[2008] AIRCFB 739 [2008] AIRCFB 739 Download Word Document AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION DECISION Workplace Relations Act 1996 s.120 - Appeal to Full Bench Australian and International Pilots Association v Qantas Airways Limited (C2008/2434) QANTAS AIRWAYS LIMITED FLIGHT CREW (LONG HAUL) CERTIFIED AGREEMENT 2005 - 2006 (EBA 7) (ODN AG2005/3736) [AG844026] Airline operations SENIOR DEPUTY PRESIDENT HARRISON SENIOR DEPUTY PRESIDENT CARTWRIGHT COMMISSIONER LARKIN SYDNEY, 17 SEPTEMBER 2008 Appeal - interpretation of dispute settlement process - whether jurisdictional error - whether Commission has power to arbitrate. [1] This is an appeal, for which leave is required, against a decision of Vice President Watson 1 that he did not have power to determine a matter in dispute by way of arbitration. The dispute had arisen between the Australian and International Pilots Association (AIPA) and Qantas Airways Limited (Qantas). In his decision the Vice President described the dispute as “relating to the application and interpretation of the seniority provisions in clause 13 and LOA 161 - a letter of agreement appended to the agreement which the parties have agreed is to be read in conjunction with EBA 7”. 2 “EBA 7” is a short-hand reference to the Qantas Airways Limited Flight Crew (Long Haul) Certified Agreement 2005-2006 (EBA 7) (the Agreement). [2] The decision of the Vice President arose out of an application made under s.170LW of the Workplace Relations Act 1996 (the Act). That section was contained in the Act, as it was prior to amendments made by Workplace Relations Amendment (Work Choices) Act 2005 (Work Choices), and is referred to as the pre-reform Act. By virtue of transitional provisions in clause 2(1)(e) of Part 2, Schedule 7, s.170LW of the pre-reform Act continues to apply in relation to pre-reform certified agreements. The Agreement is a pre-reform certified agreement. At the time it was certified the Act required an agreement to include procedures for preventing and settling disputes between an employer and employees about matters arising under the agreement. 3 Section 170LW provided that procedures in a certified agreement for preventing and settling disputes between the employer and employees may “ empower the Commission ” to, relevantly, settle disputes over the application of the agreement. [3] The Appellant was represented before us by Mr J Nolan of Counsel and Qantas was represented by Ms H McKenzie. The notice of appeal filed by the Appellant refers to s.120 of the Act. It was accepted by both parties that we should proceed on the basis that an appeal against a decision made under a dispute settlement procedure in an agreement certified prior to Work Choices should be brought under s.45 of the pre-reform Act. Little turns on this however as the relevant provisions of s.45 and s.120 (the current appeal section) are the same. It is clear that the Appellant here relies upon s.45(1)(g), (s.120(1)(f) is in the same terms) which provides that an appeal lies to a Full Bench, with the leave of the Full Bench, against a decision of a member of the Commission that the member has jurisdiction or a refusal or failure of a member of the Commission to exercise jurisdiction. Relevantly, in this matter, the challenge is against the refusal or failure of the Vice President to exercise jurisdiction the Appellant asserts he had to arbitrate a matter in dispute in accordance with the dispute settlement procedure in the Agreement. [4] The Appellant submitted that the Vice President’s decision was affected by jurisdictional error. In those circumstances the consideration for this Full Bench is whether the decision of the Vice President was correct. However, it is first necessary for the Appellant to identify appealable errors in the decision under challenge. 4 [5] The Appellant did not take issue with His Honour’s summary of the relevant background to the dispute and its referral to the Commission. Nor is it suggested that any of the agreed facts set out in his decision were disregarded or given inadequate consideration. The submissions made below to the Vice President were again relied on by the Appellant in its written submissions to this Full Bench. [6] To understand the Appellant’s challenges to the decision it is appropriate for us to set out an extract from His Honours decision. He described the issue about which he was required to rule and the construction he placed upon the dispute settlement clause in the Agreement as follows: “[7] The question as to whether the Commission has jurisdiction to determine this dispute primarily involves the construction of clause 10 of EBA 7. It provides: ‘10.1 The matter will first be discussed between representatives of the Company and the Association to attempt to resolve the dispute. 10.2 If the dispute is not resolved at the first discussion, and if it is possible the matter could be resolved with further conferences, the parties will arrange further meetings in any attempt to settle the dispute. 10.3 If the matter is not settled, either party may notify the existence of an industrial dispute to the Commission, in accordance with the Act. 10.4 Until the matter is determined, normal work will continue and neither party will be prejudiced as to the final settlement by the continuation of work.’ [8] The clause is almost identical to the dispute settlement clause of the Qantas Airways Limited (Long Haul) Award 1996. POWER OF ARBITRATION [9] The question for determination is whether the parties have empowered the Commission to determine disputes of the nature raised in this application by arbitration. It is now well established that the source of the Commission’s power to arbitrate disputes arising from the application of an agreement is the power conferred by the parties in the agreement itself. [ CFMEU v AIRC [2001] 203 CLR 645] [10] Where a dispute settlement procedure does nothing more than provide that if a matter is not settled it may be referred to the Commission, it is fair to assume that the parties intended that the referral be for a purpose, but in the absence of clear words implying more, that role is confined to conciliation. [ ABC v Media Entertainment and Arts Alliance Print M3463; Warkworth Mining v CFMEU [ PR916526 ]] If the parties confer a power on the Commission “for determination” then this is to be interpreted as conferring a power to arbitrate. [ SDA v Big W Discount Stores [ PR924554 ]; CEPU v Telstra (2003) 125 IR 88] [11] The critical question in this case is whether the disputes settlement clause in question contains the additional words necessary to confer the power of arbitration. [12] Counsel for AIPA submitted that the combined effect of clauses 10.3 and 10.4 is to confer a power of determination on the Commission. He submits that the mention of determination evinces the intention of the parties that disputes once notified to the Commission could be determined by the Commission if not resolved by conciliation. [13] Counsel for Qantas submits that clause 10.3 is the only clause which refers to the notification of matters to the Commission and which can be the source of powers conferred by the parties. This clause does not confer the power of arbitration. Clause 10.4 is directed to the performance of normal work. Its introductory words “Until the matter is determined” do not confer power or contemplate anything other than resolution in a general sense. [14] In my view the interpretation contended for by Qantas is the better interpretation. It is well established by the authorities referred to above that clear authority is required in a certified agreement in order to confer the power of arbitration on the Commission of disputes arising from the application of an agreement. Other agreements, such as the Qantas Airways Limited Flight Crew (Short Haul) Certified Agreement 2002 confer such a role on the Commission. [15] As a matter of ordinary construction, the introductory words of a clause which concerns work practices while a dispute is subject to the dispute settlement process, cannot be construed as a source of power to arbitrate. An explanation for the use of the words may be their origins in an award applying under legislation which empowered the Commission to determine industrial disputes. The identical wording is now found in an agreement, which was made under legislation which devolves to the parties to an agreement the power to confer arbitration powers on the Commission. [16] In any given case the parties would be free to agree to the Commission determining a particular matter, in which case the words would have possible literal application. It may also be said that the meaning of the term could have been intended to be a general reference to resolution or determination by the parties, rather than determination by the Commission by arbitration. I do not think that recourse to dictionary definitions is of great assistance as the meaning of the term depends very much on its context. [17] I believe that the critical factor is the nature of the respective clauses. Clause 10.3 deals with notification of a dispute to the Commission and by implication, powers agreed to be conferred on the Commission. Clause 10.4 deals with a separate and distinct subject matter - the performance of work. Clause 10.3 does not confer a power of arbitration. It would be inappropriate to construe the general introductory words of clause 10.4 as conferring powers not conferred by the relevant clause.” [7] The Appellant submitted that from paragraph 10 onwards the reasoning of the Vice President reflects the error in his approach. It submitted that His Honour adopted a “ prima facie ” position that in the absence of express words conferring a power of arbitration in a dispute settlement clause, the Commission’s role will be confined to conciliation. It submitted that to approach the matter this way was to ask the wrong question. The real question it submitted was whether the clause, read as a whole and in context, suggests that a power of arbitration is conferred upon the Commission. [8] We think this submission of the Appellant is made upon a narrow reading of His Honour’s approach. He did not adopt the “ prima facie ” position as suggested by the Appellant. In any event there is no doubt that the question His Honour addressed was in fact whether the clause read as a whole and in context provided for a power of arbitration. This is precisely what he was considering when he was construing clause 10 as a whole and clauses 10.3 and 10.4 in particular. [9] The Appellant criticised the comments made by the Vice President in paragraph 16 of his decision. It submitted the analysis therein was artificial. In our opinion, read in context, they comprise no more than some possible scenarios in respect of which clause 10.4 would operate and have “work to do”. [10] About this consideration we agree with Qantas that the construction for which the Appellant contends in effect requires the words “by the Commission” to be read into clause 10.4 after the word “determined”. The Commission should not readily read words into a dispute settlement procedure and in our opinion, those additional words are not necessary for clause 10.4 to operate. There was no evidential basis established in this matter which might have justified our accepting that the parties should be taken to have understood the clause to be read in the way for which the Appellant contends. It is equally open to read clause 10.4 as being the agreement of the parties as to what would occur whilst the dispute remains and has not been finally settled. It is not necessarily the case that, in terms of clause 10.4, the “final settlement” could only be one achieved in the Commission. Disputes may be settled in a number of ways including, as Qantas submitted, by the parties resolving the matter themselves, not choosing any part of it to be referred to the Commission, by effluxion of time, by variation to the Agreement or by resolving to have further negotiations. [11] The Appellant also criticised His Honour’s approach as being dismissive of the plain ordinary English meaning of the word “determine”. It was submitted that he disregarded consideration that had been given to that word in the context of a dispute settlement clause in two decisions. In our opinion it is clear from His Honour’s decision and the footnotes to it that he took into account precisely those two decisions that the Appellant asserts were disregarded. [12] Had the dispute settlement procedure referred any dispute to the Commission for determination we would have accepted that should be read as the parties having agreed to empower the Commission to arbitrate in respect of that dispute. This too was clearly accepted by the Vice President. In support of that proposition he first referred to the Full Bench decision in Shop, Distributive and Allied Employees Association v Big W Discount Department Stores 5 (Big W). There, the relevant agreement provided in its dispute settlement procedure that any matters which had not been resolved were able to be referred to the “Australian Industrial Relations Commission for determination”. The other decision referred to by His Honour is Communications, Electrical, Electronic, Energy, Information Postal, Plumbing and Allied Services Union of Australia v Telstra Corporation 6 . In that case the dispute settlement procedure provided, relevantly, that “a dispute referred to the Australian Industrial Relations Commission will be referred for … conciliation/determination”. We note that this decision was the subject of an appeal to a Full Bench which allowed the appeal in part but not in relation to the aspect of the decision here being discussed. 7 The Full Bench accepted that where, in the context of a dispute resolution procedure, a dispute is referred to the Commission for “determination”, provided it is unqualified, that is to be taken as meaning arbitration. [13] We agree with the Vice President’s construction of clause 10. Like His Honour, we think the better construction of the provisions of the clause is that for which Qantas contends. [14] Before disposing of this appeal we wish to make some general comments. It has been clear from at least decision of the High Court of Australia in Construction, Forestry, Mining and Energy Union v Australian Industrial Relations Commission 8 in 2001, and a number of Full Bench decisions subsequent to it, that the parties are able to agree, in an enterprise bargaining agreement, to empower the Commission to undertake a range of dispute resolution procedures or functions. If parties intend for one of those procedures or functions to include arbitration so much should be made clear. In this matter the facts agreed between the parties reveal that there was no discussion between them in relation to the terms of clause 10. Further we note in paragraph 14 of His Honour’s decision which we have earlier reproduced, that other certified agreements to which these parties are bound specifically and expressly identify that a dispute, not having been resolved, is able to be referred to the Commission for arbitration. It is regrettable that there needs to be an argument about competing constructions to be placed on the relevant dispute settlement clause provisions. Further, the practice of calling up dispute settlement procedures previously applying in awards made many years earlier, without giving consideration to what, in the context of an enterprise bargaining agreement, the terms are to mean is unsatisfactory. [15] We are not persuaded that the decision of the Vice President reflects a misunderstanding of the nature of his jurisdiction or that he misconceived his role or his duty, failed to apply himself to the question he needed to address or misunderstood the nature of the opinion he was required to form. In short, nothing in His Honour’s decision reflects jurisdictional error. [16] No arguable case of appealable error having been demonstrated we are not persuaded that the grounds of appeal raise matters which warrant the grant of leave. Nor does the appeal raise matters which, in the public interest, persuade us that leave to appeal would be appropriate. Leave to appeal is refused and the appeal is dismissed. BY THE COMMISSION: SENIOR DEPUTY PRESIDENT Appearances : J Nolan of Counsel with P van den Heever for Australian and International Pilots Association H McKenzie for Qantas Airways Limited Hearing details: 2008. Sydney: June 17. 1 [2008] AIRC 290 2 Ibid at para 2 3 Section 170LT(8) 4 Coal and Allied v Australian Industrial Relations Commission (2000) HCA 47 at 17 5 PR 924554 6 PR933892 7 PR 940569 8 (2001) HCA 16 Printed by authority of the Commonwealth Government Printer <Price code C, AG844026 PR983254 >