On 13 September 2024, the Full Bench of the Fair Work Commission (FWC) ruled on the jurisdictional scope of the FWC to deal with disputes under section 240 of the Fair Work Act 2009 (Cth) (FW Act) in Qube Ports Pty Ltd v Construction, Forestry, Maritime, Mining and Energy Union[1].
The decision sheds light on what the FWC will deem to be a dispute “about the agreement” for the purposes of section 240, and when it can be said that those parties are “unable to resolve the dispute”.
Defining Disputes: what does section 240 cover?
Section 240 of the FW Act allows bargaining representatives to apply to the FWC to deal with disputes about proposed enterprise agreements if they are unable to resolve the dispute themselves. Relevantly, section 240 gives the FWC jurisdiction to deal with a dispute “about the agreement”.
This naturally raises the question: what constitutes a dispute “about the agreement”? Until now, there has been a lack of clear authority which has considered this question.
What did the Full Bench have to say?
Qube Ports was engaged in bargaining for 19 proposed enterprise agreements, covering its stevedoring employees at various port facilities across Australia. Qube Ports insisted on a port-by-port bargaining method, which the union (MUA) argued was inefficient and costly. The MUA sought a unified approach to discuss common terms before addressing port-specific issues.
The MUA made an application to the FWC under section 240 of the FW Act, seeking assistance in resolving the dispute. At first instance, Deputy President Slevin held that the FWC had jurisdiction to hear the matter. Qube Ports appealed to the Full Bench of the FWC.
On appeal, Qube Ports contended that the FWC lacked the jurisdiction to deal with the dispute, because it was about the bargaining process, rather than the content of the proposed agreements. Additionally, Qube Ports asserted that the parties had not demonstrated that they were “unable to resolve the dispute”, a prerequisite to enliven the FWC’s jurisdiction under section 240.
The central issue before the FWC was whether the dispute was a dispute “about the agreement”. Qube Ports argued for a narrow interpretation that only disputes concerning the substantive content of an agreement, not the bargaining process, should be considered.
The FWC rejected the narrow interpretation advanced by Qube Ports, affirming that a dispute about the manner in which bargaining is conducted is indeed a dispute “about the agreement”. The FWC emphasised that the purpose of section 240 is to facilitate good faith bargaining and the making of enterprise agreements, which includes resolving procedural disputes that could impede the bargaining progress.
The FWC further observed that Qube Ports’ refusal to negotiate common terms collectively was a dispute about the agreement’s content, not just the bargaining process and that Qube Port’s refusal to negotiate was in breach of the good faith bargaining requirements under the FW Act.
On Qube Ports’ argument that the parties had not made sufficient efforts to resolve the dispute independently, the FWC found evidence to the contrary, noting that the parties had engaged in multiple bargaining meetings and correspondence without reaching a resolution. The FWC concluded that the requirement under section 240(1) was met, as the parties were unable to resolve the dispute at the time assistance was sought.
What’s the difference Between process and content?
The FWC distinguished between disputes about the bargaining process and the content of enterprise agreements. While Qube Ports argued the dispute was purely procedural, the FWC determined it was inherently linked to the agreement’s content, as the method of negotiation directly impacted the terms being discussed.
The evidence showed that Qube Ports’ insistence on port-by-port negotiations was driven by concerns about the applicability of the MUA’s claims to specific ports. This indicated that the dispute was not merely procedural but also related to the substantive content of the agreements.
Key takeaways for employers
Broad Interpretation of Section 240
The decision confirms that section 240 encompasses disputes about both the content and the process of bargaining.
Employers should be prepared for the possibility that disputes about the bargaining process, not just the content of agreements, can be brought before the FWC. This means that procedural disagreements, such as the method of bargaining, may be subject to the FWC’s intervention. However, it is important to note that the FWC can only make a recommendation and cannot arbitrate an outcome without the agreement of all parties.
Encouragement of Efficient Bargaining
By recognising procedural disputes as legitimate grounds for the FWC’s intervention, the decision encourages parties to make use of the section 240 process in complex negotiations involving multiple agreements and parties.
Employers will need to develop more comprehensive strategies to address both procedural and substantive differences in bargaining and consider where a section 240 application could be used as a strategic tool in negotiations.
Clarification of “Unable to Resolve”
The decision clarifies that demonstrating an “inability to resolve a dispute” does not require exhaustive efforts over an extended period. Instead, it is sufficient to show that the parties have made reasonable attempts to resolve the dispute without success.
[1] [2024] FWCFB 370
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