Australian Workers' Union v Santos Ltd

[2021] FWC 792

[2021] FWC 792

FAIR WORK COMMISSION

STATEMENT AND RECOMMENDATION

Fair Work Act 2009
s.739 - Application to deal with a dispute

Australian Workers' Union
v
Santos Ltd
(C2020/8736)

Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers' Union
v
Santos Ltd
(C2020/8737)

SANTOS LTD COOPER BASIN ENTERPRISE AGREEMENT 2019
[AE506914]

COMMISSIONER HAMPTON ADELAIDE, 17 FEBRUARY 2021

Alleged dispute about any matters arising under the enterprise agreement and the NES;[s186(6)]

[1] The Commission has been dealing with two directly related disputes following applications being taken by the Australian Workers’ Union (AWU) and the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) respectively. The Respondent in each case is Santos Limited (Santos) and all of these parties are covered by the Santos Ltd Cooper Basin Enterprise Agreement 2019 (Agreement).

[2] Santos is a major Australian producer and supplier of liquefied natural gas (LNG) and oil, and has significant LNG, pipeline gas and oil assets in a number of States and Territories.

[3] The Agreement applies to Santos and its employees in terms of the company’s operations in the Cooper Basin, Port Bonython and the Regional Distribution Centre (RDC) located in Port Adelaide.

[4] The general context for each application is that the COVID-19 Pandemic, and the related Government restrictions and health and safety initiatives taken to control the spread of the virus, have led to changes being implemented that have from time to time impacted upon some staffing arrangements. For example, one of these, which is the focus of another aspect of the present disputes, involved a decision to require employees to “quarantine” and undertake COVID-19 testing in the days leading up to their next rostered (including fly-in) shift. This is the subject of ongoing discussions and beyond the scope of these particular recommendations.

[5] Some of the changes that have been made by Santos since the outbreak of the pandemic are the direct result of Government directives. Some of these have been introduced with very little notice given the urgency and nature of the requirements. There is no particular controversy about those matters. Other changes have been the result of Government guidelines issued by various agencies, including the Department of Mines and Energy, and independent Santos WHS or business risk management considerations. It is proposed or actual changes in these latter two categories that are the focus of the present matters.

[6] Santos has established an internal regular COVID‐19 working group to keep abreast of applicable state and federal government restrictions, health advice and relevant matters impacting Santos operations across Australia. These discussions are attended by senior management representatives, together with government affairs and HSE professionals. Discussions relate to Santos assets across its operating divisions and office locations, relevant to nearly 3,000 employees. Many of these employees are not covered by the Agreement. I observe that this working group appears to be an appropriate and effective mechanism for management to deal with the many COVID-19 challenges that arise across its business, but it is not designed to be an employee consultative forum. I also do not consider that it would be appropriate to attempt to simply supplement the membership of the forum with Agreement-covered employee representatives to make it into something that it is not.

[7] The Agreement provides the following in respect of workplace change:

“3.2 MANAGEMENT OF CHANGE

3.2.1 The Parties are committed to effective consultation on major changes that will or will be likely to have Significant Effects on Employees (“Significant Effect”). In this Clause, Significant Effects may include an outcome of change that may lead to:

•  Termination of employment; or

•  Major changes in the composition, operation or size of the workforce; or

•  Major changes in the skills required of the workforce; or

•  Elimination or diminution of job opportunities, promotional opportunities or job tenure; or

•  A change to the regular roster or ordinary hours of work of an Employee. Where this Agreement makes provision for a change to occur, the change will not be a Significant Effect.

3.2.2 Effective consultation between the Parties is dependent upon information sharing, trust and recognition of each other’s needs and concerns. The Company is committed to a process of making an informed decision with due consideration being given to alternatives raised by the Employees or their chosen representatives.

3.2.3 When the Company has finalised a proposal to introduce change that may have Significant Effects on Employees (and prior to a final decision being made in respect to that proposal), the Company shall discuss the proposal with the Employees or their chosen representatives. These discussions will address the changes that will or may have Significant Effects, the basis for such changes and measures which may be taken to mitigate or lessen any adverse effects on Employees. This information shall also be provided in writing.

3.2.4 The Company shall consider matters raised and alternatives submitted by the Employees or their chosen representatives. It is acknowledged that agreement may not necessarily be achieved between the Parties, and provided that the change is Safe, Efficient, Legal and Logical (the SELL principle) there will be no impediment to the change being introduced.

3.2.5 The Company and Employees are jointly committed to implementing initiatives and change that is consistent with the SELL principle.

3.2.6 The Parties may refer any dispute over the application of this Clause to FWC (provided that they have complied with the prerequisite steps of the Dispute Settlement Procedure at Clause 3.1 of this Agreement).”

[8] The dispute resolution procedure (DRP) provided by the Agreement is in the following terms:

“3.1 DISPUTE SETTLEMENT PROCEDURE

3.1.1 The purpose of this procedure is to provide a process to discuss and resolve individual and/or collective grievances and disputes relating to any matter in relation to the Employee(s) employment relationship or the operation and application of this Agreement and the National Employment Standards (“Issue”). The following steps will be taken to ensure that the Issue receives prompt attention and is resolved at the earliest possible stage.

3.1.2 The procedure is:

3.1.2.1 The Issue should initially be raised with the Employee’s immediate Team Leader or Supervisor concerned. An Employee may raise an Issue to the level above the Employee’s immediate Team Leader or Supervisor in extenuating circumstances.

3.1.2.2 If the Issue cannot be resolved the Employee, they may request further discussion with the responsible area Manager/Superintendent and their representative.

3.1.2.3 If the Issue is still not resolved, the matter will be discussed with the Employee’s Department Manager and a representative from Human Resources.

3.1.2.4 If the Issue remains unresolved the Employee(s) shall utilise the provisions contained within the Santos Issue Resolution Procedure in an attempt to resolve the Issue.

3.1.2.5 If the Issue is still not resolved the Employee(s) or the Company may refer the Issue to FWC for conciliation.

3.1.2.6 If conciliation fails to resolve the Issue, the Company or the Employee(s) involved in the dispute may request FWC to arbitrate the Issue.

3.1.3 While this procedure is being followed, the status quo relating to the matter in dispute, will be maintained with work continuing in accordance with the Employee(s) contract of employment. If either party requires the matter to be dealt with urgently and makes such request to the FWC, the other party shall not oppose that request. Employees will at all times avoid any stoppages of work or industrial action, except where there is a reasonable concern(s) held by the Company or Employees about any imminent risk to the health and safety of Employees.

3.1.4 Where an Employee(s) holds a reasonable concern about an imminent health and safety risk, the Employee(s) concerned will consult with management and discuss their concerns and follow the required procedure to resolve any occupational health and safety matter. In such cases an Employee(s) will remain available to work and comply with any reasonable direction from the Company to perform other available and alternative duties.

3.1.5 At any stage of this procedure an Employee may seek assistance or representation from a Union, person or agent of their choice.”

[9] The Agreement does not establish a formal workplace consultative committee. There is however a more informal process that is activated when issues arise requiring discussions, potentially including disputes being dealt with under the dispute resolution procedure of the Agreement. The informal process generally involves officials of the AWU and AMWU, workplace delegates from each of the relevant operational sites, and management representatives. During negotiations for enterprise agreements, this group, in effect, becomes a single bargaining unit (SBU). Between negotiations, this group could be best described as being the informal SBU.

[10] I observe that the introduction of change provision contemplates that disputes about such matters may be dealt with in accordance with the DRP. Clause 3.2.6 of the Agreement requires that the necessary steps be taken under the DRP. This involves, amongst other matters, that the issue should initially be raised with the Employee’s immediate Team Leader or Supervisor concerned. An Employee may raise an issue to the level above the Employee’s immediate Team Leader or Supervisor in extenuating circumstances. This informs how a dispute about the immediate issue must at least be initially processed.

[11] As a result of discussions related to these matters, Santos has agreed to lift the level of notification of COVID-19 related changes and information to include the AWU and AMWU, as well as to their employees. This has been seen as constructive by the unions and delegates. There is also some common ground in that all parties recognise that some COVID-19 responses may, in exceptional circumstances where there is an urgent imperative – such as giving effect to Government directives, need to be made and implemented immediately.

[12] However, despite further constructive discussions in the context of conferences before the Commission, some differences remain between the parties about the initiatives and changes arising from the COVID-19 pandemic. The major issues in dispute include:

•  The scope of matters that should be subject to consultation

•  When should consultation take place?

•  What processes should be utilised for any consultation?

•  The meaning of consultation

[13] It is appropriate that the Commission provides some assistance to the parties at this juncture and I have decided to issue a recommended framework to that end. That framework involves the following elements:

Notification

[14] The Unions are covered by the Agreement and history would suggest that each has significant relevant membership amongst the group of employees covered by that instrument. Under the DRP and the consultation provisions, these organisations are able to represent their members as required. Further, given the changing nature of the responses to COVID-19 and the need to deal with such expeditiously, information about the changing context as it may impact on Santos, its operations and employees should be provided on an ongoing basis. Accordingly, it is appropriate for Santos to inform the AWU and AMWU of COVID-19 related developments that will or may impact upon the employees subject to the Agreement. This should be done in addition to the regular notification to the employees that already takes place. To the extent that Santos chooses to include any commercially sensitive information, appropriate undertakings could be sought from, and provided by, the AWU and AMWU.

The scope of consultation

[15] Clause 3.2 appears to provide a more expansive scope of matters that should be subject to consultation than the standard introduction of change provision. 1 The Agreement contemplates that there will be consultation about matters that will or will be likely to have ”significant effects” on employees.2 Further, significant effects have been defined on a non-exclusive basis to include an outcome of change that may lead to significant effects including changes to regular rosters or ordinary hours of work. Changes that are expressly contemplated elsewhere within the Agreement, are not considered to create a significant effect.

[16] More significantly, clause 3.2 appears to contemplate that consultation will be about proposed changes with the process providing for employee input into the final decision, including that management will give due consideration about alternatives raised by them. This means that the consultation is not merely about the impact of the decision and means to mitigate the impact, but about the decision itself.

[17] As a result, it would be prudent for Santos to consult about any proposed changes that are not expressly provided for in the Agreement and which will or will be likely to have an effect upon the employment levels, the elimination or diminution of job opportunities, promotional opportunities or job tenure, existing working conditions, and rosters or ordinary hours of work, or a significant change to the composition, operation size or skills required of the workforce. For present purposes I would describe these matters as having industrial significance. The unions and employees should recognise that not all COVID-19 related changes will fall within the scope of the required consultation; but Santos should also be alert to the broad nature of the Agreement consultation requirement and the benefits of genuinely engaging the workforce and their representatives as early in the process as possible.

The process of consultation

[18] The process of consultation commences with the notification of proposed changes. Other than for the exceptional matters discussed above, this should occur prior to the planned introduction of the changes. Where the COVID-19 related issues are likely to have any industrial significance, it is desirable that the notification include the range of matters that are contemplated in clause 3.2 of the Agreement, even when Santos does not necessarily concede that a “major change” is involved. That is, the notification should be in writing and include the nature of any proposed changes with sufficient details to enable the impact to be understood, the basis for the changes, and measures which may be taken to mitigate or lessen any adverse effects on employees. This should facilitate alternative proposals, as well as mitigation initiatives, to be advanced by or on behalf of the workforce. For their part, the Unions would need to recognise that Santos may not be conceding that it was required to formally consult about the COVID-19 related issues, but rather has adopted a broad approach in the interests of openly and expeditiously dealing with the many complex issues that may arise from time to time given the changing nature of the Pandemic.

[19] Where the unions or employees seek further discussion about the proposals, the informal SBU could be utilised where appropriate. That is, where a broad issue involving all interests is being considered, as many of the informal SBU members as possible would participate. However, where issues involved only a specific group, the relevant employee representatives and management representatives would convene. The informal SBU would also need to meet virtually where required and given the urgency of some issues, not all representatives would need to be present.

[20] Should an employee or group of employees seek to formally utilise the DRP, the steps contemplated in clause 3.1.2 would need to be followed. Hopefully, the process of early and expeditious discussions at the informal SBU will limit the need to do so.

The meaning of consultation

[21] To a large degree this is already outlined in the Agreement itself and canvassed above. In the present matters, the following summary of elements drawn directly from clause 3.2 may be useful:

The purpose:

Effective consultation between the Parties is dependent upon information sharing, trust and recognition of each other’s needs and concerns. The Company is committed to a process of making an informed decision with due consideration being given to alternatives raised by the Employees or their chosen representatives.

The process:

When the Company has finalised a proposal to introduce change that may have Significant Effects on Employees (and prior to a final decision being made in respect to that proposal), the Company shall discuss the proposal with the Employees or their chosen representatives. These discussions will address the changes that will or may have Significant Effects, the basis for such changes and measures which may be taken to mitigate or lessen any adverse effects on Employees. This information shall also be provided in writing.

The Company shall consider matters raised and alternatives submitted by the Employees or their chosen representatives.

The objective:

The Company and Employees are jointly committed to implementing initiatives and change that is consistent with the SELL principle.

It is acknowledged that agreement may not necessarily be achieved between the Parties, and provided that the change is Safe, Efficient, Legal and Logical (the SELL principle) there will be no impediment to the change being introduced.

Disputes:

The Parties may refer any dispute over the application of this Clause to the FWC (provided that they have complied with the prerequisite steps of the Dispute Settlement Procedure at Clause 3.1 of this Agreement).

Accordingly, it is recommended as follows:

THAT the parties hold further discussions about the disputes with a view to reaching agreement on future processes to give effect to the framework outlined by the Commission above.

[22] Liberty to apply has been granted, including for the parties to seek the relisting of these matters before the Commission.

COMMISSIONER

Hearing details:

2021
February 12.
By Telephone.

Printed by authority of the Commonwealth Government Printer

<PR726990>

 1 Such as the model consultation term in Schedule 2.3 of the Fair Work Regulations 2009.

 2   This is broadly consistent with the model term.