1
Fair Work Act 2009
s.526 - Application to deal with a dispute involving stand down
Timothy Schell, Chris Cootes, Scott Colwell, Nathan Wollman and Tye
Jakubowski
v
Ensign Australia Pty Ltd
(C2015/3008, C2015/3009, C2015/3010, C2015/3443, C2015/5246)
COMMISSIONER JOHNS SYDNEY, 21 DECEMBER 2015
Application to deal with a dispute involving stand down - stand down in relation to protected
industrial action – jurisdictional issue - whether ex-employees can bring an application - Fair
Work Act 2009 ss 524,526.
Introduction
[1] This decision is in relation to applications made by each of Timothy Schell, Chris
Cootes, Scott Colwell, Nathan Wollman and Tye Jakubowski under section 526 of the Fair
Work Act 2009 (FW Act) for an order that Ensign Australia Pty Ltd (Ensign) “pay [each of]
the applicant[s] an amount that is fair in the circumstances.”1
[2] The circumstances involve each of the applicants having been stood down by Ensign
in late 2014 due to economic factors it faced at the time. In May 2015 each of the applicants
had their employment terminated by reason of redundancy. In the period between the stand
down and the termination of their employment the applicants received no pay.
[3] The applications in the present matters were made after the termination of the
applicants’ employment (i.e. not during the actual period of stand down). For this reason
Ensign objected to the Fair Work Commission (Commission) exercising jurisdiction in
relation to the matters.
[4] The jurisdictional hearing was held on 7 September 2015 following the parties’
compliance with directions for the filing of evidence and outlines of submissions. Witness
statements were filed by four of the applicants (namely Messrs Schell, Wollman, Colwell and
Cootes). The respondent’s evidence was contained in an affidavit sworn by James Ackland,
HR Team Lead-Queensland. Mr Ackland gave evidence about the circumstances relating to
Messrs Schell, Colwell and Cootes. There was no evidence in respect of Mr Jakubowski. His
application, by consent of the parties, was joined to the other four applications during the
1 Transcript PN9.
[2015] FWC 8825
DECISION
E AUSTRALIA FairWork Commission
[2015] FWC 8825
2
course of the jurisdictional hearing on the basis that the same substratum of facts applied to
him.
[5] At the hearing Mr I Latham of counsel appeared for the applicants. Mr A Joseph of
counsel appeared for Ensign. Having regard to the complexity of the matter, the Commission,
as presently constituted, was satisfied that it would be assisted in the efficient conduct of the
matter if permission was granted to all parties to be represented pursuant to s.596(2)(a) of the
FW Act.
[6] At hearing of the matter on 7 September 2015 counsel for the applicants sought to
amend the orders sought in relation to the applications. Each of the original applications
sought an order that the applicants be paid an amount referable to the period from when they
were stood down to when their employment was terminated. In essence the original orders
sought had all the hallmarks of a claim for back payments in respect of the identified period.
On the face of the original applications it seemed, more likely than not, that the applicants, by
way of remedy, wanted the Commission to enforce a past right. That is to say they wanted the
Commission to exercise judicial power rather than arbitral power. That would have been
beyond the jurisdiction of the Commission.
[7] The proposed amendment to the orders was opposed by Ensign. While recognising the
broad discretion invested in the Commission to amend applications under s.586 of the FW
Act, Ensign submitted that the proposed amendment went further than the correction of a
mistake or anomaly in the original application, but in essence created a new cause of action.
Ensign submitted that the fundamental change sought to be made to the applications by the
applicants should not be allowed.
[8] The applicants submitted that the proposed amendment should be allowed because it
does not seek to correct or amend an application made under one statutory provision so that it
becomes an application under a fundamentally different statutory provision. It was submitted
that the proposed amendment falls within the broad discretion that the Commission has under
s.586 of the FW Act. The applicants submitted that the amendment issue should be dealt with
after the Commission determined whether it had jurisdiction to arbitrate the dispute.
Background
[9] The following matters were either agreed, not substantively different or not otherwise
contested:
Applicant Date employed Last day
worked
Date of stand
down direction
Date
employment
terminated
Date of
application to
deal with the
stand down
Timothy Schell 9 March 2011 16 Dec 2014 30 Nov 2014 15 May 2015 5 June 2015
Chris Cootes 5 August 2013 10 Dec 2014 22 Dec 2014 15 May 2015 5 June 2015
Scott Colwell 16 Nov 2013 13 Nov 2014 22 Dec 2014 15 May 2015 5 June 2015
Nathan
Wollman
2 Oct 2011 18 Dec 2014 Not in evidence 4 May 2015 29 July 2015
Tye Jakubowski 19 Dec 2013 20 Nov 2014 Not in evidence Not in evidence 31 August 2015
[2015] FWC 8825
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[10] What is not contested and what gave rise to the jurisdictional objection is the fact that
each of the applications were made at a time when the applicants were no longer employed by
the respondent.
The Relevant Legislation
[11] Stand down provisions were a feature of many awards for many years. Now the right
to stand down employees is contained in the FW Act. Section 524 of the FW Act provides:
“Division 2—Circumstances allowing stand down
524 Employer may stand down employees in certain circumstances
(1) An employer may, under this subsection, stand down an employee during a period in which the
employee cannot usefully be employed because of one of the following circumstances:
(a) industrial action (other than industrial action organised or engaged in by the employer);
(b) a breakdown of machinery or equipment, if the employer cannot reasonably be held
responsible for the breakdown;
(c) a stoppage of work for any cause for which the employer cannot reasonably be held
responsible.
(2) However, an employer may not stand down an employee under subsection (1) during a period in
which the employee cannot usefully be employed because of a circumstance referred to in that
subsection if:
(a) an enterprise agreement, or a contract of employment, applies to the employer and the
employee; and
(b) the agreement or contract provides for the employer to stand down the employee during
that period if the employee cannot usefully be employed during that period because of that
circumstance.
Note 1: If an employer may not stand down an employee under subsection (1), the employer
may be able to stand down the employee in accordance with the enterprise agreement or the
contract of employment.
Note 2: An enterprise agreement or a contract of employment may also include terms that
impose additional requirements that an employer must meet before standing down an
employee (for example requirements relating to consultation or notice).
(3) If an employer stands down an employee during a period under subsection (1), the employer is not
required to make payments to the employee for that period.”
[12] The remedy sought to be accessed by the applicants in this case arises from s.526 of
the FW Act which provides:
“Division 3—Dealing with disputes
526 FWC may deal with a dispute about the operation of this Part
(1) FWC may deal with a dispute about the operation of this Part.
(2) FWC may deal with the dispute by arbitration.
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Note: FWC may also deal with a dispute by mediation or conciliation, or by making a
recommendation or expressing an opinion (see subsection 595(2)).
(3) FWC may deal with the dispute only on application by any of the following:
(a) an employee who has been, or is going to be, stood down under subsection 524(1) (or
purportedly under subsection 524(1));
(b) an employee in relation to whom the following requirements are satisfied:
(i) the employee has made a request to take leave to avoid being stood down
under subsection 524(1) (or purportedly under subsection 524(1));
(ii) the employee’s employer has authorised the leave;
(c) an employee organisation that is entitled to represent the industrial interests of an
employee referred to in paragraph (a) or (b);
(d) an inspector.
(4) In dealing with the dispute, FWC must take into account fairness between the parties concerned.”
[13] The issue to be determined in this matter is whether the applicants are within the scope
of s.526 of the FW Act. The answer lies in whether the applicants are each “an employee”
within the meaning of s.526(3)(a).
[14] Section 523 of the FW Act provides that the “meanings of employee and employer”
are as follows:
“In this Part, employee means a national system employee and employer means a
national system employer.”
[15] Section 13 of the FW Act provides that the meaning of “national system employee” is
as follows:
“A national system employee is an individual so far as he or she is employed, or
usually employed, as described in the definition of national system employer in section
14, by national system employer, except on a vocational placement.”
[16] It is common ground between the parties that at the time that the applications were
made the applicants were not employed by the respondent. Consequently, for the
Commission to have jurisdiction in relation to the matter the applicants must be individuals
who are “usually employed”. There was a dispute between the parties about the point in time
when the applicants must be “usually employed”.
Respondent’s submissions
[17] The respondent conceded that the concept of “usually an employer” and “usually an
employee” can extend beyond existing employment relationship. However, it submitted that
in the context of the stand down provisions in the FW Act that is not the case. It submitted
that the words “has been, or is going to be, stood down” are properly interpreted as meaning
that a stand down is either occurring or has been notified to occur at the time the application is
made. It further submitted that this interpretation is supported by the fact that the Commission
is empowered to deal with such a situation by arbitration only. That is to say, that the
Commission can only exercise arbitral power in respect of future rights (concerning the
existing or proposed stand down). It submitted that this interpretation is consistent with s.527
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which makes contravention of an order made by the Commission under this part a civil
remedy provision. The respondent submitted that such a provision could only apply to orders
affecting future conduct.
[18] The respondent submitted that the capacity of the Commission to deal with a dispute
by arbitration means that s.526 of the FW Act was never intended to apply to circumstances
where the employment relationship has ceased.
[19] The respondent further submitted that its proposed interpretation is consistent with
other parts of the FW Act which, by contrast, clearly extend to individuals other than current
employees.
For example, the Unfair Dismissal jurisdiction in Part 3-2 of the Act. The
jurisdictional threshold for an unfair dismissal claim appears at section 386 of the
Act, which states that “a person has been dismissed if…” (Section 386(1) of the Act).
Reference to a “person” quotes means that those other than an “employee” (e.g. a
former employee) are eligible to access the jurisdiction. The same applies to the
adverse action provisions at Part 3-1 of the Act.2
Applicants’ submissions
[20] The applicants rejected the respondent’s construction on the basis that, they submitted,
the time for assessing whether the applicants are “employed” or “usually employed”, is not
when the applications are made (in the present matter after employment relationship ended),
but rather when the act of stand down occurred. It is not contested that, at the time when the
act of stand down occurred, the applicants were employees of the respondent.
[21] The applicants further submitted that,
“It would be an absurd conclusion that a person who had been stood down and then
dismissed could not make such an application while a registered organisation or an
inspector could make one on their behalf under s.526(c) and (d).3
[22] In the alternative, the applicants submitted that they were “usually” national system
employees.
Respondent’s submissions in reply
[23] In reply, the respondent submitted that the time to assess whether the applicants are
“employed” or “usually employed” is at the time when the applications to the Commission are
made and not at the time when the stand down occurs.
Consideration
[24] Neither of the parties were able to direct the Commission’s attention to any authorities
where an application under s.526(3) of the FW Act was made by a former employee.
[25] The Fair Work Bill 2009 Explanatory Memorandum provides the following guidance
in relation to the operation of s.526:
Division 3 – Dealing with disputes
2 Respondent's submissions regarding the jurisdictional objection dated 14 August 2015, para 20.
3 Applicant's submissions regarding the jurisdictional objection dated 21 August 2015, para 11.
[2015] FWC 8825
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Clause 526 – FWA may deal with a dispute about the operation of this Part
2086. FWA is able to deal with a dispute about the operation of this Part. FWA is specifically permitted
to deal with the dispute by arbitration (subclauses 526(1) and 595(3)).
2087. The legislative note under subclause 526(2) alerts readers to the fact that FWA may also deal
with a dispute by mediation or conciliation or by making a recommendation or expressing an opinion
(see subclause 595(2)).
2088. FWA may only deal with a dispute upon application by:
an employee who has been (or is going to be) stood down under subclause 524(1);
an employee who has made a request to take leave to avoid being stood down under subclause
524(1) (and the employer has authorised the leave);
an employee organisation that is entitled to represent the industrial interests of an employee
who has been or is going to be stood down; and
an inspector.
2089. A person who has been stood down in circumstances where the requirements set out in this Part
have not been met is also able to make an application to FWA (subclause 526(3)).
2090. Subclause 526(4) requires FWA to take into account fairness between the parties to the dispute
when making orders.
[26] When considered in context and having regard to the purpose of investing the
Commission with a dispute settling power, the better interpretation is that, at the time the
application is made to the Commission, there must be an existing employment relationship
between the applicant employee and the respondent employer. In the present context the
power to stand down is a creature of statute. It relieves the employer of the obligation to pay
an employee who is otherwise ready, willing and able to work for the employer. At common
law the employee would be entitled to be paid, however s.524(3) of the FW Act relieves the
employer of that common law obligation. The consequences for an employee, deprived of his
or her wage by operation of the statute, are potentially significant. It is for this reason that the
Parliament provided for a mechanism through which an employee adversely affected by a
stand down could make application to address those adverse consequences.
[27] Such an interpretation is assisted by focusing on the phrase “who has been, or is going
to be, stood down”. That is to say, at the time the application is made to the Commission, the
employee must be experiencing the consequences of the stand down or be about to experience
the consequences of the stand down. They must be employed by the respondent employer
when the application to the Commission is made. The whole purpose of the legislative
scheme is to provide affected employees with a remedy that can be promptly actioned by
them.
[28] In the present matters the applicants had every opportunity between the time when
they were stood down to when their employment with Ensign was ultimately terminated to
complain about the stand down and seek the assistance of the Commission. They chose not to
do so. In truth, what they seek to do now (through their present applications) is to recover
what they consider to be an underpayment of wages. The Commission does not have
jurisdiction to deal with underpayments of wages (i.e. the enforcement of past rights). As
such an interpretation of s.526 that would invest the Commission with a power to do
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indirectly that which it cannot do directly must be rejected.
Conclusion
[29] For the reasons above:
a) the respondent’s jurisdictional objection is upheld; and
b) the applications by the applicants are dismissed.
COMMISSIONER
Appearances:
Mr I. Latham for the applicants.
Mr A. Joseph for the respondent.
Hearing details:
2015.
Sydney
7 September.
Final submissions:
Respondent, 11 September 2015.
Applicants, 16 September 2015.
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Price code C, PR575294
WORK COMMIS SSION THE SEAL OF THE F
