The Fair Work Commission (FWC) has held that it did not have the jurisdiction to settle a dispute where the parties’ own dispute resolution procedures had not been followed.

The company’s enterprise bargaining agreement set out an internal dispute resolution procedure (DR Procedure) that employees had to follow before either party could refer the matter to the FWC for conciliation or arbitration. A dispute arose, and the employee’s union applied to the FWC to resolve the matter before exhausting the steps set out in the DR Procedure.

The Commissioner concluded that he did not have jurisdiction to resolve the issue, as the union had not followed the DR Procedure. The Commissioner held that “[t]he importance of parties complying with their agreed dispute resolution procedures has been emphasised by the Commission in a number of matters”.

This case also highlights the need for careful consideration when negotiating dispute resolution clauses, with the Commissioner commenting that "parties do not as a general rule take sufficient care to ensure that their agreed dispute resolution provisions adequately allow for the different classes of disputes that may arise, or the various circumstances where the provisions may be needed. This is particularly so when provisions are modelled on terms that were made under former legislative schemes".

A link to the case can be found here: Transport Workers' Union of Australia v Torrens Transit Services Pty Ltd [2013] FWC 7318