each case, including by hearing the parties to the dispute, considering relevant evidentiary material and making a decision.

[37] As s.739(5) makes clear, the Commission must not make a decision that is inconsistent with the Act, or a fair work instrument that applies to the parties. For present purposes, the Agreements are fair work instruments.

[38] Clause 70.6 of the MFB Agreement expressly preserves the UFU’s right to pursue a “work value / anomaly type exercise within the 2005 MFB UFU Operational Staff Agreement” on or after the nominal expiry date of the Agreement. The scope of that “preserved entitlement” is not before us but it is an exception to the prohibition on extra claims. It is sufficient to conclude that the Commission had jurisdiction to deal with a claim of that kind made after the specified time.

[39] Clause 68 of the CFA Agreement provides that, subject to the Agreement, rank and promotional structures are to be maintained unless otherwise agreed by the EBIC. For the purposes of the Agreement, the “EBIC” is the Enterprise Bargaining Implementation Committee, established by clause 13.3. Its mandate includes implementation of the CFA Agreement and ongoing workplace reform. Decision making is by consensus. Clause 68 also operates subject to clause 65, which limits the capacity to make extra claims, and the dispute resolution term which provides for the settlement of disputes where no agreement is reached. In our view, the Commission had jurisdiction to deal with disputes about rank and promotional structures under the CFA Agreement, however any arbitrated decision could not be inconsistent with the prohibition of a ‘party’ making ‘extra claims’.

[40] The Commissioner’s Decision that he did not have jurisdiction or power to arbitrate the Relativities Question under the dispute resolution term in the ACFO agreement turned on a different consideration.

[41] Clause 52 of the ACFO Agreement which is titled “No Extra Claims” provides:

“52.1 The union will make no extra claims prior to the nominal expiry date of the Agreement.

52.2 The MFESB will make no extra claim prior to the nominal expiry date of the Agreement.

52.3 The power of Fair Work Australia to arbitrate, granted by this agreement, does not extend to matters that are extra claims, or, to change defined at Clause 8 about a matter outside the scope of this agreement.”

[42] The Commissioner construed clause 52.3 as pertaining to “extra claims” whether made before after the nominal expiry date of the agreement. He described clause 52.3 as “an open-ended exclusion” which stood in contradistinction with clauses 52.1 and 52.2 where “extra claims” are not to be made “prior to the nominal expiry date of the Agreement”.

[43] The MFB supports the Commissioner’s construction and contends that any other construction would have the effect of reading words into clause 52.3 that are not present. It contends that the Commissioner’s construction is supported by the text of the ACFO Agreement as a whole and that the alternative construction pays no attention to that context.

[44] At first blush there is a superficial attraction to the construction advanced by the UFU. However, we consider that the construction adopted by the Commissioner was correct. Clause 52 of the ACFO Agreement does not in terms define that which is an “extra claim” but it prohibits the making of such claims before the nominal expiry date of the ACFO Agreement. Separately clause 52.3 limits the power of the Commission to arbitrate, but not otherwise to deal with disputes about matters that are “extra claims”, for example by conciliating, mediating, making a recommendation or expressing an opinion. Clause 52.3 also limits the capacity of the Commission to arbitrate about “change defined at Clause 8 about matters outside the scope of” the ACFO Agreement. Plainly, clause 52.3 is a limitation on the power of the Commission to arbitrate on matters that are not limited to “extra claims”.

[45] Although clauses 52.1 and 52.2 are concerned with the making of extra claims prior to the nominal expiry date of the ACFO Agreement, it is not correct that the no extra claims provision read as a whole deals only with matters that are extra claims made prior to the nominal expiry date. Either party may make an extra claim once the nominal expiry date of the ACFO Agreement has passed, but it seems to us that the parties turned their minds to the limits of the power to arbitrate and agreed, as is evident from the text of clause 52.3, that certain matters would be beyond the arbitral power otherwise conferred on the Commission by the dispute resolution term. Those matters included “extra claims” whenever made, as well as matters concerning change about a subject matter outside the scope of the ACFO Agreement. Viewed another way, if “extra claims” in clause 52.3 is confined only to extra claims that are made during the nominal life of the ACFO Agreement, the clause would have very little work to do since the mere advancement of such a claim by either party would be a breach of clause 52.1 or clause 52.2 as the case requires. The Commission could also not arbitrate an extra claim that is inconsistent with the prohibition of such claims during the nominal life of the ACFO Agreement.

Conclusion on jurisdiction

[46] The subject matter of the Rank Alignment Question and the Relativities Question fell within the ambit of the dispute resolution terms in the MFB Agreement and the CFA Agreement in the manner described above. In so finding, we should not be taken to have established the outer limits of the Commission’s jurisdiction in that regard. The Agreements are each comprehensive and deal with a range of matters in different ways. It is sufficient, for the purposes of this application to find that there was power to arbitrate the disputes as contemplated by s.739(4), albeit limited by the terms of the Agreements. The Commissioner erred in concluding to the contrary.

[47] For the reasons set out above, we also consider that the Commissioner erred in finding that the Relativities Question was not a matter arising under the ACFO Agreement. Nevertheless he was correct in his construction of clause 52. No party has suggested that the Relativities Question, so far as it concerns ACFOs, is not an extra claim. Consequently, the Commission does not have the power to arbitrate the Relativities Question under clause 12.2.6 of the ACFO Agreement because that power is limited by clause 52.3. The Commission had jurisdiction to deal with the dispute, but no power to arbitrate.

[48] The foregoing analysis resolves most of the appeal grounds identified in the first and sixth groupings earlier in this decision.

Third, fourth and fifth group of appeal grounds

[49] The matters raised by the appeal grounds identified in the third, fourth and fifth groupings which concern findings made by the Commissioner about the effect of particular Agreement terms upon the Commission’s capacity to arbitrate go to the content of any decision that might be made as a consequence of the Commission exercising the power of arbitration contemplated by s.739(5) of the Act. Given the conclusions already stated we do not consider it necessary to deal with these grounds.

Second group of appeal grounds

[50] The grounds of appeal identified in the second grouping go to the effect of clause 70.6 of the MFB Agreement, which we have dealt with above and which goes to the Relativities Question. Before the Commissioner there was a dispute as to the scope of any arbitration in respect of work value and/or anomaly. That is, whether it extended to developments after the Metropolitan Fire and Emergency Services Board, United Firefighters Union of Australia, Operational Staff Agreement 2005 was made. That the clause preserved the subject matter of any work value or anomaly was not in dispute. 10 The Commissioner construed clause 70.6 as doing no more than enabling future bargaining.

[51] As noted above, the nominal expiry date of the MFB Agreement has now passed and by agreement of the parties, such claims may be pursued, including the dispute resolution term of the MFB Agreement since they would fall within the broad description of matters arising under the agreement. For the reasons earlier stated, the power to arbitrate is available to the Commission. The matters identified by the Commissioner at [82] concerning how the claims in respect of work value and anomaly have any jurisdictional basis having regard to the scheme of the Act, are, respectfully, matters going to the decision that might be made in exercising arbitral power rather than a bar to the exercise of that power. It is not necessary for us to resolve the issue between the parties as to whether the scope of any arbitration is limited as suggested by the MFB, as that is itself part of the dispute to be resolved. It is also not necessary to resolve the procedural fairness issue which forms part of this grouping in circumstances where the dispute remains.

Discretion to arbitrate the dispute

[52] We turn then to the grounds of appeal going to the discretionary basis upon which the Commissioner considered he would not exercise arbitration power and which together form the seventh grouping.

[53] The Commissioner’s ultimate conclusion and disposition of the applications before him is set out at [117]. The Commissioner states that for “the reasons articulated above I find that each of the three applications before the Commission is unable to proceed for reason of jurisdictional impediment. Orders dismissing each of the applications are issued at the same time as this decision.”

[54] The Commissioner had earlier, in relation to the MFB Agreement and the ACFO Agreement, indicated that if there were jurisdiction to deal with some or all of the subject matter of the disputes he considered that it would be appropriate to decline to proceed further with the matter or matters. This view is expressed at [92] in relation to the MFB Agreement and at [101] in relation to the ACFO Agreement. The Commissioner does not appear to have expressed any similar view in relation to the CFA Agreement.

[55] Although it seems clear enough that the Commissioner dismissed the applications on the basis that he considered he did not have jurisdiction to deal with the disputes, we will proceed upon what we perceive to be the common assumption of the parties to this appeal; that the Commissioner’s view expressed at [92] and [101] of the Decision would have in any event resulted in the applications relating to the MFB and ACFO Agreements being dismissed on discretionary grounds. The discretionary basis upon which the Commissioner expressed his view is largely, though not exclusively, related to the application currently before the Commission for the approval of the 2016 MFB Agreement. In short compass, the considerations that the Commissioner weighed, as is apparent from his Decision, are concerned with the potential duplication and waste of resources in respect of proceeding with an arbitration which might be overtaken by referrals of the same questions or at least aspects of these questions for arbitration under the 2016 MFB Agreement. This is apparent from [85]-[92] of the Decision. Also apparent from the Decision is that the Commissioner considered that the 2016 MFB Agreement represented the bargain struck between the parties as to these questions or at least aspects of them. This consideration also appears to have provided the basis for the view the Commissioner expressed that proceeding with the arbitration was inconsistent with enterprise level collective bargaining.

[56] The attack on this aspect of the Commissioner’s Decision is founded upon two bases. The first is that there is no available discretion allowing the Commissioner to refuse to arbitrate the disputes. The second is that if there was a discretion, it miscarried.

[57] As to the first of these bases the MFB contends that the Commissioner’s discretion to decline to arbitrate is plain under s.739(4) and s.595(3) of the Act.

[58] As we have earlier noted s.739(4) provides that if, in accordance with the term, the parties have agreed that the Commission may arbitrate (however described) the dispute, the Commission may do so. Section 595(3) provides that the Commission may deal with a dispute by arbitration (including by making any orders it considers appropriate) only if the Commission is expressly authorised to do so under or in accordance with another provision of the Act, such as section 739(4).

[59] The dispute resolution terms in the MFB and ACFO Agreements provide that if “the matter is not settled the following progression through the disputes procedure it may be referred by the union or the employer to the FWA. FWA may utilise all its powers in conciliation and arbitration to settle the dispute”. It appears to us that this procedure is both permissive and discretionary. It is permissive because it is a conferral of power. It is discretionary because it leaves it to the Commission to determine which of its powers it will exercise to settle the dispute, and how. But in the end it is not a discretion which is exercisable at large because the discretionary choice that is to be made is to be directed at the object of the power, namely “to settle the dispute”. It may be, for example, that a Commission Member dealing with a dispute forms the view that the continued exercise of conciliation power is a better vehicle through which to settle the dispute than arbitrating the dispute. But we do not think it open under the dispute resolution terms for the Commission to refuse to arbitrate a dispute with the consequence that the dispute has no means of resolution. As long as it is within the scope of the matters which can be progressed under the term, what is required is that the Commission do what is necessary, using the powers conferred by the term, “to settle the dispute”.

[60] The matters identified by the Commissioner could not, in our view, support dismissal of the applications. The matters raised against arbitration go to the effect of the 2016 MFB Agreement, the fate of which is yet to be determined. Those matters are relevant to an adjournment but do not establish a proper basis for dismissal of a dispute that may otherwise remain unresolved.

[61] To the extent that the Commissioner indicated that he would not proceed to arbitrate the disputes under the MFB and ACFO agreements on discretionary grounds and dismiss the applications, we consider that he did so without regard to the purpose of arbitration being to settle disputes. It is unnecessary, given our view in this regard, to consider further the alternative basis advanced by the UFU. It should be noted however given our earlier conclusion as to the ACFO Agreement dispute, the discretionary consideration raised by the Commissioner did not arise in respect of that application.

Conclusion

[62] For the reasons stated, permission to appeal should be granted, the appeal should be upheld on the bases identified in this decision and the Commissioner’s Decision and orders relating to the disputes brought under the MFB and CFA Agreements should be quashed.

Disposition

[63] That leaves the question as to what should now be done with the s.739 applications. The discretionary matters identified by the Commissioner are relevant, as we have already noted, to how the Commission should now deal with the applications. Pursuant to s.589(1) of the Act, the Commission may make “decisions as to how, when and where a matter is to be dealt with”. Having regard to the matters identified by the Commissioner it may be appropriate to remit the dispute brought under the MFB Agreement to the Commissioner or another Member but to adjourn them, so far as they can be dealt with by the Commission, until the application for approval of the 2016 MFB Agreement is determined.

[64] The second part of the Rank Alignment Question relates to a comparison between CFA Oms and MFB ACFOs. Given that the Relativities Question is concerned with relativities between, inter alia, ACFOs and SLFs, and that wages payable to other “managerial employees” which are also part of the Relativities Question and are the subject of the 2016 MFB Agreement, the dispute brought under the CFA Agreement might be adjourned on the same basis.

[65] It is our preliminary view that an adjournment of each of the remaining applications is appropriate. The question of an adjournment was briefly discussed between the bench and Counsel for the MFB and CFA during the course of the hearing of this appeal but was not addressed by Counsel for the UFU. Therefore, before deciding whether to adopt this course we give the parties to the appeal seven days from the date of this decision to provide short written submissions as to whether they agree with our preliminary view and if a party does not then, having regard to our decision, it should set out how the applications should be progressed.

[66] There is no reason the order made dismissing the ACFO Agreement application should be disturbed.

[67] In the meantime we order as follows:

a. Permission to appeal is granted;

b. The appeal is upheld on the grounds specified in our decision and is otherwise dismissed;

c. The decision in [2018] FWC 4920 is quashed so far as it deals with the MFB and the CFA Agreements;

d. The orders in PR620032 and PR620033 are quashed; and

e. The parties to the appeal have seven days from the date of this decision to file and exchange short written submissions as to the matters identified in [65] the decision.

DEPUTY PRESIDENT

Appearances:

W Friend QC and J Fetter of Counsel for the United Firefighters’ Union of Australia.

R Dalton SC and L Howard of Counsel for the Metropolitan Fire and Emergency Services Board and the Country Fire Authority.

Hearing details:

2018.

Sydney and Melbourne (video hearing):

October 19.

<PR703801>

 1   AE881005

 2   AE881004

 3   AE881690

 4   United Firefighters' Union of Australia v Metropolitan Fire and Emergency Services Board and Country Fire Authority [2018] FWC 4920

 5   PR620031, PR620032 and PR620033

 6   Clause 19.7 of the MFB Agreement, clause 12.7 of the ACFO Agreement and clause 15.7 of the CFA Agreement

 7   [2016] FWCFB 8120, (2016) 262 IR 83

 8   Ibid at [31] – [33]

 9   [2013] FWCFB 8165 at [37]

 10   Appeal Book pp 150 – 151

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