1
Fair Work Act 2009
s.739 - Application to deal with a dispute
Mr Nathan Brown; Mr Grant Welsh
v
Broadspectrum Limited
(C2016/310)
Manufacturing and associated industries / black coal mining industry
COMMISSIONER SAUNDERS NEWCASTLE, 18 APRIL 2016
Jurisdiction to arbitrate a dispute under a dispute settlement procedure in an enterprise
agreement.
[1] Mr Nathan Brown and Mr Grant Welsh (the Applicants) are employed by
Broadspectrum Limited (formerly known as Transfield Services Limited). They work for
Broadspectrum in coal handling preparation plants in Wyee, Myuna and Cooranbong, New
South Wales. They claim they are entitled to long service leave in accordance with the Coal
Mining Industry (Long Service Leave) Administration Act 1992 (Coal LSL Act).
Broadspectrum denies those allegations.
[2] There is no dispute in these proceedings that the Applicants are covered by the
Transfield Services Limited (Maintenance Services – Wyee) Collective Agreement 2011-15
(Enterprise Agreement). Senior Deputy President Hamberger made a decision to that effect on
7 September 2014 (recorded on transcript) in earlier proceedings.
[3] The Applicants have applied for the Fair Work Commission (the Commission) to deal
with their present dispute in relation to long service leave in accordance with s.739 of the Fair
Work Act 2009 (Cth) (FW Act).
[4] On 25 February 2016, the parties participated in conciliation of their dispute before the
Commission. The dispute was not resolved in conciliation. As a result, the Applicants, who
are represented by the CFMEU, requested the dispute proceed to arbitration. Directions were
made by the Commission on 25 February 2016, to prepare the matter for arbitration on 7, 8
and 9 June 2016.
[5] By letter dated 4 March 2016, the Australian Industry Group (AiGroup), who
represents Broadspectrum, asserted, for the first time, that the Commission does not have
jurisdiction to arbitrate the dispute. Further directions were made by the Commission on 9
March 2016, to enable the parties to make submissions on the question of jurisdiction.
[2016] FWC 2004
DECISION
E AUSTRALIA FairWork Commission
[2016] FWC 2004
2
Detailed written submissions have been filed and served by the CFMEU and AiGroup on the
question of jurisdiction.
[6] The only question I have been asked to determine in this interlocutory decision is
whether or not the Commission has jurisdiction to arbitrate the dispute between the
Applicants and Broadspectrum, save for any potential argument that the Commission does not
have jurisdiction to arbitrate because the steps set out in the dispute settlement procedure
(clause 11) of the Enterprise Agreement have not been complied with. Any such argument
will be dealt with at the final hearing, if the matter proceeds that far.
[7] In the event that the Commission is satisfied it has jurisdiction, the matter will proceed
to arbitration on 7, 8 and 9 June 2016. If, on the other hand, the Commission agrees with the
AiGroup’s contention that it does not have jurisdiction to arbitrate the dispute, the application
will be dismissed.
Legal principles concerning the proper characterisation of the dispute
[8] The test under s.739 of the FW Act is whether the dispute settlement procedure in the
enterprise agreement “requires or allows” the Commission to deal with the dispute. It is
therefore necessary to look at the text of the dispute settlement procedure, understood in light
of its industrial context and purpose, to determine whether the dispute, properly characterised,
falls within it.1
[9] The scope of a dispute settlement procedure in an enterprise agreement should not be
narrowly construed; “to do so would be contrary to the notion that certified agreements are
intended to facilitate the harmonious working relationship of the parties during the operation
of the agreement.”2
[10] In characterising the nature of a dispute the Commission is not confined to the
application filed to deal with the dispute.3 The entire factual background is relevant, and may
be ascertained from the submissions advanced by the parties on the question of jurisdiction.4
Further, a dispute may evolve during proceedings in the Commission. It may therefore be
necessary in some cases when ascertaining the character of a dispute to have regard to both
the nature of the dispute alleged in an originating application and the factual circumstances as
they evolve.5
[11] It is also important to note that the character of the dispute is distinguishable from any
relief which may be sought, or granted, following an arbitration of the dispute.6 However, the
relief sought may cast light on the true nature of the dispute in some cases.7
1 CEPU v Thiess Pty Ltd (2011) 212 IR 327 (CEPU v Thiess) at [42] & [47]; CFMEU v AIRC [2001] HCA 16
2 SDA v Big W Discount Department Stores PR924554 at [23]
3 AMWU v Holden Limited PR940366 at [47]; MUA v ASP Shipping Management Pty Ltd [2015] FWC 4523 (ASP) at [23]
4 AMWU v Holden Limited PR940366 at [47]; ASP at [23]
5 ASP at [19] & [23]; R v Bain; Ex parte Cadbury Schweppes Australia Ltd (1984) 159 163 at 168; United Firefighters’
Union v Metropolitan Fire and Emergency Services Board PR973884
6 MUA v Australian Plant Services Pty Ltd PR908236; ASP at [21]-[22]
7 United Firefighters’ Union v Metropolitan Fire and Emergency Services Board PR973884 at [20]
[2016] FWC 2004
3
[12] If the Commission has jurisdiction to deal with the dispute, the nature of the relief that
the Commission may grant in such circumstances will depend on the limitation in s.739(5) of
the FW Act and the agreement of the parties as recorded in their enterprise agreement,
provided that such relief is reasonably incidental to the application of the Enterprise
Agreement to which the dispute relates.8
What is the scope of disputes which may be dealt with under the dispute settlement
procedure in the Enterprise Agreement?
[13] Clause 11 of the Enterprise Agreement provides as follows:
“11. AVOIDANCE OF DISPUTE PROCEDURE
11.1 It is a condition of this Enterprise Agreement and each employee’s contract of
employment that continuous operations and workflow be maintained without
bans, limitations or stoppages of work. This shall apply whether the issue,
matter, dispute (hereinafter referred to as the grievance) relates directly to a
National Employment Standard, Site employment, Term of this Agreement or
Modern Award or any other matters but excluding genuine safety matters when
the provisions of Clause 28 of this Agreement will be followed. The parties
acknowledge that it is a fundamental requirement that this clause be observed in
its entirety. Provided an employee pursuing any grievance under this
Agreement can at their election have union representation at any time of the
procedure.
Step 1: The grievance shall, in the first instance, be pursued between the
employee or employees concerned and their immediate Supervisor.
Step 2: If the grievance is not resolved within the same shift as it was
reported to the Supervisor, or the aggrieved party has not received a
formal response, then the aggrieved party shall discuss the grievance
with the relevant Manager.
Step 3: If after raising the grievance with the relevant Manager and the
grievance is not resolved within a 48-hour time frame or the
aggrieved party has not received a formal response, then the
aggrieved party shall seek a conference with the General Manager or
his nominee. The General Manager or his nominee, only if the
employee/s chooses to be represented, will also have the option of
having other Company Managers present.
11.2 Notification to Fair Work Australia:
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. Any arbitrated matter must be fully in accordance
8 MUA v Australian Plant Services Pty Ltd PR908236 at [63]; Seven Network (Operations) Ltd v CPSU (2003) 122 IR 97 at
[31]-[32]
[2016] FWC 2004
4
with the provisions of the Fair Work Act 2009 and the rules of Fair Work
Australia.”
[14] Broadspectrum contends that:
(a) the phrase “This shall apply …” at the commencement of the second sentence of
clause 11.1 demonstrates that the second sentence is intended to clarify the
operation of the prohibition on industrial action set out in the first sentence;
(b) the second sentence clarifies that the word “dispute” is thereafter referred to as
“the grievance”. The word “grievance” rather than “dispute” is used throughout the
rest of the clause;
(c) the definition of a dispute as a grievance has no relevance to the types of disputes
covered by clause 11; and
(d) it does not follow that “the second sentence describes the scope of the
Commission’s powers to settle disputes”.
[15] Further, Broadspectrum submits that clause 11 of the Enterprise Agreement does not
expressly clarify the types of disputes or grievances to which the dispute settlement procedure
applies, with the result that “the dispute settlement procedure only covers the two types of
disputes referred to in s.186(6) of the Act”, namely disputes:
(a) about matters arising under the Enterprise Agreement; and
(b) in relation to the National Employment Standards.
[16] At the heart of Broadspectrum’s submissions in relation to this point is the question of
whether the word “grievance” in clauses 11.1 and 11.2 should be construed:
(a) to simply mean a “dispute”, as contended for by Broadspectrum; or
(b) to mean an issue, matter, or dispute which “relates directly to a National
Employment Standard, Site employment, Term of this Agreement or Modern
Award or any other matters but excluding genuine safety matters”.
[17] The fact that the definition of “grievance” occurs part way through the second
sentence of clause 11.1, rather than at the end of the sentence, lends some support to the
submissions made by Broadspectrum, as do the opening words of the second sentence (“This
shall apply …”).
[18] However, the better view, in my opinion, is that the word “grievance” in clauses 11.1
and 11.2 should be construed to mean an issue, matter, or dispute which “relates directly to a
National Employment Standard, Site employment, Term of this Agreement or Modern Award
or any other matters but excluding genuine safety matters”. That is because, first, clause 11
[2016] FWC 2004
5
needs to be read as a whole, and in light of its industrial context and purpose.9 The object of
the clause is to establish a procedure to deal with disputes in an orderly manner. The first
sentence of the clause, when read in the context of a dispute settlement procedure, gives the
clear message to employees that it is not acceptable to deal with disputes by imposing “bans,
limitations or stoppages of work”. The second sentence sets out the scope or character of
disputes to be dealt with in accordance with the procedure in clause 11. The balance of the
clause sets out the procedure to be followed when dealing with such disputes. In contrast, the
effect of Broadspectrum’s submissions is that clause 11 deals with two different topics: a
prohibition on industrial action and a procedure for dealing with undefined disputes. Adopting
such an approach is not consistent with construing the dispute settlement clause as a whole.
[19] Having regard to the industrial context and purpose of a dispute settlement procedure
in an enterprise agreement and the requirement for a dispute within the scope of clause 11 of
the Enterprise Agreement to be discussed with relevant supervisors and managers in the
workplace, I am of the view that the proper construction of the words “other matters” in this
part of clause 11.1 is “other matters connected with the workplace”. A reasonable person
would not understand the procedure in clause 11.1 of the Enterprise Agreement to extend to
any grievance between an employee and Broadspectrum relating to a private matter
unconnected with the workplace.
[20] Secondly, the construction I prefer is consistent with the following principles:
(a) the scope of a dispute settlement clause in an enterprise agreement should not be
narrowly construed.10 In my view, the dispute settlement procedure (clause 11) in the
Enterprise Agreement is plainly intended to have operation in a wide range of
circumstances. It prescribes procedures designed to resolve issues, matters, and
disputes which relate “directly to a National Employment Standard, Site employment,
Term of this Agreement or Modern Award or any other matters but excluding genuine
safety matters.” Clause 28 of the Enterprise Agreement sets out a separate procedure
for dealing with safety matters. If the safety matter cannot be resolved in accordance
with the procedure in clause 28, then the procedure in clause 11 must be followed
(clause 28.4(e));
(b) “It is trite that narrow or pedantic approaches to the interpretation of an award [or
enterprise agreement] are misplaced. The search is for the meaning intended by the
framer(s) of the document, bearing in mind that such a framer(s) were likely of a
practical bent of mind; they may well have been more concerned with expressing an
intention in ways likely to have been understood in the context of the relevant industry
and industrial relations environment than with legal niceties or jargon…”;11 and
(c) the construction to be given to a clause in an enterprise agreement “should not be a
strict one but one that contributes to a sensible industrial outcome such as should be
attributed to the parties who negotiated and executed the Agreement”.12
9 AMIEU v Golden Cockerel [2014] FWCFB 7447 at [41]
10 SDA v Big W Discount Department Stores PR924554 at [23]
11 Kucks v CSR Ltd (1996) 66 IR 182 at 184
12 Amcor Ltd v CFMEU (2005) 222 CLR 241 at 270
[2016] FWC 2004
6
[21] Thirdly, guidance as to the construction of industrial instruments such as the
Enterprise Agreement may be obtained by reference to the principles which courts apply to
the construction of commercial contracts.13 Commercial contracts should, as Justice Kirby
held in Pan Foods Company Importers & Distributors Pty Ltd v Australia and New Zealand
Banking Group Ltd,14 “be construed practically, so as to give effect to their presumed
commercial purposes and so as not to defeat the achievement of such purposes by an
excessively narrow and artificially restricted construction.” Further, the process of
construction is intended to elucidate and give effect to what the parties by their words in a
contract objectively conveyed to one another was their agreement.15 Unless parties have
expressed themselves in such a way that their terms are so obscure or incapable of any
definite or precise meaning so that a court cannot attribute to them any particular intention,
the court will find a meaning which an objective person in the position of the parties at the
time they entered into the contract would have understood them to have intended.16 In the
present case, the construction I prefer of the word “grievance” in clause 11 of the Enterprise
Agreement uses the words chosen by the parties in clause 11 to give meaning to the scope of
disputes which may be dealt with in accordance with the dispute resolution procedure. In
contrast, Broadspectrum contends that “clause 11 does not expressly clarify the types of
disputes/grievances that the dispute settling procedure applies to”.
[22] Even if I am wrong as to the proper construction of the word “grievance” in clause 11
and it means no more than “a dispute”, as contended for by Broadspectrum, it does not
follow, in my opinion, that the scope of grievances or disputes which may be dealt with in
accordance with clause 11 should be confined to the two types of disputes referred to in
subsection 186(6) of the Act.
[23] Sections 186 and 187 of the FW Act set out mandatory requirements for enterprise
agreements. Subsection 186(6) requires the Commission to be satisfied that an enterprise
agreement includes a term that provides a procedure that requires or allows the Commission,
or another independent person, to settle disputes of a particular character, namely disputes:
(a) about matters arising under the enterprise agreement; and
(b) in relation to the National Employment Standards.
[24] Parties to an enterprise agreement may, and often do, include a dispute settlement
procedure in their enterprise agreement which gives the Commission, or some other person,
the power to deal with disputes of a wider character than the minimum provided for in
subsection 186(6) of the FW Act. Provided that the scope of disputes which may be dealt with
under an enterprise agreement includes, as a minimum, disputes about matters arising under
the enterprise agreement and in relation to the National Employment Standards, the clause
complies with subsection 186(6) of the FW Act.
13 TWU v Linfox Australia Pty Ltd [2014] FCA 829 at [34]
14 [2000] HCA 20; (2000) 170 ALR 579 at 584
15 Hoy Mobile Pty Ltd v Allphones Retail Pty Ltd (No 2) [2008] FCA 810 at [87]
16 Hoy Mobile Pty Ltd v Allphones Retail Pty Ltd (No 2) [2008] FCA 810 at [87];
http://www.austlii.edu.au/cgi-bin/LawCite?cit=%282000%29%20170%20ALR%20579?stem=0&synonyms=0&query=title(linfox%20)
http://www.austlii.edu.au/au/cases/cth/HCA/2000/20.html
[2016] FWC 2004
7
[25] There is nothing in the text of the Enterprise Agreement which suggests that the
parties to it objectively intended for clause 11 to be limited to the types of disputes described
in subsection 186(6) of the FW Act. Further, apart from the fact that the Enterprise Agreement
had to comply with subsection 186(6) to be approved, neither the industrial context nor the
purpose of a dispute settlement procedure (clause 11) supports the construction contended for
by Broadspectrum.
[26] In my view, even if the word “grievance” in clause 11 means no more than “a
dispute”, as contended for by Broadspectrum, the proper construction of such a “dispute” in
the context of clause 11 would be any dispute connected with the workplace. Such a
construction would avoid a narrow approach to interpretation. In addition, the connection of
the dispute to the workplace is appropriate because a reasonable person would not understand
the procedure in clause 11.1 of the Enterprise Agreement to extend to any dispute between an
employee and Broadspectrum relating to a private matter unconnected with the workplace.
What is the proper characterisation of the dispute between each of the Applicants and
Broadspectrum?
[27] The Applicants contend that the proper characterisation of the dispute between each of
them and Broadspectrum is a dispute about what their long service leave entitlements are
“under a true operation of the Enterprise Agreement”.17
[28] Broadspectrum asserts that the dispute is one relating to the coverage of the Coal LSL
Act.18
[29] There is not a great deal of difference between the ways in which the dispute has been
characterised by the parties. In my view, the proper characterisation of the dispute is a dispute
about whether the Applicants are entitled to long service leave in accordance with the Coal
LSL Act, notwithstanding the fact that they are covered by an Enterprise Agreement which
provides for such employees to be entitled to long service leave in accordance with the NSW
Building and Construction Industry (Portable Long Service Leave) Act 1983 (Building LSL
Act).
Is the dispute between each of the Applicants and Broadspectrum, properly
characterised, within the scope of disputes which may be dealt with under clause 11 of
the Enterprise Agreement?
[30] A dispute about whether the Applicants are entitled to long service leave in
accordance with the Coal LSL Act, notwithstanding the fact that they are covered by an
Enterprise Agreement which provides for such employees to be entitled to long service leave
in accordance with the Building LSL Act, is, in my view, a dispute:
(a) within the scope of clause 11, as I have interpreted it in paragraphs [18] to [19]
above19, because it is an issue, matter or dispute which relates directly to a term of the
Enterprise Agreement (clause 24) and/or any other matter connected to the workplace;
17 Applicants’ written submissions at [7]-[8]
18 Broadspectrum’s written submissions dated 17 March 2016 at [52]-[53]
[2016] FWC 2004
8
(b) within the scope of clause 11, as I have interpreted it in the alternative in paragraph
[26] above20, because a dispute about the long service leave entitlements of the
Applicants is clearly connected to the workplace; and
(c) within the scope of clause 11, as Broadspectrum has interpreted it21, because the
dispute between the parties is about a matter arising under the Enterprise Agreement,
in that the Applicants contend the Enterprise Agreement (clause 24) purports to
establish an entitlement on their part to long service leave which is less beneficial to
them than their statutory entitlement to long service leave under the Coal LSL Act.
[31] It follows that the dispute between each of the Applicants and Broadspectrum,
properly characterised, falls within the scope of disputes which may be dealt with under
clause 11 of the Enterprise Agreement.
Is the Commission being asked to exercise judicial powers, not arbitral powers?
[32] Broadspectrum contends that the Commission does not have jurisdiction to arbitrate
the dispute because it is being asked to exercise judicial powers, not arbitral powers. I reject
this argument, for the following reasons.
[33] When the Commission is arbitrating a dispute pursuant to a dispute settlement clause
in an enterprise agreement it is not exercising judicial power, but is instead exercising a power
of private arbitration.22 As a private arbitrator, the Commission is authorised to make
decisions as to the legal rights and liabilities of parties to whom the enterprise agreement
applies.23 That involves deciding “all questions both of law and of fact”24 that arise in the
dispute, subject to any limitation on power in the dispute settlement clause25 and a
requirement not to make a decision that is inconsistent with the FW Act, or a fair work
instrument that applies to the parties.26
[34] In the present case, the Commission has been asked to arbitrate a dispute in relation to
the question of whether the Applicants are entitled to long service leave under the Coal LSL
Act on the basis, so it is contended by the Applicants, that they are “eligible employees” as
defined in the Coal LSL Act (Eligible Employees). In answering that question the
Commission will, in its capacity as private arbitrator, decide “all questions both of law and of
fact” as to whether the Applicants are Eligible Employees. In so doing, the Commission will
19 That is, clause 11 covers an issue, matter, or dispute which “relates directly to a National Employment Standard, Site
employment, Term of this Agreement or Modern Award or any other matters but excluding genuine safety matters”.
20 That is, clause 11 covers any disputes connected with the workplace.
21 That is, clause 11 covers disputes about matters arising under the enterprise agreement and in relation to the National
Employment Standards.
22 CFMEU v AIRC (2001) 203 CLR 645 at [30]-[31]; Linfox Australia Pty Ltd v TWU [2013] FCA 659 at [19]-[24]; AMWU v
ALS Industrial Australia Pty Ltd [2015] FCAFC 123 at [34]-[36]
23 CFMEU v AIRC (2001) 203 CLR 645 at [32]; Linfox Australia Pty Ltd v TWU [2013] FCA 659 at [19]-[24]; AMWU v ALS
Industrial Australia Pty Ltd [2015] FCAFC 123 at [34]-[36]
24 AMWU v ALS Industrial Australia Pty Ltd [2015] FCAFC 123 at [36]
25 s.739(3) of the FW Act
26 s.739(5) of the FW Act
[2016] FWC 2004
9
exercise the powers of private arbitration the parties to the Enterprise Agreement have agreed
to confer on the Commission, not judicial power.
Is the Commission being asked to make a decision that would be implemented by a third
party but which is not binding on the third party?
[35] Broadspectrum submits that the Commission does not have jurisdiction to arbitrate the
dispute because any decision by the Commission to the effect that the Applicants are entitled
to long service leave in accordance with the Coal LSL Act would need to be implemented by
a third party, namely the Coal Mining Industry (Long Service Leave Funding) Corporation
(Coal LSL Corporation), which is not a party to the dispute, with the result that any decision
or order by the Commission in any arbitration of the dispute could not bind the Coal LSL
Corporation.
[36] I reject this argument on the basis that it does not bear on the question of whether the
Commission has jurisdiction to arbitrate the dispute. If the argument were correct, it would be
relevant to the question of what relief, if any, should be granted by the Commission and
whether any such relief could be effective.
[37] In any event, I am of the opinion that the argument is incorrect. Section 39AC of the
Coal LSL Act imposes an obligation on the employer to pay an Eligible Employee for any
long service leave taken by the employee. Similarly, if an employee ceases to be an Eligible
Employee, sections 39C, 39CA, 39CB and 39CC of the Coal LSL Act impose an obligation
on the employer (in the circumstances with which each section deals), on receipt of a written
request from the employee, to pay the employee their accrued long service leave entitlements.
Sections 39AC, 39C, 39CA, 39CB and 39CC of the Coal LSL Act are all civil penalty
provisions, with the result that an Eligible Employee can apply to the Federal Court or the
Federal Circuit Court for an order awarding compensation for loss that the employee has
suffered because of the contravention (ss.39DA and 39DB of the Coal LSL Act).
[38] If an employer makes a payment under Part 5A of the Coal LSL to a person who is or
was an Eligible Employee, the Coal LSL Corporation must pay the employer out of the fund
the “reimbursable amount the Board decides in accordance with the Employer
Reimbursement Rules” (s.44(1) of the Coal LSL Act). In addition, if an employer of a person
who is or was an Eligible Employee is insolvent, is being wound up or has ceased to exist, the
Coal LSL Corporation is obliged to pay the employee their accrued long service leave
entitlements (s.48 of the Coal LSL Act).
[39] Because the primary obligation to pay long service leave benefits to Eligible
Employees under the Coal LSL Act is imposed on the employer of such employees, any
decision by the Commission to the effect that the Applicants are entitled to long service leave
in accordance with the Coal LSL Act would not need to be implemented by the Coal LSL
Corporation. In the event that Broadspectrum failed to comply with any obligation it may be
found to have under the Coal LSL Act to the Applicants, the Applicants could seek an order
for compensation, or other appropriate relief, in the Federal Court or the Federal Circuit
Court.
[2016] FWC 2004
10
[40] In relation to this issue, Broadspectrum makes the additional submission that “the
monies in the Coal Mining Industry (Long Service Leave) Fund have been contributed by
other employers through the 2.7% Payroll Levy that they have paid to fund the long service
leave entitlements of their employees. The Commission has no power to order Broadspectrum
to pay the 2.7% Payroll Levy prescribed under the Coal Mining Industry (Long Service
Leave) Payroll Levy Act 1992.” The short answer to this point is that the Commission has not
been asked in these proceedings to make an order for Broadspectrum to pay any levy
prescribed under the Coal Mining Industry (Long Service Leave) Payroll Levy Act 1992. If I
make an order or determination to the effect that the Applicants are entitled to long service
leave in accordance with the Coal LSL Act, it will be a matter for Broadspectrum to comply
with any obligations it has, or may have in the future, under the Coal LSL Act, or any other
legislation. A failure to comply with any such obligation may result in further proceedings in
an appropriate court or tribunal.
The Commission’s dispute settling powers under the Coal LSL Act
[41] Broadspectrum submits that the Commission does not have jurisdiction to arbitrate the
dispute because:
(a) the Commission does not have the power under the Coal LSL Act to deal with
disputes about the coverage of the portable long service leave scheme; and
(b) the Coal LSL Act does not confer on the Commission the power to arbitrate disputes.
[42] The short answer to both of these points is that the Commission is not being asked in
these proceedings to exercise any jurisdiction or power under the Coal LSL Act. The
Applicants could have made an application under s.39D of the Coal LSL Act to “deal with a
dispute about matters in relation to long service leave under this Part”, but they elected not to
do so and Broadspectrum is aware that they have not done so.27 Instead, the Applicants chose
to notify Broadspectrum of their dispute in relation to long service leave and to have that
dispute dealt with in accordance with clause 11 of the Enterprise Agreement. As part of that
process, the Commission is being asked to arbitrate the dispute in accordance with clause 11.2
of the Enterprise Agreement.
[43] Section 39D of the Coal LSL Act provides as follows:
FWC may deal with disputes relating to long service leave
(1) Despite subsection 595(1) of the Fair Work Act 2009, the FWC may deal with a
dispute (an LSL dispute) about matters in relation to long service leave under this Part.
(2) For the purposes of the FWC dealing with an LSL dispute, the Fair Work Act 2009
applies as if:
(a) the dispute were a dispute in relation to the National Employment
Standards; and
27 Broadspectrum’s written submissions dated 17 March 2016 at [2] (third bullet point) and [33]-[34]
[2016] FWC 2004
11
(b) subsection (1) of this section were a term referred to in section 738 of that
Act; and
(c) a reference in subsection 739(5) of that Act to “this Act” were a reference
to “the Coal Mining Industry (Long Service Leave) Administration Act
1992”.
[44] If the Applicants had made an application under s.39D of the Coal LSL Act for the
Commission to deal with their dispute and had not made an application under s.739 of the FW
Act for the Commission to deal with the dispute in accordance with clause 11 of the
Enterprise Agreement, then I would agree that the Commission would not have jurisdiction to
arbitrate such a dispute. However, that is not the circumstance with which I am dealing in
these proceedings.
Is the Commission being asked to make a decision which is inconsistent with clause 24 of
the Enterprise Agreement?
[45] Broadspectrum contends that the Commission does not have jurisdiction to arbitrate
the dispute because s.739(5) of the FW Act and s.39D(2)(c) of the Coal LSL Act prevent the
Commission from making a decision that is inconsistent with clause 24 in the Enterprise
Agreement.
[46] Section 739(5) of the FW Act provides that “the FWC must not make a decision that is
inconsistent with this Act, or a fair work instrument that applies to the parties”. The
Enterprise Agreement applies to the parties to this dispute. Accordingly, the issue is whether
any decision the Commission may make in arbitrating the dispute is inconsistent with the
Enterprise Agreement. In my view, that is not an issue which is relevant to the question of
whether the Commission has jurisdiction to arbitrate the dispute, but rather whether any of the
relief I may be asked to grant in the arbitration can be granted in light of the restriction in
s.739(5) of the FW Act. In any event, I am satisfied that there is no inconsistency, for the
reasons set out below.
[47] The Applicants are currently seeking the following relief in their s.739 application:
“We seek the FWC’s assistance to resolve the matter in conciliation and if it is unable to
resolve the matter by conciliation, then we wish the FWC to arbitrate the dispute and a
determination from the FWC as to the true long service leave entitlements for the
Applicant’s and other similarly affected employees.”
[48] For the purpose of dealing with this argument I will assume that the Applicants
continue to seek such relief in the final hearing.
[49] Clause 24 of the Enterprise Agreement states:
“Employees covered by this Agreement shall be entitled to long service leave in
accordance with the provisions of the NSW Building and Construction Industry
(Portable Long Service Leave) Act, 1983.”
[2016] FWC 2004
12
[50] There are two ways clause 24 may potentially be construed:
(a) First, in order for an employee to be entitled to the long service leave benefits referred
to in clause 24, the employee must be covered by the Building LSL Act. That is, the
employee must satisfy the definition of “worker” in the Building LSL Act; or
(b) Secondly, regardless of whether an employee is covered by the Building LSL Act,
they are entitled to long service leave benefits as if they were covered by that
legislation.
[51] In my view, the first construction is the correct one. The use of the expression “in
accordance with the provisions of” in clause 24 directs attention to the provisions of the
Building LSL Act, including the provisions that define which class of “workers” is entitled to
long service leave under that statute. In addition, the scheme of the Building LSL Act is such
that the Long Service Leave Corporation, not the employer of the relevant employee, is the
entity on whom the obligation is imposed to make long service leave payments to “workers”
(ss.28 & 29 of the Building LSL Act). It would be very odd if clause 24 of the Enterprise
Agreement had the effect that employees who were not covered by the Building LSL Act
were entitled to payments in respect of long service leave from the Long Service Leave
Corporation.
[52] Regardless of which of the two interpretations of clause 24 is preferred28, the analysis
set out below demonstrates, in my view, that clause 24 has, at the present time, no effect or
operation in relation to the Applicants. I note that the Applicants may, in the future, undertake
other work for Broadspectrum at other (non-mining) sites, which work may remain covered
by the Enterprise Agreement. The circumstances of such work would need to be considered in
order to form a view about the effect or operation of clause 24 of the Enterprise Agreement at
that time.
No inconsistency because the Applicants are not “workers” within the meaning of the
Building LSL Act
[53] The provisions of the Building LSL Act only confer an entitlement to long service
leave payments on “workers”, who are defined as persons who undertake building and
construction work. The term “building and construction work” is defined in the Building LSL
Act to mean work in the building and construction industry (ss.3 & 28 of the Building LSL
Act). The “building and construction industry” is defined in s.3 of the Building LSL Act to
“mean the industry of carrying out the construction, reconstruction, renovation, alteration,
demolition or maintenance or repairs” to “buildings, swimming pools, fences, roadworks,
railways, airfields or other works for the carriage of persons, animals or vehicles, …
structures, fixtures or works for use in conjunction with any building or other works referred
to” [above], and other named structures and things.
28 See paragraph [50] above
http://www.austlii.edu.au/au/legis/nsw/consol_act/bacilspa1986611/s33.html#building_and_construction_industry
[2016] FWC 2004
13
[54] In contrast to the Building LSL Act, the Coal LSL Act confers an entitlement to long
service leave payments on Eligible Employees, who are defined as employees who are
employed in the black coal mining industry (s.4 of the Coal LSL Act).
[55] The Enterprise Agreement covers employees of Broadspectrum “engaged on
maintenance & miscellaneous services work (as defined) at Wyee Rail Unloader/Delta Link
Conveyors, Rutleys Road, Wyee, NSW 2259, where maintenance & miscellaneous services
work is performed. This Agreement covers wages and conditions for the employees whose
terms and conditions of employment are expressly underwritten by this Agreement, and who
are classified in any of the classifications as listed at Appendix “A” of this Agreement”
(clause 2 of the Enterprise Agreement).
[56] Clause 9 of the Enterprise Agreement defines “maintenance & miscellaneous services”
to mean “any work, including work to repair, replace, renovate, rehabilitate, maintain,
overhaul, upgrade and/or upkeep the plant, machinery, equipment and associated buildings
and property of the Wyee Rail Unloader/Delta Link Conveyors or on any other Companies
plant and equipment where the Company has a contract to perform such work within a 65km
radius of the Wyee Post Office in the State of NSW”.
[57] It is clear from the definition of the “building and construction industry” in s.3 of the
Building LSL Act that work undertaken by Broadspectrum’s employees at the Wyee Rail
Unloader would fall within the scope of that industry. It follows that clause 24 of the
Enterprise Agreement has work to do in relation to those employees. However, work
undertaken by Broadspectrum’s employees at other sites where Broadspectrum undertakes
work within a 65km radius of the Wyee Post Office (and which are therefore covered by the
Enterprise Agreement) may not fall within the scope of the “building and construction
industry”, particularly where such work was acquired by Broadspectrum after the Enterprise
Agreement was approved (eg Broadspectrum did not have the contract (GR597) to undertake
work at the Centennial Coal coal handling preparation plant at the time the Enterprise
Agreement was approved).
[58] Broadspectrum has asserted in their written communications to the Applicants that
they are entitled to long service leave in accordance with the Long Service Leave Act 1955
(NSW).29 The Building & Construction Long Service Leave Corporation has refused to accept
the Applicants’ registration on the basis that they do not undertake building and construction
work. The Applicants agree that they do not undertake work in the building and construction
industry. Accordingly, it is clear the parties agree that the Applicants do not undertake
building and construction work, as defined in the Building LSL Act. It follows that the
provisions of the Building LSL Act do not, at the present time, confer any long service leave
entitlements on the Applicants. The situation may change in the future if the Applicants, or
either of them, are required to work at other sites for Broadspectrum.
[59] Because the provisions of the Building LSL Act do not confer any long service leave
entitlements on the Applicants and (assuming for the purposes of this argument only) the Coal
LSL Act does confer such entitlements on the Applicants on the basis that they are Eligible
29 Letter from Broadspectrum to “all Employees” dated 7 April 2014: “…The Long Service Leave Act: 1955 has generally
governed the entitlement to LSL in NSW. This also applies to Transfield Services employees working under the
Contracts at Wyee, Cooranbong and Myuna …”
[2016] FWC 2004
14
Employees, there is no inconsistency between a decision to the effect that the Applicants are
entitled to long service leave in accordance with the Coal LSL Act and clause 24 of the
Enterprise Agreement, nor would such an outcome be inconsistent with the Enterprise
Agreement as a whole.
No inconsistency because the Coal LSL Act establishes minimum long service leave
standards for Eligible Employees
[60] Even if the Building LSL Act and the Coal LSL Act covered the same classes of
employees, there would be an issue as to whether clause 24 of the Enterprise Agreement had
any effect or operation in relation to Eligible Employees who were covered by the Enterprise
Agreement.
[61] Section 61 of the FW Act provides as follows:
The National Employment Standards are minimum standards applying to
employment of employees
(1) This Part sets minimum standards that apply to the employment of employees
which cannot be displaced, even if an enterprise agreement includes terms of the
kind referred to in subsection 55(5).
Note: Subsection 55(5) allows enterprise agreements to include terms that have the
same (or substantially the same) effect as provisions of the National Employment
Standards.
(2) The minimum standards relate to the following matters:
(a) maximum weekly hours (Division 3);
(b) requests for flexible working arrangements (Division 4);
(c) parental leave and related entitlements (Division 5);
(d) annual leave (Division 6);
(e) personal/carer's leave and compassionate leave (Division 7);
(f) community service leave (Division 8);
(g) long service leave (Division 9);
(h) public holidays (Division 10);
(i) notice of termination and redundancy pay (Division 11);
(j) Fair Work Information Statement (Division 12).
[2016] FWC 2004
15
(3) Divisions 3 to 12 constitute the National Employment Standards.
[62] It is clear from s.61 that the National Employment Standards are the minimum
standards that apply to the employment of employees in relation to the ten matters specified in
s.61(2) of the FW Act. One of those matters is long service leave.
[63] Sections 39E, 39EA and 39EB of the Coal LSL Act state:
39E Relationship with the National Employment Standards
Despite section 61 of the Fair Work Act 2009, this Part applies in relation to
eligible employees and their employers to the exclusion of Division 9 of Part
2‑ 2 of that Act.
39EA Relationship with State and Territory long service leave laws
This Part applies in relation to eligible employees and their employers to the
exclusion of a State or Territory law that deals with long service leave.
39EB Relationship with industrial instruments
This Part establishes minimum entitlements and rights in respect of long
service leave for an eligible employee and is not intended to override
entitlements or rights in respect of long service leave under an industrial
instrument that covers the employee.
[64] The expression “industrial instrument” in s.39EB is defined in s.4 of the Coal LSL Act
to mean a fair work instrument or a contract of employment. A fair work instrument in the
Coal LSL Act has the same meaning as in the FW Act, which includes enterprise agreements
such as the Enterprise Agreement.
[65] The Explanatory Memorandum to the Coal Mining Industry (Long Service Leave)
Legislation Amendment Bill 2011, which introduced the relevant provisions in Part 5A of the
Coal LSL Act, includes the following explanation in relation to what is now s.39EB of the
Coal LSL Act:
“Clause 39EB makes it clear that this Part establishes minimum entitlements and rights
in respect of long service leave for eligible employees and does not override more
beneficial entitlements or rights arising from an industrial instrument that covers the
employee.” [emphasis added]
[66] The following propositions are, in my view, apparent from the legislative provisions
set out in the previous five paragraphs:
(a) the minimum standards that apply to Eligible Employees relation to long service
leave are those set out in Part 5A of the Coal LSL Act;
[2016] FWC 2004
16
(b) minimum long service leave standards set out in Part 5A of the Coal LSL Act
apply to Eligible Employees to the exclusion of a State or Territory law that deals
with long service leave (s.39EA of the Coal LSL Act);
(c) if an enterprise agreement that covers Eligible Employees contains a term that
provides for long service leave benefits which are less beneficial to the employee
than those provided for in the Coal LSL Act, the term of the enterprise agreement
will have no effect. That is because Part 5A of the Coal LSL Act establishes
minimum entitlements and rights in respect of long service leave for Eligible
Employees. Parliament clearly considered the relationship between Part 5A of the
Coal LSL Act and industrial instruments such as an enterprise agreement made
under the FW Act when enacting s.39EB of the Coal LSL Act. The use of the
expression “minimum entitlements”, in the context of a consideration of the
relationship between Part 5A of the Coal LSL Act and industrial instruments, in
s.39EB demonstrates that Parliament intended for Part 5A to establish minimum
entitlements to long service leave for Eligible employees which could not be
undermined by a term in an enterprise agreement; and
(d) if an enterprise agreement that covers Eligible Employees contains a term that
provides for long service leave benefits which are more beneficial to the employee
than those provided for in the Coal LSL Act, the term of the enterprise agreement
will apply. That is because Part 5A of the Coal LSL Act does not override more
beneficial entitlements or rights arising from an industrial instrument (s.39EB of
the Coal LSL Act).
[67] There is no dispute that the long service leave benefits provided for in the Coal LSL
Act are more beneficial to employees than those provided for in the Building LSL Act.
Accordingly, and in light of my analysis of the relevant legislative provisions set out in
paragraph [66(c)] above, if the Applicants are Eligible Employees, then clause 24 of the
Enterprise Agreement will have no effect for the Applicants. In addition, because the Building
LSL Act is a “State … law that deals with long service leave”, Part 5A of the Coal LSL Act
applies to the exclusion of the Building LSL Act (s.39EA of the Coal LSL Act). As a result,
the entitlement of each of the Applicants to long service leave, if they are Eligible Employees,
will be governed by the Coal LSL Act. I note that I have not, at this stage, made any finding
as to whether the Applicants, or either of them, are Eligible Employees. That issue will be
determined in the arbitration of the present dispute.
[68] Broadspectrum also relies on the following arguments in relation to the legal effect of
clause 24 of the Enterprise Agreement:
(a) First, clause 7 of the Enterprise Agreement states that “nothing in this Agreement will
disadvantage employees against any terms of the” NES. Broadspectrum’s employees
who are covered by the Enterprise Agreement have “applicable award-derived long
service leave terms” which operate as the NES because Broadspectrum was bound by
the Metals Award 1998 immediately before the commencement of Part 2-2 of the FW
Act. However, these matters are not determinative for any Eligible Employees because
Part 5A of the Coal LSL Act applies to them to the exclusion of Division 9 of Part 2-2
of the FW Act (s.39E of the Coal LSL Act);
[2016] FWC 2004
17
(b) Secondly, the CFMEU made similar arguments to those it is making in this case in
proceedings before Deputy President Asbury concerning the approval of an enterprise
agreement in Queensland. Deputy President Asbury approved the Queensland
enterprise agreement notwithstanding the CFMEU’s submissions. In my view, the
proceedings before Deputy President Asbury are distinguishable on the basis that
those proceedings concerned whether the enterprise agreement should be approved,
rather than the effect of any terms of the enterprise agreement, particularly those that
may or may not be inconsistent with a Commonwealth law. In addition, the clause in
the enterprise agreement under consideration in the proceedings before Deputy
President Asbury was materially different from clause 24 of the Enterprise Agreement;
and
(c) Thirdly, the time for the CFMEU to raise any arguments about inconsistency between
the Enterprise Agreement and a Commonwealth law was during the approval
proceedings before Commissioner Cargill. I reject that argument. A person is not
estopped or otherwise prevented from raising an issue of potential inconsistency
between the terms of an enterprise agreement and the FW Act or some other
legislation simply because they did not raise it at the time the enterprise agreement
was being considered by the Commission for approval. That is particularly so in this
case, given that the Applicants were not employed by Broadspectrum at the time the
Enterprise Agreement was approved by Commissioner Cargill in 2011, the CFMEU
had no members who were to be covered by the Enterprise Agreement at the time it
was approved, and Broadspectrum did not have a contract to undertake work at the
Centennial Coal coal handling preparation plant at that time.
Conclusion
[69] The dispute between each of the Applicants and Broadspectrum, properly
characterised, falls within the scope of disputes which may be dealt with under clause 11 of
the Enterprise Agreement. Assuming the preliminary steps in clause 11 have been undertaken,
the Commission has jurisdiction to arbitrate the dispute and the dispute will proceed to
arbitration on 7, 8 and 9 June 2016.
COMMISSIONER
Printed by authority of the Commonwealth Government Printer
Price code C, AE890467 PR578534
THE FAIR WORK AIR NORK C OMMISSION KLIA SEX THE SEAL OF THE
