1
Fair Work Act 2009
s.739 - Application to deal with a dispute
United Firefighters' Union of Australia
v
Metropolitan Fire and Emergency Services Board
(C2016/2892)
VICE PRESIDENT HATCHER
DEPUTY PRESIDENT GOSTENCNIK
COMMISSIONER HARPER-GREENWELL SYDNEY, 12 MAY 2016
Alleged dispute under the enterprise agreement - whether matters pertaining to the
employment relationship.
[1] On 8 March 2016 the United Firefighters’ Union of Australia (UFU) lodged an
application for the Fair Work Commission (Commission) to deal with a dispute with the
Metropolitan Fire and Emergency Services Board (MFB) in accordance with the dispute
resolution procedure in clause 19 of the Metropolitan Fire and Emergency Services Board &
United Firefighters Union Operational Staff Agreement 2010 (Agreement). The application
described the dispute as concerning a failure by the MFB to consult in accordance with clause
13 of the Agreement in relation to a review being conducted by the MFB concerning
recruitment procedures for firefighters (Review). Included in the application’s description of
the subject matter of the dispute was the proposition that “Recruitment standards is a serious
issue for UFU members who have a direct interest in the standards that apply to recruit
firefighters due to the nature of the work they perform, including that it’s dangerous”.
[2] The MFB’s position in relation to the dispute was that the changes to its recruitment
procedures were not a matter about which it was obliged to consult under the Agreement, and
a dispute about the changes to its recruitment procedures was not a matter to which the
dispute resolution procedure in the Agreement applied.
[3] On 10 March 2016, in correspondence addressed to the President (Ross J) of the
Commission, the MFB applied for a direction that the UFU’s application be referred to a Full
Bench for hearing and determination. It was contended that such a referral would be in the
public interest for reasons which included the following:
“1 The MFB is a statutory body providing fire and emergency services to the
community in the Metropolitan district.
2 The MFB is taking steps to improve the diversity of its workforce, in particular
to increase the number of female firefighters. Presently, there is 3.4 percent of
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DECISION
E AUSTRALIA FairWork Commission
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the MFB’s operational workforce is female and the MFB has a target to
increase this representation to 5 percent by 2018.
3 To achieve the target the MFB intends to offer not less than 30 suitably
qualified female candidates places on the next three recruit courses. The recruit
courses are significant investments by the MFB in time and resources. They are
also necessary to be conducted as scheduled in order for the MFB to meet its
obligations to maintain minimum staffing commitments. There are two courses
currently being conducted and only 4 females have been offered roles out of
the 60 places.
4 The subject matter of the Application is significant. It is also very important to
the MFB that this dispute be determined finally and in a timely manner as the
recruit courses in July 2016 require numerous steps to be taken between now
and the commencement.
5 The outcome of the Application and second dispute will have a significant
effect on how the MFB, as a statutory body and emergency service, improves
the number of suitably qualified female candidates for its recruit course and
therefore the number of recruit positions able to be offered to women.
...
8 The matter is complex and includes consideration of legal uncertainties in
relation to whether the UFU can raise a dispute in respect to prospective
employees as described in the Application and second dispute. The following
issues arise:
(a) Whether or not the Application or second dispute are disputes within
the meaning of clause 19 of the MFB 2010 EBA and whether or not the
status quo provision in clause 19.4 of the MFB 2010 EBA is enlivened.
(b) For a dispute to fall within the meaning of cl.19 it must either relate to
matters for which express provision is made in the agreement (19.1.1);
matters pertaining to the employment relationship (19.1.2); or matters
pertaining to the relationship between the MFB and the union (19.1.3).
(c) There is a strong difference of view between the MFB and UFU as to
whether the dispute does or does not fall within clause 19.1.1, as the
Agreement makes no express provision for any matter related to
recruitment, other than in cl. 70.2 which addressed a review of the
recruit procedure that was to have occurred in the first year of the MFB
2010 EBA’s operation (i.e. between September 2013 and September
2014).
(d) There is a strong difference of view between the MFB and UFU as to
whether the dispute does or does not fall within clause 19.1.2, in
particular whether as Application and second dispute as described
pertain to the employment relationship. This question involves
consideration of the High Court of Australia’s decisions in Re Cram; ex
parte NSW Colliery Proprietors’ Association Limited (1987) 163 CLR
117; Electrolux Home Products Pty Ltd v Australian Workers’ Union
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(2004) 221 CLR 309 and R v Portus; ex parte ANZ Banking Group Ltd
(1972) 127 CLR 353 and how they apply to the provisions in s.172 of
the FW Act.
...”
[4] In an email to the President’s chambers dated 11 March 2016, the UFU indicated that
it consented to the reference to a Full Bench on the following basis:
“(a) That the question to be determined by the Full Bench is whether, in the
circumstances, the terms of clause 13 of the Metropolitan Fire and Emergency
Services Board, United Firefighters Union of Australia, Operational Staff
Agreement 2010 are attracted?; and
(b) That the status quo be maintained until the hearing and determination of the
matter.”
[5] After conducting a short hearing about the issue on 15 March 2016, the President
issued a direction the relevant part of which stated: “Pursuant to ss.582 and 615A of the Fair
Work Act 2009, I direct that this matter be dealt with by a Full Bench”. The “matter” was the
UFU’s dispute resolution application, which had been assigned the matter number
C2016/2892.
[6] After the direction was made, a dispute arose between the parties as to whether the
whole of the UFU’s application had been referred to the Full Bench, or merely the
determination of the legal questions identified in the MFB’s correspondence of 10 March
2016 and the UFU’s correspondence of 11 March 2016. We took the view that there had been
a referral of the entirety of the matter, but that the legal questions identified would be
determined by us as a preliminary issue. That preliminary issue may be stated in the following
way: are the changes which the MFB proposes to implement arising out of the Review
matters about which the MFB was required to consult about under clause 13 of the Agreement
and which could be the subject of the dispute resolution procedure in clause 19 of the
Agreement?
[7] Under s.739 of the Fair Work Act 2009 (FW Act), the Commission may only deal with
a dispute arising under the dispute resolution procedure of an enterprise agreement to the
extent that it is authorised to do so by the terms of that procedure. If the dispute identified in
the UFU’s application is not one to which clause 19 of the Agreement applies, it follows that
the Commission has no jurisdiction to deal with the dispute and the application must be
dismissed as incompetent.
The proposed changes
[8] The evidence before us gave greater particularity as to the changes which the MFB
wishes to implement arising out of the Review. The pre-existing position was relevantly as
follows:
Applications for employment as a firefighter are received without
consideration as to gender.
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Applicants must undergo a rigorous selection process which involves a number
of different stages: a written test which has various components including one
concerning mechanical reasoning, a group assessment, a shuttle run or “beep
test”, a physical aptitude test, a selection interview; and a psychological profile
questionnaire.
All stages of the selection process must be passed in order for an applicant to
progress to the next stage. However there is a “three-strikes” policy whereby
an applicant is given three opportunities to pass each stage.
Three stages - the written test, the group assessment and the interview - involve
a score being assigned to the applicant. Those who pass all stages of the
selection process are ranked on an “Order of Merit” on the basis of their total
score for these three stages.
Persons who have passed the selection process may then be offered a place in
the MFB’s recruit training course. This course is the gateway to a career as a
firefighter. All recruits must achieve all of the required competencies in the
training course before they can commence employment as an operational
firefighter.
Available places in the recruit training course are offered in order of the
applicants’ ranking on the Order of Merit.
[9] The MFB now proposes the following specific changes to the above system:
(1) When the MFB invites applications for employment as firefighters, there will
be quotas for the number of persons who will be considered for employment
via the selection process: only the first 350 applications from males and the
first 350 applications from females will be progressed to the selection process.
(2) The cut-off score for each component of the written test will be changed from
50 to 45.
(3) The “three-strikes” policy will be abolished, so that applicants will have only
one opportunity to pass each stage of the selection process.
(4) The MFB will not strictly follow the Order of Merit in offering places in the
recruit training course, but will take into account its target of achieving a 5%
female workforce and also the desirability of achieving greater cultural and
linguistic diversity. For the next three recruit courses (each involving 30
places), the MFB will select a minimum of ten females for each course
(assuming that a sufficient number have passed the selection process)
regardless of their position on the Order of Merit.
[10] The MFB has already implemented some of these changes with respect to the
processing of the current round of applicants. The gender quotas of 350 male and 350 female
applicants were applied. The applicants who were then progressed are currently undergoing
the selection process, and have not been given the benefit of the “three-strikes” policy in
doing so. The applicants have already completed the written test, and the changed cut-off
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mark was applied in respect of those tests. The remaining stages of the selection process,
namely the psychological profile questionnaire and the interview, are anticipated to be
completed by the end of the first week in June 2016. The MFB then intends to select those to
be offered places in the next recruit training course, which is scheduled to commence on 18
July 2016, on the changed basis we have identified.
[11] The MFB originally proposed a further change to the selection process, namely the
abolition of the mechanical reasoning component of the written test. However that change
was not implemented in respect of the current intake of applicants, who have accordingly
undergone the existing mechanical reasoning test. The MFB’s current position is that it has
not yet made any decision to remove the mechanical reasoning component of the written test
from future selection processes.
[12] We will therefore determine the preliminary question we have earlier identified by
reference to the four specific proposed changes set out above.
Relevant provisions of the Agreement
[13] Clause 15 of the Agreement establishes an obligation to consult concerning the
introduction of change in the following terms:
“15. INTRODUCTION OF CHANGE
Where the employer wishes to implement change in matters pertaining to employment
relationship in any of the workplaces covered by this agreement, the provisions of
clause 13 will apply.”
[14] Clause 30 also requires that the consultation procedures in clause 13 be followed in
respect of changes to policies which affect employees:
“30. MFESB POLICIES
The MFESB currently has a range of policies that affect employees covered by this
agreement. Policy that is dealt with elsewhere in the agreement may only be varied by
agreement. Should the MFESB elect to modify, delete or add to existing policy that
affects employees then any change or addition will be subject of consultation pursuant
to clause 13 of this agreement. Should any policy be inconsistent with a term of this
Agreement, then it will be invalid to the extent of any inconsistency.”
[15] The substantive consultation provisions are set out in clause 13. It is not necessary for
present purposes to reproduce the full clause. It is sufficient to note that clause 13.1 requires
“... the full, meaningful and frank discussion of issues/proposals and the consideration of
each party's views, prior to any decision...” and clause 13.2 establishes a “MFB/UFU
Consultative Committee” as the mechanism by which the required consultation is to occur.
[16] Clause 20.1 provides that “Any dispute from either party regarding consultation and
change shall be dealt with in accordance with this clause and the dispute resolution clause of
this agreement”. The dispute resolution procedure is set out in clause 19. Clause 19.1
prescribes the scope of operation of the procedure in the following terms:
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“19.1. This dispute resolution process applies to all matters arising under this
agreement, which the parties have agreed includes:
19.1.1. all matters for which express provision is made in this agreement; and
19.1.2. all matters pertaining to the employment relationship, whether or not express
provision for any such matter is made in this agreement; and
19.1.3. all matters pertaining to the relationship between the MFESB and UFU,
whether or not express provision for any such matter is made in this agreement.
The parties agree that disputes about any such matters shall be dealt with by using the
provisions in this clause.”
[17] The procedure set out in the remainder of clause 19 requires various steps to be taken
by the parties to resolve any dispute to which the clause applies between themselves, and
ultimately empowers the Commission to “utilise all its powers in conciliation and arbitration
to settle the dispute” (clause 19.2.6). Clause 19.4 provides that while the procedures are being
followed, “work must continue and the status quo must apply in accordance with the existing
situation or practice that existed immediately prior to the subject matter of the grievance or
dispute occurring”.
[18] The submissions of the parties raised two questions concerning the interpretation and
application of the above provisions:
(1) Did the proposed changes involve “matters pertaining to the employment
relationship” to which the consultation requirement in clause 15 and the
dispute resolution procedure in clause 19 applied?
(2) Did the proposed changes involve a change of policy to which the consultation
requirement in clause 30 applied?
Matters pertaining to the employment relationship?
[19] The phrase “matters pertaining to the employment relationship” used in clauses 15 and
19.1.2 of the Agreement was clearly not an original formulation of those who negotiated and
drafted the Agreement. As was stated in Electrolux Home Products Pty Limited v Australian
Workers’ Union1 in relation to a phrase to the same effect appearing in the Workplace
Relations Act 1996, “This phrase has a long history in the industrial relations law of this
country, and in the decisions of this Court...”, and elsewhere in that decision it was described
as a “pivotal definition” in the field of industrial relations legislation.2
[20] Of immediate relevance in the interpretation and application of the phrase as it appears
in the Agreement is the statutory context in which the Agreement was made.3 Section 172(1)
of the FW Act set out the matters which may be regulated by an enterprise agreement as
follows:
1 [2004] HCA 40; (2004) 221 CLR 309 at [157] per Gummow, Hayne and Heydon JJ
2 Ibid at [162] per Gummow, Hayne and Heydon JJ
3 See AMIEU v Golden Cockerel Pty Limited [2014] FWCFB 7447, (2014) 245 IR 394 at [41] subpar 8(c)
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Enterprise agreements may be made about permitted matters
(1) An agreement (an enterprise agreement) that is about one or more of the following
matters (the permitted matters) may be made in accordance with this Part:
(a) matters pertaining to the relationship between an employer that will be
covered by the agreement and that employer’s employees who will be covered
by the agreement;
(b) matters pertaining to the relationship between the employer or employers,
and the employee organisation or employee organisations, that will be covered
by the agreement;
(c) deductions from wages for any purpose authorised by an employee who
will be covered by the agreement;
(d) how the agreement will operate.
[21] The use of the “matters pertaining to the relationship” formulation in s.172(1)(a)
echoed statutory formulations used to describe the scope of matters falling within the
jurisdiction of industrial arbitration tribunals ever since the enactment of the Conciliation and
Arbitration Act 1904 (which defined “industrial matters” which could be the subject of an
industrial dispute as including “all matters pertaining to the relations of employers and
employees”). The Explanatory Memorandum for the Fair Work Bill 2009 explained the use of
this formulation in s.172(1) in the following way:
“668. Paragraph 172(1)(a) refers to 'matters pertaining to the relationship between an
employer that will be covered by the agreement and that employer's employees
who will be covered by the agreement', referred to after this as 'matters
pertaining to the employment relationship'.
669. The matters pertaining to the employment relationship formulation is of long
standing. Under both the Industrial Relations Act 1988 and the WR Act prior
to 27 March 2006, collective agreements had to be about matters pertaining to
the employment relationship. Since 27 March 2006, a term of a workplace
agreement that was not about such matters was 'prohibited content'. Between
1904 and 2006, the formula was also used in the definition of 'industrial
dispute' under successive Commonwealth industrial relations statutes.
670. Although the precise words used have changed from time to time, the
courts have construed each manifestation of the formula in a similar way.
There is substantial jurisprudence about what the phrase means. It is intended
that paragraph 172(1)(a) should be read in line with that jurisprudence. The
courts' interpretation of the formulation has evolved over time in line with
changing community understandings and expectations about the kinds of
matters that pertain to the employment relationship, and it is expected that this
approach will continue.
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671. Whether a particular term is about matters pertaining to the employment
relationship will depend on its precise construction, as well as the
circumstances surrounding the particular employment relationship. Frequently,
it will be obvious that a term pertains to the employment relationship - e.g., a
term about the payment of wages or a term about hours of work and shift
patterns. However, there are some terms where it is not so immediately clear
whether the terms are about matters pertaining to the employment relationship
(see, e.g., the discussion in Re Schefenacker Vision Systems Australia Pty Ltd,
AWU, AMWU Certified Agreement 2004 [2004] AIRC 1064.
672. It is intended that the following terms would be within the scope of
permitted matters for the purpose of paragraph 172(1)(a):
terms relating to particular staffing levels (subject to any other applicable
legislative requirements or limitations) particularly if those terms are
aimed at ensuring the health, safety and well-being of employees;
terms relating to conditions or requirements about employing casual
employees or engaging labour hire or contractors if those terms
sufficiently relate to employees' job security - e.g. a term which provided
that contractors must not be engaged on terms and conditions that would
undercut the enterprise agreement;
terms that would provide that casual employees are converted to
permanent employees after a set period of time;
terms that would prevent an employer from seeking a contribution or
indemnity from an employee in respect of personal injuries or losses
suffered by that person where such injuries or losses were cause by the
employee in the course of their employment.
673. The following terms would not be intended to be within the scope of permitted
matters for the purpose of paragraph 172(1)(a):
terms that would contain a general prohibition on the employer engaging
labour hire employees or contractors;
terms that would contain a general prohibition on the employer employing
casual employees;
terms that would require an employer or employee covered by to the
enterprise agreement to make a donation to a political party or charity;
terms that would require an employer to source only products from a
particular supplier or Australian made products (unless, e.g., such a term
was directly related to employees' job security);
terms that would require an employer to engage or not engage particular
clients, customers or suppliers who had agreed to commit to certain
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employment, environmental or ethical standards (unless, e.g., such a terms
was directly related to employees' health and safety);
terms that relate to corporate social responsibility, e.g., terms requiring an
employer to participate in charity events or commit to climate change
initiatives.”
[22] The inference we draw from the statutory context is that in using the “matters
pertaining to the employment relationship” formulation in clauses 15 and 19.1.2 of the
Agreement, the makers of the Agreement intended that the consultation and dispute resolution
provisions operate to the full extent permitted by s.172(1)(a), and accordingly that it was
intended that the formulation bear the same width of meaning that it did in s.172(1)(a). That
being the case, the long line of authority, much of it consisting of decisions of the High Court,
concerning the “matters pertaining to the relationship” formulation as it appeared in various
industrial statutes must necessarily guide the proper interpretation of clause 15 and 19.1.2 of
the Agreement.
[23] The most pertinent decision in this line of authority is Re Cram; Ex parte NSW
Colliery Proprietors’ Association Limited.4 It concerned a dispute which had arisen out of a
decision by the relevant coal mining employer to abandon an arrangement whereby it had
recruited labour from a register of unemployed union members and members seeking
employment in the industry. The Local Coal Authority (Northern District), constituted
pursuant to the Coal Industry Act 1946 (Cth) and the Coal Industry Act 1946 (NSW), directed
the employer to abide by the existing arrangement, and this decision was confirmed on an
interim basis on review by the Coal Industry Tribunal established by the same legislation. The
jurisdiction of the Authority and the Tribunal to make these orders was challenged before the
Court.
[24] The jurisdiction of the Authority and the Tribunal to make the orders in question
turned upon whether they were made in settlement of a dispute about an “industrial matter”.
That expression was defined in s.4 of both Acts as meaning, relevantly: “... all matters
pertaining to the relations of employers and employees in the coal mining industry, and,
without limiting the generality of the foregoing, includes, in respect of that industry ...”. What
followed in the definition was a number of specifically identified dispute subject matters (set
out in paragraphs (a)-(p) of s.4).
[25] It was contended by the employer interests challenging the jurisdiction of the
Authority and the Tribunal that the dispute was not about an industrial matter “because a
dispute about manning and mode of recruitment of labour does not directly affect the relations
of employer and employees”.5 That was rejected by the Court. The joint judgment of the
entire seven member court said6:
“Accepting the major premise of the prosecutor's argument, we are nevertheless unable
to accept the minor premise, namely that a dispute about manning and recruitment, in
particular a dispute about mode of recruitment, as that is the correct characterization of
the dispute here, is not directly connected with the relationship between employer and
4 [1987] HCA 28; (1987) 163 CLR 117
5 Ibid at 132
6 Ibid at 133-136
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employee and is merely consequential. The essence of the prosecutor's argument on
this point is that a dispute about manning and recruitment does not directly affect the
relationship of existing employer and employee as such; it is a dispute about the policy
and procedure to be adopted by the employer in the management of his business
enterprise and thus falls within the scope of managerial prerogatives. The subject-
matter of the dispute is non-industrial, just as a dispute about the opening and closing
hours of shops was held to be non-industrial in Clancy and R v Kelly; Ex parte State of
Victoria [1950] HCA 7; (1950) 81 CLR 64, at p 84.
Before dealing with the various strands of thought embedded in this argument, we
should mention some aspects of the general words of the definition of "industrial
matters" as established in the context of s.4 of the Conciliation and Arbitration Act
1904 (Cth). The words "pertaining to" mean "belonging to" or "within the sphere of"
and the expression "the relations of employers and employees" refers to the relation of
an employer as employer with an employee as employee: Kelly, at p.84. And, as Dixon
CJ noted in The Queen v. Findlay; Ex parte The Commonwealth Steamship Owners'
Association [1953] HCA 81; (1953) 90 CLR 621, at pp 629-630, although the
possibility of an indirect and consequential effect is not enough, the conception of
what arises out of or is connected with the relations of employers and employees
includes much that is outside the contract of service, its incidents and the work done
under it. The Chief Justice went on to say (at p.630):
"Conditions affecting the employee as a man who is called upon to work in the
industry and who depends on the industry for his livelihood are ordinarily
taken into account."
His Honour referred to the remarks of Isaacs and Rich JJ. in Australian Tramways
Employes Association v Prahran and Malvern Tramway Trust [1913] HCA 53; (1913)
17 CLR 680. Their Honours, with reference to the equivalent of par.(h) of the
definition of "industrial matters" in the Commonwealth and State Acts, said (at
pp.693-694):
"The 'conditions' of employment include all the elements that constitute the
necessary requisites, attributes, qualifications, environment or other
circumstances affecting the employment.
And the words 'employers' and 'employes' are used in the Act not with
reference to any given contract between specific individuals, but as indicating
two distinct classes of persons co-operating in industry, proceeding
harmoniously in time of peace, and contending with each other in time of
dispute."
Then they referred to the extended definition of "employe" in s.4 of the Conciliation
and Arbitration Act which includes "any person whose usual occupation is that of
employe in any industry", asserting that it makes manifest the last point made in the
passage already quoted. Although neither the Commonwealth nor the State Act
contains any corresponding definition of "employee" or "employer", the point
sufficiently emerges from the opening words of the definition of "industrial matters",
reinforced by the particular paragraphs which follow. And the comments of Isaacs and
Rich JJ. also apply to the opening words of the definition, notwithstanding that they
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were directed at par.(h). Dixon C.J. obviously read them as relating to the general
conception of relations between employers and employees.
In the context of the issue which arises in the present case it makes no difference
whether the comments apply to the general words of the definition, to par.(h) or even
to pars(g), (i), (j) or (k). The comments apply with varying force to each of these
paragraphs. And they apply with even greater force now than at the time when they
were made. To make this point, we return to the statement already quoted by O'Connor
J in Clancy, at p.207. That statement probably echoes in some respects what was
received doctrine at an earlier time - that it was the prerogative of management to
decide how a business enterprise should operate and whom it should employ, without
the workforce having any stake in the making of such decisions. In that climate of
opinion, disputes about the making of such decisions, despite their impact on working
conditions and work to be done, might not necessarily be regarded as industrial
matters susceptible of resolution by industrial arbitration. Over the years that climate
of opinion has changed quite radically, perhaps partly as a result of the extended
definition of "industrial matters" in s.4 of the Conciliation and Arbitration Act and
partly a result of a change in community attitudes to the relationship between
employer and employee. The judgment of Isaacs and Rich JJ. in Tramways Employes
reflects the first of these factors. No doubt our traditional system of industrial
conciliation and arbitration has itself contributed to a growing recognition that
management and labour have a mutual interest in many aspects of the operation of a
business enterprise. Many management decisions, once viewed as the sole prerogative
of management, are now correctly seen as directly affecting the relationship of
employer and employee and constituting an "industrial matter".
A dispute about the level of manning is a good example. It has a direct impact on the
work to be done by employees; it affects the volume of work to be performed by each
employee and the conditions in which he performs his work. So also with the mode of
recruitment of the workforce. The competence and reliability of the workforce has a
direct impact on the conditions of work, notably as they relate to occupational health
and observance of safety standards. Employees, as well as management, have a
legitimate interest in both these matters.
Why then is not the proposed employment of non-union labour or the refusal to abide
by a system of recruitment which gives preference to union labour a matter directly
affecting the relations of employer and employee? The decision in Reg v Gaudron; Ex
parte Uniroyal Pty. Ltd. [1978] HCA 3; (1978) 141 CLR 204, shows that it is. There
the Court held that a dispute about preference in employment for a particular class of
members of a union was a dispute as to an "industrial matter" as defined by s.4 of the
Conciliation and Arbitration Act: see also Waterside Workers' Federation of Australia
v Gilchrist, Watt & Sanderson Ltd [1924] HCA 61; (1924) 34 CLR 482; Reg v
Holmes; Ex parte Altona Petrochemical Co. Ltd [1972] HCA 20; (1972) 126 CLR
529. It is simply not to the point that the industrial matter related to prospective
employment: see Uniroyal, at p.211. There was an actual dispute between existing
employees and employers about that industrial matter.
The order made by the Authority in settlement of the dispute did not exceed the ambit
of the dispute that arose from the employer's refusal to abide by the pre-existing
arrangement for recruitment of labour from a register maintained by the Union, so
http://www.austlii.edu.au/au/cases/cth/HCA/1972/20.html
http://www.austlii.edu.au/au/cases/cth/HCA/1924/61.html
http://www.austlii.edu.au/au/cases/cth/HCA/1978/3.html
[2016] FWCFB 2894
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long as there were sufficient or suitable persons on the register. The dispute was,
accordingly, a dispute about a mode of recruitment of labour which involved a claim
for preference for members of the Union enshrined in the pre-existing arrangement for
recruitment. And the order made by the Authority required compliance with a detailed
procedure embodied in the order which gave effect to that claim for preference. The
order was valid on the ground that it was made in settlement of a dispute as to
"industrial matters" as defined, the relevant matter falling within the opening words of
the definition as well as pars. (h), (i) and (j). We have no need to decide whether the
matter also fell within pars. (g), (k) and (l).”
[26] We derive two propositions from the above passage in Cram:
(1) A matter will pertain to the relationship of employers and employees if it
directly affects the conditions of employees, which includes all the elements
that constitute the necessary requisites, attributes, qualifications, environment
or other circumstances affecting the employment.
(2) The “mode of recruitment” is a matter which has the necessary direct effect,
because the competence and reliability of the workforce has a direct impact on
the conditions of work, notably as they relate to occupational health and
observance of safety standards.
[27] In using the expression “mode of recruitment”, we understand that the Court was
referring to the standards and procedures used to select those who would be engaged in
employment by the employer, because it is the competence and reliability of those selected
which may have an effect on the working conditions of employees including their health and
safety.
[28] We do not consider that any subsequent decision of the High Court has overturned or
called into question the correctness of Cram or sought to confine or distinguish the
propositions for which it stands. The most recent decision of the Court concerning the
“matters pertaining to the relationship” formulation was Electrolux Home Products Pty
Limited v AWU7. That decision concerned the particular subject matter of “bargaining agent’s
fees”, which was held not to be a matter pertaining, but there was no change in the general
approach of the Court as to what constituted a “matter pertaining” - namely a matter directly
affecting employers and employees in their relations as such.
[29] It was submitted by the MFB that Cram was handed down in a legislative context
“which expressly permitted that the preferential employment of union members was a matter
pertaining [and] it necessarily extended to the recruitment of future employees”, whereas
under the current legislative framework “Recruitment can pertain only to the extent that it
tangibly and directly affects current employees”. That submission must be rejected. It is
sufficient to say that it involves a mischaracterisation of Cram, since the ratio of the Court’s
decision was that the mode of recruitment was a matter pertaining because the competence
and reliability of the workforce directly affected the workforce’s employment conditions
including health and safety. That was an effect on current employees just as much as on future
employees.
7 [2004] HCA 40; (2004) 221 CLR 309
[2016] FWCFB 2894
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[30] The MFB also pointed to the absence of a reference to recruitment in the list of matters
identified as “matters pertaining” in paragraph 672 of the Explanatory Memorandum for the
Fair Work Bill as being significant. That submission must also be rejected. That list is only
some examples. Paragraph 670 of the Explanatory Memorandum makes it clear that s.172(1)
is to be read in line with the existing jurisprudence concerning the “matters pertaining to the
relationship” formulation - which necessarily includes Cram. Additionally, the first item in
paragraph 672 identifies “staffing levels” as a matter pertaining. That is evidently a
proposition derived from Cram.
[31] We therefore consider that Cram is directly relevant to the interpretation of s.172(1)
and therefore, for the reasons earlier stated, also relevant to the interpretation and application
of the phrase “matters pertaining to the employment relationship” in clauses 15 and 19 of the
Agreement. The question before us about those provisions must therefore be approached on
the basis that the mode of recruitment is a matter pertaining to the employment relationship
for the purposes of the Agreement.
[32] The MFB advanced its case on the basis that, notwithstanding Cram, we should
approach the matter by analysing whether the specific changes it proposed were ones which
would, once implemented, actually have any effect upon its existing employees. In that
connection it adduced a significant amount of evidence concerning what may be characterised
as the merits of its proposed changes with the objective of demonstrating the lack of potential
for any detrimental effect on employees.
[33] We consider that this approach is, with respect, misconceived. The primary reason is
that it is based on a misreading of the relevant provisions of the Agreement. Clause 15
requires the consultation provision in clause 13 to be applied in respect of “changes in matters
pertaining to the employment relationship” which the MFB wishes to implement. Thus, on
the ordinary meaning of the words used, it is not the changes themselves which must pertain,
but the matters the subject of the change. If the subject matter of the relevant change in
question is the mode of recruitment, then (on the authority of Cram) it is a matter pertaining
to the employment relationship and clause 13 applies.
[34] The MFB’s approach would necessarily involve the Commission in effect undertaking
a full merits consideration of the proposed changes at a stage where it had not yet satisfied
itself that it had the jurisdiction to do so. That is not an approach authorised by the Agreement
or the FW Act.
[35] The question to be determined therefore is whether the MFB’s proposed changes are
to be characterised as changes to the mode of recruitment. In this respect the UFU submitted
that we should look at the proposals for change as a whole, which were (at least initially) set
out in a document entitled “MFB Recruit Firefighter Selection Process”, and not engage in
“parsing and separate scrutiny of each sub-item” of the entire proposal. On that basis, it was
submitted, the subject matter of the change proposal was the mode of recruitment, and the
consultation requirement of clause 13 therefore applied to the proposal in its entirety.
[36] We do not accept that submission. The fact that any particular proposed change was
set out in a document the title of which referred to the recruitment process and which
contained other proposed changes to the recruitment process does not necessarily mean that
the particular change was itself one which related to the recruitment process. It is necessary to
properly characterise each particular change.
[2016] FWCFB 2894
14
[37] It is clear that the proposed abolition of the three-strikes policy, the change to the cut-
off score for the components of the written test and the abandonment of the strict use of the
Order of Merit in selecting persons to undergo upcoming training courses are all changes to
the mode of recruitment because they all concern the standards and procedures used by the
MFB to select those who will be trained and engaged as employees. They are therefore
matters about which the MFB was required by clause 15 to consult about in accordance with
clause 13.
[38] However we have formed a different view about the quotas of 350 for male and
female applicants. The potential effect of this change would only be to the gender mix of
persons whose application for employment with the MFB will be the subject of consideration.
It has nothing to do with the criteria and procedures by which applicants are actually selected
for engagement as employees. Neither party submitted, nor could it reasonably be suggested,
that any alteration to the gender mix of the pool of applicants to whom the recruitment
selection tests and standards are to be applied could ever have any direct effect on the
conditions of employees of the MFB. We do not consider that the introduction of the quotas
for male and female applicants would, properly characterised, be a change to the mode of
recruitment, and consequently the MFB was not required by clause 15 to consult with the
UFU about this under clause 13.
[39] It follows from these conclusions that the three changes we have identified about
which consultation was required could be the subject of a dispute to which clause 19 applies,
because they are covered by clause 19.1.2 as “... matters pertaining to the employment
relationship, whether or not express provision for any such matter is made in this
agreement...”. Additionally, clause 19 would apply to the dispute the subject of the UFU’s
application on two other bases. First, because the dispute is said to concern a failure to
consult, the requirement in clause 20.1 that any dispute about consultation and change had to
be dealt with under clause 20 and “the dispute resolution clause of this agreement” would
apply. Second, clause 19.1.1 provides that the dispute resolution procedure applies, inter alia,
to “all matters for which express provision is made in this agreement”. Consultation about
matters pertaining to the employment relationship is expressly provided for in clauses 13 and
15.
[40] In respect of the quotas of 350 for male and female applicants, because that is not a
change to a matter pertaining and is not a matter to which clauses 13 and 15 apply, it cannot
be the subject of a dispute under clause 19.
A change in policy?
[41] Given the conclusion we have already stated, it is only necessary to consider the
second question of whether there was any change in policy to which clause 30 applied in
relation to the introduction of the quotas for male and female applicants. We consider that
when clause 30 refers to “policies that affect employees covered by this agreement”, it is
referring to formally promulgated written policies and not anything more informal. The
evidence did not disclose that the introduction of the quotas involved any such policy being
changed. Accordingly no requirement to consult arose under clause 30 in relation to the
quotas.
Conclusion and directions
[2016] FWCFB 2894
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[42] The conclusions we have stated above resolve the preliminary issue before us. They
obviously do not involve the expression of any view as to the merits of the proposed changes
or whether the MFB has in fact already consulted about them in accordance with clause 13 of
the Agreement.
[43] As earlier stated, we consider that the President’s direction has referred the whole of
the dispute to us for resolution. We consider that we should expedite the finalisation of the
dispute because of the desirability of the MFB being able to select, by mid-June 2016, the
recruits for the training course due to commence on 18 July 2016. Having found that the
dispute is, except for the one aspect identified, subject to the dispute resolution procedure in
clause 19 of the Agreement, we do not consider that it would be appropriate for the MFB to
be indefinitely constrained by the status quo provision in clause 19.4.
[44] The UFU opposed its application being the subject of an arbitral hearing on the basis
that it has separately initiated proceedings against the MFB in the Federal Court of Australia
for breach of the consultation requirements of the Agreement, and it would be prejudiced by
having to deal with the same issues in two different forums, with the prospect of different
outcomes. That contention cannot be accepted. The potential situation which the UFU
complains of only arises because the UFU has chosen to litigate substantially the same issues
in two different forums. If the UFU considers that the arbitration of its application before the
Commission would prejudice its position in its Federal Court proceedings, or if it does not
seek any relief from the Commission arising from that application, the appropriate course is
for it to discontinue the application. However it cannot expect to keep the application on foot
and obtain the benefit of clause 19.4 without having the application determined in the normal
way.
[45] We therefore make the following directions:
(1) The MFB/UFU Consultative Committee is directed to meet in respect of the
proposals for the abolition of the three-strikes policy, the change to the cut-off
score for the components of the written test, and the abandonment of the strict
use of the Order of Merit in selecting persons to undergo upcoming training
courses, on a minimum of two occasions in the period from the date of this
decision to 21 May 2016 inclusive. This direction is made without prejudice to
the parties’ respective positions as to whether consultation in accordance with
clause 13 has already occurred.
(2) The UFU shall file and serve a document setting out the final relief which it
wishes to obtain in the proceedings, and any further evidence and submissions
it wishes to rely upon at the final hearing of the matter, on or before 27 May
2016.
(3) The MFB shall file and serve any further evidence and submissions it wishes to
rely upon at the final hearing of the matter on or before 6 June 2016.
(4) The matter is listed for the final hearing of all outstanding issues on 9 and 10
June 2016 in Melbourne.
[2016] FWCFB 2894
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(5) The evidence already adduced in the matter may be relied upon by the parties
at the final hearing.
(6) If the parties consider that they would be assisted by any further conciliation in
the matter prior to the final hearing, a member of the Commission will be made
available for this purpose upon request.
(7) Liberty to apply is granted.
VICE PRESIDENT
Appearances:
R. Kenzie QC, T.J. Dixon of counsel, T. Davies and T. Sakkas solicitors for the United
Firefighters’ Union of Australia.
M. Richards SC, R. Preston of counsel, S. Clarke and A. Loftus solicitors for the Metropolitan
Fire and Emergency Services Board.
Hearing details:
2016.
Melbourne:
26 April and 6 May 2016.
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OF THE FAIR WORK MISSION THE
