DECISION Fair Work Act 2009 s 739 - Application to deal with a dispute Dapto Leagues Club Ltd v Hope Agius (C2014/6087) DEPUTY PRESIDENT SAMS SYDNEY, 18 NOVEMBER 2014 Dispute under the terms of an enterprise agreement - club industry - compliance with Club s policies and procedures in respect to body piercings - policy change - wearing of lip piercing - jurisdictional objection - interpretation of an enterprise agreement - policies expressly excluded from the Agreement - policies and procedures not a matter arising under the Agreement - no ambiguity or uncertainty - Commission has no jurisdiction - matter dismissed. [1] On 28 August 2014, Dapto Leagues Club Ltd (the Club or the applicant ) filed an application, pursuant to s 739 of the Fair Work Act 2009 (the Act ), requesting the Fair Work Commission (the Commission ) deal with a dispute arising under the Dapto Leagues Club Enterprise Agreement 2010 [AE878610] (the Agreement ). The respondent to the dispute is Ms Hope Agius, who is employed as a Waitress/Cashier by the Club. Ms Agius is represented by her Union, United Voice. [2] The factual background to the dispute is relatively straightforward. Until October 2013, the Club s dress policy did not make explicit reference to facial piercings or visible body art (tattoos, etc). Ms Agius had been permitted by the Club to wear her lip piercing during working hours up until this time. However, the policy was changed on 21 October 2013, after what appears to be a commendably in-depth consultation process with staff, which had commenced on 2 January 2013. Ms Agius did not participate in the Consultative Committee or otherwise provide feedback in relation to drafts of the amended employee handbook in respect to the changes in policy. She continued to wear her lip piercing after 21 October 2013 contrary to the amended Appearance and Attire policy (the policy ), which states as follows in relation to piercings: 1
Nose piercings: stud style, small and co-ordinated. Piercings are not acceptable on other parts of the face, including the lip, eyebrow and neck. [3] The following policy was also implemented in relation to visible body art : 3. VISIBLE BODY ART The following policy applies to all new employees. Additional visible body art is not permitted for existing staff and may lead to disciplinary action. Visible body art on the face, neck, arms or legs on front of house staff is not acceptable. The reasons for the policy is that that it does not fit the image that Dapto Leagues Club wishes to portray and has worked hard to develop over time. It may also be offensive to some people. At the time of employment offer, an agreed covering may be considered. It is noted that there are current employees who have existing visible body art who at the time of this handbook being acknowledged will understand and have signed an acknowledgement form that additional visible body art will not be accepted. [4] The Club has had several informal discussions with Ms Agius in relation to her compliance with the policy. On 23 July 2014, a meeting was held with the Club, Ms Agius and an Organiser from United Voice, Liquor and Hospitality Division (the Union ). Arising from this meeting, Ms Agius was handed a letter on 24 July 2014, which was expressed as follows: In reference to the meeting held at Dapto Leagues on the 23rd of July, this letter is to confirm the intentions and outcomes of that meeting. Present at the meeting were you, myself, Matt Grant HR and your representatives Ryan McQueen and Lilly Proctor. During the meeting it was explained to you the club went through a consultative process and developed a new staff hand book which included numerous new policies. One of these policies related piercings [sic] which as discussed in the meeting impacted you and a piercing you wear and that by wearing the piercing at work you are in breach of the new policy. In the meeting you indicated you would not remove the piercing whilst at work and the club indicated the policy would not be changing. You gave reasons why believed [sic] you should not have to remove the piercing and the club gave reasons the policy needed to be retained. The outcome of the above meeting was that the club would consider what had been discussed during the meeting and confirm its decision on the matter. 2
This letter is to confirm the club will not change the policy for reasons outlined in the above meeting, therefore if you are to wear the piercing at work after the 24th of July 2014 you will be breaching club policy and disciplinary proceeding [sic] will ensure. [5] The Club sought that the matter be conciliated by the Commission and a recommendation be made that Ms Agius comply with the policy. The matter was subsequently listed for conciliation before me on Monday 29 September 2014 with Mr C Langton of ClubsNSW appearing for the applicant and Mr C Acev of the Union appearing for Ms Agius. [6] The terms of the Agreement s Dispute Resolution Process was the subject of considerable debate in the proceeding. That procedure is set out at cl 33 as follows: 33 DISPUTE RESOLUTION PROCESS 33.1 If a dispute relates to: 33.1.1 a matter arising under this Agreement; or 33.2.2 the National Employment Standards; this term sets out procedures to settle the dispute. 33.2 In the first instance, the parties to the dispute must try to resolve the dispute at the workplace level, by discussions between the employee or employees and the relevant supervisors and/or management. They Employee who is party to the dispute may appoint a representative of their choice present at any stage during these discussions. 33.3 If discussions at the workplace level do not resolve the dispute, a party to the dispute may refer the matter to Fair Work Australia. 33.4 Fair Work Australia may deal with the dispute in 2 stages: 33.4.1 Fair Work Australia will first attempt to resolve the dispute as it considers appropriate, including by mediation, conciliation, expressing an opinion or making a recommendation; and 33.4.2 if Fair Work Australia is unable to resolve the dispute at the first stage, Fair Work Australia may then; (i) (ii) arbitrate the dispute; and make a determination that is binding on the parties. 33.5 While the parties are trying to resolve the dispute using the procedures in this term: 3
33.5.1 Employees must continue to perform work as normal unless the they [sic] have a reasonable concern about an imminent risk to their health or safety; and 33.5.2 Employees must comply with a direction given by the Club to perform other available work at the same workplace, or at another workplace, unless: (i) (ii) (iii) (iv) the work is not safe; or applicable occupational health and safety legislation would not permit the work to be performed; or the work is not appropriate for them to perform; or there are other reasonable grounds for Employees to refuse to comply with the direction. 33.6 The parties to the dispute agree to be bound by a decision made by Fair Work Australia in accordance with this term. [7] At the outset, Mr Acev raised a jurisdictional objection that the Commission did not have power to deal with the dispute in that the matter raised by the Club was not a matter arising under the Agreement (or the NES). Specifically, Mr Acev drew the Commission s attention to cl 7 of the Agreement, which is expressed as follows: 7 RELATIONSHIP WITH POLICIES AND PROCEDURES 7.1 Employees must comply with any workplace policies and procedures implemented and/or amended by the Club from time to time. 7.2 Policies and procedures of the Club shall not form part of this Agreement with Employees. [8] The Club continued to seek a recommendation from the Commission. However, Mr Acev maintained the objection to the application proceeding in any form. Accordingly, I issued directions for both parties to file submissions on the jurisdictional issue and, by consent, I proposed to deal with the matter on the papers. SUBMISSIONS For the respondent [9] In written submissions, Mr Acev put that, as a threshold issue, the Commission was required to determine whether the dispute related to a matter arising under the Agreement. While the dispute was not at the point of arbitration on the merits, the Commission was limited, or precluded from dealing with the matter, even at a preliminary stage; See: United 4
Voice v Ambulance Victoria [2013] FWC 8356 ( United Voice v Ambulance Victoria ). The source of the power of the Commission to arbitrate did not arise from an exercise of judicial power, but rather from the Dispute Resolution Process agreed to by the parties. It was therefore a power of private arbitration; See: Construction, Forestry, Mining and Energy Union v Australian Industrial Relations Commission (2001) 203 CLR 645; [2001] HCA 16 ( CFMEU v AIRC ). [10] Mr Acev submitted that there were a number of preliminary matters to be determined before the Commission could deal with the dispute, pursuant to s 739 of the Act. The Commission is required to properly characterise the dispute as having arisen under the terms of an enterprise agreement; See: Maritime Union of Australia v Australian Plant Services Pty Ltd [PR908236]; Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Holden Limited [PR940366] and Automated Reading Services (AMRS) - v Australian Municipal Administrative Clerical and Services Union [PR922053]. [11] Mr Acev contended that there were two aspects of this dispute which the Commission must be satisfied have been met. Firstly, the dispute must be factually about the application of a term or terms of the enterprise agreement. Secondly, there must be a meaningful relationship between the facts relied upon and the disputed terms of the Agreement; See: Skurnik v Australian Broadcasting Corporation [2011] FWA 8069 ( Skurnik v ABC ). Cl 7.2 of the Agreement clearly sets out that the Club s policies and procedures do not form part of the Agreement and cl 33 only applies to disputes relating to matters under the Agreement or the NES. This dispute related to Ms Agius wearing a lip ring in a manner which was said to be contrary to the policy of the Club. S 595 of the Act therefore precluded the Commission from issuing a recommendation to the parties, as requested. The application should be dismissed. For the applicant [12] In written submissions, Mr Langton sought a recommendation from the Commission in relation to the dispute between the parties. He outlined the relevant provisions of ss 738-739 of the Act and the Dispute Resolution Process under cl 33 of the Agreement. Mr Langton asserted that the dispute between the parties was a matter arising under the Agreement. This phrase should not be narrowly construed; See: Shop Distributive and Allied Employees Association v Big W Discount Department Stores [PR924554] ( SDA v Big W ). He added that 5
cl 7 served to confirm what is known as managerial prerogative, being the employer s right to issue reasonable and lawful directions to its employees. Cl 7.1 served to bring the compliance with workplace policies and procedures within the scope of the Agreement s Dispute Resolution Process. [13] Mr Langton noted that the Australian Industrial Relations Commission (AIRC) had conciliated a dispute involving compliance with an employer s dress policy; See: Woolworths Limited (t/as Safeway) v Cameron Brown [PR963023] ( Woolworths v Brown ). That dispute was ultimately arbitrated by the AIRC. [14] Mr Langton claimed that the Union was actively seeking ways in which to avoid the use of the dispute resolution clause. This approach was not compatible with the objects of the Act (ss 3(e) and (f)). The removal of cl 7.1 of the Agreement would mean that neither the Club, nor any of its employees, would have the ability to invoke cl 33 of the Agreement in respect to the Club s policies and procedures. [15] Mr Langton referred to Skurnik v ABC and said that Ms Agius had breached cl 7.1 of the Agreement in failing to comply with the Appearance and Attire Policy of the Club. The issue had been raised with her a number of times. However, both she and the Union had disputed that she was required to comply with it. The dispute was therefore a factual one about the application of cl 7.1. Mr Langton asserted that there was a meaningful relationship between the facts relied upon and the terms of the Agreement said to be in dispute. There was a rational nexus in that Ms Agius had failed to comply with the Club s amended policy, in breach of her obligation to do so, pursuant to cl 7.1; See: United Voice v Ambulance Victoria. [16] Mr Langton addressed cl 7.2 of the Agreement and noted that s 207 of the Act set out that the terms of an enterprise agreement could not be changed, other than by a variation approved by the Commission, on application. This was necessary to preserve terms and conditions that had been negotiated between the employer and its employees. However, the reality of industrial practice was that employers were required to adapt quickly and flexibly to changes which may arise by implementing and amending its policies and procedures. The intent of cl 7.2 was to allow them to do so, without having to seek a variation of the Agreement with the Commission each time. The intent was not to exclude the operation of the Dispute Resolution Process. 6
[17] Mr Langton denied that ccl 7.1 and 7.2 were in conflict. The effect of cl 7.1 was to allow the Club to invoke the Dispute Resolution Process in relation to breaches of its policies and procedures. A different interpretation would discourage the use of the Commission in resolving disputes, contrary to the objects of the Act. Ms Agius jurisdictional objection should be dismissed. [18] In reply, Mr Acev put that the objects of the Act should not be interpreted to allow such a wide and liberal meaning of cl 7. The Club had not successfully addressed the jurisdictional objection of the respondent. Nor did Woolworths v Brown assist the Club, as that matter related to an application for relief from termination of employment after a breach of the employer s dress policy. [19] Mr Acev submitted that cl 33 of the Agreement set out the Dispute Resolution Process could only be invoked in circumstances where there was a dispute relating to the operation or implementation of a term of employment in the Agreement. The plain meaning of cl 7.2 excluded the policies and procedures of the Club. While the Club may have recourse to disciplinary measures against the applicant for her failure to comply with the dress policy. This application did not give rise to a dispute capable of being dealt with in accordance with cl 33. The application should be dismissed for lack of jurisdiction. CONSIDERATION Powers of the Commission [20] It is trite to observe that the powers of the Fair Work Commission (the Commission ) to deal with a dispute under s 739 of the Act, are limited by the powers conferred on the Commission by the agreement between the parties. This proposition was helpfully set out by Johns C in United Voice v Ambulance Victoria, where the learned Commissioner said at para [31]: [31] Under the provisions of sections 738 and 739 of the FW Act the powers of arbitration exercised by the Commission depend on the powers conferred on it by the agreement of the parties. Under the scheme of the FW Act there is no broad unfettered power of private arbitration that otherwise exists to resolve disputes between parties. Those arbitral powers instead depend on the agreement of the parties and any decision made by the Commission is not binding of its own force but derives from that agreement, which effectively authorises that exercise of power. The exercise of that 7
arbitral power, and what it involves, has been considered in a number of decisions of this Commission and its predecessors. [21] It is well recognised that where industrial parties agree to put their dispute before the Commission for decision, the power so exercised is not a judicial power, but a power of private arbitration; See: CFMEU v AIRC. The first task of the Commission in this case is to properly characterise the dispute under the Dispute Resolution Process as to whether it has arisen under the terms of the Agreement. Axiomatically, if the dispute does not arise or relate to a matter under the Agreement (or the NES, as the case may be), then the Commission has no jurisdiction to deal with the matter. [22] Ccl 7.1 and 7.2 are the relevant provisions of the Agreement. On their face, these provisions appear directly contradictory, probably as a result of unintended poor drafting. However, it seems to me that one cannot escape a finding that the expressed intention of cl 7.2 is to exclude the Club s policies and procedures from the Agreement and by logical extension render the Disputes Settlement Process under the Agreement of no force or effect. [23] This conclusion necessarily stems from the plain, unequivocal language used in the clause and the principles of interpreting enterprise agreements. In this latter respect, I refer to an extract from Lamb v Bunnings Group Limited [2013] FWCFB 2698, where a Full Bench of the Commission, after referring to a number of the authorities, said this: [19] A leading case in relation to the interpretation of agreements is Codelfa Construction Pty Ltd v State Rail Authority of NSW. The dicta of Justice Mason, as he then was, (with whom Stephen, Aickin and Wilson JJ agreed) has frequently been adopted and applied in matters concerning the interpretation of enterprise agreements. In Codelfa His Honour said (at 352): The true rule is that evidence of surrounding circumstances is admissible to assist in the interpretation of the contract if the language is ambiguous or susceptible of more than one meaning. But it is not admissible to contradict the language of the contract when it has a plain meaning. Generally speaking facts existing when the contract was made will not be receivable as part of the surrounding circumstances as an aid to construction, unless they were known to both parties, although, as we have seen, if the facts are notorious knowledge of them will be presumed. It is here that a difficulty arises with respect to the evidence of prior negotiations. Obviously the prior negotiations will tend to establish objective background facts which were known to both parties and the subject matter of 8
the contract. To the extent to which they have this tendency they are admissible. But in so far as they consist of statements and actions of the parties which are reflective of their actual intentions and expectations they are not receivable. The point is that such statements and actions reveal the terms of the contract which the parties intended or hoped to make. They are superseded by, and merged in, the contract itself. The object of the parol evidence rule is to exclude them, the prior oral agreement of the parties being inadmissible in aid of construction, though admissible in an action for rectification. Consequently when the issue is which of two or more possible meanings is to be given to a contractual provision we look, not to the actual intentions, aspirations or expectations of the parties before or at the time of the contract, except in so far as they are expressed in the contract, but to the objective framework of facts within which the contract came into existence, and to the parties' presumed intention in this setting. We do not take into account the actual intentions of the parties and for the very good reason that an investigation of those matters would not only be time consuming but it would also be unrewarding as it would tend to give too much weight to these factors at the expense of the actual language of the written contract. [20] It should be emphasised that in interpreting the terms of an enterprise agreement neither a court, nor this Commission, determines what is fair and just. The task involves adopting a meaning consistent with the ordinary or usual meaning of the words the parties have adopted in their agreement. [24] Thus, it will be seen that the words in cl 7.2 are neither ambiguous or susceptible of more than one meaning. When the words used are given their ordinary or usual meaning, there can be only one answer to the meaning of cl 7.2: the Club s policies and procedures do not form part of the Agreement, so the Dispute Resolution Process under the Agreement cannot be a vehicle to resolve disputes about any of them. Of course, the outcome would be entirely different if a policy or procedure was incorporated within the Agreement. But the current dispute cannot be clothed in words which do not exist to give the dispute a legal character which it does not otherwise have. I would add that this finding does not give the words a too narrow or too literal interpretation as alluded to in SDA v Big W. Rather, the approach I prefer is an entirely orthodox one, in respect to the construction of a term of an enterprise agreement. [25] In deference to Mr Langton s interesting and carefully considered submissions, I would make these additional observations. Mr Langton submitted that there was no conflict between cl 7.1 and 7.2. He said that firstly, cl s.71 allows for policies and procedures to be included within the scope of the Dispute Resolution Process under cl 33 and, secondly, that cl 9
7.2 enables the flexibility for the Club to amend or vary its policies, without a formal variation process under s 210 of the Act. [26] In my view, these submissions are misconceived and find no substantiation in any of the Agreement s other provisions. Had the Agreement intended to allow the policies and procedures to be dealt with under the Dispute Resolution Process then it would surely have said so. That there is no basis for assuming this intention, confirms my view that cl 7.1 cannot be read that way. Indeed, as a matter of construction, words cannot be imported into a clause to give it a meaning which the expressed stated words cannot bear; See: ResMed Limited v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers' Union (AMWU) [2014] FWCFB 2418. [27] Mr Langton s second argument is innovative and adventurous, but ultimately flawed. In my view, such an approach undermines the principles of enterprise bargaining being a process of agreeing to and codifying the terms of employment between an employer and its employees. It is to give certainty about outcomes for the life of the Agreement. This is precisely why the process of varying an agreement is similar to the process for making and approving the agreement. Were it otherwise, one could imagine an employer, complying with all the requirements of the NES, but having policies and procedures impacting on every other aspect of employment which could be changed or altered at the whim of the employer. Such an outcome could not possibly have been the intention of the legislature. See: Amcor Ltd v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241; [2005] HCA 10 ( Amcor ), where the High Court said: 30. Clause 55.1.1 must be read in context. It is necessary, therefore, to have regard not only to the text of cl 55.1.1, but also to a number of other matters: first, the other provisions made by cl 55; secondly, the text and operation of the Agreement both as a whole and by reference to other particular provisions made by it; and, thirdly, the legislative background against which the Agreement was made and in which it was to operate [my emphasis]. [28] Moreover, there are many other policies or procedures of employers which sit entirely within the framework of an Agreement or are to be taken as being read in conjunction with the operation and application of an Agreement; for example, drug and alcohol policies. Had the words of cl 7.2 not been so emphatically clear to the contrary, then there may be some room to doubt the meaning of the provision. However, that is not the position here. 10
[29] In addition, Mr Langton submitted that the intention was that as a matter of industrial reality, the Club could quickly and flexibly adapt to changes required in its policies and thereby avoid the time consuming process of varying the Agreement. This submission is difficult to reconcile with the fact that the Club undertook a process of consultation from January to October 2013. While this process was commendable, it was hardly quick. [30] For completeness, I agree with Mr Acev that Woolworths v Brown does not support Mr Langton s submissions. That case dealt with a breach of the employer s dress policy in the context of the alleged unfair termination of an employee. The facts and circumstances of this matter are clearly distinguishable to Woolworths v Brown. [31] Nevertheless, in my opinion, the above finding does not render cl 7.1 nugatory. An employee may still be required to comply with the policies and procedures of the Club, as a term of the employment contract; See: Adami v Maison de Luxe (1924) 35 CLR 143. That said, however, the policies and procedures of the Club cannot, as a matter of law, be a term of the Agreement, given the expressed and clear intention of cl 7.2 to the contrary. When viewed from this perspective, the Dispute Resolution Process in the Agreement cannot apply to the circumstances of this case and the Commission lacks jurisdiction to determine the matter, or even deal with it at all, over an objection to jurisdiction. Notwithstanding this finding, that is not, in my judgement, the end of the matter. [32] While I would dismiss this matter on jurisdictional grounds, I would nevertheless make some obiter comments which I trust may be of assistance to the parties. I do not think I will be betraying any private conciliation confidence by indicating that Mr Langton advised me that throughout the time that Ms Agius had been wearing the lip ring, no-one - be it customers or fellow workers - has complained about it. Indeed, it is apparent that the Club had no suggestion with her doing so, prior to the change of policy in October 2013. There was no suggestion that wearing a lip ring affects health or safety; it is purely a personal aesthetic preference. [33] This observation causes me to take judicial notice that the dress and appearance norms of contemporary Australians, particularly young people, are very different to the community expectations of say, the 1960s or even the 1980s. Moreover, it strikes me as somewhat ironic, 11
that this strict approach is being adopted by a football club when one considers that probably the majority of professional footballers we see on our television every football season, are covered in tattoos ( visible body art ), including on their legs, arms, necks and even their faces. This was not the case 40 years ago, when one rarely saw a tattoo, unless it was discretely displayed by ex or existing Navy personnel or where all over body art was regarded as a curiosity, found only at the circus or amusement parks. Indeed, it was unheard of for women to have any tattoos at all. How times have changed. [34] It must also be observed again that Ms Agius has worn the lip piercing for many months and was employed by the Club when there was no policy about the matter and when presumably, no issue was taken about her doing so. Given current standards, it seems to me to be somewhat unrealistic that she is being denied her right to self-expression, when it was never an issue previously, and where her original contract of employment at least, impliedly, did not prevent her from doing so. [35] In addition, there must also be a hint of discrimination in that those who are now in breach of the policy because they have permanently exposed visible body art, will not be required to have them removed and will not be subject to any discipline. This aspect of the policy is sensible and realistic. [36] My musings about the merits of this matter should in no way be seen as suggesting that the Club is not entitled to introduce and insist on compliance with policies which it considers is in the Club s best interests, subject to the policy being lawful and reasonable; See: Potter v WorkCover Corporation [PR948009]. This means that, at the point of hiring, a prospective employee would be made aware of the Club s requirements and if there was a subsequent breach, there may well be justifiable disciplinary ramifications. [37] In any event, if the Club wishes to press this matter, other options may well be open to it. However, it is not my role to advise what such options may be. Nevertheless, given the circumstances, I would foresee difficulties for the Club if it seeks to discipline Ms Agius, arising from her refusal to remove her lip piercing. 12
[38] In summary then, the Union s jurisdictional objection is upheld and this dispute is dismissed on jurisdictional grounds in that the Commission has no power to deal with the matter. The proceeding is concluded. I order accordingly. DEPUTY PRESIDENT Final written submissions: Applicant: 27 October 2014. Respondent: 13, 31 October 2014. Printed by authority of the Commonwealth Government Printer <Price code C, PR557544> 13