1
Fair Work Act 2009
s.739—Dispute resolution
“Automotive, Food, Metals, Engineering, Printing and Kindred Industries
Union” known as the Australian Manufacturing Workers’ Union (AMWU)
v
Unilever Australia Trading Limited
(C2016/1627)
COMMISSIONER RYAN MELBOURNE, 20 OCTOBER 2016
Alleged dispute about casual conversion - jurisdiction of the Fair Work Commission not
dependent upon compliance with the disputes procedure in an enterprise agreement.
[1] On 14 July 2016 the “Automotive, Food, Metals, Engineering, Printing and Kindred
Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) made
an application pursuant to s.739 of the Fair Work Act 2009 (the FW Act) for the Fair Work
Commission (the Commission) to deal with a dispute in accordance with the dispute
settlement procedure in the Unilever Australia Trading Limited – Tatura Site – Enterprise
Agreement 2015 (the Agreement).
[2] The dispute was described in the Form F10 as follows:
“2. About the dispute
2.1 What is the dispute about?
Parties and background
1. The Respondent operates a factory at Tatura producing a variety of foodstuffs
and drinks such as powdered soup and iced tea (“Factory”).
2. The Applicant has as members the bulk of production employees engaged at
the factory.
3. The production employees work over 3 shifts, and there are about 200
permanent employees and a varying number of casual employees, from about 25-35.
4. The terms of the production employees’ employment are largely set out in the
Agreement.
[2016] FWC 7600
DECISION
E AUSTRALIA FairWork Commission
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Issues in dispute
5. Since about 2013, the applicant has complained to the respondent about how the
respondent has engaged a significant proportion of its casual production workforce for
extended periods on a regular basis. The applicant has contended that such employees
should be given the option to convert to permanent employment.
6. The respondent has resisted the applicant’s complaints about long term casual
engagements by arguing that the work performed by casuals was too irregular to allow
for conversion.
The Agreement and casual conversion
7. The Agreement provides:
a. At cl 31.3, for casual employees to convert to permanent employment in
particular circumstances; and
b. At cl 29.3, for the parties to negotiate a form of “flexible part time
employment” into which casuals may seek conversion.
8. The applicant has contended to the respondent that various casual employees
currently engaged under the Agreement are eligible for offers of conversion under the
Agreement, cl 31.3.
9. The respondent has countered these contentions by, in March 2016, offering regular
casual employees conversion into the respondent’s own formulation of “flexible part
time employment”. This formulation is not agreed and the applicant contends it
subverts cl 31.3.
10. The applicant has disputed the respondent’s version of casual conversion as
unlawful because:
a. There has been no agreement on how cl 29.3 is to operate;
b. The respondent’s version of casual conversion is contrary to cl 31.3;
c. The respondent’s version of casual conversion is contrary to the Agreement
more broadly, especially cl 12.1 of the Food, Beverage and Tobacco
Manufacturing Award 2010, which is incorporated into the Agreement by cl 2.
11. Despite the applicant’s objections over the respondent’s version of casual
conversion, the respondent has indicated that it will implement its proposal on 17 July
2016.”
[3] The Form F10 also required the AMWU to identify what had occurred under the
disputes resolution procedure of the Agreement and the AMWU answered as follows:
“2.4 What steps have already been taken to resolve the dispute under the dispute
resolution procedure?
See para 2.1 above. There have been numerous exchanges of
correspondence and meeting between the parties where their respective
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positions have been pressed, but the dispute remains unresolved.
[4] Finally the AMWU identified the relief it sought:
“3. Relief sought
3.1 What relief are you seeking by making this application to the Commission?
1. At first instance, under step 4 of the dispute resolution procedure, the
applicant seeks the Commission to conduct a conciliation conference.
2. If the conference fails to resolve the dispute, the applicant will seek
orders that provide for compliance with the Agreement, cl 31.3, for eligible
employees.
3. If the respondent seeks to press for its own version of casual conversion
to be implemented, the applicant may seek interim orders enjoining the
respondent from so acting.”
[5] The Commission conducted a conciliation conference on 9 August 2016 but the matter
could not be resolved. At the conclusion of the conciliation process the Commission issued
directions to the parties. The first two directions were to the AMWU and Unilever and were
as follows:
“1. The Applicant is to formulate a question or statement, which describes the
issue in dispute to be arbitrated and also set out the relief it seeks and provide same to
the Commission and to the Respondent by COB on 16 August 2016.
2. The Respondent is to provide its response to that material by COB on 23
August 2016.”
[6] The question posed for arbitration by the AMWU was expressed as follows:
“Is sub-clause 29.3 of the Unilever Australia Trading Limited – Tatura Site – Enterprise
Agreement 2015 (“Agreement”) precatory in that it does not operate to allow the
employment of permanent part time employees on terms contrary to the rest of the
Agreement?
If the above answer is answered in the affirmative, the applicant seeks a decision that
states that the employment of permanent part time employees to whom the Agreement
applies must be in conformity with clause 12 of the Food, Beverage and Tobacco
Manufacturing Award 2010 as incorporated into the Agreement by clause 2 of the
Agreement.”
[7] Unilever, through its legal representative, Mr Paul Brown, Partner at Baker &
McKenzie, responded to the question by raising a number of objections to the matter
proceeding to arbitration.
[8] Firstly, Unilever contended that the question as formulated by the AMWU was beyond
the jurisdiction of the Commission pursuant to s.739 of the FW Act. The essence of this
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contention was that there was no actual dispute that needed to be resolved using the dispute
resolution processes of the Agreement because there was no individual employee identified as
having a dispute with Unilever and that the dispute resolution process of the Agreement had
not been complied with.
[9] Secondly, Unilever contended that the AMWU was seeking that the Commission give
an opinion as to the interpretation of the Agreement rather than resolve an industrial dispute.
This challenge is related to the first in that it is based upon a contention that there is no
dispute.
[10] Thirdly, Unilever contended that if the AMWU was seeking a declaration relating to
the meaning of an industrial dispute that this was properly a matter for the Federal Court.
[11] The AMWU filed and served an outline of submissions on 9 September 2016. The
AMWU contended that there was no need for any evidence and that the AMWU was not
filing any witness statements.
[12] Unilever filed and served its outline of submissions on 26 September 2016 and in a
covering email requested that the hearing of the matter listed for 4 October 2016 be vacated
and that the matter be determined on the papers, unless the Commission was of the view that
it may be necessary to have regard to any additional oral submissions, in which case a hearing
would be needed.
[13] The hearing listed for 4 October 2016 was vacated by the Commission.
[14] Although the directions issued by the Commission did not provide for any rebuttal
from the AMWU to the submissions of Unilever, the AMWU filed and served a submission
titled “Applicant’s Rebuttal” on 5 October 2016.
The Commission’s jurisdiction to deal with the dispute
[15] Unilever raise two very different jurisdictional challenges to the present matter. The
first relates to the dispute resolution procedure in the Agreement and to the jurisdiction of the
Commission to deal with disputes arising under the terms of an enterprise agreement. The
second relates to the separation of powers doctrine which makes clear that the Commission is
not a court and cannot exercise judicial power. I will deal with the two challenges separately.
The jurisdiction of the Commission and the Dispute Resolution Procedure of the
Agreement
[16] Any consideration of the Commission’s jurisdiction in the present matter must start
with the relevant provisions of the FW Act and of the Agreement. The relevant provisions of
the FW Act are s.186(6), 595, 738 and 739 and the relevant provision of the Agreement is
clause 9.
[17] Section 595 relevantly provides as follows:
“595 FWC’s power to deal with disputes
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(1) The FWC may deal with a dispute only if the FWC is expressly authorised to
do so under or in accordance with another provision of this Act.
(2) The FWC may deal with a dispute (other than by arbitration) as it considers
appropriate, including in the following ways:
(a) by mediation or conciliation;
(b) by making a recommendation or expressing an opinion.
(3) The FWC may deal with a dispute by arbitration (including by making any
orders it considers appropriate) only if the FWC is expressly authorised to do so under
or in accordance with another provision of this Act.
Example: Parties may consent to the FWC arbitrating a bargaining dispute (see
subsection 240(4)).
(4) In dealing with a dispute, the FWC may exercise any powers it has under this
Subdivision.
Example: The FWC could direct a person to attend a conference under section 592.
(5) To avoid doubt, the FWC must not exercise the power referred to in subsection
(3) in relation to a matter before the FWC except as authorised by this section.”
[18] Section 738 relevantly provides as follows:
“738. This Division applies if:
(b) an enterprise agreement includes a term that provides a procedure for dealing with
disputes, including a term referred to in subsection 186(6)”
[19] Section 739 provides as follows:
“(1) This section applies if a term referred to in section 738 requires or allows the
FWC to deal with a dispute.
(2) The FWC must not deal with a dispute to the extent that the dispute is about
whether an employer had reasonable business grounds under subsection 65(5) or
76(4), unless:
(a) the parties have agreed in a contract of employment, enterprise agreement
or other written agreement to the FWC dealing with the matter; or
(b) a determination under the Public Service Act 1999 authorises the FWC to
deal with the matter.
Note: This does not prevent the FWC from dealing with a dispute relating to a term of
an enterprise agreement that has the same (or substantially the same) effect as
subsection 65(5) or 76(4) (see also subsection 55(5)).
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(3) In dealing with a dispute, the FWC must not exercise any powers limited by
the term.
(4) If, in accordance with the term, the parties have agreed that the FWC may
arbitrate (however described) the dispute, the FWC may do so.
Note: The FWC may also deal with a dispute by mediation or conciliation, or by
making a recommendation or expressing an opinion (see subsection 595(2)).
(5) Despite subsection (4), the FWC must not make a decision that is inconsistent
with this Act, or a fair work instrument that applies to the parties.
(6) The FWC may deal with a dispute only on application by a party to the
dispute.”
[20] Whilst s.739 creates the statutory power for the Commission to deal with disputes
arising under the terms of an enterprise agreement, that power only exists if a term of the
agreement specifically provides for the Commission to deal with disputes.
[21] Clause 9 of the Agreement provides as follows:
“9 Dispute Resolution Procedure
9.1 The parties are confident that the combination of a responsible, committed and
co-operative workforce, responsive co-operative management and consultation will
result in a harmonious working relationship where grievances are resolved without
disputation.
9.2 The following procedure shall be observed in dealing with any dispute or
grievance concerning the interpretation, application and/or implementation of a term
or terms of:
(a) This Enterprise Agreement, including the incorporated Award provision,
any other provisions or arrangements recognised in this Agreement; or
(b) The National Employment Standards.
Step 1 The employee(s) with the complaint or grievance to hold
discussions with his/her immediate team leader. If the
employee(s) wishes he/she can nominate a representative to
assist and/or represent him/her. Such a representative can, if
nominated by the employee(s), be a union delegate.
If not resolved:
Step 2 The issue will be referred to the Manager. At this step, the
employee(s) can also nominate a representative to assist
and/or represent him/her. Such a representative can, if
nominated by the employee(s) be a union delegate and/or
union official.
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If not resolved:
Step 3 The issue will be referred to the attention of a senior
Manager. At this step, the employee can also nominate a
representative to assist and/or represent him/her. Such a
representative can, if nominated by the employee be a union
delegate and/or union official.
Note: In the event of a dispute between a union(s) covered by this Agreement
and the employer, in the first instance the parties will attempt to resolve the
matter at the workplace by discussions between a union representative(s)
concerned and the relevant management personnel and, if such discussions do
not resolve the dispute, by discussions between union representative(s) and
more senior levels of management as appropriate. This union representative
may be a delegate/shop steward(s) or other official(s) at any stage of the
dispute.
If not resolved:
Step 4 If the matter remains unresolved the parties may, jointly or
individually, refer it to Fair Work Commission (FWC) for
conciliation.
Step 5 If conciliation fails to resolve the matter in dispute and if
either party wishes FWC shall resolve the matter by
arbitration.
Powers of Fair Work Commission
9.3 Fair Work Commission may do the following:
(a) Take evidence on oath or affirmation;
(b) Make an order relation to all or any matters in dispute including an interim
order and an order for specific performance of the terms of the agreement (the
term “order” herein used does not mean an order for the purposes of the FW
Act. Rather, an order made under this procedure has effect as if it were a term
of this agreement);
(c) Give a direction, in the course of, or for the purpose of, the hearing or
determination of the matter in dispute;
(d) Hear and determine the matter in dispute in the absence of a party who has
been summoned or served with a notice to appear;
(e) Sit at any place;
(f) Conduct its proceedings, or any part of its proceedings, in private;
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(g) Adjourn to any time and place;
(h) Refer any matter to an expert and accept the expert’s report as evidence;
(i) Direct parties to be joined or struck out;
(j) Allow the amendment, on such terms as it considers appropriate, of any
application or other document relating to any proceeding;
(k) Correct, amend, or waive any error, defect or irregularity, whether in
substance or form;
(1) summon before it the parties to the agreement, witnesses or any other
person whose presence FWC determines is essential in the hearing or
determination of the matter in dispute and compel the production before it of
documents and other things essential for the hearing and determination of the
matter in dispute providing those documents and other things that are
privileged or treated by the company as commercial in confidence do not
become public record; and;
(m) Generally give all directions and do all such things as are necessary or
expedient for the speedy and just hearing and determination of the matter in
dispute.
9.4 If any party fails or refuses to follow any step of this procedure the non
breaching party shall not be obligated to continue through the remaining steps of the
procedure, and may immediately seek relief by application to FWC.
9.5 The status quo shall remain whilst following the Dispute Resolution
Procedure.”
[22] It is very clear through the language of Steps 4 and 5 in clause 9.2 and the provisions
of clause 9.3 that clause 9.2 of the Agreement meets the requirements of s.738 in that it is a
term of an enterprise agreement which requires or allows the FWC to deal with a dispute.
[23] The challenge raised by Unilever to the Commission having jurisdiction to deal with
the alleged dispute is similar to a jurisdictional challenge dealt with by me in an earlier matter,
AMWU v CBI Constructors P/L1. Much of what was said in that decision is apposite to the
present matter.
[24] Unilever in its initial response dated 24 August 2016 to the question posed for
arbitration identified the jurisdictional issues as follows:
“It is the submission of Unilever that the above formulation is, in the circumstances,
beyond the jurisdiction of the Commission to determine with reference to the powers
available to the Fair Work Commission pursuant to section 739 of the Fair Work Act
2009 (Cth).
In making this submission, Unilever notes that no party to the Enterprise Agreement
who is or may be the subject of any alleged grievance or dispute who has accepted the
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offer of permanent part time employment has sought to make use of the provisions of
the dispute resolution provisions of the Enterprise Agreement.
…In circumstances where there is no employee that has in our submission activated
the requirements of the Enterprise Agreement, we submit there is no actual
controversy that needs to be resolved and/or determined.
It is the submission of Unilever that if there is to be a proper exercise of the powers of
the Fair Work Commission with regard to the requirements of section 739 of the FW
Act and to avoid the prohibition on the Fair Work Commission acting in an apparent
advisory capacity, the Applicant Union or a party to the Agreement must:
1. invoke the jurisdiction provided by the term of the Enterprise Agreement
by nominating the nature of the employee’s complaint or grievance as it
relates to the dispute or grievance concerning the interpretation, application
and/or implementation of a term or terms of the Enterprise Agreement
(paragraph 9.2(a));
2. nominate a representative to assist and/or represent him or her;
3. refer the issue to the manager as defined; and
4. (assuming no resolution is reached) refer the matter to the Fair Work
Commission.
Unilever raises the above concerns so as to ensure that it has the benefit of
understanding the particular employee’s dispute or grievance and to address the
dispute or grievance as envisaged by the terms of the Enterprise Agreement.
Unilever remains of the view that within the context of the existing proceedings, the
Applicant Union and the relevant employee could be permitted leave to observe the
above steps as a prerequisite to any matter that is capable of being resolved in
accordance with the terms.
The above submission stands in contrast to the apparent position of the Union whereby
it appears to be asking an administrative body such as the Fair Work Commission to
conclusively decide the legal issue or issues in the absence of:
1. an employee who is or may be affected by the dispute or grievance; and
2. compliance with the steps mandated by the Enterprise Agreement.”
[25] Unilever repeated its jurisdictional objection in its outline of submissions as follows:
“8. The Respondent repeats the jurisdictional objections contained in the letter from
Baker & McKenzie dated 24 August 2016 and submits that the Commission should
exercise its discretion to dismiss the Application and/or refrain from determining the
Question until a genuine dispute or grievance is before the Commission.”
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[26] Apart from repeating and relying on its original jurisdictional objections, Unilever was
now seeking that, to the extent that the Commission had jurisdiction to deal with the matter,
that the Commission exercise its jurisdiction to either dismiss the application or to refrain
from determining the matter.
[27] Further, Unilever in its outline of submissions expanded on its jurisdictional challenge
as follows:
“No compliance with Enterprise Agreement- No Valid Grievance
10. The Applicant Union submits that evidence as to how the dispute arose and
how the Respondent has applied and is applying the Enterprise Agreement is not
necessary (paragraph 4). This submission fails to comprehend the fact that the
Enterprise Agreement envisages that in the “application” of any grievance, that:
(a) pursuant to Step 1 of paragraph 9.2 of the Enterprise Agreement, the
employee(s) with the complaint or grievance is to hold discussions with his or
her immediate team leader;
(b) pursuant to Step 2 of paragraph 9.2 of the Enterprise Agreement, the issue
(that being the complaint or grievance of the employee) is to be referred to the
manager; and
(c) pursuant to Step 3 of paragraph 9.2 of the Enterprise Agreement, the issue
(as defined) is to be referred to a senior manager;
(d) pursuant to Step 4 and 5 of paragraph 9.2 of the Enterprise Agreement, if
the matter remains unresolved the parties may jointly or individually refer the
issue to the Fair Work Commission for conciliation or arbitration.
11. Whilst the Respondent acknowledges that clause 9.2 of the Enterprise
Agreement envisages potential “representation” by nomination of a representative
(including the Applicant Union) the appointment of a Representative proceeds on the
assumption that the “Employee” asserts the complaint or grievance. In the context of
this Application to the Fair Work Commission, Step 1 has not been completed, in that
no employee has at any time asserted a complaint or grievance as defined.
12. The power of the Fair Work Commission derives from the procedure. The
Enterprise Agreement requires that relevant disputes and grievances must follow the
procedure in order that the subject of the dispute may, where not resolved, ultimately
be referred to the Fair Work Commission. If this is not done, the potential jurisdiction
and powers provided by section 739 of the FW Act are not engaged. Accordingly,
there is no valid grievance in accordance with the provisions of the Enterprise
Agreement.
13. In addition, clause 9.4 of the Enterprise Agreement states that where a party
fails or refuses to follow a step in the procedure, the non-breaching party shall not be
obliged to continue through the remaining steps of the procedure.”
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Jurisdiction of the Commission to deal with this application
[28] I will deal with the issue as to the jurisdiction of the Commission to deal with the
application in this matter.
[29] The contention of Unilever that there is a requirement that the procedural steps of an
enterprise agreement’s disputes procedure must be followed before the Commission has
jurisdiction to deal with a dispute must be rejected. Such a contention is not supported by any
provision of the FW Act.
[30] Whilst it is clear that s.595, 738 and 739 create a statutory framework which enables
the Commission to deal with disputes arising under an enterprise agreement it is necessary to
look beyond these provisions to determine whether the jurisdiction of the Commission is also
dependent upon there being strict compliance with the dispute resolution processes contained
in an enterprise agreement. Much of the answer to this issue is to be found in considering the
FW Act and its predecessor, the Workplace Relations Act 1996 (WR Act).
[31] The starting point must be s.186(6) which requires an enterprise agreement to have a
term relating to the settlement of disputes. The language of s.186(6) is very specific.
“(6) The FWC must be satisfied that the agreement includes a term:
(a) that provides a procedure that requires or allows the FWC, or another
person who is independent of the employers, employees or employee
organisations covered by the agreement, to settle disputes:
(i) about any matters arising under the agreement; and
(ii) in relation to the National Employment Standards; and
(b) that allows for the representation of employees covered by the
agreement for the purposes of that procedure.”
[32] Section 737 of the FW Act requires that the “regulations must prescribe a model term
for dealing with disputes for enterprise agreements.” However the FW Act does not require
that the model term be used in enterprise agreements and if an enterprise agreement does not
contain a dispute settlement term as required by s.186(6) the model term does not become a
term of the agreement.
[33] The FW Act and the Fair Work Regulations provide for three model clauses for
enterprise agreements: a Consultation term, a Flexibility term and a Disputes procedure term.
The specific treatment within the FW Act of enterprise agreements which do not contain a
flexibility term or a consultation term, contrasts starkly with how the FW Act treats an
enterprise agreement which does not contain a disputes procedure term.
[34] In the case of enterprise agreements which do not contain a consultation term or a
flexibility term as required by the FW Act then the FW Act mandates that the model
flexibility term and/or the model consultation term are taken to be terms of the enterprise
agreement.
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[35] In the case of an enterprise agreement which does not contain a disputes settlement
term as required by s.186(6) of the FW Act, the enterprise agreement cannot be approved by
the Commission. There is nothing in the FW Act which would either permit or require the
Commission to treat the model disputes procedure term as being part of an enterprise
agreement.
[36] The first thing to note about s.186(6) is that it does not require enterprise agreements
to include a term that provides a procedure which requires that disputes be dealt with at the
workplace or enterprise level. Section 186(6) only requires that an enterprise agreement
contain a term which allows the Commission or another independent third party to settle
disputes.
[37] The FW Act clearly permits an enterprise agreement to contain a term which goes
beyond the minimum requirement of s.186(6)(a). Such is clear from s.172 which permits
enterprise agreements to be made about one or more of the following matters:
“(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.”
[38] Whilst s.186(6)(a) only requires a dispute settlement term that deals with settlement of
disputes about any matters arising under the agreement; and/or in relation to the National
Employment Standards, s.172 permits an enterprise agreement to contain a disputes
settlement term which deals with the settlement of disputes about any matter than can be
contained within an enterprise agreement. Section 738 makes this very clear when it provides
that Division 2 of Part 6-2 applies if:
“(b) an enterprise agreement includes a term that provides a procedure for dealing with
disputes, including a term referred to in subsection 186(6).”
[39] When considered in light of the operation of ss.186(6) and 172 and 738 it is clear that
the model disputes procedure term as set out in Schedule 6.1 of the Regulations does more
than is required by s.186(6) and provides a procedure for dispute resolution at the workplace
level as permitted by s.172 and as recognised by s.738.
[40] As the Full Bench in Woolworths Ltd trading as Produce and Recycling Distribution
Centre2 at [29] said:
“[29] In our view the model term does no more than illustrate the types of
procedures and powers that may be dealt with in a dispute resolution term. There is no
basis for an implication that all of them must be included in every term. Such an
implication would, in any event, be inconsistent with the express terms of s.739(3).”
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[41] The foregoing discussion makes very clear that what is required to meet the
requirements of s.186(6) is far less than what appears in the model term and far less than
appears in most dispute resolution terms.
[42] The second matter that is relevant is the difference which exists between the FW Act
and the WR Act approaches to dispute resolution.
[43] Under the WR Act there was a strong emphasis on having disputes resolved at the
enterprise level. Furthermore, the WR Act required workplace agreements to contain a term
which included procedures for settling disputes (dispute settlement procedures) about matters
arising under the agreement between:
(a) the employer; and
(b) the employees whose employment will be subject to the agreement.
[44] The Commission could not deal with some disputes unless all of the procedures of the
dispute resolution process had been complied with and in the case of some disputes the
Commission was specifically empowered to refuse to deal with the dispute if all of the dispute
resolution procedures were not complied with
[45] The principal object of the WR Act was set out in s.3 and two of the means for
achieving the principal object of the FW Act were:
“(d) ensuring that, as far as possible, the primary responsibility for determining
matters affecting the employment relationship rests with the employer and employees
at the workplace or enterprise level; and
(h) supporting harmonious and productive workplace relations by providing
flexible mechanisms for the voluntary settlement of disputes.”
[46] Section 353 of WR Act provided as follows:
“(1) A workplace agreement must include procedures for settling disputes (dispute
settlement procedures) about matters arising under the agreement between:
(a) the employer; and
(b) the employees whose employment will be subject to the agreement.
(2) If a workplace agreement does not include dispute settlement procedures, the
agreement is taken to include the model dispute resolution process mentioned in
Part 13.”
[47] As can be seen there was a very strong difference between s.186(6) of the FW Act and
s.353 of the WR Act. The latter requires a procedure for settling disputes and that procedure
does not have to involve the Commission or an independent third party. Under the latter
provision if no disputes procedure was included in the workplace agreement then the model
term was included.
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[48] The comparison between s.186(6) of the FW Act and s.353 of the WR Act makes it
very clear that Parliament, in enacting the FW Act, significantly changed the requirements in
relation to dispute settlement terms to be included in an enterprise agreement.
[49] Part 13 of the WR Act dealt with dispute resolution processes including the role of the
Commission in dealing with disputes. Division 1 included the objects of the Part. Division 2
dealt with the Model Dispute Resolution Process. Division 3 dealt with alternative dispute
resolution processes conducted by the Commission under the model dispute resolution
process. Division 5 dealt with dispute resolution processes conducted by the Commission
under a workplace agreement. Division 6 dealt with dispute resolution process conducted by a
provider other than the Commission.
[50] Section 692 in Division 1 provided as follows:
“692. Object
The objects of this Part are:
(a) to encourage employers and employees who are parties to a dispute to
resolve it at the workplace level; and
(b) to introduce greater flexibility for the resolution of disputes by allowing
the parties to determine the best forum in which to resolve them.”
[51] Division 2 contained s.695 which provided as follows:
“695. Resolving dispute at workplace level
The parties to a dispute must genuinely attempt to resolve the dispute at the workplace
level.
Note: This may involve an affected employee first discussing the matter in dispute
with his or her supervisor, then with more senior management.”
[52] Division 3 dealt with alternative dispute resolution processes conducted by the
Commission under the model dispute resolution process.
[53] Disputes about maximum ordinary hours of work, annual leave, personal and carer’s
leave and parental leave entitlements which were part of the Australian Pay and Conditions
Standards could only be dealt with under the model dispute resolution process (s.175 of the
WR Act). This meant that Division 3 of Part 13 would come into play when a dispute about
one of these three APCS matters could not be resolved at the workplace. S700(2) which was
part of Division 3 provided that:
“700(2) The Commission may refuse to conduct an alternative dispute resolution
process under this Division if the parties in dispute on the matter have not made a
genuine attempt:
(a) to resolve the dispute at the workplace level; or
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(b) to reach agreement on who would conduct the alternative dispute
resolution process.”
[54] Division 5 contained s.710 which provided as follows:
“710. Grounds on which Commission must refuse application
The Commission must refuse to conduct a dispute resolution process under this
Division in relation to a matter in dispute if:
(a) the dispute is not one that, under the terms of the workplace agreement,
may be resolved using a dispute resolution process conducted by the
Commission; or
(b) any of the steps that, under the terms of agreement, must be taken before
the matter is referred to the Commission have not been taken.”
[55] Division 6 of Part 13 did not contain any prohibition on a provider other than the
Commission from dealing with a dispute if the parties to the dispute had not taken all of the
steps that, under the terms of agreement, must be taken before the matter is referred to the
other provider.
[56] The strict prohibition which applied to the Commission under s.710(b) to not deal with
a dispute under a workplace agreement unless each of the steps which had to be taken under
the dispute resolution process in the workplace agreement before the dispute could be referred
to the Commission had been taken, was not included by Parliament in the FW Act.
[57] The jurisdiction of the Commission to deal with a dispute arising under the terms of an
enterprise agreement arises through a term of the enterprise agreement which meets the
statutory requirements of s.186(6) of the FW Act. That term must provide a procedure which
requires or allows the Commission, or another person who is independent of the employers,
employees or employee organisations covered by the agreement to settle the dispute. The
jurisdiction of the Commission is not dependent upon a term of an enterprise agreement that
provides for a dispute resolution process at the workplace or enterprise level.
[58] It is not possible for a dispute resolution term in an enterprise agreement to operate so
as to prevent a dispute from being referred to the Commission, or another person who is
independent of the employers, employees or employee organisations covered by the
agreement to settle the dispute.
[59] Where a term of an enterprise agreement contains a dispute resolution process which
has several steps for dealing with the dispute at the workplace and lastly provides for the
dispute to be referred to the Commission, or another person who is independent of the
employers, employees or employee organisations covered by the agreement to settle the
dispute, the steps for dealing with the dispute at the workplace cannot operate as a bar to the
Commission, or another person who is independent of the employers, employees or employee
organisations covered by the agreement, having jurisdiction to settle the dispute. If such was
allowed to occur then the term would not be a term that met the requirements of s.186(6) of
the FW Act.
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[60] Whereas, in the present matter, clause 9 provides for three internal steps to the dispute
resolution process before the dispute can be referred to the Commission the three internal
steps of the dispute resolution process must have some work to do and the clause must be
understood and applied so as to give effect to the intention of the parties in creating a three
step internal dispute resolution process. However, the key elements of clause 9 are Step 4 and
Step 5 in sub-clause 9.2 which relevantly provide as follows:
“Step 4 If the matter remains unresolved the parties may, jointly or individually, refer it
to Fair Work Commission (FWC) for conciliation.
Step 5 If conciliation fails to resolve the matter in dispute and if either party wishes
FWC shall resolve the matter by arbitration.”
[61] It is these two provisions which clearly meet the requirements of s.186(6) and thus
create the jurisdiction for the Commission to deal with unresolved disputes.
[62] Non-compliance with any or all of Step 1, Step 2 and Step 3 in sub-clause 9.2 cannot
deny the Commission jurisdiction to deal with a dispute under Step 4 or Step 5 of sub clause
9.2.
[63] It is to be noted that the very structure of clause 9.2 makes compliance with each of
the steps in the sub-clause impossible in some circumstances. For example the Agreement
contains a contractors’ clause (clause 17.2) which requires Unilever to only use contractors
who apply wages and conditions to their employees that are no less favourable than the wages
and conditions provided by the Agreement. A dispute about the operation of this clause is
most likely to be raised by one or all of the unions covered by the Agreement and not by an
individual employee of Unilever. In such a case a union which raises the dispute could not
comply with the procedural step in Step 1 of sub-clause 9.2 where no individual employee of
Unilever has raised the dispute. Equally where Unilever raises a dispute with employees,
either individually or collectively or with a union or unions covered by the Agreement, it
makes a nonsense to suggest that Unilever has to comply with Step 1 of sub-clause 9.2. What
would be the utility of requiring Unilever to take up the dispute with the supervisor of the
employee or employees involved. Little would be achieved by having Unilever talk to itself.
[64] The very structure of clause 9.2 seems to be predicated upon the concept that a dispute
can never or would never be identified and raised by Unilever with its employees or by the
unions covered by the Agreement. Yet if Unilever raises a dispute about a matter arising
under the Agreement clause 9 will apply to that dispute and as required by s.186(6) the
Agreement must contain a term which requires or allows the Commission, or another person
who is independent of the employers, employees or employee organisations covered by the
agreement to settle the dispute.
[65] Where Unilever raises the dispute about a matter arising under the Agreement a
modified operation of clause 9.2 would be appropriate. If Unilever raises a dispute with an
individual employee then Step 1 of sub-clause 9.2 could be applied as if the requirement to
take the matter up with an employee’s supervisor was taken to require Unilever to take the
matter up with the employee. If not resolved at that level any attempt to translate Step 2 and
Step 3 of sub-clause 9.2 to allow Unilever to further progress the dispute appears problematic.
However, Step 4 of sub-clause 9.2 would permit Unilever to refer the matter in dispute to the
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Commission for conciliation and Step 5 would permit Unilever to refer the dispute to the
Commission for arbitration.
[66] I note that there are a number of decisions of members of the Commission made under
the FW Act where the Commission has refused to deal with a dispute arising under the
dispute resolution process of an enterprise agreement because the applicant has not complied
with the procedural steps for trying to resolve the dispute at the workplace or enterprise level.
I am not aware of any decision which says that the Commission’s jurisdiction to deal with a
dispute under the dispute resolution process of an enterprise agreement is dependent upon the
applicant complying with each step of the dispute resolution process at the enterprise or
workplace level.
[67] Even though the Commission’s jurisdiction to deal with a dispute under the dispute
resolution term in an enterprise agreement is not dependent upon the applicant having
complied with each or any of the steps for attempting to resolve the dispute at the workplace
or enterprise level there are still good reasons why the Commission should not, on occasions,
exercise its jurisdiction where the applicant has failed to follow all of the steps of the dispute
resolution term.
[68] In Boral Cement Ltd v AWU3 a Full Bench of the Commission observed as follows:
“[6] We do not think this is an appropriate case in which to grant permission to
appeal. The underlying industrial issue which led to the s.418 application is capable of
being resolved using the agreed procedures in the enterprise agreement. It seems to us
that if we were to grant permission to appeal we could be seen as encouraging Boral,
or both parties, to continue to ignore their obligations under clause 41 of the enterprise
agreement. This is an important question of principle.”
[69] I agree that there is an important question of principle involved in not encouraging
parties to an enterprise agreement to ignore their obligations under the enterprise agreement.
In the present matter the parties to the Agreement (Unilever, AMWU and CEPU and
employees) have all agreed to the dispute resolution term as part of the process of making the
Agreement. Where a party could have, and should have, followed the steps set out in clause
9.2 of the Agreement but chose not to, the Commission could be seen to be encouraging the
parties to ignore their obligations under the dispute resolution term of the enterprise
agreement by proceeding to deal with a dispute referred directly to the Commission by the
offending party.
[70] The important question of principle would suggest that there are times when the
Commission should decline to exercise its jurisdiction under the dispute resolution term of an
enterprise agreement when the applicant has failed to comply with a procedural step for
attempting to resolve the dispute at the workplace or enterprise level.
[71] Such is not the case in the present matter. Whilst no individual employee has raised
the issue in dispute with Unilever, the AMWU certainly has and the AMWU has used the
dispute resolution term as far as is possible.
[72] The foregoing discussion provides an answer to two of jurisdictional issues raised by
Unilever.
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[73] Firstly, the Commission has jurisdiction to deal with the matter in dispute under clause
9 of the Agreement and s.595 and 739 of the FW Act.
[74] Secondly, the Commission should and will exercise its discretion to deal with the
matter in dispute.
The Separation of Powers Challenge
[75] Unilever made a detailed submission that the question posed by the AMWU and the
relief it sought amounted to asking the Commission to exercise a judicial power. As Unilever
put it in
“Declaration
14. The Question is framed in a manner which seems to invoke or attempt to invoke the
jurisdiction of the Commission to find, on the bare wording of subsection 29.3, that it
“fits the description of a hortatory or aspirational provision” (paragraph 12).
15. The Question, as framed by the Applicant Union, is a bald request for a declaration
as to the meaning or intended meaning of a clause of the Enterprise Agreement. This
application is made in the absence of any particular factual circumstances that would
otherwise invoke section 739 of the FW Act and permit the exercise of the powers of
the Commission.
16. A determination (or declaration) of the character sought by the Applicant Union
amounts to an exercise of judicial power. The Commission cannot exercise judicial
power.
23. …The dispute (or Question) as framed by the Applicant Union involves improper
exercise of judicial power and should be dismissed.”
[76] The AMWU in its “Applicant’s rebuttal” contended that the answer to the this
challenge by Unilever was to be found in the authorities and particularly in the recent Full
Bench decision in Kentz (Australia) P/L v CEPU,4 (Kentz). In Kentz the Full Bench
considered whether or not the Commission was exercising judicial power when dealing with a
dispute arising under the terms of an enterprise agreement. The relevant clause of the
enterprise agreement provided, inter alia, as follows:
“18.2 Steps in the Dispute Resolution Process
(a) Any disagreement or dispute in respect of any matters arising under the Agreement
or the National Employment Standards (NES) will be dealt with as outlined in this
clause 18.2.”
[77] The provisions of the dispute resolution clause in Kentz are very similar to the
provisions of clause 9.2 of the Agreement in the present matter which opens with the
following:
“9.2 The following procedure shall be observed in dealing with any dispute or grievance
concerning the interpretation, application and/or implementation of a term or terms of:
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(a) This Enterprise Agreement, including the incorporated Award provision,
any other provisions or arrangements recognised in this Agreement; or
(b) The National Employment Standards.”
[78] The decision in Kentz is very clearly apposite to a consideration of the challenge raised
by Unilever. In considering whether the Commission was exercising judicial power if dealing
with a matter under clause 18 the Full Bench, after having reviewed the relevant authorities,
said:
“[55] The Kentz Agreement was made in accordance with Part 2–4 of the FW Act.
The dispute settlement process in clause 18 of the Kentz Agreement is a term, of the
type contemplated by s.738(b) of the FW Act, which includes a term referred to in
s.186(6)(a), that provides a “procedure that requires or allows the FWC, or another
person 48 who is independent of the employers, employees or employee organisations
covered by the agreement, to settle disputes” about any matter arising under an
agreement. In clause 18 of the Kentz Agreement, the parties to the Kentz Agreement
authorise the Commission to deal with a dispute within its scope.
[56] Clause 18 of the Kentz Agreement is broad in its reach, relating to “[a]ny
disagreement or dispute in respect of any matters arising under the Agreement or the
National Employment Standards (NES)”.49 There is no limitation expressed — it
applies to any dispute in respect of any matters arising under the Kentz Agreement.
[57] In clause 18.2(b)(5), the parties agree that the Commission may arbitrate the
dispute. It provides that, following attempts in good faith to resolve the issue(s) in
dispute through earlier steps in the process:
‘In the event that resolution is not achieved, any party or the Employee may
refer the matter to Fair Work Australia for conciliation and/or arbitration.’
[58] The processes within clause 18 are directed to avoiding the “escalation of
disputes or grievances” and providing “prompt resolution of issues of concern”.
[59] Clause 18 of the Kentz Agreement confers the authority of the parties on the
Commission to arbitrate any disagreement or dispute in respect of any matters arising
under the Kentz Agreement for the purpose of resolving the dispute. It affords the
Commission a power of private arbitration in relation to such disputes. It does not
limit the scope of an arbitration to preclude the resolution of disputes in relation to
past events or about rights and obligations under an agreement. There is no basis for
reading an unstated limitation on the scope of the dispute resolution provision in the
context of the broad scope which is expressed in it – “[A]ny disagreement or dispute”.
Clause 18 does not provide or purport to provide an authority that exceeds what is
permitted either by The Constitution or by the FW Act.
And
[69] The Commissioner was authorised by the parties to the Kentz Agreement to
conciliate and/or arbitrate the matters in dispute. The power being exercised by the
Commissioner was not a statutory power, but a power conferred by the parties through
their enterprise agreement. The Commissioner was exercising a power of private
https://www.fwc.gov.au/documents/decisionssigned/html/2016fwcfb2019.htm#P406_47608
https://www.fwc.gov.au/documents/decisionssigned/html/2016fwcfb2019.htm#P403_47073
[2016] FWC 7600
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arbitration afforded to the Commission by the dispute resolution process within the
Kentz Agreement.
[70] Where, as in this case, the parties agreed to submit their differences for
decision by a third party, the decision maker does not exercise judicial power, but a
power of private arbitration.
[71] In exercising the power of private arbitration afforded to the Commission, the
Commissioner had power to arbitrate an outcome to resolve the dispute over matters
arising under the Kentz Agreement. In doing so she was authorised to form
conclusions as to the legal rights and liabilities of the parties to the Kentz Agreement
and give a decision expressing a conclusion as to the operation of the relevant terms of
the Kentz Agreement, in order to discharge her role in the dispute resolution procedure
to resolve disputes between the parties to the Kentz Agreement, in furtherance of the
objective of the parties of avoiding the escalation and providing prompt resolution of
disputes or grievances.
[72] Commissioner Bissett received submissions and evidence in relation to the
issues in contention, considered them and made findings in relation to the matters of
fact and interpretation in dispute, in order to discharge her responsibility in private
arbitration to resolve the dispute. The Commissioner was authorised to make findings
in the course of the private arbitration concerning the operation of the relevant
provisions of the Kentz Agreement for the purpose of resolving the dispute. The
Commissioner was not “declaring [an] opinion about the legal position and only doing
that for its own sake”.
[73] The Commissioner’s conclusions were not a binding declaration of rights. The
findings involved the formation of an opinion on a matter of interpretation required in
discharging the arbitral function afforded to her by the parties for the purpose of
resolving the dispute before her. The Commissioner did not seek to or purport to make
a judicial determination. The dispute was clearly one in respect of a matter arising
under the Kentz Agreement and, in our view, the Commissioner did not consider any
matters outside the jurisdiction reposed in the Commission by the dispute settlement
procedure in clause 18 of the Kentz Agreement.
[74] The decision of the Commissioner arising from the arbitration is not a
conclusive or legally binding determination of the rights and obligations of the parties
in the Kentz Agreement by way of a judicial determination reserved for a Chapter III
Court. Having been made on the basis of a power of private arbitration afforded to her
by the agreement of the parties, the Commissioner’s decision is not binding of its own
force. Rather, its effect, depends on the law which operates with respect to it, having
regard to the terms of the Kentz Agreement.” [citations removed]
[79] The AMWU relied on paras [57] to [59] and [70] and [71] of Kentz but did not draw
attention to or rely on paras [72] to [74] of Kentz.
[80] The conclusion of the Full Bench in Kentz at paras [55] to [59] and at [69] and [70]
leads to a similar conclusion in the present matter. Very clearly, the Commission in the
present matter is not exercising judicial power when arbitrating a dispute under clause 9 of the
Agreement.
[2016] FWC 7600
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[81] In the present matter Unilever contend that there is no evidence of a dispute. As
Unilever put it:
“15. This application is made in the absence of any particular factual circumstances that
would otherwise invoke section 739 of the FW Act and permit the exercise of the
powers of the Commission.”
And
“23. The real issue in dispute may well be that a particular individual employee or
group of employees has reason to believe that the arrangements that they have entered
into are not or may not be permitted by the Enterprise Agreement. At this stage in
these proceedings, this can only be a matter of conjecture and the Respondent should
not be required to guess as to the nature of any genuine dispute that may (in time)
arise.
If there were a competent application before the Commission and a genuine dispute,
then such matters could only be determined on the basis of evidence and material
regarding the nature of the arrangements.”
[82] There is a very real difference between the present matter and the circumstances
considered by the Full Bench in Kentz at paras [71] and [72] in that the AMWU in the present
matter has not lead evidence but has simply relied upon its submissions.
[83] Having noted the difference between the present matter and Kentz it is also necessary
to note that in the present matter the AMWU have identified an issue in dispute and that the
AMWU have raised that issue with Unilever and that as the issue remains unresolved the
Commission is asked to determine the matter. In the present matter the Commission is not, as
contended by Unilever, dealing with a matter of conjecture rather than dealing with a real
dispute. Whilst the matter has proceeded before the Commission without the AMWU leading
evidence from witnesses the matter in dispute is clearly identified both in the original
application and in the question posed by the AMWU and in the submissions of the AMWU.
[84] That there is substance to the issue before the Commission is established by the email
from Unilever to the AMWU on 8 July 2016 which was provided to the Commission through
Attachment A to the “Applicant’s rebuttal” filed by the AMWU on 5 October 2016.
Relevantly the email provides as follows:
“Subject: Tatura - Flexible Permanent Part-Time
Dear Jason, Tom
As you are aware, Gary Smith and Nicole Cooper have been consulting with the
Tatura Delegates, the casual employees and Jason Hefford (AMWU) since February
2016 regarding Flexible Permanent Part-Time arrangements as per the Tatura
Enterprise Agreement, Clause 29.3. As per Clause 29.3, the Flexible Permanent Part-
Time arrangement enables the business to meet operational demands while supporting
and delivering pro-rata benefits of permanent employment to employees.
[2016] FWC 7600
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There has been multiple meetings, site communications, conference calls, emails and
various questions & answers to consult between all noted parties. In March 2016, an
additional key action of consultation with the casual employees, was the completion of
documentation advising the business their preferred options of:
1. Do you wish to remain as per the current casual arrangement? Yes/No
2. Do you wish to be considered for casual conversion? Yes/No
3. If yes, consideration for Flexible Permanent Part-Time opportunities ie.
three choices of 900 hours per year OR 600 hours per year OR 300 hours per
year
The outcome was 12 responded yes to Flexible Permanent Part Time arrangements
and 26 elected not to be converted.
Since March 2016, we have held conference calls with you, have provided reporting
data as requested and have enabled the AMWU’s request to attend the Tatura Site to
consult with all employees on the 29th May (cancelled by AMWU), 9th June
(cancelled by AMWU) and 16th June (attended). Since March 2016, on numerous
occasions, the elected casual employees for Flexible Permanent Part Time have
requested for their conversion to be completed immediately.
Consequently, based on six months of consultation and at the request of the casual
employees, the business is informing AMWU the conversion of 12 employees to
Flexible Permanent Part Time will be implemented effective 17th July 2016.
If you wish to discuss this further, please do not hesitate to contact me.”
[85] The email specifically links reference to “Flexible Permanent Part Time” to clause
29.3 of the Agreement. The email also makes clear that Unilever have offered “Flexible
Permanent Part Time” employment to employees and that some employees have accepted
“Flexible Permanent Part Time” employment. The issue for determination by the Commission
is in relation to a concrete issue.
[86] To paraphrase the language in Kentz, in the present matter it is necessary for the
Commission to form conclusions as to the legal rights and liabilities of the parties to the
Agreement and to give a decision expressing a conclusion as to the operation of the relevant
terms of the Agreement, in order to discharge the Commission’s role in the dispute resolution
procedure to resolve disputes between the parties to the Agreement.
[87] Nothing the Commission is doing in relation to the matter in dispute constitutes the
exercise of judicial power.
The Issue for Arbitration
The AMWU posed a very specific question to be answered by the Commission.
“Is sub-clause 29.3 of the Unilever Australia Trading Limited – Tatura Site – Enterprise
Agreement 2015 (“Agreement”) precatory in that it does not operate to allow the
employment of permanent part time employees on terms contrary to the rest of the
Agreement?”
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[88] The question is to be understood in the context of the relief sought by the AMWU
when it posed the question:
“If the above question is answered in the affirmative, the applicant seeks a decision that
states that the employment of permanent part time employees to whom the Agreement
applies must be in conformity with clause 12 of the Food, Beverage and Tobacco
Manufacturing Award 2010 as incorporated into the Agreement by clause 2 of the
Agreement.”
[89] The question is also to be understood in the context of the conduct of Unilever as
described in the email from Unilever to the AMWU in July 2016 which is set out above.
[90] It is relevant to set out the terms of clause 29 of the Agreement.
“29 Casuals
29.1 The following conditions shall apply:
(a) All casuals will complete an induction program on a yearly basis.
(b) Casual employees will not be used to displace full time employees from
their regular work except by agreement with the full time employee. When
overtime is available, it would be offered to employees in the following order:
(i) Full time employees performing the work on that day
(ii) Full time employees in that work area
(iii) Full time employees in the plant
(iv) Casual employees
29.2 Where permanent positions become available, (except in exceptional
circumstances), permanent employees will be given the first opportunity to transfer
shifts or apply for the job, then this will be opened up to casual employees. The
following selection criteria will be applied, within these guidelines, to select the most
suitable person for the position – an assessment on the employee’s performance and
attendance; skills/experience; previous training and ability to be trained.
29.3 The parties may meet to explore the possibility of creating flexible permanent
part time employment for employees, which meets the operational demands of the
business and delivers pro rata benefits of permanent employment.
29.4 In conjunction with this, the Enterprise Consultative Committee will be
responsible for conducting an annual review of labour usage, taking into account
volume and product mix and expected future volume and product mix in order to
review appropriate levels of full time and casual employees. Shop stewards will be
given the opportunity to participate in this review.”
[91] As can be seen the sub-clause in dispute sits within a clause dealing with casual
employment but appears not to be limited to casual employees.
[2016] FWC 7600
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[92] Clause 29 sits within a group of clauses all dealing with casual employment. Clause 28
deals with the application of the 25% casual loading. Clause 30 deals with the allocation of
work to casuals who are ‘food preservers’. Clause 31 deals with the number of casuals and
also specifically incorporates the casual conversion provision of the Food, Beverage and
Tobacco Manufacturing Award 2010 (the Modern Food Award):
“31.3 Casuals performing work covered by the Modern Food Award will be entitled to
the casual conversion provision of the Modern Food Award after 6 months.”
[93] The presence of clause 31.3 makes it very clear that whatever else may be intended by
clause 29.3 it is not to act as a casual conversion clause for ‘food preservers’.
[94] The Agreement does not contain a specific clause dealing with part time employees.
Therefore the part time clauses from the incorporated awards apply as terms of the
Agreement. Those clauses are as follows:
Food, Beverage and Tobacco Manufacturing Award 2010
12. Part-time employment
12.1 An employee may be engaged to work on a part-time basis involving a regular
pattern of hours which average less than 38 ordinary hours per week.
12.2 A part-time employee must be engaged for a minimum of three consecutive hours
a shift. In order to meet their personal circumstances, a part-time employee may request
and the employer may agree to an engagement for less than the minimum of three hours.
12.3 Before commencing part-time employment, the employee and employer must
agree in writing:
(a) on the hours to be worked by the employee, the days on which they will be worked
and the commencing and finishing times for the work; and
(b) on the classification applying to the work to be performed in accordance with
Schedule B—Classification Structure and Definitions.
12.4 The terms of the agreement in clause 12.3 may be varied by consent in writing.
12.5 The agreement under clause 12.3 or any variation to it under clause 12.4 must be
retained by the employer and a copy of the agreement and any variation to it must be
provided to the employee by the employer.
12.6 Except as otherwise provided in this award, a part-time employee must be paid for
the hours agreed on in accordance with clauses 12.3 and 12.4.
12.7 The terms of this award will apply pro rata to part-time employees on the basis that
ordinary weekly hours for full-time employees are 38.
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12.8 A part-time employee who is required by the employer to work in excess of the
hours agreed under clauses 12.3 and 12.4 must be paid overtime in accordance with
clause 33—Overtime.
12.9 Where the part-time employee’s normal paid hours fall on a public holiday
prescribed in the NES and work is not performed by the employee, such employee must
not lose pay for the day. Where the part-time employee works on the public holiday, the
part-time employee must be paid in accordance with clauses 30.2(f), 31.5 and 33.8.
Manufacturing and Associated Industries and Occupations Award 2010
13. Part-time employment
13.1 An employee may be engaged to work on a part-time basis involving a regular
pattern of hours which average less than 38 ordinary hours per week.
13.2 A part-time employee must be engaged for a minimum of three consecutive hours
a shift. In order to meet their personal circumstances, a part-time employee may request
and the employer may agree to an engagement for less than the minimum of three hours.
13.3 Before commencing part-time employment, the employee and employer must
agree in writing:
(a) on the hours to be worked by the employee, the days on which they will be worked
and the commencing and finishing times for the work; and
(b) on the classification applying to the work to be performed in accordance with
Schedule B.
13.4 The terms of the agreement in clause 13.3 may be varied by consent in writing.
13.5 The agreement under clause 13.3 or any variation to it under clause 13.4 must be
retained by the employer and a copy of the agreement and any variation to it must be
provided to the employee by the employer.
13.6 Except as otherwise provided in this award, a part-time employee must be paid for
the hours agreed on in accordance with clauses 13.3 and 13.4.
13.7 The terms of this award will apply pro rata to part-time employees on the basis that
ordinary weekly hours for full-time employees are 38.
13.8 A part-time employee who is required by the employer to work in excess of the
hours agreed under clauses 13.3 and 13.4 must be paid overtime in accordance with
clause 40—Overtime.
13.9 Public holidays
(a) Where the part-time employee’s normal paid hours fall on a public holiday
prescribed in the NES and work is not performed by the employee, such employee must
not lose pay for the day.
[2016] FWC 7600
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(b) Where the part-time employee works on the public holiday, the part-time employee
must be paid in accordance with clauses 32.4(e), 36.2(f), 37.5 and 40.9.”
[95] The issue for arbitration was explained by the AMWU in its Outline of submissions as
follows:
“12. The applicant submits that sub-clause 29.3 neatly fits the description of a hortatory
or aspirational provision as canvassed in the abovementioned authorities. In other
words, the sub-clause it is precatory. For a start, it is observed that it would be
impossible to be in breach of the sub-clause. Second, it provides no concrete benefit to
the employees covered by the Agreement.
13. Then, it is submitted that the sub-clause simply does not go far enough to establish
a workable mechanism by which employees can be engaged. The sub-clause allows
the parties to meet to explore such (and it is doubtful that anyone needs to be granted
this permission) and it gives some parameters to the exploratory process—but that is
about all it does.
14. The sub-clause is merely a notation in the Agreement recording a topic of
negotiations that did not conclude. It is apparent that the negotiating parties put the
issue covered in the sub-clause in abeyance: perhaps because it was too hard; perhaps
because it was peripheral; or, perhaps for another reason altogether. What is certain is
that the topic was inconclusively dealt with and the resultant provision is void of any
binding effect.
15. What flows from all this is that permanent part time employment is then to be
governed by the definite and enforceable terms in the Agreement. As said earlier, the
relevant terms are those in clause 12 of the Food, Beverage and Tobacco
Manufacturing Award 2010 as incorporated into the Agreement by clause 2 of the
Agreement.”
[96] Unilever, in its outline of submissions, contended as follows:
“18. Clause 29.3, on its terms, provides for a valuable benefit to the parties to the
Enterprise Agreement and in particular, persons wishing to enter into flexible
permanent part-time employment. The clause envisages the creation of a flexible
permanent part-time arrangement. To the extent that clause 29.3 may be described as
“aspirational”, this description, in the submission of the Respondent, could only have
regard to the additional wording with respect to the criteria for the creation of a
flexible permanent part-time employment arrangement in that it should, would or
could meet the “operational needs of the business”, and delivers pro-rata benefits of
permanent employment.
19. Whilst the Applicant Union has not chosen to rely upon the facts or circumstances
of any individual and/or their individual part time arrangements at the Tatura Site, the
Respondent submits that clause 12.4 of the Food, Beverages and Tobacco
Manufacturing Award 2010 (the Modern Award) appears to envisage that any
agreement reached by an employee and the employer in compliance with the Modem
Award can be “varied by consent in writing”. Accordingly, if the Commission were to
[2016] FWC 7600
27
be persuaded to accept the Applicant Union’s submissions, it would appear that any
such arrangement described as a part time employment arrangement (in accordance
with the Modem Award) could be varied by agreement.
20. To the extent that any guidance is required with respect to the interpretation of
clause 29.3, the relevant authority is Australian Meat Industry Employees Union v
Golden Cockerell Pty Limited [2014] FWC FB 7447. The Applicant Union’s
submissions, at paragraph 14, speculate as to the background to the introduction of
clause 29.3 of the Enterprise Agreement. There is no actual evidence before the Fair
Work Commission as to the alleged facts and circumstances that, presumably, pre-
dated the insertion of clause 29.3.
21. The singular lack of any ambiguity in the wording of clause 29.3 and the proper
application of the principles set out by the Full Bench of the Fair Work Commission in
Golden Cockerell would suggest that the Commission should have no regard to the
Applicant Union’s submission that “the negotiating parties put the issue covered in
the sub-clause in abeyance: perhaps it was too hard; perhaps it was peripheral; or,
perhaps another reason altogether”.
22. It is the submission of the Respondent that clause 29.3 should be given its full
effect, and that it be permitted to provide to the negotiating parties the benefit of
exploring the possibility of creating flexible part-time employment for employees.
This submission is also reinforced by clause 12.4 of the Modem Award.”
[97] The Full Bench decision in Golden Cockerel must guide the Commission when
interpreting the terms of an enterprise agreement.
[98] I agree with the well put contention of Unilever that the Commission should have no
regard to any of the contentions of the AMWU as to the background to clause 29.3 given the
lack of any evidence to support the AMWU’s contention.
[99] Both the AMWU and Unilever seem to have missed the obvious in relation to clause
29.3.
[100] Clause 29.3 must be considered in the context of the Agreement as a whole. The
Agreement contains a No Extra Claims term at clause 8 and the Flexibility Term required by
s.202 of the FW Act and which is clause 11 of the Agreement limits individual flexibility
arrangements to the subject of “Single Days of Annual Leave”.
[101] In the context of the presence of clause 8, clause 29.3 clearly permits Unilever to
propose forms of “flexible permanent part time employment” for consideration by the parties.
In this sense clause 29.3 is not precatory or hortatory or aspirational as contended for by the
AMWU. The clause has work to do. The clause clearly identifies a subject matter and clearly
identifies that the parties are permitted to explore that subject matter. The clause provides a
specific authorization to explore the subject of flexible permanent part time employment.
[102] Clause 29.3 must be read and understood in the context of the Agreement containing
clause 4 which describes the parties to the Agreement. Clause 4 makes clear that there are 4
separately identified parties to the Agreement: Unilever, the AMWU, the CEPU and the
employees. When clause 29.3 refers to the parties meeting to explore the possibility of
[2016] FWC 7600
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creating flexible permanent part time employment for employees any such meeting must
involve all of the parties. There is nothing in clause 29.3 which would suggest that Unilever
could meet with an employee to explore the possibility of creating flexible permanent part
time employment for the employee. The very language of clause 29.3 tells strongly against
“parties” meaning anything other than all of the parties as identified in clause 4.
[103] Clause 29.3 must also be understood in the context that the Agreement contains
specific provisions relating to part time employment. In the case of food production
employees, part time employment is specifically regulated by clause 12 of the Modern Food
Award which has been incorporated into the Agreement.
[104] The contention of Unilever that “clause 12.4 of the Food, Beverages and Tobacco
Manufacturing Award 2010 (the Modern Award) appears to envisage that any agreement
reached by an employee and the employer in compliance with the Modem Award can be
“varied by consent in writing”” is undoubtedly correct.
[105] Critically (and correctly) Unilever acknowledge that the starting point for part time
employment must be an “agreement reached by an employee and the employer in compliance
with the Modem Award”. Once such agreement has been reached then it is also correct that
such an agreement can be varied by agreement.
[106] Having stated the obvious it appears that Unilever has not actually applied the
obvious. The process outlined by Unilever in its email of 8 July 2016 was not about creating
an agreement with employees which was in compliance with clause 12.3 of the Modern Food
Award. Rather, Unilever sought to bypass clause 12 of the Modern Food Award and go
straight to a concept of “Flexible Permanent Part-Time” arrangements.
[107] Given the explicit language of clause 12.3 of the Modern Food Award it is not
possible to read clause 29.3 of the Agreement as permitting the creation and implementation
of a concept of part time employment which is inconsistent with clause 12 of the Modern
Food Award.
[108] The plain words of clause 29.3 of the Agreement refer only to the act of exploring “the
possibility of creating” a new concept of part time employment. The clause does not contain
any authority to actually create a new concept of part time employment within the Agreement.
Even if the parties agreed on a new “flexible permanent part time employment” concept the
clause does not provide any authority to implement such a concept during the life of the
Agreement.
[109] In the context of clause 12 of the Modern Food Award being a term of the Agreement
through incorporation it is clear that if the parties used clause 29.3 of the Agreement to
successfully explore the possibility of creating flexible permanent part time employment, any
implementation of flexible permanent part time employment could only be implemented
either through an agreed variation to a part time employment agreement made in conformity
with clause 12.3 of the Modern Food Award, or as a variation to the Agreement through the
processes provided for in Subdivision 7 of Part 2-4 of the Act.
[110] In the present matter Unilever offered existing casual employees conversion to
permanent employment where the permanent employment was in the form of “flexible
[2016] FWC 7600
29
permanent part time employment” as described by Unilever in its email to AMWU on 8 July
2016.
[111] I note that clause 13.4 of the Modern Food Award, which deals with casual conversion
to permanent employment, is a term of the Agreement through incorporation. Clause 13.4 of
the Modern Food Award permits casual conversion to either full time or part time
employment. However the reference to part time employment in clause 13.4 of the Modern
Food Award can only be understood as being a reference to part time employment as provided
for in clause 12 of the Modern Food Award.
[112] The starting point for the creation of part time employment, whether by way of
directly engaging an employee as a part time employee or by way of converting a casual
employee to part time employment, must be by an agreement in writing specifying the hours
to be worked by the employee, the days on which they will be worked and the commencing
and finishing times for the work; and specifying the classification applying to the work to be
performed.
[113] What is very clear from the email from Unilever to the AMWU on 8 July 2016 is that
Unilever offered part time employment on the basis of an agreed number of hours per year
and what was offered was not in accordance with requirements of clause 12.3 of the Modern
Food Award.
Conclusion
[114] The question proposed by the AMWU must be answered in the negative. Sub-clause
29.3 of the Agreement is not precatory in any sense. As the question was answered in the
negative the Commission does not have to consider the relief proposed by the AMWU.
[115] Having answered the question posed it is absolutely clear from the discussion above
that the question was poorly framed and asked too narrow a question. The matter in dispute
could never be dealt with simply by deciding whether clause 29.3 was or was not precatory.
[116] The matter in dispute as identified in the application and given substance to by the
email from Unilever to the AMWU on 8 July 2016 was about the proper interpretation of
clause 29.3 and its interaction with other provisions of the Agreement. Attaching labels to
clause 29.3 as the AMWU has done is singularly unhelpful. The consideration of the way in
which clause 29.3 operates and the means by which Unilever can move casual employees to
part time employment should be sufficient to enable the parties to the Agreement to
understand and correctly apply the Agreement.
[117] If the answering of the question posed does not resolve the issue in dispute, either
party may seek to have this matter listed for further conciliation and/or arbitration.
[2016] FWC 7600
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COMMISSIONER
Printed by authority of the Commonwealth Government Printer
Price code G, PR586696
1 [2016] FWC 4896.
2 [2010] FWAFB 1464.
3 [2012] FWAFB 350.
4 [2016] FWCFB 2019.
THE FAIR WORK COMMISSION HE SEALO
