Does it work while wielding a great axe?

Yes. You can disarm someone by smacking the weapon out of their hand with your great axe.

But does it work mechanicaly? I have yet to disarm anything, useing a greataxe, and have seen the *disarm hits* message in the combat log, and they still have there weapon in hand. I use it on every attack, to increase the percentaile, and still nothing...this is against quest npc monsters, not PC's. Perhaps I just have not actually acheived a disarm, just that the attack hits? And yes, they were humanioid wielding a variety of weapons from daggers to swords :D

Some quest NPC's are marked so that disarm effects them in a certain way. (In this case, they aren't actually disarmed.) Disarms will still work on PC's normally.