Disputes under enterprise agreements

This is an interesting portion of a decision of the Federal Court determining a claim by an employee that her employer had breached a relevant enterprise agreement by failing to comply with an obligation under an enterprise agreement to mainatian the staus quo pending a resolution of a dispute whch had been referred to the Fair Work Commision un der the agreement.

“In the ordinary way of proceedings in the Commission, the dispute was first dealt with by a relatively informal process of conciliation. As will be seen, whilst that was reflective of a longstanding practice of the Commission, it also took up a process enshrined in the Enterprise Agreement. In the result, that process yielded recommendation and related reasons were issued by the Commission on 10 May 2023.
Mrs Gulliver’s claim in the present proceeding is that CathEd contravened s 50 of the FWA by contravening a status quo maintenance provision in the Enterprise Agreement, while the processes for which the Enterprise Agreement made provision were still extant. Those processes included the making of a recommendation of the kind to which I have referred, as well as the contingency of arbitration. Mrs Gulliver’s allegation is that the termination of her employment on 31 May 2023 amounted to a violation of the ordained status quo. That is contested by CathEd.
It is now necessary to put some factual and legal flesh on the foregoing recital of the bare bones of how this proceeding has come to be before the Court.
Section 186 of the FWA is directed to the subject of when the Commission must approve an Enterprise Agreement. One of the requirements found in s 186 is a requirement flowing from s 186(6) for the Commission to be satisfied that the agreement concerned includes a term that, presently materially, provides a procedure that requires or allows the Commission to settle disputes about any matters arising under the agreement, and which allows for the representation of employees covered by the agreement for the purposes of that procedure.
The procedure concerned is found in cl 2.4 of the Enterprise Agreement, which provides, materially:
2.4 Procedures for Preventing and Settling Disputes

The matters to be dealt with in this procedure shall include all grievances or disputes between an employee and an employer in respect to any industrial matter and all other matters that the parties agree on and are specified herein. Such procedures shall apply to a single employee or to any number of employees.

2.4.1 In the event of an employee having a grievance or dispute the employee shall in the first instance attempt to resolve the matter with the immediate supervisor, who shall respond to such request as soon as reasonably practicable under the circumstances. Where the dispute concerns alleged actions of the immediate supervisor the employee/s may bypass this level in the procedure.

2.4.2 An employee who is a party to the dispute may appoint a representative for the purposes of the procedures in this clause.

2.4.3 If the grievance or dispute is not resolved under clause 2.4.1, the employee or the employee’s representative may refer the matter to the next higher level of management for discussion. Such discussion should, if possible, take place within twenty-four (24) hours after the request by the employee or the employee’s representative.

2.4.4 If the grievance involves allegations of unlawful discrimination by a supervisor the employee may commence the grievance resolution process by reporting the allegations to the next level of management beyond that of the supervisor concerned. If there is no level of management beyond that involved in the allegation the employee may proceed directly to the process outlined at clause 2.4.6.

2.4.5 If the grievance or dispute is still unresolved after discussions mentioned in clause 2.4.3, the matter shall, in the case of a member of the union, be reported to the relevant officer of the union and the senior management of the employer or the employer’s nominated industrial representative. An employee who is not a member of the union may report the grievance or dispute to senior management or the nominated industrial representative. This should occur as soon as it is evident that discussions under clause 2.4.3 will not result in resolution of the dispute.

2.4.6 If, after discussion between the parties, or their nominees mentioned in clause 2.4.5, the dispute remains unresolved after the parties have genuinely attempted to achieve a settlement thereof, then notification of the existence of the dispute is to be given to the Fair Work Commission.

2.4.7 Fair Work Commission may deal with the dispute in two (2) stages:

(a) Fair Work Commission will first attempt to resolve the dispute as it considers appropriate, including by mediation, conciliation, expressing an opinion or making a recommendation; and

(b) If Fair Work Commission is unable to resolve the dispute at the first stage, Fair Work Commission may then:

(i) Arbitrate the dispute; and

(ii) Make a determination that is binding on the parties.

(Note: If the Fair Work Commission arbitrates the dispute, it may also use the powers that are available to it under the Act.)

A decision that the Fair Work Commission makes when arbitrating a dispute is a decision for the purpose of Division 3 of Part 5.1 of the Act. Therefore, an appeal may be made against the decision.

2.4.8 Whilst all of the above procedure is being followed, normal work shall continue except in the case of a genuine safety issue.

2.4.9 The status quo existing before the emergence of the grievance or dispute is to continue whilst the above procedure is being followed.

2.4.10 All parties to the dispute shall give due consideration to matters raised or any suggestion or recommendation made by the Fair Work Commission with a view to the prompt settlement of the dispute.

2.4.11 Discussions at any stage of the procedure shall not be unreasonably delayed by any party, subject to acceptance that some matters may be of such complexity or importance that it may take a reasonable period of time for the appropriate response to be made. If genuine discussions are unreasonably delayed or hindered, it shall be open to any party to give notification of the dispute in accordance with the provisions of the Act.

[emphasis in original]

The dispute resolution clause in cl 2.4 of the Enterprise Agreement takes up a model term about dealing with disputes for which, in furtherance of s 737 of the FWA, reg 6.01 and sch 6.1 of the Fair Work Regulations 2009 (Cth) (FW Regulations) provide.
It will be necessary to construe the terms of the dispute resolution clause for the purpose of determining whether or not, in light of the defence made by CathEd, Mrs Gulliver has established a contravention.
Before so doing, it is necessary to recall that, although the present proceeding is of a civil rather than criminal character, the standard of proof applicable, by virtue of s 140 of the Evidence Act 1995 (Cth) is affected by the provisions of s 140(2) of that Act. That subsection takes up, in effect, observations long ago made by Sir Owen Dixon in Briginshaw v Briginshaw (1938) 60 CLR 336 in relation to the proof of grave matters in civil proceedings. In short, inexact proofs or indirect references are not sufficient to establish such matters, even on the balance of probabilities. As it happens, I am well-satisfied in this particular case that no nice issues as to whether or not proof to that standard as affected by s 140(2) has been established. Obviously enough, it is, in terms of onus, for Mrs Gulliver to prove the alleged contravention to that standard.
To return, then, to matters of governing law concerning the process in the Commission invoked by Mrs Gulliver, a necessary starting point is within Div 2 of Pt 6-2 in Ch 6 of the FWA. That is where s 737 is found. As already mentioned, reg 6.01 and sch 6.1 in the FW Regulations give voice to s 737’s requirement for prescription of model terms in dealing with disputes for Enterprise Agreements. Section 738 provides, materially by s 738(b), that the division – Div 2 as mentioned – applies if ‘an Enterprise Agreement includes a term that provides a procedure for dealing with disputes, including a term referred to in s 186(6)’. This enterprise agreement includes such a term.
It is then provided by s 739, that the section applies if a term referred to in s 738 requires or allows the Commission to deal with a dispute. The present is a case where the Enterprise Agreement makes just such provision with respect to the Commission dealing with a dispute.
By s 739(4), it is provided that if, in accordance with the terms of the Enterprise Agreement the parties have agreed that the Commission may arbitrate (however described) a dispute, the Commission may do so. Section 739 is not exhaustive of the powers that fell to the Commission to exercise in relation to the dispute notified by the Form 10 mentioned. Section 595 of the FWA provides:
FWC’s power to deal with disputes

(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.

Notably, by s 595(2), the Commission is expressly empowered to make a recommendation or express an opinion. Section 595 was applicable because the Commission was expressly authorised by s 739 to deal with this particular dispute.
Understanding the dispute also requires that some other clauses of the Enterprise Agreement to be set out. Clause 10.6 deals with complaints against employees. It provides:
10.6 Complaints Against Employees

10.6.1 The parties acknowledge that schools are a partnership between the employing authority, staff, students and parents. The employing authority will ensure that guidelines exist to cover situations where complaints are made against employees.

10.6.2 The guidelines will ensure that, in dealing with a complaint, the concerns are addressed in an objective and sensitive manner giving due consideration to the reputation and dignity of the persons concerned, and that any staff member who is subject to a complaint will be afforded the fundamental principles of natural justice within a fair and transparent process.

10.6.3 The parties agree that a policy and guidelines consistent with these principles shall be developed or reviewed in consultation with employees and their union. Once developed or reviewed the policy and guidelines will be documented and recorded by the parties.

10.6.4 It is recognised that these processes are not those used to deal with situations where allegations of abuse or sexual misconduct are made against employees.

Although framed by reference to cl 10.6.2, Mrs Gulliver’s dispute on analysis was whether or not, in accordance with the guidelines which CathEd did have, she was entitled to all that she thought she was entitled in meeting the allegation of misconduct.
There was much evidence given in affidavit and also some limited oral evidence with respect to dealings between the parties and, for that matter, even amongst themselves before the Commission prior to the Commission coming to address a particular question. That question was the end result of dealings between the parties and the Commission in the course of informal conciliation in April this year.
In the reasons which were given by the Commission on 10 May 2023, the Commission recited, at [2], its understanding of the nature of the dispute:

The Applicant is employed by Brisbane Catholic Education as a Teacher at St John Fisher College, Bracken Ridge. The dispute relates to a misconduct process (Misconduct Process) conducted by the Respondent which broadly alleges that the Applicant breached the Catholic Education Archdiocese of Brisbane Code of Conduct (Code of Conduct) on or around 30 January 2023.

The Commission then stated at [3]:

The parties have provided an agreed question on which they seek a recommendation from the Commission to address the dispute.

“Does clause 10.6.2 of the [enterprise agreement] … require [CathEd] to provide Mrs Gulliver with a copy of any investigation report and any annexures before being required to respond to the show cause notice of 15 March 2023?”
There then follows, in the Commission’s reasons, a summation of submissions made on behalf of each of the parties on the question posed, which culminates in a conclusion found, along with a related recommendation, in the balance of the Commission’s reasons. It is neither necessary nor, for that matter, desirable to pass at all upon the conclusion reached in a necessarily provisional way by the Commission in relation to the submissions made with respect to the question posed. All that is necessary, for present purposes, is to recite the concluding paragraphs of the Commission’s reasons which contain both a reference to the conclusion reached as well as the recommendation made and, for that matter, a cautionary note which the Commissioner sounded to CathEd.
The Commission stated in its reasons at [56] to [58] the following:

[56] Whilst I have expressed the view that clause 10.6.2 of the Agreement does not of itself compel the Respondent to produce the material the Applicant seeks, it is recommended in the particular circumstances of this case, that the sensible course is for the Respondent to provide to the Applicant to the full extent that is permissible, any material that will be put before the decision maker before a final decision is made.

[57] This recommendation is made on the basis that on the current material a factual contest clearly exists as to the extent and nature of the Applicant touching the ears of the two students.

[58] Depending on the content of material not currently disclosed to the Applicant, in the event of potential future unfair dismissal proceedings, were it to be concluded the material not disclosed was relevant and had an impact on the Respondent’s decision making process, the Respondent would risk an adverse finding being made against it, that it denied the Applicant an opportunity to respond. That issue cannot arise and is disposed of if the material is disclosed now, and the Applicant has an opportunity to respond to it before the Respondent makes a final decision.
Notably, within these paragraphs, the Commission’s recommendation was that CathEd provide Mrs Gulliver, to the full extent that is permissible, any material that will be before the decision-maker before a final decision is made. As it happens – and it is clear to the point of demonstration not just on the balance of probabilities – CathEd provided Mrs Gulliver with nothing, nothing at all, in response to that recommendation prior to giving her notice on 31 May 2023 of her termination with effect on and from that day.
In conveying the Commission’s reasons to the parties, the Associate to the Commissioner, who had constituted the Commission (Commissioner Simpson), advised that the matter was finalised and that the Commission was closing its file. Much was made of this in terms of the defence by CathEd. It was put that this was indicative that the process, found at cl 2.4.7 of the Enterprise Agreement, had come to an end, such that there was no longer a requirement for preservation of a status quo and thus that no status quo had been interrupted by termination. It was also put that I should conclude from the evidence concerning anterior dealings that this was not just the expectation but the agreement of the parties.
Whilst I did not have any affidavit evidence from the respondent, and the respondent was under no onus to tender any such evidence, I did have evidence of dealings both in writing as well as orally between the parties in the evidence offered for Mrs Gulliver. This notably included evidence from one of the solicitors in the firm acting for her, Mr Quinn. When all is said and done, that evidence, in my view, amounts to nothing more and nothing less than an agreement that a particular question would be posed to the Commission, the answer to which it was expected would, if acted upon, resolve the dispute.
In turn, the way in which the Associate’s advice is to be viewed is nothing more than a reflection of a confident expectation by the Commission that its recommendation would be acted upon, and thus, in accordance with what it understood to be the agreement between the parties, that recommendation, if acted upon, would resolve the dispute.
Before proceeding further, it is necessary to construe the dispute resolution clause. The approach to the construction of an industrial instrument is well settled, but it is nonetheless desirable to recall the approach which should be taken. A helpful starting point, much cited at intermediate and also, as will be seen, ultimate appellate level, is a statement made by Madgwick J in Kucks v CSR Limited (1996) 66 IR 182, at 184:

It is trite that narrow or pedantic approaches to the interpretation of an award are misplaced. The search is for the meaning intended by the framer(s) of the document, bearing in mind that such framer(s) were likely of a practical bent of mind: they may well have been more concerned with expressing an intention in ways likely to have been understood in the context of the relevant industry and industrial relations environment than with legal niceties or jargon. Thus, for example, it is justifiable to read the award to give effect to its evident purposes, having regard to such context, despite mere inconsistencies or infelicities of expression which might tend to some other reading. And meanings which avoid inconvenience or injustice may reasonably be strained for. For reasons such as these, expressions which have been held in the case of other instruments to have been used to mean particular things may sensibly and properly be held to mean something else in the document at hand.
That particular approach to the construction of an industrial instrument was referred to with express approval in Amcor Limited v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241, at [95], by Kirby J, and also at [129] and [130] by Callinan J. Also in that case at [2], Gleeson CJ and McHugh J observed in respect of the construction of the industrial instrument in that case that it was to be construed by reference to its language “understood in light of its industrial context and purpose”.
Another case frequently cited for its erudition in relation to the construction of industrial instruments is City of Wanneroo v Holmes (1999) 30 IR 362, in which at 378 and following, French J made, by reference to authority, particular statements concerning the interpretation of an industrial instrument. Notably, his Honour stated in respect of the text of an industrial instrument that:

That is not to say that the words must be interpreted in a vacuum, divorced from industrial realities.

His Honour made reference then to a statement made now almost a century ago by Street J, as he then was, in Geo A Bond & Co Ltd (in liq) v McKenzie [1929] AR(NSW) 498, at 503:

It must be remembered that awards are made for the various industries in light of the customs and working conditions of each industry, and they frequently result from an agreement between the parties, couched in terms intelligible to themselves but often framed without careful attention to form and draughtsmanship which one expects to find in an Act of Parliament.

I think, therefore, in construing an award, one must always be careful to avoid too literal adherence to the strict technical meaning of words and must view the matter broadly, and after giving consideration and weight to every part of the award, and endeavour to give it a meaning consistent with the general intention of the parties to be gathered from the whole award.
The same may also be said of an enterprise agreement.
The position in this case is somewhat nuanced in that the Enterprise Agreement takes up a particular model provision found in the FW Regulations. For all that, it is the deliberate choice of those who promoted the approval by the Commission.
It is necessary to give the clause which takes up the model provision industrial meaning. Clause 2.4.7 is not to be read in isolation. In particular, it is not to be read in isolation from cl 2.4.10 in terms of provision for giving consideration to a recommendation made by the Commission.
The practice of making a recommendation is clearly contemplated by clause 2.4.10. That practice is hardly unique in its contemplation or adoption to this particular Enterprise Agreement. This is made plain by a decision of the Full Bench of the Commission, Clermont Coal Pty Ltd v Construction, Forestry, Mining and Energy Union [2015] FWCFB 332, at [29], wherein the Commission recognises the longstanding role which the making of a recommendation plays, and has played for a very long time indeed, in the process of conciliation by the Commission and its predecessors. The Full Bench stated at [29], as follows:

29 The meaning that should be ascribed to the word “conciliation” pursuant to ss 739 and 595 of the Act does not require a convoluted answer. It is to be given its long standing meaning in an industrial context. That meaning accords with the proposition found in Finance Sector Union of Australia and New Zealand Banking Group Limited in which the Full Bench of the Commission referred to recommendations as “a common feature of the conciliation process” and made the following observations:

“[32] We make it clear that in our view the making of a recommendation is often a useful tool in the conciliator’s armoury and can facilitate the parties reaching agreement. As the President of the South Australian Commission said in Re: Clerks Customs Agent (SA) Award:

‘The prime charter course of the Commission is, in any proceedings before it under the statute, to attempt to effect conciliation by mediation between the parties and that is a process well known to all who appear in this jurisdiction. It is, in our view, quite proper, indeed quite normal, in the course of many if not most mediations, for the person attempting the mediation to make positive suggestions to the parties as to what might be a suitable basis for resolving the matter, indeed, if felt appropriate, expressing strong views as to what might be a possible consequence, prima facie, of any arms length arbitration before the Commission. There is nothing improper about that. It happens every day of the week.

“[33] We agree with the above observations.”

[emphasis in original]
It is a mistake to consider that the making of a recommendation of the kind contemplated by cl 2.4.7 of the Enterprise Agreement is an end in itself. The making of a recommendation is a step along the way in a process for which cl 2.7 provides. It is contemplated by that clause, read in conjunction with cl 2.4.10, that the parties to a dispute will treat a recommendation with all of the gravitas of a pronouncement as to a recommended course of conduct by a person appointed deliberately by the Governor-General in Council to the Commission on the basis of very particular industrial experience. But it is just a recommendation. As this Enterprise Agreement expressly contemplates, that one would expect that in the ordinary course of events the parties to a dispute, taking into account such a recommendation will act on it. That is not to say that either party is obliged so to act, only that there is that expectation.
But the recommendation itself does not bring a dispute to an end. What brings the dispute to an end is if the parties choose to accept and act upon the recommendation.
All that the Commission’s Associate’s email evidences is a confident expectation, unfulfilled as it happens in the circumstances of this case, that the parties would act on the recommendation. That doubtless reflects an expectation, inferentially, which the Commission held as a result of reciting the question posed to it. And it is to be remembered as well that the Commission, as constituted by Commissioner Simpson, was constituted by a very experienced Commissioner indeed. There is no substance whatsoever, in my view, in the contention made on behalf of CathEd that in some way, that email evidenced finalisation of a dispute. All it evidenced, properly understood in the industrial context in which it was sent, was a confident expectation.
Mrs Gulliver was left in a position of not knowing, prior to her dismissal, whether or not CathEd would act on the recommendation. Had CathEd chosen to act on the recommendation by communication to her, even if only to the extent of stating, “You already have, by correspondence of particular dates, the following material and this is the only material which will be placed before the decision-maker”, she would then have had the choice of whether or not to accept that this was in fulfilment of the recommendation or, had she chosen to want more, to press for an arbitrated outcome.
Alternatively, CathEd might have stated to her that it chose not to act on the recommendation. That, of course, would have been its perfect right, although a serious thing industrially. As it happens, it is proved to the point of demonstration that CathEd did neither.
What CathEd did do by the termination was to interrupt the status quo. I am well satisfied, not just on the balance of probabilities but to demonstration that, in the circumstances of this case, the contravention alleged has been proved. What has occurred here is that there has been a violation by termination of an employment of a status quo ordained by cl 2.4.9 of the Enterprise Agreement.
These Enterprise Agreements are the contemporary way in which the employment of many employees in Australia are regulated. There is a most helpful account of the provision in the FWA for the approval of Enterprise Agreements offered by White J, with whom, relevantly, Banks-Smith and Jackson JJ agreed in Maersk Crewing Australia Pty Ltd v Construction, Forestry, Maritime, Mining and Energy Union [2021] FCAFC 231, at [9] and following. His Honour stated, at [9], of enterprise bargaining that:

This reflects the emphasis of the FWA on enterprise bargaining and resolution of disputes at the enterprise level.

In keeping with that, the FWA limits the circumstances in which the Commission may exercise arbitral powers. But arbitral powers are not excluded for the reasons which I have already outlined.
What the actions of CathEd did in this particular case by the termination of the process and by earlier profound silence as far as Mrs Gulliver was concerned, was to deprive her of the choice of the recourse to arbitration if so advised. CathEd interrupted the process and the related status quo. That was, to use a euphemism, unfortunate indeed.
It will be necessary now to take that into account in determining what penalty, if any, is appropriate. For the present, the case is one where it is most desirable indeed to record by declaration the contravention of s 50 constituted by the contravention of the Enterprise Agreement as alleged. I will hear the parties as to the form of the declaration as well as with respect to penalty.”

Gulliver v Corporation of the Trustees of the Roman Catholic Archdiocese of Brisbane [2023] FCA 823 delivered 7 JUly 2023 per Logan J