Fair Work Act 2009
s.604 - Appeal of decisions

Appeal against decision in transcript of Commissioner Saunders at Newcastle on 2 September 2016 in matter number C2016/1751.

[1] On 2 September 2016, Commissioner Saunders issued a Decision 1 (“Decision”) which found that the Fair Work Commission (“Commission”) had jurisdiction to arbitrate a dispute between Mr Paul Crawford and Broadspectrum Australia Pty Ltd (“Broadspectrum”) under the Transfield Services Limited (Maintenance Services – Wyee) Collective Agreement 2011 – 2015 (“the Agreement”) in circumstances where Mr Crawford was no longer an employee of Broadspectrum. The Commissioner also found that Mr Crawford’s attendance at compulsory training at Broadspectrum was not “work” within the meaning of the Agreement and that, as a result, Mr Crawford was not entitled to be paid overtime for training that he attended during overtime hours.

[2] The Construction, Forestry, Mining and Energy Union (“CFMEU”) and Broadspectrum lodged respective appeals against parts of the Decision of Commissioner Saunders. We heard both appeals in a hearing on 26 October 2016. At that hearing, Mr B. Madden of counsel sought permission to appear for the CFMEU and Mr C. Gianatti of counsel sought permission to appear for Broadspectrum. Given the complexity of the matter, and having regard to section 596 of the Act, permission was granted to both parties to be represented.

[3] At the end of the hearing, we informed the parties that we would provide our decision at a later date. The reasons for our decision are provided below. The first part of this decision deals with the extension of time issue. The second part of this decision deals with Broadspectrum’s appeal concerning the Commission’s jurisdiction to arbitrate the dispute. The third part of this decision deals with the CFMEU’s appeal regarding whether compulsory training is to be deemed as “work” within the meaning of the Agreement and whether Mr Crawford was entitled to overtime pay.

Part I - Extension of Time

[4] We note that the Decision was made on 2 September 2016 and that Broadspectrum filed their appeal on 12 October 2016. Therefore, Broadspectrum filed their appeal 40 calendar days after the Decision, which was not within 21 calendar days as required by rule 56(2) of the Fair Work Commission Rules 2013. At the hearing on 26 October 2016, we informed the parties of our decision to allow the appeal to be filed out of time. 2 Our reasons for reaching this decision are outlined in this part of the decision.

Broadspectrum’s Submissions

[5] Broadspectrum contended that the delay in filing the appeal was occasioned by there being no practical utility in any appeal by Broadspectrum. In this regard, had Broadspectrum appealed the Decision and been successful, there would have been no practical change to the outcome of the matter.

[6] Additionally, Broadspectrum asserted that once the CFMEU appeal was filed 21 calendar days after the Decision, questions of not only jurisdiction, but also, the issues regarding the CFMEU’s appeal came forward. As such, Broadspectrum contended that the new issues arising from the CFMEU’s appeal weighed heavily in favour of an extension of time being granted to address both Broadspectrum’s and the CFMEU’s respective appeals. In this regard, Broadspectrum submitted that there was no prejudice to Mr Crawford or the CFMEU by an extension of time being granted.

CFMEU’s Submissions

[7] The CFMEU contended that there was an unexplained and unsatisfactory delay in Broadspectrum filing their appeal. Further, the CFMEU asserted that Broadspectrum’s appeal would cause prejudice to the CFMEU, as the resources that would have been used for the CFMEU’s appeal would be required to be split between two sets of appeals. Additionally, the CFMEU submitted that extensions of time within which to appeal “should not simply be extended as a matter of course.” 3

Consideration

[8] Rule 56 of the Fair Work Commission Rules 2013 (FWC Rules 2013) deals with appeals and the time period for instituting appeals. That rule relevantly provides that an appeal must be instituted within 21 days after the date of the decision appealed against. The Notice of Appeal was lodged by Broadspectrum on 12 October 2016. The Decision was made on 2 September 2016. Broadspectrum’s appeal was, therefore, instituted nineteen days outside of the time prescribed. 4 Nevertheless, rule 56(2)(c) confers a discretion on the Commission to extend the time within which the appeal is to be lodged.

[9] The authorities 5 indicate that the following matters are relevant to considering whether to exercise the Commission’s discretion under Rule 56(2)(c):

• Whether there is a satisfactory reason for the delay;

• The length of the delay;

• The nature of the grounds of appeal and the likelihood that one or more of those grounds being upheld if time was extended; and

• Any prejudice to the CFMEU if time were extended.

[10] Once the CFMEU appeal was filed 21 calendar days after the Decision, questions of not only jurisdiction, but also, issues regarding the CFMEU’s appeal came forward. As such, there were new issues that Broadspectrum had to consider. This factor weights in favour of granting an extension of time.

[11] Having regard to the matters set out above, we are satisfied that the interests of justice favour an extension of the time within which to lodge the appeal. 6 Accordingly, we exercise our discretion pursuant to Rule 56(2)(c) of the FWC Rules 2013 to extend the time for Broadspectrum to lodge their appeal to 12 October 2016.

Part II – Jurisdiction (C2016/6113)

[12] In this part of our decision, we consider Broadspectrum’s assertion that the Commission did not have jurisdiction to deal with this dispute.

The Decision

[13] The Commissioner decided that the Commission had jurisdiction to hear the dispute, notwithstanding the fact that Mr Crawford was no longer an employee of Broadspectrum. The Commissioner referred to ING Administration Pty Ltd v Jajoo 7 (“Jajoo”) where a Full Bench stated that:

“As a matter of interpretation, a court or tribunal should not read limitation into a source of power unless the words clearly bear such a meaning.”

[14] Applying Jajoo, the Commissioner, asserted that there were no clear words preventing the Commission from arbitrating a dispute which arose during employment, particularly when all the steps in the dispute procedure, other than the final step of going to conciliation or arbitration, were exercised before the dismissal took effect.

[15] The Commissioner also relied upon clause 11 and, in particular, clause 11.2 of the Agreement which stated that:

“Any party may apply to Fair Work Australia seeking resolution of the grievance via conciliation as a first step or thereafter arbitration.”

[16] The Commissioner concluded that reference to “any party” in clause 11.2 is to the party to the dispute, that is, the aggrieved party, or any party to the dispute, not a party to the enterprise agreement. On this basis, the Commissioner noted that a person continues to be a party to a dispute, even if they cease to be employed by Broadspectrum at the time the dispute is referred to the Fair Work Commission.  As a consequence, the Commissioner determined that clause 11 did not limit the right to refer the matter to the Commission and to have the matter arbitrated by the Commission, nor did it limit that right to current employees.

[17] Broadspectrum asserted that the Commissioner erred in this part of his decision. It is necessary then, for us to consider whether to grant permission to appeal and the appeal agitated by Broadspectrum.

Permission to Appeal

Broadspectrum’s Submissions

[18] Broadspectrum submitted that permission to appeal ought to be granted on the basis that there is limited Full Bench authority with detailed reasoning that addresses, in the context of the Act, the capacity for an employee, who is no longer in employment to which a particular enterprise agreement applies, to have the Commission determine a dispute arising under the enterprise agreement.

[19] Broadspectrum asserted that, given the wide ranging implications of this jurisdictional question for employees and employers alike, it is in the public interest that permission to appeal be granted.

CFMEU’s Submissions

[20] On behalf of Mr Crawford, the CFMEU asserted that permission to appeal ought to be refused for two reasons.

[21] Firstly, the CFMEU submitted that the appeal raises a jurisdictional issue that has been well-settled.

[22] Secondly, the CFMEU submitted that the grounds of appeal lack any real likelihood of success and, thus, refusing to grant permission to appeal would be in the public interest.

Consideration

[23] The FWC will grant permission to appeal only if it is in the public interest to do so. 8 The test of assessing whether a matter is in the public interest is discretionary and involves a broad value judgement.9 In GlaxoSmithKline Australia Pty Ltd v Colin Makin,10 the Full Bench summarised the test for determining the public interest as follows:

“[26] Appeals have lain on the ground that it is in the public interest that leave should be granted in the predecessors to the Act for decades. It has not been considered useful or appropriate to define the concept in other than the most general terms and we do not intend to do so. The expression ‘in the public interest’, when used in a statute, classically imports a discretionary value judgment to be made by reference to undefined factual matters, confined only by the objects of the legislation in question. [Comalco v O’Connor (1995) 131 AR 657 at p.681 per Wilcox CJ & Keely J, citing O’Sullivan v Farrer (1989) 168 CLR 210]

[27] Although the public interest might be attracted where a matter raises issues of importance and general application, or where there is a diversity of decisions at first instance so that guidance from an appellate court is required, or where the decision at first instance manifests an injustice, or the result is counter intuitive, or that the legal principles applied appear disharmonious when compared with other recent decisions dealing with similar matters, it seems to us that none of those elements is present in this case.”

[24] Alternately, the second ground for granting permission to appeal is that the decision is attended with sufficient doubt to warrant its reconsideration or that substantial injustice may result if leave is refused. 11

[25] In determining whether permission to appeal should be granted, we have reviewed and considered all material filed by the parties including all submissions, correspondence and the relevant authorities relating to permission to appeal.

[26] Whether an employee who is no longer in employment is able to pursue his or her rights arising under an enterprise agreement is an important issue for both employees and employers in Australia. In this regard, we agree with Broadspectrum’s submission that whether the Commission has the requisite jurisdiction to deal with disputes such as the one raised in this appeal is an issue, the determination of which is in the public interest.

[27] In light of the above, we are of the view that Broadspectrum’s submissions concerning the Commission’s jurisdiction raise important questions pertaining to rights arising from enterprise agreements. It is on this basis that permission to appeal with respect to the dispute over jurisdiction is granted.

The Appeal

[28] At the heart of the dispute was whether the Commissioner erred in his application of section 739 of the Act and clause 11 of the Agreement in finding that the Commission had jurisdiction to deal with the dispute.

Broadspectrum’s Submissions

[29] Firstly, the Broadspectrum contended that the Commissioner erred in his construction of the Act in finding there was jurisdiction for the dispute to be arbitrated by the Commission in circumstances where Mr Crawford was, at the time of the hearing of the matter, no longer an employee to whom the Agreement applied. Broadspectrum submitted that the jurisdiction of the Commission to conduct arbitration pursuant to the dispute resolution clause in an enterprise agreement depended on the relevant legislative provisions (section 739 of the Act) and the specific terms in the Agreement itself (clause 11.2). 12 Relying on King and Ors v Patrick Projects Pty Ltd (‘Patrick Project’),13 Kentz (Australia) Pty Ltd v CEPU (‘Kentz’),14 Jajoo and Telstra v CEPU,15 Broadspectrum contended that the Commissioner’s Decision disclosed the following errors:

(a) The Commissioner’s application of the general presumption that a source of power must be read broadly was erroneous as it misapprehended the reversal nature of section 89 of the Workplace Relations Act 1996 (Cth) (“the WR Act”) compared to the limited power conferred by sections 595 and 739 of the Act, that being:

(i) Section 89 of the WR Act conferred standing arbitral power on the Australian Industrial Relations Commission as being a broad one, unless a specific limitation was present (as interpreted in Jajoo), whereas;

(ii) Part 5-1 of the Act provides no such standing powers of the Commission and sections 595 and 739 only permit disputes under an enterprise agreement to be arbitrated where they are expressly agreed by the parties. Therefore, this means the starting point of the Commission’s jurisdiction to arbitrate such a dispute is “no power” and, therefore, any exercise of power must be done cautiously.

(b) The Commissioner failed to deal with Broadspectrum’s submission at first instance that, having regard to the coverage and application of the Agreement specified in clauses 2 and 3, titled “Application and Incidence of Agreement” and “Parties Bound” respectively, and clause 11, titled “Avoidance of Dispute Procedure”, could not give rise to any entitlement in respect of Mr Crawford once he ceased to be employed by Broadspectrum. This is because:

(i) Section 51(2) of the Act provides that an enterprise agreement only gives an entitlement to a person if the agreement applies to the person;

(ii) Section 52(1) of the Act provides that an enterprise agreement only applies to an employee if the agreement covers the employee;

(iii) Section 53(1) of the Act provides that an enterprise agreement covers an employee if it is expressed to covered the employee (howsoever described);

(iv) Clauses 2 and 3 of the Agreement set out that it only covers employees who are “engaged”; and

(v) In circumstances where Mr Crawford ceased to be employed, the Agreement conferred no entitlements on him, including any recourse to the private arbitration otherwise conferred by clause 11.

[30] Broadspectrum contended that whilst acceptance of the above submissions may require a departure from previous Full Bench decisions, the principles of stare decisis do not bind the Commission, and as there are cogent reasons for departure from these decisions, the Commission should do so.

[31] Secondly, Broadspectrum contended that the Commissioner erred in his interpretation of the Agreement in finding that Mr Crawford could progress a dispute beyond conciliation at the time which he was no longer employed. Broadspectrum contend that even if Jajoo was relied upon, clause 11 of the Agreement required an election to be made at a certain point in time for arbitration to occur. Clause 11.2 of the Agreement relevantly provides that:

“After the above steps have concluded and if the grievance is not resolved to the satisfaction of the person raising the grievance, any party may apply to Fair Work Australia seeking resolution of the grievance via conciliation as a first step, or thereafter Arbitration.”

[32] Broadspectrum, therefore, contended that as Mr Crawford was no longer an employee at the time of his election to proceed to arbitration, clause 11 did not permit him or the Commission to proceed in this regard.

CFMEU’s Submissions

[33] The CFMEU contended that the appeal by Broadspectrum raised a jurisdictional issue that has been well settled. 16 The CFMEU noted it was undisputed that Mr Crawford was an employee at the time the dispute was raised with Broadspectrum and when the dispute was filed in the Commission. The CFMEU posited that a person who is employed at the time a dispute is filed is entitled to pursue that dispute through arbitration in accordance with the relevant enterprise agreement under which they are covered. In this regard, the CFMEU asserted there is nothing contained in the Act which would lead the Commission to form the view that Mr Crawford was no longer covered by the Act once he ceased employment with Broadspectrum. When sections 595 and 739 of the Act and clause 11 of the Agreement are read together, the CFMEU contended there was no limitation on pursuing arbitration as contended by Broadspectrum.

[34] The CFMEU posited that a plain reading of the Agreement would lead one to conclude that a former employee is entitled to continue to pursue their dispute after cessation of their employment. The CFMEU noted that clause 11.1 provides for a “three step process” for the resolution of grievances before notifying a dispute to the Commission pursuant to clause 11.2.

[35] Clause 11.2 states that:

“After the above [‘three stage process’ for the resolution of grievances has] concluded and if the grievance is not resolved to the satisfaction of the person raising the grievance, any party may apply to Fair Work Australia seeking resolution of the grievance via conciliation as a first step, or thereafter Arbitration. Any arbitrated matter must be fully in accordance with the provisions of the Fair Work Act 2009 and the rules of Fair Work Australia”.

[36] The CFMEU contend there are four propositions borne out of clause 11.2:

1. Clause 11.2 does not use the terms “employee” or “employees” when describing who may lodge and pursue a dispute under the Agreement. The absence of the term “employee” in clause 11.2 can be contrasted with that in clause 11.1 which does not use the descriptors “employer” and “employee”. Therefore, clause 11.2 is not restricted to current employees and it follows that former employees who commenced their dispute while they were an employee will be covered by the Agreement;

2. The phrase “any party” in clause 11.2 clearly encompasses Mr Crawford as it may apply to those who are a party or an aggrieved party;

3. As any party may “apply” to the Commission, pursuant to clause 11.2, this supports a wide reading of the clause and imposes no restrictions. Further, that clause 11.2 empowers a party to apply to the Commission seeking conciliation in the first instance. The party does not then continue to be regulated through the process of the Agreement, but rather, the Commission then regulates the dispute; and

4. The phrase “or thereafter Arbitration” does not restrict some point in time at which the right to pursue a dispute expires. Therefore, clause 11.2 does not extinguish the party’s right to continue to pursue their dispute to arbitration upon cessation of employment.

[37] In light of these four submissions, the CFMEU contended that there is no limitation contained in the Agreement that only current and continuing employees of Broadspectrum are entitled to pursue a dispute through arbitration.

Consideration

[38] We note that a decision under appeal is of a discretionary nature and such a decision can only be successfully challenged on appeal if it is shown that the discretion was not exercised correctly. We note that it is not open for us to substitute our view on the matters that fell for determination before the Commissioner in the absence of error of an appellable nature in the Commissioner’s original Decision. As the High Court said in House v The King 17:

“The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred.”

[39] Broadspectrum’s appeal alleged two appellable errors in the Commissioner’s decision relation to jurisdiction. Firstly, to adopt the language of the High Court in House v The King 18, Broadspectrum asserted that the Commissioner acted “upon a wrong principle” of law by finding that there was jurisdiction for the matter to be arbitrated pursuant to the Act. Secondly, Broadspectrum asserted that an appellable error exists within the Commissioner’s interpretation of the Agreement in finding that Mr Crawford could progress a dispute beyond conciliation at the time at which he was no longer an employee. We turn to consider these two alleged appellable errors.

Jurisdiction under the Act

[40] In relation to terms of enterprise agreements which allow the Commission to deal with a dispute, section 739(3) of the Act provides that:

“In dealing with a dispute, the FWC must not exercise any powers limited by the term.”

[41] At issue in this case is whether, pursuant to section 739 of the Act, the Commission has the jurisdiction to deal with a dispute concerning a former employee. In Jajoo, a Full Bench considered this issue and the preceding authorities and stated that:

“[38] We accept that a single person dispute which arises for the first time after the termination of employment is not a dispute between an employer and an employee. However, many disputes will arise while employment exists and continue after the termination of employment. In such a case, when the dispute arises, it is a dispute between an employee and an employer. If the dispute is progressed to the point of seeking the assistance of the Commission, the ING interpretation would require the employee to remain in employment. If it was intended to incorporate a limitation in s 170LW of the nature contended for by ING, we would expect there to be a clear express reference to that effect.

[39] The ING interpretation involves construing the provision as disqualifying employees from any process the parties may agree to confer on the Commission once they cease to be employed by their employer. Further, it requires s 170LW to be construed as depriving the parties to agreements of the ability to have a dispute continue to be resolved under an agreed procedure after termination of employment. Such a consequence would arise with respect to any dispute over any aspect of the agreement, even claims such as the non-payment of a meal allowance. It would also operate to deprive the Commission of jurisdiction at any time during the process. If termination arises after a decision is reserved, the jurisdiction to hand down the decision would not exist.

[40] As a matter of interpretation, a court or tribunal should not read a limitation into a source of power unless the words clearly bear such a meaning. Further, we do not believe that concepts of legal and industrial disputes provide any assistance in resolving the matter. Nor do we believe that it matters how the termination of employment occurred. We do not believe that s 170LW should be interpreted as including a limitation on the rights of parties to agreements in this way. If a dispute arises when the employment relationship exists, we are of the view that it is a dispute between the employer and an employee. We believe that a limitation of the nature contended for by ING should not be inferred from the words of s 170LW.

[41] In the circumstances of this matter, Mr Jajoo sought to progress a dispute under the relevant dispute settlement procedure while still employed. It was unresolved when his employment was terminated. We do not believe that there is a sound basis for construing the terms of s 170LW in a way which would deprive him of the right to progress his dispute to other levels of the procedure, including to the Commission, after the termination of his employment.”

[42] Jajoo is authority for the finding that if an employee agitates a claim arising under an enterprise agreement while employed, the Commission has the jurisdiction to deal with the dispute, even after that employee’s relationship with the employer is terminated. This is consistent with National Tertiary Education Industry Union v The University of Wollongong 19 (‘Wollongong’), where a Full Bench considered the jurisdiction of the Commission to deal with a dispute lodged by the National Tertiary Education Industry Union regarding various matters including redundancy payments in relation to the employment of a specified employee.

[43] In Wollongong, a Full Bench of the Commission found that the Commission had jurisdiction to entertain a notification and upheld an appeal against the decision of Commissioner Lawson to the effect that no jurisdiction existed. The notices lodged by the NTEU were lodged one day prior to the termination of the employee’s employment.

[44] If we were to follow Jajoo and Wollongong, we would find that the Commission had the requisite jurisdiction to deal with the dispute on the basis that Mr Crawford was an employee at the time that he lodged his application. It is true, however, that Jajoo and Wollongong were decided prior to the enactment of section 739 of the Act. Primarily, for this reason, Broadspectrum asserts that the principles of stare decisis do not bind the Commission in relation to Jajoo and Wollongong.

[45] We agree with Broadspectrum to the extent that it asserts that we are not bound by the principles of stare decisis in relation to Jajoo and Wollongong. However, while we are not bound by the principles of stare decisis, we are of the view that we should depart from Jajoo and Wollongong only if we are persuaded that there is a sufficient reason to do so.

[46] Broadspectrum have pointed to Patrick Projects in support of its assertion that we ought to depart from Jajoo and Wollongong. Certainly, the Full Bench in Patrick Projects stated that:

“An application for the Commission to deal with a dispute in accordance with a dispute settlement procedure of an Enterprise Agreement pursuant to s.739 of the Act can only be heard when the applicants are employed.” 20

[47] Prima facie, this statement indicates a departure from Jajoo and Wollongong. A closer analysis reveals, however, that the Full Bench in Patrick Projects were considering a different issue to that which arose in Jajoo and Wollongong, and to what arises in this case. The employees in Patrick Projects lodged their applications after the employment relationship had ended. The Full Bench’s finding in Patrick Projects is consistent with Jajoo on the basis that the Full Bench in Jajoo concluded that the Commission’s jurisdiction is enlivened, and only remains enlivened, for applications that are lodged prior to the termination of the employment relationship. On this basis, we are not persuaded that Patrick Projects is a sufficient reason to depart from Jajoo and Wollongong.

[48] Broadspectrum also point to Kentz in the part of its written submissions in which it agitates for a “departure from previous Full Bench” 21 decisions. In Kentz, however, the Full Bench found22 that Commissioner Bissett had the requisite jurisdiction to deal with a dispute concerning former employees on the basis that those employees initiated their dispute prior to the termination of their relationship. Specifically, the following findings by Commissioner Bissett were not overturned by the Full Bench in Kentz:

“[29] I am satisfied that the dispute was raised and referred to the Commission prior to the termination of employment of the employees concerned. I am therefore satisfied that the Commission’s power to deal with the dispute is not lost solely because the employees to whom the dispute relates no longer work at Kentz.” 23

[49] In light of the above, the Full Bench’s findings in Kentz cannot be relied upon to support a departure from Jajoo and Wollongong. The Full Bench’s findings in Kentz are consistent with Jajoo and Wollongong, and do not persuade us that the Commission’s jurisdiction to deal with a dispute concerning a former employee is lost in circumstances where the employee lodged his or her dispute prior to the termination of the employment relationship.

[50] We are not persuaded to depart from Jajoo and Wollongong. We are not persuaded that the Commissioner erred with his construction of the Act in finding that there was jurisdiction for the dispute to be arbitrated by the Commission in circumstances where Mr Crawford was no longer an employee of Broadspectrum.

Jurisdiction under the Agreement

[51] Broadspectrum asserted that even if Jajoo is followed, clause 11 of the Agreement requires an election to be made at a certain point in time for arbitration to occur. Broadspectrum asserted that as Mr Crawford was no longer an employee at the time of his election to proceed to arbitration, clause 11 of the Agreement did not permit him, or the Commission, to proceed with the arbitration.

[52] Clause 11.1 provides for a “three step process” for the resolution of grievances before notifying a dispute to the Commission pursuant to clause 11.2. Clause 11.2 of the Agreement states that:

“After the above steps have concluded and if the grievance has not resolved to the satisfaction of the person raising the grievance, any party may apply to Fair Work Australia seeking resolution of the grievance via conciliation as a first step, or thereafter Arbitration. Any arbitrated matter must be fully in accordance with the provisions of the Fair Work Act 2009 and the rules of Fair Work Australia.”

[53] While clause 11.1 refers to “employees” and “employers”, clause 11.2 refers to “any party.” Broadspectrum posited that there is nothing of significance in the change of wording and that it is only logical that a different formulation of words was needed in clause 11.2 given that it could be either the employee or the employer who could progress the dispute to the Commission.

[54] Mr Crawford was an “employee” of Broadspectrum on 27 July 2016 which was the time that the CFMEU lodged the F10 application on his behalf. Even if, as Broadspectrum asserts in its submissions, the phrase “any party” constitutes “employees” and “employers” only, Mr Crawford was “any party” pursuant to clause 11.2 of the Agreement when the application was lodged.

[55] Many disputes, such as the one in the present matter, arise while the employment relationship is alive and continue after the termination of employment. In such a case, when the dispute arises, the dispute is between an employee and an employer. Broadspectrum’s submissions involve interpreting clause 11.2 of the Agreement so as to disqualify employees from any process the parties may agree to confer on the Commission once they cease to be employed. We are not persuaded that we should interpret the Agreement to limit the rights of former employees in this way, particularly when Mr Crawford lodged his application while he was employed by Broadspectrum. If we were to follow the Broadspectrum approach, employees who lodge a dispute while employed would not be entitled to the resolution of that dispute if the dispute was unresolved when their employment ends. We are not persuaded to reach this finding.

[56] We are of the view that if a dispute is lodged by a person who is employed at the time that they lodge the dispute, the Commission has the requisite jurisdiction to deal with the dispute pursuant to the Agreement. We believe that this is consistent with AMIEU v Golden Cockerel. In particular, we believe that pursuant to the ninth factor in AMIEU v Golden Cockerel, a “reasonable person would understand the language the parties have used to express their agreement” 24 as an indication that an employee who lodges a dispute while still employed ought to have the opportunity to have the Commission resolve that dispute even if their employment relationship is terminated.

[57] On this basis, we are of the view that the Agreement does not oust the jurisdiction of the Commission to deal with the dispute on the basis that Mr Crawford is no longer an employee of Broadspectrum.

[58] We are, therefore, satisfied that the Commission has the requisite jurisdiction to deal with the dispute.

Summary

[59] Broadspectrum is granted permission to appeal.

[60] The Appeal is dismissed.

Part III – Overtime Pay (C2016/5733)

[61] In this part of our decision, we consider the CFMEU’s assertion that Mr Crawford had an entitlement under the Agreement to be paid overtime for attendance of compulsory training during overtime hours.

Decision

[62] The Agreement provides that overtime rates will be paid for “work” that is performed outside ordinary hours. At the heart of the dispute is whether training constitutes “work”, and, therefore, whether training conducted in overtime attracts overtime pay.

[63] The Commissioner considered how a reasonable person would construe the word “work” in the enterprise agreement having regard to its context and purpose. The Commissioner noted a longstanding distinction between work and training.  The Commissioner relied on the decision of CEPU v Excelior Pty Ltd (2013) FCA 638 (“Excelior”) which was followed in United Voice v Wilson Security [2015] FWC 2507 (“United Voice”) as authority for that proposition.

[64] The Commissioner found that the distinction between work and training was not limited to apprentices.  The Commissioner further found that there was nothing in the text, context or purpose of the relevant provisions of the enterprise agreement that suggested that the parties to the enterprise agreement objectively intended to not maintain the longstanding distinction between work and training. Amongst other clauses, the Commissioner had particular regard to clause 10(b) of the Agreement, which stated:

“Skills enhancement to develop, extend an employee's skills consistent with the productivity and flexibility requirements of the work to be completed and to extend the employee's competence so he/she can ideally perform the whole task.”

[65] The Commissioner asserted that this clause made a distinction between the acquisition of skills, on the one hand, and the performance of work, on the other hand. Additionally, the Commissioner noted an issue about whether the terms of the relevant modern award, namely the Manufacturing and Associated Industries and Occupations Award (“the Award”), were incorporated into the terms of the enterprise agreement. In this regard, the Commissioner opined that the terms of the modern award were incorporated into the enterprise agreement. In particular, the Commissioner noted clause 4 of the Agreement, which states:

“where there is any inconsistency between the relevant award and this agreement then the terms of this agreement shall prevail to the extent of the inconsistency.”

[66] On this basis, the Commissioner considered that there was nothing in the text, context or purpose of the relevant provisions of the Award that suggested the makers of the award objectively intended not to maintain the distinction between work and training. As a result, the Commissioner found that training is not “work”, and that as a consequence, training conducted outside of ordinary hours does not attract overtime pay.

[67] For the above reasons, the Commissioner concluded that the attendance by Mr Crawford was not entitled to overtime pay for training that he engaged in during overtime hours.

Permission to Appeal

[68] At the heart of the dispute was whether the Commissioner erred in finding that training was not “work” for the purposes of the Agreement.

CFMEU’s Submissions

[69] The CFMEU asserted that permission to appeal should be granted on the basis that it is in the public interest for a Full Bench to consider the issues raised in the appeal. The CFMEU asserted that sufficient doubt exists in the decision of the Commissioner and that the public interest is enlivened.

Broadspectrum’s Submissions

[70] Broadspectrum asserted that it is not in the public interest to grant permission to appeal on the basis that the CFMEU has not identified an appealable error and that there is longstanding judicial and tribunal authority with respect to the distinction between work and training.

Consideration

[71] In paragraphs [23] and [24], we have outlined the principles that are to be applied when considering whether permission to appeal ought to be granted.

[72] In determining whether permission to appeal should be granted we have reviewed and considered all material filed by the parties including all submissions, correspondence and the relevant authorities relating to permission to appeal.

[73] We are of the view that the appeal raises important questions concerning the construction and interpretation of the Agreement in relation to whether compulsory training is “work” and whether it follows that Mr Crawford was entitled to overtime pay. We consider this to be an important matter regarding the Commissioner’s approach in making such a determination and, therefore, the dispute arising in this case is a matter of public interest. It is on this basis that permission to appeal is granted.

The Appeal

[74] The CFMEU submitted three grounds of appeal which Broadspectrum disputed.

CFMEU’s Submissions

[75] Firstly, the CFMEU contended that the Commissioner erred in finding that Mr Crawford had no entitlement under the Agreement to be paid overtime or other penalty rates for attendance at compulsory training. The CFMEU highlighted that the Agreement contained no definition of “work” or “training”, which, therefore, creates ambiguity and regard may be had to the surrounding circumstances in order to resolve that ambiguity.

[76] The CFMEU posited that the training carried out by employees of Broadspectrum was of such significance that undertaking work in the absence of such training would lead to employees being barred from working. Further, if Mr Crawford failed to undertake the relevant training, he would be in contravention of the Agreement. On this basis, the CFMEU asserted that training was a condition precedent to work and it is so intimately connected to work that it forms part of it.

[77] The CFMEU contended that, when read together, clauses 9, 10, 15, 16.7 and 19 support the proposition that “work” under the Agreement includes “training”. In line with the above clauses, the CFMEU submitted that Mr Crawford was required to work more than the “ordinary hours” of 38 hours per week. Further, that clauses 16.7 and 19 make express provision for overtime when time is worked in excess of or outside the ordinary working hours. In particular, clause 19.2.1 provides that Broadspectrum can require employees to work overtime for the purposes of “meeting operational requirements”. For the above reasons, the CFMEU contended that the compulsory training attended by Mr Crawford formed part of his “work” and, as he worked outside the ordinary hours stipulated by the agreement, he was entitled to overtime.

[78] Secondly, the CFMEU contended that Excelior and United Voice turned upon their own facts which were distinguishable to those before the Commission at first instance.

[79] The CFMEU submitted that United Voice was distinguishable on the basis that it concerned a very specific training clause and no such training clause existed in the Agreement before the Commission at first instance.

[80] Thirdly, the CFMEU contended that the Commissioner failed to apply the following two principles of construction in relation to the Agreement:

1. The principle outlined in Kucks v CSR Ltd 25, which was approved by the Full Bench in Australian Meat Industry Employees Union v Golden Cockerel Pty Ltd26 (“Golden Cockerel”) that:

“A narrow pedantic approach to interpretation should be avoided, a search of the evident purpose is permissible and meanings which avoid inconvenience or injustice may reasonably strained for …”

2. The principle outlined in City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union 27 (“Wanneroo”) that the:

“words [of an enterprise agreement] must not be interpreted in a vacuum divorced from industrial realities …”

[81] Applying Golden Cockerel, the CFMEU contended that the “evident purpose” of the Agreement was that there was no distinction between “work” and “training”. When applying Wanneroo, the CFMEU asserted that the Commissioner’s construction was “divorced from industrial realities” as the training was so intrinsically linked to work that an employee of Broadspectrum who did not undertake the training was not permitted to work. Further, the CFMEU asserted it would lead to real doubts as to whether particular statutory rights and obligations of the employees and Broadspectrum apply when, on the Commissioner’s construction, employees are not working, but merely training.

[82] For the above reasons, the CFMEU contended compulsory training was “work” for the purposes of the Agreement and that, consequently, Mr Crawford was entitled to be paid overtime or other penalty rates for attendance at compulsory training.

Broadspectrum’s Submissions

[83] Broadspectrum responded to each of the three submissions made by the CFMEU in its appeal.

[84] Regarding the first submission, Broadspectrum contended that it is well established that the entitlement to any particular benefit in an industrial instrument arises not because an employee was required to do something as part of their contract of employment, but rather, it arises if the instruments provides the entitlement. 28 Broadspectrum also noted that it was interesting that the distinction between “work” and other things like “service” is itself a feature of the oft-cited passage of Dixon J (as his Honour then was) in Automatic Fire Sprinklers Pty Ltd v Watson.29

[85] Broadspectrum submitted that the issue is that overtime is only paid in respect of “work performed” and/or “overtime hours worked”. 30 Broadspectrum noted that a request to work overtime may be for the purposes of operational requirements, but throughout the Agreement, the hours must be in respect of “work”. Further, Broadspectrum asserted that it is well established that work and training are different and considered as different concepts.31 Broadspectrum highlighted that this was recognised in the CFMEU’s own submission that “training is a condition precedent to work”.32

[86] Regarding the second submission, Broadspectrum contended that, in respect of Excelior, it did not matter that the employee was a trainee in that case. Rather, the point was that the case maintained a distinction between “work” and “training”. In relation to United Voice, Broadspectrum asserted that it did not matter that the clause in that case related to training payments. Rather, the point was that the agreement illustrated that “work” and “training” could be distinguished, as well as the basis on which one is paid or not paid.

[87] Regarding the third submission, Broadspectrum contended that Commissioner’s approach was orthodox and disclosed no errors at all and that he correctly applied the principles in Golden Cockerel and Wanneroo.

[88] For the above reasons, Broadspectrum contended that Mr Crawford’s attendance at compulsory training was not “work” and, as such, he was not entitled to any overtime payments.

Consideration

[89] Clause 19.1 of the Agreement relevantly provides that:

“OVERTIME

19.1 Payment for Working Overtime

19.1.1 For all work performed outside ordinary hours the rates of pay shall be time and a half for the first two hours and double ordinary time rates thereafter, such double time to continue until the completion of the overtime work.”

[90] Clause 19.2.1 of the Agreement relevantly provides that:

“19.2 Requirement to Work Reasonable Overtime

19.2.1 The Company may require any employee to work reasonable overtime at overtime rates. Such reasonable request may be for the purposes of meeting operational requirements and as such employee/s will not refuse to work the overtime unless a justifiable reason exists.”

[91] The key question that arises in this case is whether, for the purposes of clause 19 of the Agreement, “work” includes the compulsory “training” that Mr Crawford engaged in outside of ordinary hours. In the Decision, the Commissioner found that there is a “longstanding line of authority dealing with the distinction between work and training.” 33 On the basis that there is a longstanding line of authority that distinguishes between work and training, the Commissioner approached the task of interpreting the Agreement by assuming that the parties intended to maintain the longstanding distinction between work and training.

[92] The CFMEU asserts that there is not a longstanding line of authority that distinguishes between work and training. This is disputed by Broadspectrum. In his decision, the Commissioner found that “Authority for that proposition is first, the decision of Katzmann J” in Excelior. In Excelier, a case which concerned the rights of a trainee under an award, Katzmann J distinguished between “work” and “training”. While the Commissioner found that Excelior is directly applicable, we agree with the CFMEU to the extent that it submits that Excelior is distinguishable to the present case for the following reasons:

a) The employee under consideration in Excelior was a trainee;

b) The question in Excelior was whether the terms of the award in that case provided for the cost of travel and related expenses in order for the employee to attend compulsory training. The issue was not regarding whether the agreement provided payment of wages when an employee attended training per se;

c) The clause in the relevant award in Excelior was very specific and there is no clause akin to the agreement in case before the Commission at first instance; and

d) The matter turned upon the employment contract, which is entirely different to that considered by the Commission in the first instance.

[93] For the above reasons, we are of the view that Excelior is of limited relevance to the present case.

[94] The second authority that the Commissioner relied upon to assert that a longstanding line of authority distinguishes between work and training is United Voice. In United Voice, however, Commissioner Gregory also identified the ‘limited relevance’ 34 of Excelior to interpreting a clause in an enterprise agreement. Commissioner Gregory found that Excelior is relevant to the extent that it acknowledges a definitional distinction in some instances between work and training.35

[95] The approach of Commissioner Gregory in paragraphs [50] – [63] in United Voice exemplifies that whether the definitional distinction between work and training ought to be read into a clause of an enterprise agreement depends upon the application of the principles outlined in Golden Cockerel. For this reason, and due to the limited relevance of Excelior in interpreting enterprise agreements, we reject the contention that it should be assumed, in the absence of evidence to the contrary, that parties intend to infuse the distinction between work and training into clauses of enterprise agreements.

[96] We are of the view that whether this distinction is infused into clauses of enterprise agreements depends upon the application of the principles to be applied to the construction of enterprise agreements, rather than by a preliminary assumption that parties seek to distinguish between work and training. The relevant principles to be applied to the construction of enterprise agreements are summarised at paragraph [41] of Golden Cockerel.

[97] In relation to principles 2 – 4 espoused in Golden Cockerel, we are of the view that an ambiguity exists in clause 19 of the Agreement, that is, whether for the purposes of that section, compulsory training is captured by the use of the term “work”. Pursuant to principle 7 espoused in Golden Cockerel, we have considered the context and purpose of the Agreement. The text of the Agreement, read as a whole, does not, in our view, resolve the ambiguity triggered by clause 19. While other clauses of the Agreement focus variously on time worked, all work performed, overtime hours worked and overtime worked, they do not provide a resolution to the issue of whether “work” captures compulsory training for the purposes of clause 19 of the Agreement.

[98] It is necessary, then, to turn to principle 9 espoused in Golden Cockerel. This principle provides that the common intention of the parties can be identified by reference to that which a reasonable person would understand by the language the parties have used to express their agreement. If Broadspectrum’s submissions are accepted, employees can be forced to attend training outside of ordinary hours without overtime remuneration, even though the Agreement does not provide that training is excluded from the overtime provision. Broadspectrum acknowledged in oral submissions that on this interpretation of the Agreement, Broadspectrum could have required an employee to undertake training and not pay them at all, since training is not “work” for the purposes of clause 16. 36 We are not persuaded that a reasonable person would identify this to be the common intention of the parties.

[99] The training that Mr Crawford engaged in was critical to the operations of Broadspectrum. In circumstances such as this, and where the relevant Agreement does not explicitly distinguish work from training, we are of the view that a reasonable person would understand the common intention of the parties to be to entitle an employee who attends compulsory training in overtime hours to be entitled to overtime remuneration.

[100] In this regard, we are of the view that a reasonable person would understand the common intention of the parties in relation to clause 19 was to adopt a wider scope of “work” than that which is asserted by Broadspectrum. A wider interpretation of “work” than that which is asserted by Broadspectrum is consistent with previous cases. In Warramunda Village Inc v Pryde, for example, a Full Court of the Federal Court observed that:

“An employee who attends at the place of employment pursuant to the employer's direction to be at the employer's premises for a period of time and be available to provide service at the premises as required by the employer, is not carrying on private activities but is providing service to the employer. Such an employee is at "work"...” 37

[101] In the circumstances of the case before us, and having had regard to the principles espoused in Golden Cockerel and the other relevant authorities, we are of the view that an employee who attends training at the direction of his or her employer outside of ordinary hours is carrying out “work” for the purposes of clause 19 of the Agreement, and is, therefore, entitled to overtime remuneration. We are of the view that a reasonable person would understand this to be the common intention of the parties based on the text of the Agreement.

[102] In light of the above, we are of the view that the Commissioner erred in his interpretation of clause 19 of the Agreement. It follows that the appeal must be upheld and that the Decision must be quashed. It also follows that Mr Crawford is entitled to overtime remuneration for the training that he undertook outside of ordinary hours.

Conclusion

[103] The appeal is upheld.

[104] The Decision is quashed.

[105] Mr Crawford is entitled to overtime remuneration for the training that he undertook.

VICE PRESIDENT

Appearances:

Mr B. Madden of Counsel for the Construction, Forestry, Mining and Energy Union

Mr C. Gianatti of Counsel for Broadspectrum

Hearing details:

1:00 pm

26 October 2016

Sydney

 1   Decision in transcript dated 2 September 2016.

 2   Transcript, PN6.

 3   Tokoda v Westpac Banking Corporation T/A Westpac [2012] FWAFV 3995, [3].

 4   21 days after 16 September 2016, not including 16 September 2016, is 7 October 2016. 10 October 2016 is three days after 7 October 2016.

 5   See for example Fox v Kangan TAFE Print S0253, 25 October 1999 at [36]; Stevenson-Helmer v Epworth Hospital, Print T2277, 19 October 2000; Dundovich v P&O Ports, Print PR923358, 8 October 2002 per; SPC Ardmona Operations Ltd v Esam and Organ (2005) 141 IR 338; Jobs Australia v Eland [2014] FWCFB 4822; Farnhill v Australian Business Academy Pty Ltd [2016] FWFBC 3410.

 6   Jobs Australia v Eland [2014] FWCFB 4822.

 7   [2007] AIRC 773.

 8   Fair Work Act 2009 (Cth) s 604(2).

 9   Esso Australia Pty Ltd v AMWU; CEPU; AWU [2015] FWCFB at [6].

 10   [2010] FWAFB 5343 at [27].

 11   Esso Australia Pty Ltd v AMWU; CEPU; AWU [2015] FWCFB 210 at [7].

 12   Construction, Forestry, Mining and Energy Union v Australian Industrial Relations Commission [2001] HCA 16.

 13   [2015] FWCFB 6323 (‘Patrick Projects’).

 14   [2016] FWCFB 2019 (‘Kentz’).

 15   [2007] AIRCFB 374 (‘Telstra’).

 16   ING Administration Pty Ltd v Jajoo, Ramsin [2007] AIRC 773.

 17   [1936] HCA 40.

 18   [1936] HCA 40.

 19   PR930177.

 20   [2015] FWCFB 6323, [43].

 21   Broadspectrum’s submissions, paragraph [21].

 22   Kentz, at [75].

 23   [2016] FWC 669.

 24   [2014] FWCFB 7447.

 25   (1996) 66 IR 182.

 26   [2014] FWCFB 7447, [20].

 27   (2006) 153 IR 426.

 28   CEPU v Excelior Pty Ltd (2013) FCA 638, [51]; Coal & Allied Mining Services v MacPherson [2010] FAFC 83, [53]-[54].

 29   (1946) 72 CLR 435, 466.

 30   Agreement, cl 19.1.1.

 31   United Voice v Wilson Security (2015) 2507, [64]-[65]; CEPU v Excelior Pty Ltd (2013) FCA 638, [55].

 32   CFMEU Submissions, C2016/5733, [18].

 33   Decision, PN928.

 34   United Voice at [45] for reasons outlined at [42].

 35   United Voice at [43].

 36   Transcript, PN172 – PN173.

 37   (2002) 116 FCR 58, [17].

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