PR944521 PR944521 Download Word Document AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION Workplace Relations Act 1996 s.170LW application for settlement of dispute Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union and Fyna Foods (Vic) Pty Ltd (K.L. Ballantyne) (C2003/5981) Food, beverages and tobacco industry DEPUTY PRESIDENT HAMILTON MELBOURNE, 17 MARCH 2004 Transmission from one company to another through a purchase and whether the Agreement has been transmitted - Notification under Award or Agreement Dispute Settlement Procedure - Authorities on Interpretation of an Agreement - Exercise of Powers under Award Procedure - May Have Limited Powers to Assist Parties to Settle Matter DECISION [1] On 16 October 2003 the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (`AMWU') purported to lodge a notice under clause 8 of the K.L. Ballantyne Confectionery Site Agreement 2000. The notice included the following statement: The matter in dispute relates to whether the Agreement has transmitted to Fyna Foods (Vic) Pty Ltd through the purchase of part of the business of K.L.Ballantyne Pty Ltd and whether the workers purported to be independent contractors supplied by CSA are in fact employees of Fyna Foods (Vic) and whether the Agreement is applicable to them. The following steps of the dispute settling procedure have been taken: The Settlement of Disputes Procedure has been followed to the stage where discussions have been held between Senior Management and State Union Officials. The parties agreed that the discussions had been exhausted as a way of resolving the dispute. [2] The AMWU asked that the Commission make a determination pursuant to that dispute procedure, a determination which it describes in the following terms: We submit that the Commission has jurisdiction to resolve the dispute and should determine that the persons are employees of Fyna and entitled to the benefits of the Agreement. Alternatively the Commission should determine that the persons are employees of ACS and ACS should have certified agreement with the AMWU. [3] Fyna Foods (Vic) Pty Ltd (`Fyna Foods') and Australian Contracting Services (`ACS') submitted that the Commission had no jurisdiction to make the determination sought. [4] Wide ranging submissions were put on a range of issues. It is necessary that I deal with the issue of jurisdiction, and in this decision I do so. Other matters will be dealt with under the procedure set out below. The Dispute Settling Procedure [5] Clause 8 of the K.L. Ballantyne Confectionery Site Agreement 2000 provides: The aim of this procedure is to ensure that any industrial grievances or disputes are resolved as quickly as possible at the level they occur in the workplace. Where a dispute or grievance arises involving confectioners the Confectioners Award Clause 8C will be adopted. Where a dispute or grievance arises involving Fitters or Electricians the following procedure will be adopted. 8.1 The following procedure for the avoidance or resolution of disputes shall apply. The mechanism and procedures for resolving industrial disputes will include, but not be limited to the following: The employee/s concerned will first meet and confer with their immediate supervisor. The employee/s may appoint another person to act on their behalf including a shop steward or delegate of their union. Subject to 8.2 and 8.3 where a shop steward or delegate is involved he/she shall be allowed the necessary time during working hours to interview the employee/s and the supervisor. If the matter is not resolved at such a meeting the parties will arrange further discussions involving more senior management as appropriate. The employee may invite a union official to be involved in the discussions. The employer may also invite into the discussions an officer of the employer Organisation to which the employer belongs. The shop steward or delegate shall be allowed at a place designated by the employer, a reasonable period of time during working hours to interview the duly accredited union officials of the union to which they belong. If the matter remains unresolved the employer may refer it to a more senior level of management or to a more senior national officer within the employer Organisation. The employee may invite a more senior union official to be involved in the discussions. In the event there is no agreement to refer the matter to a more senior level or it is agreed that such a reference would not resolve the matter the parties shall jointly or individually refer the matter to the Australian Industrial Relations Commission for assistance in resolving the matter. 8.2 In order to facilitate the procedure in 8.1: The party with the grievance must notify the other party at the earliest opportunity of the problem; Throughout all stages of the procedure all relevant facts must be clearly identified and recorded; Sensible time limits must be allowed for completion of the various stages of discussion. However, the parties must cooperate to ensure that the disputes resolution procedures are carried out as quickly as possible. 8.3 Subject to sub-clause 8.4, whilst the parties are attempting to resolve the matter the parties will continue to work in accordance with the Award, this Agreement and their contract of employment, unless the employee has a reasonable concern about an imminent risk to his or her health or safety. Subject to the relevant provisions of the State Occupational Health and Safety Law, even if the employee has a reasonable concern about an imminent risk to his or her health or safety, the employee must not unreasonably fail to comply with a direction by the company to perform other available work, whether at the same enterprise or another enterprise, that is safe and appropriate for the employee to perform. 8.4 Whilst these processes are being followed the parties shall be committed to avoid stoppages of work, lockouts or other bans or limitations on the performance of work and the company shall ensure that all practices applied during the operation of the procedure are in accordance with safe working practices and consistent with established custom and practice at the enterprise. 8.5 Conciliation regarding disputes and potential disputes arising out of the operation of this clause will be dealt with by the Australian Industrial Relations Commission or as otherwise agreed between the parties. [6] It was not in dispute that the matter involves confectioners 1 , and that therefore clause 8C of the Confectioners Award was the applicable provision to be `adopted' . Clause 8C provided at the time of notification: Subject to the provisions of the Industrial Relations Act 1988, as amended: - (a) A procedure for the avoidance of industrial disputes shall apply in factories or enterprises covered by this award. (b) The objective of the procedure shall be to promote resolution of disputes based on consultation, co-operation and discussions; to reduce the level of industrial confrontation and to avoid interruption to work and the consequential loss of production and wages. (c) Four stages of discussion shall apply. These are: (i) discussions between the employee concerned and at his or her request the appropriate Union shop steward or delegate, and the immediate supervisor; (ii) discussions involving the employee, shop steward and more senior management; (iii) discussions involving any or all of the employee, the shop steward, senior management and representatives of the State Branch of the Union; (iv) discussions involving the employee, shop steward, senior management, senior union officials and representatives of the appropriate employer organisation. Nothing in this clause should be construed as requiring the involvement of the Union in those cases where the Union has no members at the particular plant or enterprise, unless the dispute has ramifications for plants or enterprises where the Union has membership or where the dispute goes to general award conditions. (d) The nature of the issue involved, considerations of urgency and the number of employees concerned may make it appropriate for earlier stages of the process to be by-passed. (e) There shall be a commitment by the parties to achieve adherence to this procedure. This should be facilitated by the earliest possible advice by one party to the other of any issue or problem which may give rise to a grievance or dispute. (f) Throughout all stages of the procedure relevant facts shall be clearly identified and recorded. (g) Sensible time limits shall be allowed for the completion of various stages of the discussion. Earlier stages of the discussion process may require less time to be finalised than later stages. (h) When a dispute has reached the third or fourth stage of process the union official(s), if any is involved, shall for the purposes of settling the dispute, be entitled to enter premises occupied by the employer or in which work to which this award applies is being carried on and inspect and view any relevant work, material, machinery, appliance, article, document or other thing and/or interview an employee who is a member of the union. Provided that a union official so acting shall not hinder or obstruct an employee in the performance of work during working time. (i) If the matter remains unresolved it shall be submitted to the Australian Industrial Relations Commission, whose decision, subject to the parties' rights of appeal, shall be accepted. (j) In order to allow for the peaceful resolution of grievances, the parties shall be committed to avoid stoppages of work, lockouts or any other bans or limitations on the performance of work while the procedures of negotiation and conciliation are being followed. (k) Whilst the procedures of negotiation and conciliation are being followed, other than in relation to a dismissal, the status quo pertaining prior to the act or acts which led to the dispute shall be strictly maintained. (l) Nothing in this clause shall operate to the prejudice of an employee's health and safety. (m) Nothing in this clause shall operate to the prejudice of an employee's right to discuss any matter with the Union shop steward or delegate without representatives of the employer being present. [7] One important issue which arises is that of whether the Agreement dispute settlement procedure simply refers all confectioners' disputes to be dealt with under the Award dispute settlement procedure, or whether it incorporates the Award procedure in the Agreement. The AMWU submits that the effect is the second, while Fyna Foods and ACS submit that the effect is the first. [8] It is not the case that all Agreement dispute settlement procedures must confer a power of private arbitration. They may limit the scope of that arbitration or may leave the parties to invoke the general arbitration powers of the Commission. It is a matter for the parties to the certified agreement to decide by their agreement as to what powers are conferred on the Commission. As the Full Court of the High Court said in a unanimous decision in CFMEU v. AIRC 2 : The parties to an industrial situation are free to agree between themselves as to the terms on which they will conduct their affairs. Their agreement has effect according to the general law. If their agreement is certified, it also has effect as an award. To the extent that an agreement provides in a manner that exceeds what is permitted either by the Constitution or by the legislation which gives the agreement effect as an award, it cannot operate with that effect. But the underlying agreement remains and the validity of that agreement depends on the general law, not the legislative provisions which give it effect as an award. [9] In this present matter the Agreement dispute settlement procedure provides: `Where a dispute or grievance arises involving confectioners the Confectioners Award Clause 8C will be adopted.' [10] Clause 8C of the Award is referred to. It is not described as clause 8C of the Award which is incorporated as part of the Agreement, nor is there anything in the clause which would lead me to draw such an inference. The Agreement clause refers us to the `Confectioners Award Clause 8C' where a dispute or grievance arises involving confectioners, as this present matter does. That `Confectioners Award Clause' is to be `adopted' by the parties. [11] This interpretation is given some greater force by the subsequent words of the procedure, which are: `Where a dispute or grievance arises involving Fitters or Electricians the following procedure will be adopted.' [12] Thereafter a detailed set of steps to be followed for such disputes is set out, steps which the parties are to adopt or follow, and which are clearly part of the Agreement. Elsewhere the Agreement makes it clear in referring to documents external to the Agreement what is part of the Agreement and what is not. In clause 9 - Relationship to Parent Award , for example, the Agreement provides that existing over award payments `shall apply as if they were a term of the Agreement ....' If it was the intention of the parties to include clause 8C as part of the Agreement, similar provision could have been made. [13] The conferral of power should not be narrowly construed 3 , but it is stretching language to breaking point to say that the meaning is that somehow the Award clause 8C becomes part of the Agreement 4 . There is no support to be found in the ordinary language of the clause, or in the words of the Agreement considered in the light of the surrounding circumstances, or in the rules applicable to the construction of contracts 5 , for that conclusion. The dispute settlement clause in the Agreement seems to simply refer all such matters to be dealt with under the Award clause. [14] Even if I am wrong about this, there are further jurisdictional problems. In CFMEU, AWU v. Geelong Grammar School 6 , a Full Bench of the Commission said, after concluding on the facts before it that an Agreement had not in fact been transmitted under s.170MB: [24] There is no doubt that the Commission may, without exercising judicial power, decide questions which "are not necessarily foreign to judicial power"[For an analogous case concerning a local coal authority under the Coal Industry Act 1946 - 1957 (Cth) see R.Lyndon; Ex parte Cumnock Collieries (1960) 103 CLR 15 at 22]. Whether the Commission purports to exercise judicial power will depend upon the facts of the case and in particular upon whether the decision which is sought to be impugned is in truth an attempt to ascertain, declare or enforce existing rights[Waterside Workers Federation of Australia v JW Alexander Ltd (1918) 25 CLR 434 at 463] or only a step in the proper exercise of the powers conferred upon the Commission by the Parliament. "[But] there is no substance in the suggestion that an industrial tribunal cannot interpret laws, awards and other legal instruments. A tribunal could not discharge its arbitral functions if it were unable to form an opinion on a matter of interpretation. The formation of views and opinions on matters of interpretation in arbitral proceedings does not in itself amount to a usurpation of judicial power: Cessnock Collieries, at p.22; The Queen v. The Commonwealth Industrial Court; Ex parte The Australian Coal and Shale Employees' Federation (1960) 103 CLR 171, at p 174; Key Meats, at pp 596-597. Indeed, a tribunal may find it necessary to form an opinion as to the existing legal rights of the parties as a step in arriving at the ultimate conclusions on which the tribunal bases the making of an award intended to regulate the future rights of the parties: Aberdare Collieries, at p.44."[Re Cram; Ex parte The Newcastle Wallsend Coal Co. Pty Ltd (1987) 163 CLR 140 at 149]. [25] While this passage analyses the issue by reference to statutory powers of arbitration, the principles apply equally to the exercise of statutory powers such as those conferred by dispute resolution provisions in certified agreements pursuant to s.170LW. The Commission may find it necessary to form an opinion as to the existing legal rights of the parties as a step in arriving at the conclusions on which it bases a decision resolving a dispute over the application of a certified agreement. [15] In this present matter I am asked to determine as a first jurisdictional step whether the Agreement has transmitted (as in Geelong Grammar ) in order to ascertain whether the dispute settlement in the Agreement applies, and as a second step to determine whether an employment relationship exists with Fyna Foods or ACS. I have real doubts as to whether the second step I am asked to take would be the determination of a dispute over the application of an Agreement, although I come to no final decision on the question given my earlier conclusions. Conclusion [16] The question then arises of how this present matter should be dealt with. I propose to convene a conference and if necessary hearing of the parties to discuss relevant issues which may include: the actual circumstances that led to these proceedings; whether the Agreement has been transmitted to Fyna Foods; if it has, the nature of the continued operation (if any) of clause 8C of the Confectioners Award 1980. Clause 8C was in the Award at the time the certified agreement was made, but was removed when the Award was simplified 7 . The Commission simplification order varied the Award to delete all clauses 8 , and included new clauses in their place. Clause 8C was deleted and a new clause 6, dispute settlement procedure, replaced it. The Award was renamed the Confectioners Award 2002 9 ; whether earlier steps in the Award dispute settlement procedure have been taken so that the step referred to in clause 8C(i) (` If the matter remains unresolved it shall be submitted to the Australian Industrial Relations Commission, whose decision, subject to the parties' rights of appeal, shall be accepted. ') may now be taken; if the earlier steps have been taken what powers exist to be exercised and if any whether any should be exercised, and in what manner; whether I should exercise any other powers with respect to the matter. [17] These issues were dealt with to some limited degree only at the hearing. For example it appears to be the case that the Commission in exercising powers under the dispute settlement procedure contained in an award is constrained by s.89A of the Workplace Relations Act 1996 (`the Act '). The decision in CFMEU v. AIRC was that a dispute settlement procedure in a certified agreement is not so constrained, if that is what the parties have agreed in their certified agreement, because such a procedure is the exercise of ` private arbitration' 10 by the Commission authorised by s.89(b), and by s.170MH (the predecessor to s.170LW). It is not an exercise of what could be described as the general arbitration powers of the Commission set down in ss.89-89A. Section 89 provides: `The functions of the Commission are: (a) to prevent and settle industrial disputes: (i) so far as possible, by conciliation; and (ii) as a last resort and within the limits specified in this Act, by arbitration; and (b) such other functions as are conferred on the Commission by this Act, the Registration and Accountability of Organisations Schedule or any other Act.' [18] Section 170LW provides: `Procedures in a certified agreement for preventing and settling disputes between the employer and employees whose employment will be subject to the agreement may, if the Commission so approves, empower the Commission to do either or both of the following: (a) to settle disputes over the application of the agreement; (b) to appoint a board of reference as described in section 131 for the purpose of settling such disputes.' [19] Section 170LW is expressed to apply only to `procedures in a certified agreement' , it has no application to an award dispute settlement procedure, and does not authorise the Commission to conduct private arbitration pursuant to such a procedure. It appears that we may need to turn to ss89-89A for the source of power to arbitrate, limited as it may be to the subject matter in s.89A (2) if the arbitration falls within s.89A (1), which provides: `(1) For the following purposes, an industrial dispute is taken to include only matters covered by subsections (2) and (3): (a) dealing with an industrial dispute by arbitration; (b) preventing or settling an industrial dispute by making an award or order; (c) maintaining the settlement of an industrial dispute by varying an award or order.' [20] There may be other relevant issues which the parties may wish to raise. [21] I might add that I am bound to act quickly (s.98), to avoid technicalities and facilitate the fair and practical conduct of proceedings (s.98A), and to deal with disputes by conciliation where possible (s.100). I am not however able to exercise powers and functions that I do not have, which may mean that I have limited power to assist the parties further in settling this matter. [22] Given the circumstances I propose to convene that conference and hearing as a matter of urgency. BY THE COMMISSION: DEPUTY PRESIDENT Printed by authority of the Commonwealth Government Printer <Price code C> 1 PN127 AMWU, PN641. 2 (2001) 178 ALR 61 at for example 70, per Gleeson CJ, Gaudron, McHugh, Gummow, Kirby, Hayne and Callinan JJ. 3 SDA v. Big W Discount Stores , PR924554 at paragraph 20, per Watson SDP, Kaufman SDP, Foggo C, 12 November 2002. 4 Victims Compensation Fund Corporation v. Brown (2003) 201 ALR 260, per Heydon J, with whom McHugh ACJ, Gummow, Kirby and Hayne JJ agreed, Full Court of the High Court of Australia 5 AMWU v. Skill Engineering [2003] FCA 260, per Finkelstein J at paragraph 15; The University of Western Australia v. The NTEIU [2003] FCA 1264, per Carr J at paragraph 58 6 PR925746, Giudice J, Blain DP and Smith C, 16 December 2002 7 A review of the Award under Item 51 of Schedule 5 of the Workplace Relations and Other Legislation Amendment Act 1996 8 and schedules and appendices 9 AW818086, order issued 30 August 2002 10 CFMEU at pp.69-70