Linfox Australia Pty Ltd v Transport Workers Union of Australia [2013] FCA 659

27 November 2013

By Daniel Victory

A recent decision of the Federal Court of Australia has emphasised the importance of dispute resolution clauses in enterprise agreements.

Linfox Australia (Linfox) and the Transport Workers Union of Australia (TWU) were engaged in a dispute about payment for crib breaks during overtime. Linfox Australia argued that the enterprise agreement provided for crib breaks during overtime to be paid at ordinary rates.  The union argued that the proper interpretation was for crib breaks during overtime to be paid at overtime rates.

After the dispute arose, Linfox used the dispute resolution clause in the enterprise agreement to file an application to have the Fair Work Commission deal with the dispute. Commissioner Harrison arbitrated the dispute and found in favour of Linfox. The TWU appealed to the Full Bench who quashed the decision of Commissioner Harrison and determined that the crib breaks should be paid at overtime rates.

Linfox applied to the Federal Court of Australia seeking to quash the Full Bench decision. Linfox argued that the Full Bench's construction of the agreement was wrong at law and as such, the Federal Court could quash it and make a declaration that crib breaks during overtime were to be paid at ordinary rates.

The TWU argued the Full Bench's decision was binding as it was made pursuant to its private arbitral function under the enterprise agreement. This meant that the Federal Court did not have jurisdiction to review it for the reasons advanced by Linfox.

Justice Rares considered the terms of the agreement, the relevant authorities in relation to the Commission's power of private arbitration and the scheme of the Fair Work Act 2009. His Honour confirmed that the power of a private arbitrator in such circumstances arises from the agreement of the parties. His Honour found that, in this case, the dispute resolution clause in the enterprise agreement gave power to the arbitrator to finally decide questions of fact and law. His Honour upheld the TWU's jurisdictional objection.

Maurice Blackburn's Mike Doherty, who represented the TWU in the case, said it was pleasing that the Federal Court came to the correct decision. He noted the case serves to highlight the importance of not only dispute resolution clauses, but also the need to ensure that clauses in enterprise agreements are clear and concise.

AMWU v Visy Packaging Pty Ltd (No 3) [2013] FCA 525

A recent Federal Court decision has shed light on the approach to General Protections cases following the High Court's decision in Barclay*. The decision is also significant for its finding that an employee taking reasonable care in relation to occupational health and safety constituted the exercise of a workplace right.

The case involved the head delegate and OHS representative at Visy in Coburg.  The delegate tagged out a forklift due to its barely audible reversing beeper. Following this, an investigation was conducted into the delegate that resulted in the delegate being issued with a final warning. The union and the delegate applied to the court claiming that the investigation and warning constituted adverse action in breach of the general protections provisions.

The union initially applied for an injunction to stop the investigation but were unsuccessful. Following the issuing of the final warning the union applied for, and were granted, an injunction restraining Visy from relying on the warning until the matter could be heard and determined.

Adverse action?

The substantive case was heard by Justice Murphy in February 2013. His honour first considered whether the action taken against Mr Zwart constituted "adverse action" for the purpose of the Fair Work Act 2009. His honour found that:

  • The investigation of the delegate constituted adverse action.  Even if the investigation were carried out properly and in good faith this still amounts to adverse action,
  • The suspension of the delegate constituted adverse action. In most cases the removal of an employee from his or her employment, even temporarily, will be adverse to his or her interests, and
  • The final written warning constituted adverse action.

Workplace right?

Justice Murphy then considered whether the delegate's conduct amounted to the exercise of a workplace right. His honour found that;

  • In tagging out the forklift the delegate was exercising a workplace right pursuant to s 25 of the Occupational Health and Safety Act 2004 to take reasonable care in relation to health and safety; and
  • In inspecting and tagging the forklift the delegate was exercising a workplace right pursuant to s 58 of the OHS Act which empowers health and safety representatives to inspect any part of a workplace.

Why was the adverse action taken?

Visy denied taking adverse action against the delegate for tagging out the forklift. It alleged that its actions towards the delegate were because of his behaviour during meetings, failing to cooperate with Worksafe and not following the OHS dispute resolution procedure.  Visy also sought to rely on the findings of the investigation conducted by a third party in relation to the dispute.

Consistent with the approach set down by the High Court in Barclay, Justice Murphy carefully considered the evidence of the decision makers against other objective facts.

Importantly, his Honour accepted the evidence of the delegate in relation to the reasons for his action and also in relation to what was said and done in investigation meetings.  In contrast, Justice Murphy found that aspects of the evidence given by Visy managers were inconsistent and implausible when seen against the surrounding facts and circumstances.

Ultimately Justice Murphy concluded that evidence given the relevant decision makers was not capable of discharging the onus imposed by s 361 of the Fair Work Act.

The decision confirms that the general protections provisions of the Act can provide important protections to employees who exercise reasonable care in relation to occupational health and safety. The decision also confirms that the decision makers evidence about the reason action was taken will be assessed against all other evidence in the proceeding. 

*Board of Bendigo Regional Institute of Technical and Further Education v Barclay (2012) 86 ALJR 1044.



Practice Areas: