“Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers' Union (AMWU) v Rheem Australia Pty Ltd
[2018] FWC 4624
•8 AUGUST 2018
| [2018] FWC 4624 |
| 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
Rheem Australia Pty Ltd
(C2018/311)
"Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU)
v
Rheem Australia Pty Ltd
(C2018/325)
| COMMISSIONER MCKENNA | SYDNEY, 8 AUGUST 2018 |
Alleged disputes about any matters arising under the enterprise agreement and the NES;[s186(6)].
The “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWW) (“the union”) has lodged applications, pursuant to s.739 of the Fair Work Act 2009 (“the Act”), to deal with disputes concerning two of its members who are employees of Rheem Australia Pty Ltd T/A Rheem (“the company”). Those employees are Steven Micallef and Ton Ngoc. The core of each dispute is the question of redundancy, and related issues.
The disputes procedure is set out in clause 22 of the Rheem Rydalmere Manufacturing Enterprise Agreement 2016 (“the Agreement”). It reads as follows:
“22 Avoidance of Industrial Disputes
The parties to this Agreement shall, in order to avoid industrial disputes, strictly observe the Disputes Avoidance Procedure as set out below.
The objectives of this procedure shall be to promote the resolution of disputes by measures based on consultation, co-operation and discussion; to eliminate industrial confrontation and to avoid interruption to the performance of work and consequential loss of production and wages.
i. The following is the intended procedure to settle any individual or collective employee(s) dispute in relation to a matter arising under the terms of this Agreement, the National Employment Standards and any matter pertaining to the employer/employee relationship:
·discussions between the employee(s) concerned and at his/her request the appropriate union delegate or employee of their choice, and the immediate supervisor;
·discussions involving the employee(s), the delegate(s) or employee of their choice and senior site management;
·discussions involving the employee(s), the delegates(s) or employee of their choice and union organiser with senior site management;
·there shall be an opportunity for any party to raise the issue to a higher stage.
ii. There shall be a commitment by the parties to follow this procedure. This should be facilitated by the earliest possible advice by one party to the other of any issue or problem, which may give rise to a grievance or dispute.
iii. Throughout all stages of the procedure all relevant facts shall be clearly identified and recorded.
iv. Sensible time limits shall be allowed for the completion of the various stages of the discussion, preferably within 48 hours and settled within seven (7) working days.
v. Emphasis shall be placed on a negotiated settlement. However, if the negotiation process is exhausted without the dispute being resolved, the parties shall jointly or individually refer the matter to FWA for assistance in resolving the dispute through conciliation and arbitration.
Up to fourteen (14) days shall be allowed for all stages up to and including Stage (iv) (v) to be finalised.
If conciliation fails to resolve the dispute, FWA is empowered to arbitrate on the matter provided that the arbitration is limited to the interpretation, application or process of implementation of a term or terms of this Agreement, and the NES.
vi. In order to allow for the peaceful resolution of grievances during the operation of this procedure, work will proceed in accordance with safe working practices, this EBA and the contract of employment and the pre-dispute situation.”
The parties agree the Commission is empowered to deal with the disputes. In each case, the dispute concerns the proposed “repositioning” of the employees. The background was described in the following way in the initiating process to each application. While Mr Ngoc’s application (C2018/311) was the first-numbered matter, Mr Micallef gave evidence first in the hearing in relation to his application (C2018/325) and so I deal with matters in the following order.
Mr Micallef
“1. The dispute relates to the proposed “repositioning” of AMWU member, Mr Steven Micallef from his position of Cleaner to a Production role.
2. Mr Micallef has been employed by the Respondent as a Cleaner since August 1986.
3. On 27 November 2017, Rheem issued a notice to employees … This notice suggested that the Respondent intended to restructure its operations.
4. On 11 December 2017, the Respondent provided Mr Micallef with a notice advising that he was to be “repositioned” into a Production role on the Cylinder Day Shift as of 16 January 2018 …
5. The respondent proposes that the work performed by Mr Micallef as a cleaner be performed by external contractors.
6. The AMWU contends that it follows from the above that it no longer requires Mr M’s job to be performed by anyone.
7. The AMWU contends that Mr M’s job is redundant and that the process set out in Appendix B [of the Agreement] is applicable.
8. The AMWU contends that Rheem has not complied with its obligations to consult with employees pursuant to cl 10 of the Agreement.
9. Rheem contends that no redundancy has occurred.”
Mr Ngoc
“1. The dispute relates to the proposed “repositioning” of AMWU member, Mr Ton Ngoc from his position of Quality Auditor to a Production role.
2. Mr Ngoc has been employed by the Respondent as a Quality Auditor for 14 years.
3. On 27 November 2017, Rheem issued a notice to employees … This notice suggested that the Respondent intended to restructure its operations.
4. On 11 December 2017, the Respondent provided Mr Ngoc with a notice advising that he was to be “repositioned” into a Production role on the Cylinder Day Shift as of 16 January 2018 …
5. In his role as a Quality Auditor, Mr Ngoc has developed a range of skills and obtained a number of qualifications. There is a real risk of Mr Ngoc being deskilled, if he is “repositioned” to the new production role.
6. In addition, the proposed change would result in Mr Ngoc losing the benefit of an afternoon shift allowance.
7. [Not pressed]
8. The AMWU contends that the Respondent no longer requires Mr Ngoc’s job to be performed by anyone.
9. The AMWU contends that Mr Ngoc’s job is redundant and that the process set out in Appendix B [of the Agreement] is applicable.
10. The AMWU contends that Rheem has not complied with its obligations to consult with employees pursuant to cl 10 of the Agreement.
11. Rheem contends that no redundancy has occurred.”
The company proposes to direct Mr Micallef and Mr Ngoc to work in production on the Cylinder Day Shift. This is in circumstances where Mr Micallef has previously worked as a cleaner and Mr Ngoc has previously worked as a quality auditor. As to that, the union submitted that the Commission should answer the following two questions (with my paraphrasing), and in the affirmative, in order to resolve the dispute:
(a) Is the company obliged to apply the provisions of Appendix B of the Agreement in relation to the changes to Mr Micallef’s role proposed in the notices of 27 November 2017 and 11 December 2017?
(b) Is the company obliged to apply the provisions of Appendix B of the Agreement in relation to the changes to Mr Ngoc’s role proposed in the notices of 27 November 2017 and 11 December 2017?
The union submitted, supported by a detailed exposition of the evidence in the case and authorities concerning redundancy, that if its contentions in respect of Mr Micallef and Mr Ngoc are accepted by the Commission, then the company is obliged to commence the processes set out in Appendix B of the Agreement.
The company, which also put on detailed materials in support of its case, contended that in essence this is a very simple case about whether the company can relocate Mr Micallef and Mr Ngoc within their skills, competence and abilities at the Rydalmere site. As to that, the company’s primary submission was that it has the right pursuant to clause 31.1 Manufacturing and Associated Industries and Occupations Award 2010 (“the Award”) as incorporated in the Agreement, to direct the employees to perform duties which are within their skills competencies and training, consistent with classification structure, provided that such direction does not create deskilling. Against that background, the company submitted that, in lieu of the questions propounded by the union, the Commission should answer the following two questions (again with my paraphrasing) in order to resolve the dispute:
(a) Is the proposed relocation of the employees to perform duties in the Cylinder Plant department within the terms of the Agreement?
(b) If the answer to the first question is no, does the proposed relocation constitute redundancy within the terms of the Agreement?
The company contended the “explicit” right in such respects is not limited by any term of the Agreement and, indeed, such right is supported by the context of the Agreement. The company also made secondary contentions in the event that primary contention was not accepted. Relevantly, the secondary contentions pointed to the fact that if the Commission accepts the submissions of the union that the employees’ jobs are redundant there are two outcomes under the terms of Appendix B of the Agreement - either redeployment within the employees’ skills or capabilities, or retrenchment. In this regard, Appendix B places certain positive obligations on the company to do everything in its power to avoid retrenchment by finding work for affected employees.
Appendix B comprises four Parts. One of those four Parts (Part B) gives a sense of the types of arrangements that are then engaged (which in the Part as to production employees employed before 1 October 1997) at the company’s Rydalmere site:
“The company has no intention of having a redundancy at the Rydalmere Water Heater Plant in the foreseeable future and is intent on providing continuing employment. As part of this, it is currently in the process of making a large capital investment at Rydalmere to increase the output and efficiency of the plant.
However, if for some reason a redundancy cannot be avoided in the future, the following would apply.
1. (a) The Company has the sole prerogative to initiate a redundancy. The Company will notify the relevant Unions and meet to discuss the proposed redundancy. The Company would propose a redundancy by announcing the number of redundant positions by shift and call for volunteers from the pre-October 1st 1997 group of employees.
(b) Employees within the nominated shift with the greatest total service within Water Heater production shall be given first opportunity to take voluntary redundancy.
(c) If there are insufficient volunteers from the pre-October 1997 employee group, we shall continue via the post-October 1997 employee group agreed procedure.
(d) If there are still insufficient employees to fulfil the redundancy requirement then we shall revert back to the. pre-October 1997 group list and choose involuntary redundancies on a last on-first off basis.
A transfer of shift does not alter the position of the employee in respect to gate seniority.
2. Should an employee volunteer who has special skills which need to be retained, the employee would be retained for a sufficient agreed period to enable another employee to be trained in those special skills.
3. The company will consult with the Consultative Committee before any final redundancies are decided.
4. The Company will discuss any issues or concerns with the Consultative Committee before the redundancy list is finalised. If there is any disagreement the parties will genuinely try to resolve the problem by discussion.”
Appendix B of the Agreement specifies the retrenchment and redundancy conditions applicable at the Rydalmere site. The preamble in Part A (which is apposite to all other Parts of Appendix, as set out in Parts B, C and D) of that Appendix reads as follows:
“This agreement is designed to provide security for employees genuinely made redundant. The company will do everything in its power to avoid retrenchments by finding work, within their skills and capabilities, for any employees who may be affected by changes to work or methods. However, in the event that retrenchment is unavoidable the following conditions will apply:”
In the event of that “retrenchment is unavoidable”, the Agreement then sets out atypically high severance payment entitlements and other entitlements. Shortly stated, Part A of Appendix B deals with entitlements for employees who are retrenched in terms including the following:
· severance pay of three week’s pay per year of service, capped at 75 weeks for employees who commenced employment after July 2013 and uncapped for employees who started with the company before that date;
· notice additional to award/NES minima;
· payment of accrued but untaken sick leave.
Consideration
It is, with respect, difficult on some levels to understand why the union has advanced the case it has concerning these related disputes, but it may be the case that the employees would prefer to have a retrenchment package than ongoing employment particularly given their disquiet, indeed, upset about the “repositioning”. It is, of course, more typically the case that unions make attempts to preserve the employment of their members than to contend for their redundancy and/or retrenchment. In saying this, I fully accept the personal concerns and sentiments expressed by Mr Micallef and Mr Ngoc about the altered proposed roles and I also note that the retrenchment package arrangements provided in the Agreement are substantially more beneficial than usual arrangements. The union referred to the classical approaches to the meaning of redundancies, and those authorities are settled and uncontroversial. The company’s submissions, which I accepted on this point, also noted there is reluctance by the Commission to find that employment should be terminated for reasons of redundancy, where there are redeployment options available; the company referred to a number of authorities in such respects. Although not referred to by the parties, see also, for example, the discussion in Technical and Further Education Commission T/A TAFE NSW v L. Pykett [2014] FWCFB 714 (per Ross J, Booth DP and Bissett C) particularly the discussion in the decision around [36] as to “whether there was a job or a position or other work within the employer’s enterprise (or that of an associated entity) to which it would have been reasonable in all the circumstances to redeploy the dismissed employer.”
In the case of Mr Micallef, he has been a very long-standing employee (more than three decades) and has been a cleaner throughout that time. His duties have, however, included using forklifts in that role; and the role in which the company wishes to utilise him in his employment also includes using forklifts. Mr Micallef does not want to undertake the altered-duties role and, I at least infer, he would personally prefer to have a severance package.
In the case of Mr Ngoc, he too also has been an employee of the company for many years. Having listened to his evidence, I can appreciate why he would view the altered-duties role as not having quite the same engagement of all the skills he has developed over the years, but the work he would be called upon to perform does overlap with work he had performed. Mr Ngoc does not want to undertake the altered-duties role and, I again at least infer, he would also personally prefer to have a severance package.
The questions put by the union for determination by the Commission appear to be designed to corral, in effect, a finding of redundancy in relation to Mr Micallef and Mr Ngoc. The matrix of interlocking provisions in the Agreement and the incorporated provisions of the Award, however, create different nuances.
If, for example, I were to conclude in the affirmative concerning the questions postulated by the union as resolving the dispute, those conclusions would not, as the company correctly pointed out, resolve the dispute. Part of the submissions for the company also correctly noted that the parties are even “in disagreement about the issues in dispute.” I accept that the essence of the dispute would remain, because of the operation of Appendix B of the Agreement coupled with the disagreement about the types of duties.
Relevantly, the company has the sole prerogative to initiate a redundancy under the Agreement, and certain volunteer and seniority-type arrangements would be engaged in redundancy-type situations. The Agreement is specifically expressed to provide security for employees genuinely made redundant. It is relevant to note that before any retrenchments can be effected, the company is obligated - “will do” - everything in its power to avoid retrenchments by finding work, within the employees’ skills and capabilities, for any employees who may be affected by changes to work or methods. So approached, the dispute would, if disposed of with the affirmative answers sought by the union, effectively be back to “square one”.
That is, it is the company’s contention that clause 31 of the Award applies.
“Employer and employee duties
31.1 An employer may direct an employee to carry out such duties as are within the limits of the employee’s skills, competence and training consistent with the classification structure of this award provided that such duties are not designed to promote de-skilling.
31.2 An employer may direct an employee to carry out such duties and use such tools and equipment as may be required provided that the employee has been properly trained in the use of such tools and equipment.
31.3 Any direction issued by an employer under clause 31-Employer and employee duties must be consistent with the employer’s responsibilities to provide a safe and healthy working environment.”
By operation of the Award’s incorporated clause 31 in the Agreement, the company “may” (in the exercise, for example, of reasonable managerial discretion or prerogative) direct Mr Micallef and Mr Ngoc to carry out such duties as are within the limits of their skills, competence and training - and, I note, those duties have not been “designed” by the company “to promote” deskilling in relation to Mr Micallef or Mr Ngoc (albeit Mr Ngoc, particularly, is concerned that deskilling or underutilisation of his existing skills-base will be one effective outcome).
In my saying that the dispute would be back to square one, the union’s contentions include that the preceding incorporated Award clause is not or has not been properly engaged in the case of Mr Micallef and Mr Ngoc. The union made fully-developed submissions about redundancies. If the union is correct in such respects and the redundancy/retrenchment provisions in the Agreement arise for engagement, then there is a type of paradoxical outcome. That is, at least so far as the union’s submissions with respect to redundancy are concerned, it is tolerably clear that the company would, as a next step, have no exercise of discretion in the matter as to finding work within the employees’ skills and capabilities. That is because the company would be obligated by the relevant provisions of the Agreement, which are, I note, “designed to provide security for employees genuinely made redundant” to “do everything in its power to avoid retrenchments by finding work, within their skills and capabilities, for any employees who may be affected by changes to work or methods.” In consequence, the Agreement would require the company to take the disputed steps already proposed to be taken in relation to Mr Micallef and Mr Ngoc in the event of redundancy and/or proposed retrenchment.
If the questions posed by the union as to the redundancy questions concerning Mr Micallef and Mr Ngoc were answered affirmatively, and so as to avoid retrenchments, the company inescapably would have to do everything in its power by finding work within the skills and capabilities of Mr Micallef and Mr Ngoc being employees relevantly affected by changes to work or methods.
I separately note the company’s submission should the Commission find that the proposed relocations enliven Appendix B of the Agreement, the detailed processes for selection set out in Parts B, C and D must be followed; and it is conceivable that the two employees would not be selected under the terms of those Parts of the Agreement.
I consider that the questions propounded by the union, being questions the union submits will resolve the dispute, will not in fact resolve the dispute. Any determination by me in such respects would thereby lack utility in resolving the dispute given the issues in dispute concerning the (however described) repositioning or redeployment that would then remain if the retrenchment arrangements were, in consequence, to arise. I reiterate there is a lack of utility in purporting to determine the questions posed. But as to collapsing the questions posed for relevant answers, I am of the view that the company may direct the employees to perform duties which are within their skills, competencies and training, and the operation of cl.11 (Continuous improvement) and cl.20 (Training and Development) may tend also to buttress that conclusion. Moreover, even if the circumstances constituted redundancies, as the union contended, the company would then be obliged - to similar practical outcome and effect - to do everything in its power to avoid retrenchments by finding work within the employees’ skills and capabilities. As was discussed in the proceeding, albeit it was perhaps an imperfect example considering the circumstances of this and the different circumstance of applications for an unfair dismissal remedy, s.385 of the Act provides that a person has been unfairly dismissed if the Commission is satisfied that the dismissal was not a case of genuine redundancy. Moreover, s.389 of the Act provides the following meaning of genuine redundancy:
“389 Meaning of genuine redundancy
(1) A person’s dismissal was a case of genuine redundancy if:
(a) the person’s employer no longer required the person’s job to be performed by anyone because of changes in the operational requirements of the employer’s enterprise; and
(b) the employer has complied with any obligation in a modern award or enterprise agreement that applied to the employment to consult about the redundancy.
(2) A person’s dismissal was not a case of genuine redundancy if it would have been reasonable in all the circumstances for the person to be redeployed within:
(a) the employer’s enterprise; or
(b) the enterprise of an associated entity of the employer.”
I accept that the company does not have an unfettered right to reposition or redeploy employees “at large” for reasons of what it considers to be operational flexibility-type considerations, and the company should not think it can do so. Before concluding, I am also bound to note my criticism of the way the company dealt with the matter of effecting the proposed changes - at least initially. Mr Micallef and Mr Ngoc are employees who have been employed by the company for many years; they had these changes presented without, I am satisfied, proper process and discussion of the type that is reasonably expected and/or required for changes of this type. Unlike the approach of “fair and reasonable process” concerning changes to hours of work at the company’s same Rydalmere site which was commended by Cargill C in “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWW) v Rheem Australia Pty Ltd[2011] FWA 7602, in this case the company effectively just sent notices and letters unilaterally advising employees of their “repositioning”, despite consultation obligations in the Agreement and, indeed, with little or no semblance of good industrial relations practice. The evidence of Mr Ngoc was particularly illustrative in this respect. Had the company complied properly with its obligations in relation to such matters of introducing change, and given better consideration to hardship-related matters, including the effects of shift changes, it may be the case that some of the issues that have arisen in these proceedings would have been averted or at least minimised. In that regard, I note that the company’s final written submissions identified, among other matters, (slight) modifications to the duties the employees as a result of the proposed relocation – being matters which may have been fruitfully discussed before the communications were issued to the employees.
The union had proposed certain relief by way of orders. I doubt I would have powers to make orders in relation to a dispute under s.739 of the Act but, putting that to one side, I decline to make any determination having any similar effect to the proposed relief sought. The parties also made final written submissions matters about National Employment Standards-related issues, redundancy payments, applications under s.120 concerning suitable alternative employment and the like. In view of my conclusions, it is unnecessary for me to address those submissions in the decision.
The proceedings before the Commission are concluded.
COMMISSIONER
Appearances:
J van Bronswijk of The Australian Industry Group for Rheem Australia Pty Ltd T/A Rheem.
S Howe for the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU).
Hearing details:
2018.
Sydney:
May 23, 24.
Final written submissions:
6 July 2018.
Printed by authority of the Commonwealth Government Printer
<PR609745>
0
2
0