Home Federal Court takes a broad view of the dispute settling powers of the Fair Work Commission under enterprise agreements

UpdatesJul 29, 2020

Federal Court takes a broad view of the dispute settling powers of the Fair Work Commission under enterprise agreements

If you are standing down employees under a clause in an enterprise agreement, this will mean disputes about the stand-down decision can be referred to the Fair Work Commission (FWC)

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If you are standing down employees under a clause in an enterprise agreement, this will mean disputes about the stand-down decision can be referred to the Fair Work Commission (FWC) under the mandatory dispute-settling procedure provided in the agreement.

In Qantas Airways Ltd v Australian Licensed Aircraft Engineers Association (No 2) (2020), the employers tried to limit the FWC’s capacity to intervene in a dispute over stand-downs under their enterprise agreements.

The agreements provided the employers could stand down workers in circumstances where they could not be usefully employed due to a stoppage of work that the employers could not be held responsible for or prevent. A dispute arose as to whether there was in fact useful work to be performed. The employers argued the FWC couldn’t arbitrate the stand down decision because:

  1. arbitration was the final step in the dispute resolution procedure and the dispute hadn’t yet passed through the steps that were to precede this process; and
  2. even if the FWC could arbitrate, it could only determine the disputed matter – whether there was useful work to be performed. It couldn’t arbitrate other questions, such as whether there was a stoppage of work and whether or not the employers could be held responsible for that stoppage.

The Court accepted that the dispute resolution procedure required a staged process of discussions about a disputed matter before the matter could be referred to the FWC. However, the Court considered that the clauses governing the dispute resolution procedure should be interpreted flexibly. Compliance with them could be achieved, even though certain formalities may not have been met.

It was not necessary for those in initial discussions around stand down to know they were participating in a formal dispute resolution process. It was sufficient that the employees had raised an opposing view to their employer at a meeting and both opposing sides knew there was a dispute in need of resolution. The requirement that the disputed matter be referred to more senior levels of management could be met if those senior managers attended the initial discussions.

The Court also ruled that a flexible approach should be taken in determining the boundaries of the dispute, such that the FWC was not confined to dealing only with the question of whether the employees could be usefully employed. The question of why there had been a stoppage of work may be relevant to whether there was now useful work to be performed.

The decision serves as a reminder that enterprise agreements are first and foremost practical documents forged in an industrial context and should not be subject to restrictive or overly technical interpretation.

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