“Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers' Union (AMWU) v ACI Operations Pty Ltd T/A O-I Melbourne

[2013] FWC 2556

[2013] FWC 2556

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739—Dispute resolution

“Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU)
v
ACI Operations Pty Ltd T/A O-I Melbourne
(C2012/6243)

COMMISSIONER RYAN MELBOURNE, 26 APRIL 2013

Alleged dispute concerning wages, reclassification/career paths, competency standards and classification structures and definitions.

[1] I gave the following ex tempore decision in transcript on 19 April 2013.

[2] An application for Fair Work Commission to deal with a dispute in accordance with the dispute settlement procedure under an enterprise agreement was filed by the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) on 7 December 2012. The dispute concerned employees employed by ACI Operations Pty Ltd T/A O-I Melbourne (O-I Melbourne) at its Spotswood operation. The dispute was identified in the form F3 as follows:

“4.1. Mould shop employees have been asked to do job changes which are at a higher rate of pay.

4.2. Those employees are not receiving the higher rate of pay.”

[3] The dispute is characterised by the Applicant in its final submissions as follows.

“What is being asked by the AMWU is that the Commission review the respondent's decision to implement an allowance which remunerates employees when they perform duties in the job change department; duties that were not part of the employees' roles when the agreement came into operation. In particular, the AMWU is seeking that through such a review, the Commission will find that the proper application of such an allowance is in line with the determination sought. It is submitted that the Commission has the jurisdiction to undertake such a task, as it does not follow that this issue can only be determined by the exercise of judicial power.”  1

[4] The dispute is characterised by the respondent in its final submissions filed on 11 April as:

“The subject matter of the dispute is a claim for a new allowance not currently provided for in the agreement".  2

[5] The actual remedy sought by the applicant was identified in its outline of applicant submissions filed on 3 April at paragraph 4, which reads:

“In particular, the applicant is seeking that the Commission determine the matter as follows:

(1) that employees directed to perform work in the job change department are entitled to a skills-based payment that includes an increase in the hourly rate. It is appropriate to increase the hourly rate by 70 cents per hour; or

(2) that employees directed to perform work in the job change department are entitled to a fortnightly job change allowance of $100.”

[6] Both sides addressed the Commission on the jurisdiction of the Commission to deal with this matter. The AWMU approached the issue from the perspective of a review of allowances already paid. O-I Melbourne, approached the issue from the perspective of creating a new allowance. I do not intend to review the allowance paid, nor do I intend to create a new allowance. There is, however, an obvious and apparent matter which can and should be arbitrated, and which is clearly encompassed by the description of the dispute in the form F3, namely that mould shop employees had been asked to do job changes which are at a higher rate of pay. “Those employees are not receiving the higher rate of pay.”

[7] I turn to the terms of O-I Melbourne - Maintenance Employees Certified Agreement 2010 (the agreement). Clause 3 of the agreement is the application clause, and it reads as follows:

“This agreement shall apply at the establishment of O-I Melbourne, Booker Street, Spotswood, Victoria to all mechanical and electrical maintenance employees.

It is agreed that a term of the National Employment Standards, NES, will apply where it is more favourable to the employee than the corresponding term, whether express or incorporated in this agreement.

Attachments A (being extracts from the Metal, Engineering and Associated Industries Award Part 1 1998);

Attachment B (being extracts from the Glass Industry Maintenance of Employees Hours of Work Award 1981);

Attachment C (being extracts of the ACI Glass Packaging Australia Glass Industry Severance Agreement 2010).

In the event of any inconsistency between an express clause of this agreement and any incorporated provision, the express provision shall apply to the extent of any inconsistency.

Where there is an inconsistency between the terms of the incorporated award terms, the terms of the modern award shall prevail to the extent of the inconsistency. For the avoidance of doubt, the agreement shall be interpreted as follows:

(1) the express terms of the agreement prevail in all instances;

(2) if the agreement does not contain a provision or a complete provision, then the terms of the modern award apply;

(3) in the event that neither the agreement nor the modern award apply, the attachments A and/or B shall apply.

Other than as for provided above, all awards and previous agreements are expressly excluded from this agreement.”

[8] The language of clause 3 is not the best. There is poorness in the drafting, but it's obvious that the clauses from the Metal, Engineering and Associated Industries Award Part 1 1998 (the 1988 Metal Industry Award), as set out in attachment A to the agreement are incorporated into the agreement. The agreement also contains Appendix A, Local Issues, Spotswood and relatively, Appendix A provides as follows:

“8. Mould shop

8.1. O-I will, during 2006, restructure the mould shop.

8.2. The parties will continue to discuss improving efficiency of the mould shop. These discussions will include such issues as the work structure, work roster and work flow.

8.3. Employees are classified according to competencies held and will work through the full range of their competencies.

8.4. The parties note that there are two trades assistants who wish to continue their employment. When new technology is introduced into the mould shop, the two trades assistants will have the option to take redundancy or be trained to a higher skilled classification.”

[9] The very presence of clause 8.1 suggests both sloppy drafting and a failure to have a clause which reflected the position as at the time the Agreement was made in 2010. It's obvious that you can't have a prospective action that has a retrospective date. There is a sense in which it may be that clause 8 is a carryover from a previous agreement. I don't need to explore that issue. The critical issue from my perspective is clause 8.3, "Employees are classified according to competencies held and will work through the full range of their competencies." The procedure for classifying employees is set out in clause 5.1.3 of attachment A to the Agreement. Attachment A being the extracts from the 1998 Metal Industry Award. Clause 5.1.3(a) reads as follows:

“The procedures for reclassifying employees under this agreement are set out in the National Metal and Engineering Competency Standards Implementation Guide, distributed by the Manufacturing Industry Skills Council.”

[10] There is, therefore, very clearly a process for classifying employees properly. The implementation guidelines referred to in 5.1.3(a) of Attachment A to the agreement, are not themselves incorporated into the Agreement. However, they are before the Commission through the written submissions of the respondent. The written submissions of O-I Melbourne dated 21 February 2013 at paragraph 16 read, "It is also inconsistent with the Competency Standards Implementation Guide, National Metal and Engineering Industry Competency Standard, Attachment 4".

[11] Attachment 4 is the same document as is referred to in clause 5.1.3(a) of attachment A to the Agreement.

[12] I now turn to the National Metal and Engineering Industry Competency Standards Implementation Guide, dated November 1999 (the Implementation Guide) which is Appendix A hereto.

[13] Relevantly, table 1 and table 2 in the Implementation Guide (pages 15 and 16 of the Implementation Guide) set out the structure for movement between the various award classifications based upon the acquisition of competencies. Table 1 and table 2 replicate each other but only with a slightly different emphasis; table 2, having regard to award classifications and qualifications, whereas table 1 uses the classification level and the number of competencies that apply at each level.

[14] Making sense of table 1 and table 2 is done through the explanatory material that comprises the Implementation Guide. At page 22 of the Implementation Guide, the following is written, and it's in relation to dealing with what are called specialisation units:

“You must have at least the minimum number of weighting points specified in tables 1 and 2 from the specialisation band B, units for C7, C6 and C5, but you can have more. The rest of the units are made up of core units and units from specialisation band A.

For example,

to achieve C7 an employee must have at least 12 points from band B and/or core band 2 units

then to achieve C6, they must have a total of at least 24 points from band B and/or core band 2 units

then to achieve C5 they must have a total of at least 36 points from band B and/or core band 2 units.

However, these band B units can be acquired at any stage from C10, that is from C10 to C9, or C9 to C8, or C8 to C7, or C7 to C6, or C6 to C5.”

[15] How that works in practice is further described at page 46 of the Implementation Guide, under a discussion on additional competencies. Relevantly, it reads:

“Additional competencies are any competencies held and used by the employee which are additional to the base competencies. They may count towards classification at a higher level. The competency units in this additional competencies category could, for example, be skills that are now required as a result of technological change or changes within the workplace.

By agreement between the parties in your enterprise, decide on which competency units in each relevant job or skilled area list are base competencies and which are additional competencies.

It does not matter which you do first. Once you have identified one category, the rest of the competency unit falls automatically into the other. Clearly, you need to do this exercise separately for each qualification and its associated classification level.

After identifying from within the additional competencies category the units held by each individual:

● add up the weighting points total for each employee,

● identify the core band units,

● identify the specialisation band units.

Compare this result with the charts and totals 1 and 2 on pages 15 and 16, which tell you how many additional points of what type are required to move from the base classification (associated with the qualification) to a higher level. The outcome will be one of the following -

● The results meet the requirements for a higher classification, in this case the employee is reclassified". I end the quote there.

[16] Classification is based upon both core and specialised units. At page 17 of the Implementation Guide (it comprises table 3) are listed the core and foundation competencies. Without going through all of that, it clearly identifies what a core competency unit band 1 is and identifies that, at the C10 level, which is the base trades level, what the core competency units are. It then identifies core competency units band 2, and these are competency units, and it says, "A total of 16 points to be gained by C5". It lists the core competency units there.

[17] The way in which the competency units are listed in table 3, the numbers attached to them, seem to be reference numbers only for the purposes of the setting out of the table, and they don't correspond to the competency unit numbers that are found on the web site for identifying more competencies that make up the relevant qualifications in this area. For example, Write Reports is identified as 2.10C5. It has a unit number of MEM16010A. But it doesn't mean that each of the competency units at band 2 and each of them at band 1 cannot be aligned with an MEM number which would relate to the actual competency unit as identified in the training packages.

[18] It is apparent that no employee can get to C5 without all of the 16 band 2 core competencies. That point is also made here in table 1. At the bottom of table 1, there is a note:

“At classification of levels C9 to C6, Core band 2 units may be included, but the full 16 points from Core band 2 units must be included in the total number of points in order to be recognised at C5.”

[19] What I have just dealt with is a summary of the Implementation Guide. Now, I turn to what is the actual position.

[20] Attachment 2 to the written submissions of the respondent, dated 21 February 2013, contains a report by Educational Living Pty Ltd which identifies the competencies of the persons who constitute the mould shop employees. A number of observations need to be made in relation to the material produced by Educational Living Pty Ltd, and which has been provided to the Commission by the respondent. At the second page of the report, there is an adding up of all of the relevant points. The total trade points which have been identified as being held by the mould shop employees is 57.

[21] But one of the issues which I'm mindful of is whether or not that is necessarily an accurate number. I note that on page 6 of the report, at paragraph 3 towards the bottom under the heading Additional Competency Identified, the reporter identifies that there is an additional competency which is MEM07003B Perform Machine Settings (Routine), which has a four-point weighting. It would appear that that is an additional competency which has to be added to the 57 points. I also note that at point 2 on page 6 of the report, the following is written:

“2. The job change task is conducted in the team environment with other key glass manufacturing personnel to routine/set procedures including:

2.1 Allocated job changeover components depending on the specifications of the next production run.

2.2 Specific job changeover procedures, processes and sequences of disassembly and assembly.

2.3 Job change tasks are required to be completed within a specific time frame to minimise wastage of glass.”

[22] What appears to be apparent from that observation from the reporter is that there is a requirement for the mould shop employees when engaged in the job change task to work in a team environment. This suggests that there is the possibility of one or more additional competencies being applied. MEM16005A is a competency titled Operate as a Team to Conduct Manufacturing, Engineering or Related Activities, and it has two points. There's also, at core band 2, which is table 3 of the Competency Standards Implementation Guide, a competency which is titled, on page 17 of the Implementation Guide, Operate in an Autonomous Team Environment. I can't identify any unit of competency in the list of competencies with that exact title. However, unit of competency MEM16013A is Operate in a Self-Directed Team. That would suggest that "autonomous team environment" has simply been changed to "self-directed team". I don't have a concluded view on that but it's possible that it's also a relevant competency that might or might not be held by the employees.

[23] The third observation I make in relation to this report is the total actual competencies must, in order to be accurate, include the four points of MEM07003B, which means that the total trade points identified on page 3 of the report would not be 57, but would be 61.

[24] The fourth observation I made is that it's likely that the real table is either 63 or 65 if one or both of the teamwork competencies is included.

[25] The fifth observation I make is that the report makes a comment, and it does so twice, at the bottom of page 4 where it identifies the sum total of 43 post-trade competency points, it has the following wording, "Post-trade elective units group B (Maximum 24 points can be used to articulate to C8)".

[26] On page 5, after having identified the additional competency of MEM07003B, the reporter notes at 3.2:

"3.2 Note that the inclusion of this competency and associated four-point weighting will not affect the industrial award classification of personnel at C7. This is due to this competency being listed in the group B listing of competencies.

3.2.1.1 A maximum value of group B elective competencies to articulate to C8 is 24 points. Current post-trade listing of group B competencies total 43 points. “

[27] I test the statement of the reporter against the actual provisions of the Implementation Guide, which have been effectively imposed upon the employer by virtue of clause 5.1.3(a) of attachment A to the Agreement. The structure identified in the implementation guide at table 1 is that:

An employee at C7 is a C10 classification plus 36 band A, band B points, with no more than 24 band A points. A C6 is a C10 plus 48 band A or band B points, with no more than 24 band A points. A C5 is a C10 plus 44 band A, band B points with no more than 24 band A points and 16 core band 2 points.

[28] That structure is reflected when one looks at the way in which table 1 and table 2 deal with the same issue. Table 1 sets out that at C7 it's 36 A and B, maximum of 24 band A. C6, 48 band A, B, with a maximum of 24 band A. But at C5 it says 44 band A and B with a maximum of 24 band A. In table 1, it appears that the number declines as you get higher up the chain. However, when one looks at table 2, they identify at C7 AQF3 plus 36, at C5 AQF plus 60. The difference is in the way in which it's set out is that to get to C5 using the set out on table 1, an employee must have 16 core band 2 units plus 44 band A, band B units; which gives a total of 60 points.

[29] I've had regard to the details of the competency units identified in the report of Educational Living and I've compared those with the core competency band 2, which are identified at page 17 of the Implementation Guide.

[30] What is very clear is that the mould shop employees do not have the 16 core band 2 competencies, which are necessary to get to C5. Therefore, the classification of C5 is not possible. However, if I apply the competencies held to the implementation guide, then the mould shop employees have a minimum of 61 points after their C10 classification, and only 14 are in band A and 47 are in band B. Whilst the report from Educational Living Pty Ltd identifies only 43 band B, I'm also adding the additional competency which has been identified in that report, which is MEM07003B, which has a four-point weighting.

[31] So at the very minimum, the mould shop employees have 61 points. Having regard to table 1 at page 15 of the Implementation Guide, the requirements for C6 classification appear to have been met. The employees are C10 and they have 48 band A, band B, with a maximum 24 band A. In fact, in the case of these employees there are only 14 band A and there are 47 band B. They exceed the requirements of C6 by a considerable margin and whilst they have a total point score which suggests C5, they lack the core band 2 units which would entitle the C5 classification. I therefore come to the conclusion that Education Living's report is based upon a wrong premise.

[32] I accept the report's accuracy in terms of identifying the units of competency but the conclusion that the employees are correctly classified at C7, and that giving them the extra four-point weighting will not affect the industrial award classification of personnel at C7 is clearly wrong. The conclusion therefore in this matter is that at least from the date upon which Educational Living Pty Ltd assessed the competencies of the mould shop employees, those employees have been entitled to C6 classification. Whether or not they had an entitlement any earlier than that date I'm not prepared to consider. But having regard to the identification of each of the competency units in that report and having regard to the way in which the competency standards implementation guide applies by virtue of the operation of the terms of this agreement.

[33] The only conclusion that can be drawn is that the relevant employees are C6 employees and are required to be classified at that level. The issue of classification is not discretionary, given the specific language of clause 8.3 of appendix A to the agreement, which says, "Employees are classified according to competencies held and will work through the full range of their competencies." Once the competencies are held, 8.3 makes it mandatory that they must be classified according to the proper application of the implementation guidelines.

[34] There are two other matters which I will comment on. The first goes to the way in which the agreement was explained to employees and it gives rise to an issue as follows.

[35] The evidence from Mr van Herwynen was that management had said to the mould shop employees that if they refused to do the job change, they would be subject to disciplinary action. It raises the issue as to whether or not the employees had an obligation to do the job change work in accordance with the terms of the enterprise agreement. This raises an issue which I don't wish to go into too far because it's not necessary, in my view, to make a final decision on it, but I make an observation. It is very clear from the evidence of Mr Payne that no presentation was given to the mould shop employees which was particular to the mould shop employees when the agreement was being made.

[36] The concern that I have is that where an employer, in proposing an enterprise agreement, segments the groups of employees and gives them limited information in relation to the contents of the agreement and the effect of the terms of the agreement. It raises the issue, have the employees been given sufficient information that they can properly and validly approve the making of the agreement. I don't need to explore this in any depth. I think the issue will, in this matter, resolve itself through the making of a new agreement. But one thing has become apparent during this matter and that is the constant contention by the applicant that mould shop employees were not required to do the work notwithstanding what is unambiguously clear language in the terms of the agreement that mould shop employees were to do job change work.

[37] The difficulty, however, arises because whilst the initial requirement to do changeover work was in a predecessor agreement to the 2010 agreement, it was not implemented prior to the 2010 agreement being made. The clause was in the agreement but with employees saying that they were not required to do it. The mere presence of wording in an agreement does not necessarily mean that employees understand or have approved an agreement with the full knowledge that words will or will not be used. For example, the very language that I've drawn to in this agreement which refers to a prospective action which will happen at a retrospective date, "The company will, in 2006 change the mould shop." In 2010, it either has happened or it is ongoing, but it can't start retrospectively. There is looseness in language within the Agreement which can cause problems and, had employees refused to undertake the job change work, it would give rise to questions as to whether or not the employer had a legitimate entitlement to do so.

[38] I raise the issue in the context of this decision because the written submission of O-I make it very clear that there is a new agreement which is about to be put to employees, which contains wording which deals with the job change issue and where the parties have not altered the existing position. It needs to be made clear to the employees if they approve a new agreement which is put to a vote after this decision, then it must be accepted that the AMWU, as one of the bargaining representatives for those employees and any other employee who reads this decision, should be left in no doubt that whatever words are in the agreement they are approving.

[39] I would caution the employer to make every effort to ensure that explanations are given to employees about the sum total of the agreement even if clauses appear not to relate directly to a particular employee. This is because, in the context of the collective agreement, employees are voting collectively on the terms and conditions of each other - not voting only to accrue their own terms and conditions of employment. This issue arises more commonly in applications for scope orders where the argument is the tyranny of the majority over the vested interests of a minority. In the context of enterprise bargaining, the same principle applies. Every employee should know and be advised of the terms and the effect of the terms of all parts of the agreement, even if some parts would relate to only small groups of employees. This then ensures that every employee has the ability to have an informed vote when they approve or decide not to approve the terms of an agreement.

[40] The next and final issue I would deal with, which is part of this matter, is that I note from the evidence of Mr van Herwynen that the ambient temperature whilst performing the job change work can be up to 80 degrees centigrade. Nothing was put to me that challenged that, although nothing was put to me that would support that that's an accurate assessment of the temperature. It appears that that was the perception or the broad understanding of Mr van Herwynen. What it does do though is raise very clearly the potential for the application of clause 5.9.3(d) of attachment A to the Agreement. Clause 5.9.3(d) is Hot Places and it is the allowance for work in hot places.

[41] To the extent that where temperature is raised by artificial means to between 46 and 54 degrees celsius, there's an allowance, and if it's in excess of 54 degrees Celsius there's an additional allowance. There's a process, in any event, within that clause both to test the temperature and to provide for consultation with the employees. I simply do no more than bring that to the attention of the parties and I leave it there.

[42] The matter therefore is determined on the basis that the proper classification as required by the terms of the agreement for the mould shop employees is C6. I do not intend to deal with the particular remedy sought by the applicant, which is an allowance.

[43] In my considered view, if the employees are classified properly, then consistent with the language of the Agreement, no allowance would be justified or payable. I note that in this matter the allowance that has been paid by the employer was from the employees' perspective an ex gratia payment based upon a disparity between the C7 classification and the G5 classification. To the extent that a C6 classification provides for a higher rate of pay than a G5 classification, then it would be appropriate and I would decide that the employer should offset any payment that might arise from applying the C6 classification from at least the date of the report to offset the allowance against any requirement to pay for C6.

[44] Employees should not be in the position of being able to double dip by retaining the allowance and having the benefit of a decision that they also get a higher base rate based upon the C6 classification. If any orders need to flow from this decision, I'll hear from the parties separately but I suspect that the decision can stand and operate on its own terms.

COMMISSIONER

Appearances:

J. Maloney for the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU)

S. Zeitz for O-I Melbourne

Hearing details:

2012.

Melbourne:

February 28

March 25

Final written submissions:

Applicant by 3 April 2013

Respondent by 10 April 2013

APPENDIX A

 1   Applicant’s final written submissions, filed 16 April 2013, at paragraph 7

 2   Further Submissions of the Respondent at paragraph 9

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