"Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU) v Transfield Services (Australia) Pty Ltd

[2015] FWC 55

[2015] FWC 55

FAIR WORK COMMISSION

DECISION

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

"Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU)

V

Transfield Services (Australia) Pty Ltd

(C2014/1673)

Building, metal and civil construction industries
COMMISSIONER RIORDAN	SYDNEY, 30 JANUARY 2015

s.739 Application to deal with a dispute

[1] This decision relates to a dispute lodged by the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (AMWU) on behalf of its member Mr Michael Dick-McGuigan, in accordance with section 739 of the Fair Work Act, 2009 (the Act) against Transfield Services (Australia) Pty Ltd (Transfield), in relation to the interpretation of a provision of the Transfield Services (Australia) Pty Ltd (Port Kembla Steelworks) Facilities Maintenance Enterprise Agreement 2012-2015 (the Agreement).

[2] The AMWU was represented by its Legal Officer, Ms Lucy Saunders. Transfield was represented by Michael Mead, who is the NSW Manager - Workplace Relations of the Australian Industry Group (AIG).

[3] The AMWU relied upon the witness statement and evidence of Mr Dick-McGuigan, who is employed as a level 5 Mechanical Worker (MW5) with Transfield. Mr Dick-McGuigan has been employed at the Port Kembla Steelworks for twenty six years, the last thirteen with Transfield. Transfield relied upon a witness statement and evidence of Mr Gary Masters who is the Operations Manager for Transfield at Bluescope Steel, who has worked at the Port Kembla Steelworks for more than forty years, and a witness statement and evidence of Mr Andrew Swanston, who is employed by Bluescope Steel (Australia) Pty Ltd (Bluescope) as a Maintenance Team Leader for Gas Processing in the Coke Making facility at Port Kembla. Mr Swanston has been employed by Bluescope for ten years.

[4] In 2001, Bluescope decided to form an Alliance Partnership with Transfield for the provision of a large proportion of its maintenance activities. This partnership resulted in a significant number of maintenance positions being transferred from the employment of Bluescope to Transfield and the negotiation of the Agreement’s predecessor industrial instrument, The Transfield Services (Australia) Pty Ltd (Port Kembla Steel Works) Maintenance Award 2001.

Background

[5] Mr Dick-McGuigan has worked all of his working life at the Port Kembla Steelworks. He was employed as an apprentice mechanical fitter in 1988 by BHP Steel (now Bluescope) and was employed as a mechanical fitter at the conclusion of his apprenticeship in 1992. In 2001, Mr Dick-McGuigan’s role was involved in the Alliance Partnership process. He accepted a voluntary redundancy from Bluescope and was then employed by Transfield. Mr Dick-McGuigan has continued to work at the Port Kembla Steelworks for Transfield performing maintenance functions. For three years, Mr Dick-McGuigan was part of a “flying crew” which enabled him to gain experience in nearly every department in the Steelworks.

[6] In 2013, Mr Dick-McGuigan transfered to the Bulk Berth or Shipping Department. On 9 July 2014, Bluescope advised Transfield that it was going to restructure its Bulk Berth Department which would result in the two Transfield maintenance employees no longer being required. On 18 July 2014, Mr Masters told Mr Dick-McGuigan that the Bulk Berth Department was being closed on 31 July 2014 and that his role was excess to requirements. Transfield began to investigate the possibility of either redeployment or a job swap for Mr Dick-McGuigan. Mr Masters approached Mr Peter McEwan to see if he was interested in accepting a voluntary redundancy by doing a job swap with Mr Dick-McGuigan. Mr McEwan is 64 years of age and is classified as a Mechanical Worker 4 (MW4) and works in the Gas Processing Plant. Mr McEwan lodged an application for Voluntary Redundancy. Mr McEwan’s personal and private circumstances provided a “win-win” situation for both Mr McEwan and Mr Dick-McGuigan.

[7] Mr Dick-McGuigan was given a three week trial in the Gas Processing Plant from 25 August 2014. Mr Dick-McGuigan understood that he needed to perform well and prove his worth to be appointed to the role. On 8 September 2014, just two weeks into the trial, Mr Masters advised Mr Dick-McGuigan that Bluescope had determined that the trial had been unsuccessful and that he would be made redundant on 12 September 2014.

[8] Up until the hearing, Mr Dick-McGuigan had been on a mixture of annual leave, long service leave and leave with pay. I have been advised that since the conclusion of the hearing Mr Dick-McGuigan has been appointed to a six month fixed term position.

Enterprise Agreement Provisions

[9] The following provisions of the Agreement 1 are relevant:

“3. APPLICATION AND PARTIES BOUND

3.1. This Enterprise Agreement shall apply to Transfield Services (Australia) Pty Limited, employees employed in the classifications set out in Appendix 1 of this Enterprise Agreement, who are performing electrical, instrumentation, plumbing, refrigeration, mechanical and/or other miscellaneous work associated with facilities maintenance work at BlueScope Steel Port Kembla Steelworks or the same or similar type work at other sites within the Illawarra Region for which the Company has a contract to perform.

3.2. The Parties to this Enterprise Agreement are:

Transfield Services (Australia) Pty Limited (ABN 11 093 114 553);
Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU);
Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (AMWU); and
Australian Workers’ Union (AWU)

6. OBJECTIVES OF THE ENTERPRISE AGREEMENT

The objectives of this Enterprise Agreement are to:

● Enable the Company to perform work in the areas covered by the Enterprise Agreement in a productive, efficient and orderly way;
● Provide appropriate remuneration and conditions of employment for employees working under the terms of the Enterprise Agreement; and
● Encourage employees to work in a productive, efficient, flexible and safe way in accordance with their full skill and competence to meet the requirements of the Company and its client.

(my emphasis)

9. CONTRACT OF EMPLOYMENT

9.8. Termination of Employment

9.8.1. Notice Period

Employees over 45 years of age at the time of the giving of the notice with not less than two (2) years' continuous service shall be entitled to an additional week's notice.
The notice of termination required to be given by an employee shall be the same as that required by the Company. By mutual agreement, the Parties may enter into an arrangement that suits either Party with a minimum notice period of not less than one (1) week.

In calculating any payment in lieu of notice, the wages an employee would have received in respect of the ordinary time the employee would have worked during the period of notice had employment not been terminated shall be used.

The period of notice in this Clause shall not apply in the case of termination of casual or fixed term employees.

Transfield Services has the right to dismiss an employee without notice for gross misconduct on the employee's part, which justifies summary dismissal.

In the event of summary dismissal, payment will be made up to the time of dismissal only. For example, theft of Company property, violence against an employee or employer, vandalism or destruction of Company property or other such matters warranting instant dismissal.

9.9. Redundancy Provisions

Redundancy means when a position is surplus to the needs of the business, and where there is no alternative employment for the person/s occupying that position/s. Employees who choose to terminate their employment are not eligible for redundancy and summary dismissal does not entitle employees to a redundancy payment.

24. EMPLOYMENT SECURITY

Security of employment is important for improving working relationships, trust and co-operating with change. We do not want an environment where everyone is working in fear of losing their employment.

We want an environment where people focus on doing jobs safely and well, implementing improvement actions, adapting swiftly to change and caring for the business. Real employment security will only be achieved by successful business performance. Working together in implementing change and improvement will maximise security for everyone.
It is not the Company’s intention to have any forced retrenchments during the life of this Enterprise Agreement.

While workplace change, new technologies and changes in operations will be ongoing, every opportunity will be taken to effect changes through voluntary means and natural attrition.
The Parties agree that any changes in the area of employment shall be handled in the following manner:

i. Employees shall be offered other available positions where possible;
ii. An employee’s skills shall be further developed to improve flexibility;
iii. Employee numbers shall be reduced if required by natural attrition;
iv. Voluntary Retirement Schemes shall be used in preference to forced redundancies.

(my emphasis)

If the above steps do not resolve the situation, the Company shall enter into further discussions with the relevant Parties to the Enterprise Agreement with a view of resolving the situation to the satisfaction of the Parties.

Provided further that this clause will not apply to situations of loss or substantial change to contract scope.

29. DISPUTE AVOIDANCE PROCEDURE (DAP)

The Parties to this Enterprise Agreement are committed to harmonious employee relations based on mutual trust, open communication and proactive consultation processes. Best endeavours will be used to resolve issues such as problems, questions, disputes, difficulties or concerns at all times and at the lowest possible level in the Company.

Any issue requiring resolution shall be dealt with in the following manner:

i. Where an employee(s) has an issue, which has not been resolved in the normal course of business, they shall raise it with their Team Leader and both shall use their best endeavours to resolve it as quickly as possible.
ii. Where an issue is directly relevant to a work area, it shall be discussed and every endeavour made to resolve it within the appropriate team.
iii. Should the issue not be resolved as above within a sensible, mutually agreed timeframe, it shall be referred to and discussed with the Company’s Operations Manager.
iv. If not resolved, any of the Parties may raise the issue with the Company’s Alliance Manager for resolution.
v. If still unresolved, and without limiting the employee’s freedom of choice, the matter may be referred to the relevant Union, who will discuss the matter with the Company.
vi. Before the issue is further escalated, the Company will ensure that its Management, and the Union will ensure that its local Union Official has been involved in the process.
vii. If still unresolved, the matter may be referred to Fair Work Australia under section 739 Dispute Notification, by either party, seeking resolution of the grievance via conciliation as a first step, or thereafter arbitration.

At all levels (i) to (v) inclusive of the above, the employee(s) may choose to have an accredited Employee Workplace Representative; or another employee in attendance.
While the above process is being pursued, work shall continue as normal (without bans and limitations).

The Parties to this Enterprise Agreement may raise an issue to a higher level in the process at any time.

Levels (i) to (v) shall be completed within seven (7) working days.

Appendix 1

MW4 – 105%

MW4 applies to skills acquired and utilised on the job.

i. Three appropriate modules in addition to the training requirements of MW3 level or;
ii. Three appropriate modules towards an Advanced Certificate; or
iii. Three appropriate modules towards an Associate Diploma; or
iv. Any training which a registered provider (e.g. TAFE) or by a State Training Authority has been recognised as equivalent to an accredited course, which the appropriate industry board recognises for this level. This can include advanced standing through recognition of prior learning and/or overseas qualifications; or
v. Will have skills equivalent to the above gained through work experience subject to competency testing to the prescribed standards.

The following indicative tasks apply to a Tradesperson at Level MW4:
Exercise the skills attained through completion of the training/work experience prescribed for this classification;

● Exercises discretion within the scope of this grade;
● Works under limited supervision either individually or in a team environment;
● Understands and implements quality control techniques;
● Provides trade guidance and assistance as part of a work team;

Exercise trade skills relevant to the specific requirements of the enterprise at a level higher than Engineering Construction Tradesperson Level 1.

MW5 – 110%

MW5 applies to skills acquired and utilised on the job.

i. Six appropriate modules in addition to the training requirements of MW3; or
ii. Six appropriate modules towards an Advanced Certificate; or
iii. Six appropriate modules towards and Associate Diploma; or
iv. Any training which a registered provider (e.g. TAFE) or by State Training Authority has been recognised as equivalent to an accredited course, which the appropriate industry training board recognises for this level. This can include advanced standing through recognition of prior learning and/or overseas qualifications; or
v. Will have skills equivalent to the above gained through work experience subject to competence testing to the prescribed standards.

The following indicative tasks apply to a Tradesperson at Level MW5:

● Exercise of skills attained through completion of the training/work experience prescribed for this classification;
● Provides trade guidance and assistance as part of a work team;
● Assists in the provision of training in conjunction with supervisors and trainers;
● Understands and implements quality control techniques;
● Works under limited supervision either individually or in a team environment;
● Interact with work groups to ensure job completion to target quality workmanship and guidance for others.
● Exercises precision trade skills using various materials and/or specialised techniques;
● Performs operations on a CAD/CAM terminal in the performance of routine modifications to the NC/CNC programs;
● Installs, repairs and maintains, tests, modifies, commissions and/or fault finds on complex machinery and equipment which utilises hydraulic and/or pneumatic principles and in the course of such work, is required to read and understand hydraulic and pneumatic circuitry which controls fluid power systems;
● Works on complex or intricate circuitry which involves examining, diagnosing and modifying systems comprising inter-connected circuits.”

(my emphasis)

Contentions

[10] The AMWU contended that:

(a) Clause 24 of the Agreement is clear and unambiguous. There is a requirement on Transfield to explore all available voluntary options before any employee will be forcefully made redundant;

(b) there is a robust job security clause which has been unchanged for thirteen years which prohibits forced redundancies for the life of the Agreement. The AMWU asserted that this provision is a binding obligation;

(c) the final sentence of Clause 24 “Provided further that this clause will not apply to situations of loss or substantial change to contract scope”, (which is acknowledged by the parties as a “carve out” clause) only applies if there is a LOSS of, or SUBSTANTIAL CHANGE to the Contract. The loss of just two positions does not enliven this provision;

(d) Bluescope, as the client of Transfield, is not a party to the Agreement and does not have the capacity to interfere in either the employment relationship between Transfield and its employees or the industrial relationship between the parties to the Agreement;

(e) it was the parties’ intention to use all voluntary means available - whether that be redundancy, job swap, transfer or retirement before utilizing the option of involuntary termination; and

(f) Mr Dick-McGuigan has been forced to exhaust all of his unused annual leave and long service leave during this process which, as a matter of fairness and in accordance with the status quo principle in the DAP, should now be re-credited back to Mr Dick-McGuigan.

[11] Transfield contended that:

(a) there were no vacancies or available positions in which to transfer Mr Dick-McGuigan;

(b) Clause 9.8 and 9.9 of the Agreement allows Transfield to terminate its employees;

(c) Clause 6 of the Agreement requires Transfield to take into account the views and interests of its clients;

(d) the Agreement only exists to service one client, ie, Bluescope, so it would be illogical and foolhardy not to take into account Bluescope’s view;

(e) Mr Dick-McGuigan did not fail his trial in the Gas Processing plant based on his competency but based on his lack of innovation and commitment;

(f) Mr Dick-McGuigan was genuinely redundant in accordance with section 392 of the Act;

(g) the intention not to have forced redundancies throughout the life of the Agreement does not create a legal obligation but merely creates an aspiration;

(h) the term “substantial” change should not be defined by numbers but by effect in so far as Transfield lost the contract to supply maintenance to the Bulk Berth Department of Bluescope;

(i) Transfield does not have a voluntary retirement scheme in place;

(j) Transfield is simply exercising its rights under the doctrine of managerial prerogative; and

(k) the Jurisdiction of the FWC is limited in dealing with this matter.

Legal Precedent

[12] The parties broadly agree as to the relevant precedents which apply to the interpretation of Agreements. In summary, words must be given their ordinary meaning whilst ensuring a pragmatic industrial outcome following the decisions in Codelfa 2, Kucks v CSR Limited3, Short v FW Hercus Pty Ltd4 and Amcor v CFMEU5.

[13] A recent Full Bench of the FWC (Ross J, Gostencnik DP and Johns C)
in Australasian Meat Industry Employees Union v Golden Cockerel Pty Ltd 6, provided further clarity to this endeavour:

1. The Acts Interpretation does not apply to the construction of an enterprise agreement made under the Act.

2. In construing an enterprise agreement it is first necessary to determine whether an agreement has a plain meaning or contains an ambiguity.

3. Regard may be had to evidence of surrounding circumstances to assist in determining whether an ambiguity exists.

4. If the agreement has a plain meaning, evidence of the surrounding circumstances will not be admitted to contradict the plain language of the agreement.

5. If the language of the agreement is ambiguous or susceptible to more than one meaning then evidence of the surrounding circumstance will be admissible to aide the interpretation of the agreement.

6. Admissible evidence of the surrounding circumstances is evidence of the objective framework of fact and will include:

(a) evidence of prior negotiations to the extent that the negotiations tend to establish objective background facts known to all parties and the subject matter of the agreement;
(b) notorious facts of which knowledge is to be presumed;
(c) evidence of matters in common contemplation and constituting a common assumption.

7. The resolution of a disputed construction of an agreement will turn on the language of the Agreement understood having regard to its context and purpose.

8. Context might appear from:

(a) the text of the agreement viewed as a whole;
(b) the disputed provision’s place and arrangement in the agreement;
(c) the legislative context under which the agreement was made and in which it operates.

9. Where the common intention of the parties is sought to be identified, regard is not to be had to the subjective intentions or expectations of the parties. A common intention is identified objectively, that is by reference to that which a reasonable person would understand by the language the parties have used to express their agreement.

10. The task of interpreting an agreement does not involve rewriting the agreement to achieve what might be regarded as a fair or just outcome. The task is always one of interpreting the agreement produced by parties.”

Consideration

[14] In reaching my decision, I have taken into account all of the evidence and submissions that have been made by the parties. I acknowledge the professional manner in which Ms Saunders and Mr Mead conducted themselves during the proceeding.

[15] On 18 July 2014, Transfield announced its intention to make two mechanical maintenance employees redundant following a decision by Bluescope to restructure its Bulk Berth Department. Mr Frank Saffiote accepted the severance package whilst Mr Dick-McGuigan indicated his desire to remain employed by Transfield.

[16] As per Transfield’s normal practice, Mr Masters began to investigate opportunities to allow Mr Dick-McGuigan to remain employed. Mr Masters was cross examined by Ms Saunders on this point:

“PN506“
So after you became aware that BlueScope were making some redundancies, you just did your normal practice?---Yes, I did.

PN507
And that was to look for voluntary opportunities?---I know most of the people that work for me and they have worked for me for a long, long time, so - - -
PN508
I’m not saying you had to look particularly hard, but the first step was seeing if you could do it on a voluntary basis. Is that right?---Yes.

PN509
And that includes job swaps?---If the opportunity arises, yes.

PN510
That’s quite a common way that redundancies are handled. Would you agree?
---When the opportunity arises, yes.

PN511
The opportunity arises pretty frequently when you have to make these changes?
---Not always.

PN512
But most of the time?---Yes. Certainly since I have been in the operational - - -

PN513
Forced redundancies are quite unusual. Is that right?---We try to avoid them.” 7

[17] There is a degree of conflict/confusion in the evidence in relation to who made suggestions about either voluntary redundancy or voluntary retirement. In my view, such a debate is of little relevance. The evidence shows that when Transfield is required to reduce the size of its workforce, it seeks to do so on a voluntary basis and that forced redundancies are avoided, if possible.

[18] Such an outcome is envisaged in the Employment Security provision of the Agreement. 8 There is some debate about the meaning or existence of the term “Voluntary Retirement Scheme” in clause 24(iv) of the Agreement. Mr Dick-McGuigan believes that this provision means that an employee who has been targeted for redundancy but wants to stay employed can “job swap” with another employee who has an on-going role but would like to take the severance package. Mr Masters claims that he has never heard the term before, even though it has been in the Agreement since its inception in 2001. I have taken this into account.

[19] Mr Mead claimed that the term relates to a rarely discussed or used taxation scheme and that Transfield is not party to such a scheme. I have trouble accepting Mr Mead’s argument. If it were true, then Transfield would place itself in a precarious position to possibly be in breach of the Agreement by not being party to such a scheme. The simple fact that the provision talks about redeployment and the opportunity to transfer to alternate positions, further development of skills, ie training, to improve flexibility, the use of national attrition to reduce numbers and the only mention of forced redundancy in the whole Agreement, indicates to me, that there has possibly been a drafting error in the document. The pragmatic and practical resolution to this issue is to define the term “Voluntary Retirement Scheme” to encapsulate the processes of voluntary redundancy associated with the practice of swapping jobs, where possible, based on the employees’ skill, competence and training. I have taken this into account.

[20] Mr Masters testified that there are approximately 250 Transfield employees working at the Port Kembla Steelworks. Bluescope’s restructuring of the Bulk Berth Department resulted in two employees being identified as being surplus to requirements. This equates to 0.8% of Transfield’s workforce being surplus to requirements. Transfield have argued that the carve out provision is enlivened in section 24 of the Agreement as a result of the restructure and the loss of contract scope, ie, no longer being required to provide mechanical maintenance services at the Bulk Berth Department. I have taken this into account.

[21] The AMWU have argued that to interpret the provision in this manner would render the entire job security provision as irrelevant. It would means that there would be no capacity for Transfield to transfer its employees to different sections of the Steelworks, provide no opportunity for employees to be retrained and make forced redundancies the only possible outcome rather than an outcome, according to Mr Masters, that Transfield tries to avoid. The AMWU argued that the provision should be read to say that the carve out clause applies to situations of LOSS of Contract or SUBSTANTIAL CHANGE to contract scope. The AMWU argued that the loss of 2 positions is not a substantial change to the contract scope or a loss of the contract. I have taken this into account.

[22] As I have said earlier, in 2001 Bluescope undertook a major restructuring in outsourcing a large proportion of its maintenance workforce. The process resulted in an industrial campaign which resulted in lengthy proceedings before the NSW IRC. The outcome of the dispute resulted in hundreds of employees being made redundant from BHP (read Bluescope) and being employed by Transfield. It is difficult to believe that a robust job security clause would not have been an integral component of the negotiated settlement. It certainly would not have been the intention, nor has it been the practice, for the exception or carve out provisions of the clause to be enlivened due to such a minor restructure or insignificant change to the scope of the contract.

[23] The Redundancy Provisions of the Agreement relevantly states:

“Redundancy means when a position is surplus to the needs of the business, and where there is no alternative employment for the person/s occupying that position/s.”

[24] Transfield argued that there were no alternative positions available. Transfield cited Mr Dick-McGuigan searching the Transfield Intranet and only discovering a role at Garden Island that was available for a mechanical fitter as proof that no alternative position existed within Transfield. I accept that there were no vacant positions available with Transfield in the Illawarra for an employee with Mr Dick-McGuigan competencies. I have taken this into account.

[25] Transfield argued that their decision to make Mr Dick-McGuigan redundant falls within the boundaries of managerial prerogative. There is no doubt that the FWC is reticent to interfere in the decision making processes of management if the provisions of the Act and the relevant Agreement have been complied with in full. I have taken this into account.

[26] The trial that was provided to Mr Dick-McGuigan in the Gas Plant can only be described as haphazard. The evidence shows that Mr Dick-McGuigan was more than competent to perform the technical aspects of the role. This is unsurprising considering his high classification grading and lengthy service. The evidence of Mr Swanston clearly establishes the reason for Mr Dick-McGuigan not being successful in his trial is due to his lack of “spark” or initiative. This analysis is flawed.

[27] I acknowledge that Mr Swanston is a manager of only three years experience and has not previously been involved in a job swap process. However, that does not explain the lack of courtesy or fairness that was afforded to Mr Dick-McGuigan. Unbelievably, Mr Dick-McGuigan failed his trial based on a criteria that he did not even know existed.

“PN242
THE COMMISSIONER: Did you talk to Mr Dick-McGuigan when he came to work in the - - -?---Yes, on several occasions. We had some discussions generally; work-related sort of discussions. There was one personal sort of conversation there around some treatment that he was receiving at the time, but yes, I did try to get to know him as best I could in the time he was there.

PN243
Did you tell him what type of employee you were looking for?---Not to that effect. We essentially - everybody knew it was a trial period. Being that he wasn’t my employee and I didn’t have any strong relationship with the person, I didn’t want to be performance managing him during the trial. I just wanted to see them for what they were.

PN244
But if he came from an area where there might have been quite strict working arrangements in the past compared to your flexible approach in your department, wasn’t he entitled to know what was expected of him?---I wasn’t aware of any, like, current - sorry. I would not have been aware of the agreements in the other departments so I only - I’m not sure of the department that he came from and what he worked under there so - I believe that would have been explained to him prior to arriving to me.

PN245
Do you think it would have been fair though for him to be aware of the type of employee that you were looking for?---I was under the understanding that it would have been explained to him that, “This is the kind of person you need to be. Here’s your opportunity.”

PN256
Who would explain that to him?---It would have been Gary Masters, I believe.” 9

[28] The only example that Mr Swanston gave of Mr Dick-McGuigan not being a team player or showing initiative was contained in PN 17 of his witness statement.

“17. On one occasion I recall Michael wanting to be in the office completing electronic training as opposed to assisting the other core team members to complete an overhaul of our centrifuge, this is not the sort of team behaviour I am looking for.”

[29] I find this statement to be perplexing. Mr Dick-McGuigan testified that he personally initiated a number of safety audits when the work requirements were slow in the Gas plant. This type of behaviour does not portray an employee with no initiative or spark. In my experience, employees who attend work tasks when they are surplus to requirements are usually referred to as bludgers or malingerers. Such a practice of overstaffing a task certainly does not fit with the current drive by Bluescope to lift labour productivity.

[30] The fact that Mr Dick-McGuigan made a conscious decision to continue his training should have been applauded rather than ridiculed. If Mr Swanston witnessed such an event and had real concerns with the behaviour of Mr Dick-McGuigan, then as his Supervisor, he had an obligation to advise him of his concerns. Mr Swanton’s silence condoned Mr Dick-McGuigan’s practice. I have taken this into account.

[31] The Gas Plant is a Major Hazard Facility. As such Mr Dick-McGuigan needed to be supervised, like any other new employee in the department. Mr Dick-McGuigan’s tasks were assigned to him by the Gas Plant’s Scheduler. Under cross-examination, Mr Swanston agreed that it was appropriate for Mr Dick-McGuigan to only do the tasks that he was given to undertake by the Scheduler, all of which he did without complaint in relation to his technical competence. I struggle to see how, under this scenario and in these circumstances, Mr Dick-McGuigan can be condemned for not showing any spark or initiative. The evidence leads me to the conclusion that Mr Dick-McGuigan was set up to fail his trial. It would have been unsafe for Mr Dick-McGuigan to simply go wandering around the plant. His actions in undertaking voluntary computer based training identify to me an employee who was trying to show his initiative and on-going commitment. I have taken this into account.

[32] I also note that Mr Swanston did not witness the work of Mr Dick-McGuigan. I accept that it is appropriate for Mr Swanston to rely on advice of his “direct reports”. However, to use the excuse that it was inconvenient to have any of these “direct reports” testify to their views does not provide me with confidence as to the veracity of Mr Swanston’s evidence. A Jones v Dunkel 10inference can be drawn as a result of the non attendance of Mr Swanston’s advisors. I have taken this into account.

[33] Mr Masters testified that he did not tell Mr Dick-McGuigan that he needed to be a self starter or show initiative before the trial but that he simply had to “sell himself”. Ms Masters agreed that it would have been appropriate for Mr Swanston to advise Mr Dick-McGuigan of his expectations before the start of the trial, to provide advice during the trial and to set the parameters of expectation before the conclusion of the trial. 11 These discussions did not occur. I have taken this into account.

[34] An important issue in this dispute is whether Bluescope has the right to actually trial or vet any Transfield employee before a “job swap” is implemented.

[35] The AMWU argued that Bluescope had no right to interfere in the internal processes of Transfield because they are not party to the Agreement and gave up “control” of these maintenance employees when they “contracted out” the work to Transfield in 2001. Transfield argued that there is an obligation on the parties to the Agreement, through Clause 6 of the Agreement, to take notice of the views of Bluescope.

“6. OBJECTIVES OF THE ENTERPRISE AGREEMENT

The objectives of this Enterprise Agreement are to: Enable the Company to perform work in the areas covered by the Enterprise Agreement in a productive, efficient and orderly way; Provide appropriate remuneration and conditions of employment for employees working under the terms of the Enterprise Agreement; and Encourage employees to work in a productive, efficient, flexible and safe way in accordance with their full skill and competence to meet the requirements of the Company and its client.” 12

(my emphasis)

[36] I could find no definitive provision in the Agreement that assists with this scenario. Although not raised by ether advocate, I have decided to inform myself of the provisions of the Bluescope Steel Port Kembla Steelworks Agreement 2012 13to see if there are any provisions which relate to this type of circumstance for any full time employee. Clause 34 of the Bluescope Agreement deals with this issue:

“34. Termination of Employment Due to Retrenchment or Redundancy

34.1 Retrenchment -

34.1.1 Application

This subclause 34.1 applies to collective dismissals by way of retrenchment, whether made at the same time or over a period of time and where the dismissals relate to circumstances affecting the Company's enterprise and not to the conduct of the employees. It does not apply to the termination of employment on account of the introduction of mechanisation or technological change.

34.3 Security for employees affected by workplace change

34.3.1 The parties recognise the importance of job security for employees.

34.3.2 While seeking to adhere to this commitment, the parties acknowledge workplace change, new technologies and changes in operations and services will be ongoing and may lead to employees being made surplus. When having to manage any reductions in employee numbers, the Company will seek to ensure that employees have the opportunity for redeployment. In addition, every opportunity will be taken to effect changes through voluntary means and natural attrition.

34.3.3 Nothing in this clause prevents the Company reassigning surplus employees into alternative and available roles where their skills are readily adaptable to these roles. In that case the other provisions of this clause, other than clause 34.3.9 will not apply.

34.3.4 In identifying surplus employees the Company will adopt a selection process that includes the employee's knowledge, skills and performance relevant to the employee's current positions.

34.3.5 Where employees are made surplus, the relevant employees will be given written notice by the Company that such positions are surplus and the options available to employees. The following principles will then apply:

(a) Within 14 days the affected employees are to advise the Company of their decision to either:

(i ) elect to leave the Company; or

(ii) seek continuing employment with the Company.

(b) for employees who elect to leave the Company, their employment will cease as soon as practical to Department needs.

(c) For those affected employees who seek ongoing employment with the Company that opportunity will be available for a transition period of up to written notice as provided for in this clause 34.3.5 (Transition Period).

(d) The Transition Period will be used to facilitate a job search within BlueScope Steel for suitable alternate employment where this is available. During the Transition Period the employee will continue to work in their department. The Company shall provide the employee and as necessary their representative, with all relevant job search details.

(e) Whenever a vacancy occurs, all reasonable efforts will be made to communicate this position to surplus employees. The recruitment and selection of surplus employees into alternative positions will be based on merit and directed by Company policies and processes. It is expected that surplus employees will reach the interview stage for vacancies where the employee's skills and experience reasonably match the criteria for the vacancy.

(f) Competency Based Redundancy Substitutions may be available, however will remain at the discretion of the Company.

(g) Surplus employees will be managed within their Department until it is determined that no suitable alternative employment is available within the business. The Company will meet regularly with the employee and their representative to ensure the employee is updated on suitable alternate employment opportunities.

(h) The Company will provide surplus employees with
Appropriate redeployment assistance as part of the surplus management process. This assistance may include job search and training opportunities, such as assessment centres, interview training, work experience, secondment placements, relief roles, retraining, and
outplacement programs.

(i) Surplus employees will be expected to actively and genuinely participate in all related surplus management processes and activities in order to maximise their opportunity to secure suitable alternative employment within the Company.

(j) Surplus employees seeking continuing employment are not to unreasonably reject an offer of suitable alternative employment, being employment that is comparable with the employee's skills and experience. Employees will have a maximum of 5 working days to advise whether or not they accept an offer of suitable alternative employment, or else they will be taken to have rejected the offer. If an employee rejects an offer of suitable alternative employment the surplus employee will, leave the Company with a severance payment in accordance with clause 34.1.3, within 14 days of rejecting that offer.

34.3.7 Any difficulties or issues arising out of the procedures described in this clause will be discussed with the involvement of the relevant representative where appropriate, and will be dealt with in accordance with the dispute resolution procedures in clause 35 of this Agreement.

35. Procedure for Resolving Claims, Issues and Disputes

35.1.7 If still unresolved, the matter will be referred to the Fair Work Commission (FWC) by either party for resolution, which will include conciliation and, if necessary, arbitration. The parties will abide by the outcome of such proceedings, subject to any right of appeal from any such decision of FWC.

35.1.8 If the matter goes to arbitration before FWC, FWC may exercise its procedural powers in relation to hearings, witnesses, evidence and submissions which are necessary to make the arbitration effective.”

[37] I note that the 2001 Transfield Award had the same or similar provisions to the current Agreement in relation to Objectives, Redundancy and Employment Security.

[38] One significant difference between the Transfield Agreement and the Bluescope Agreement is in relation to the concept of job swaps. The Transfield Agreement does not mention the concept specifically but the custom and practice is that the concept of a Voluntary Retirement Scheme encapsulates the job swap option. I can understand the reasoning behind employees being given a trial in a new area. It is important to ensure that any new employee has the skill and competence to work in the new environment or the capacity to adapt to the new environment whether that be through training or “on the job” experience. There is no evidence of Bluescope interfering in any Transfield job swap in the past. The Bluescope Agreement allows for the opportunity to swap jobs to be at the discretion of Bluescope. There is certainly no expressed capacity for Bluescope to have discretion over Transfield’s job swap. I have taken this into account.

[39] It is also worth noting that Transfield approached Mr Peter McEwan and asked him to submit an application for voluntary redundancy. Mr Masters is a very experienced and good Manager. I regard Transfield as being a fair, honourable and caring employer. It is obvious that Transfield were of the view that Mr Dick-McGuigan had the skills and competence to perform the work at the Gas Plant, whilst Mr McEwan would obtain benefit from taking voluntary redundancy due to his unfortunate personal circumstances.

[40] I also note that another Transfield employee, Mr Miranda, had expressed a desire to take voluntary redundancy. For some unexplained reason, Transfield did not pursue this opportunity in any detail. Mr Masters accepted that Mr Dick-McGuigan would have the skills and competency to work in the Oil Preparation Plant where Mr Miranda is currently located.

[41] At my request, Transfield made contact with Bluescope during the hearing to assess Bluescope views on a possible job swap between Mr Dick-McGuigan and Mr Miranda. I was advised by Mr Mead that Bluescope rejected this approach. It would appear that Bluescope management believe that they have the right of veto over Transfield personnel movements throughout the Steelworks. I have taken this into account.

[42] I have also taken note of the second reading speech of the Fair Work Act, 2009, by the Minister for Employment and Workplace Relations, the Hon Julia Gillard, MP, where she said:

“...One century on from Federation, and one year on from the election of the Rudd Labor Government, this Bill takes the Australian value of the fair go and builds around it a new workplace relations system ready to meet the needs of the nation in the 21st Century...”

[43] The law is settled in relation to an employee being entitled to the benefit of their workplace instrument. In this circumstance, the AMWU have claimed that Mr Dick-McGuigan is entitled to have Transfield source and exhaust all options in relation to voluntary job swaps, retirements and redundancies before forcibly making Mr Dick-McGuigan redundant.

[44] Section 341(1)(a) of the Act states:

“Section 341

Meaning of workplace right

(1)  A person has a workplace right if the person:

(a)  is entitled to the benefit of, or has a role or responsibility under, a workplace law, workplace instrument or order made by an industrial body...” 14

[45] I agree with the AMWU on this point. Mr Dick-McGuigan had a workplace right to swap jobs with Mr McEwan. This did not occur due to the interference of Bluescope. This type of activity could result in possible action against Bluescope in relation to the General Protection provisions of the Act.

[46] It is obvious from this extract that the principle of a “fair go” permeates throughout the provisions of the Act and is not limited to the issue of unfair dismissal.

[47] The AMWU, perhaps flippantly, raised the issue as to whether the real employer of Mr Dick-McGuigan was Bluescope rather than Transfield, based on the fact that Bluescope prevented Mr Dick-McGuigan swapping jobs with either Mr McEwan or Mr Miranda. Transfield described this submission as fanciful and I agree. Transfield is clearly the employer of Mr Dick-McGuigan. Mr Dick-McGuigan worked for Bluescope’s predecessor for thirteen years but the relationship terminated in 2001 when Mr Dick-McGuigan was then hired by Transfield and has worked in accordance with the respective Transfield industrial arrangements ever since. Mr Dick-McGuigan is paid by Transfield, wears a Transfield uniform and workers under Transfield’s control and direction. To suggest otherwise raises a plethora of issues associated with the employment relationship (see Damevski v Guiduce 15).

[48] However, the AMWU have raised this issue to highlight the actions of Bluescope in preventing Mr Dick-McGuigan from obtaining a job swap with Mr McEwan, thereby forcing Transfield to make Mr Dick-McGuigan redundant. I agree with the sentiments of Asbury C (as she then was) in Koppe v Compass Group Australia Pty Ltd 16. In this case Ms Koppe worked for a contractor (Compass) who provided catering services for a client at a remote mine site.

[49] The client decided to withdraw Ms Koppe’s accommodation rights. Compass then dismissed Ms Koppe. In her decision, the Commissioner said;

“If actions and their consequences for an employee would be found to be unfair if carried out by the employer directly, they do not automatically cease to be unfair because they are carried out by a third party to the employment relationship. If the Commission considers that a dismissal is unfair in all of the circumstances, it can be no defence that the employer was complying with the direction of another entity in effecting the dismissal. To hold otherwise would effectively allow employers to contract out legislative provisions dealing with unfair dismissal.”

[50] I acknowledge that this matter is not an unfair dismissal case but the analogy that can be drawn to this case is quite compelling. Put simply, if Bluescope had not rejected the job swap between Mr Dick-McGuigan and Mr McEwan then Mr Dick-McGuigan would have been working in the Gas Plant today. I have taken this into account.

Conclusion

[51] The Dispute Avoidance Procedure gives the FWC very broad powers to arbitrate a dispute between the parties, in accordance with section 739 of the Act. I accept the proposition of Transfield that the FWC’s powers are limited in accordance with section 739 (5) to the powers expressed in the Agreement.

[52] This case revolves around the interpretation of provisions of the Agreement. In this regard, I see no barrier to the FWC providing an interpretation or issuing Orders to ensure compliance with the provisions of the Agreement.

[53] I find that I have the necessary jurisdiction to deal with this matter but accept that such capacity does not include binding Orders on Bluescope.

[54] The only conclusion that is available for me to draw in relation to Mr Dick-McGuigan’s trial in the Gas Plant is that it was a farce and a sham. The fact that the trial was concluded early without giving Mr Dick-McGuigan the opportunity to improve his performance in relation to the criteria of which he was unaware, simply exacerbates the unfairness and confirms the true nature of the trial. Put simply, it didn’t matter what Mr Dick-McGuigan did during the trial, Mr Swanston was not going to let Mr McEwan leave under any circumstance.

[55] In relation to the issue of Voluntary Retirement Schemes, Transfield’s submissions are at odds with its principal witness, Mr Masters. Mr Masters claims that he has never heard of the expression Voluntary Retirement Scheme, only Voluntary Redundancy despite being the Operations Manager at Transfield for many years. The relevant point is that Mr Masters was proactive in trying to organise the “job swap” between Mr McEwan and Mr Dick-McGuigan.

[56] I do not accept the submission from Transfield on this issue. It is near on impossible to believe that the parties would have been discussing ATO ruling (TR 94/12) in 2001 when formulating the Award. Neither Mr Dick-McGuigan or Mr Masters, who were both employed by Transfield in 2001, had any recollection of any such discussion or any understanding of the explanation proposed by Mr Mead.

[57] Applying the reasoning of the Full Bench in Golden Cockerill, I find that the language of the agreement contains an ambiguity in relation to the term “voluntary retirement scheme”. This term is not contained in any other provision in the Agreement and is unknown to the Operations Manager of Transfield. It is relevant that Mr Masters has always interpreted the provision to mean voluntary redundancy and has always sought “job swaps” for employees who have wanted to continue their employment. The practice which has been adopted by Mr Masters was exactly the same as the process that Mr Dick-McGuigan understood would apply to his situation.

[58] I find that the practice which has been adopted by the parties, both in the past and in this case, is for a voluntary retirement scheme to include the processes of voluntary redundancy and job swap. It is the only conceivable and pragmatic interpretation to such a clause.

[59] Clause 6 of the Transfield Services Agreement identifies an objective to encourage employees to work:

● “...in a productive, efficient, flexible and safe way in accordance with their full skill and competence to meet the requirements of the Company and its client.”

[60] This provision does not give Bluescope the right of veto over any component of the employment relationship between Transfield and its employees. “Encouraging employees” is another “aspirational” statement similar to the Company’s intention of “no forced redundancies during the life of the Agreement.”

[61] I do not accept that this provision forces Transfield to consult and abide by any decision of Bluescope in relation to any of its employees, unless that employee has been barred from site due to a major safety incident or some other appropriate reason. Mr Dick-McGuigan has not been barred from the Bluescope Steelworks. I find that Mr Dick-McGuigan has been treated unfairly by Transfield.

[62] The carve out provision in clause 24 is written in such a way that it makes no sense. I do not accept that the carve out clause would take effect if Transfield had any loss of their contract scope. If that were the case, than the loss of a single employee would affect the contract scope of Transfield. The inclusion of the term “significant change” in the sentence leads me to support the submissions of the AMWU. I find that the carve out clause has not been enlivened in this situation.

[63] However, I do not accept the argument from the AMWU that clause 24 provides a binding obligation that there will not be any forced retrenchments during the life of the Agreement. An intention does not provide an obligation. It is beyond my comprehension how any contractor could provide a guarantee to any of its employees in the manner prescribed by the AMWU. Transfield appropriately descried the phrase as “aspirational”.

[64] The delay in the process has resulted in Mr Dick-McGuigan utilising all of his Annual Leave and Long Service Leave. The AMWU has argued that this leave should be re-credited to Mr Dick McGuigan. I do not agree.

[65] All of the leave was taken at the instigation of Mr Dick-McGuigan, except for the four days in October immediately after Labour Day. Mr Masters asked Mr Dick-McGuigan to take those four days of annual leave. Mr Dick-McGuigan exhausted his leave to delay the termination of his employment, undoubtedly hoping that a solution could be found in the interim. In normal circumstances, I would require Transfield to recredit Mr Dick-McGuigan for those four days. However, following discussion in private conference, Transfield has continued to pay Mr Dick-McGuigan his normal salary after his leave entitlements had expired. It would be unfair for Transfield to now be required to reinstate Mr Dick-McGuigan’s exhausted leave entitlements. I find that Transfield is not required to recredit the Annual and Long Service Leave taken by Mr Dick-McGuigan during this process.

[66] I hereby order that Transfield use its best endeavours to maintain the employment of Mr Dick-McGuigan in accordance with clause 24 of the Agreeement, including revisiting the voluntary job swap options with Mr McEwan and Mr Miranda.

COMMISSIONER

 1   Transfield Services (Australia) Pty Ltd (Port Kembla Steelworks) Facilities Maintenance Enterprise Agreement 2012-2015

 2 (1982) 149 CLR 337

 3 (1996) 66 IR 182

 4 [1993] FCA 51

 5 (2005) 222 CLR 241

 6   [2014] FWCFB 7447

 7   Transcript - PN506-513

 8   Clause 24 - Transfield Services (Australia) Pty Ltd (Port Kembla Steelworks) Facilities Maintenance Enterprise Agreement 2012-2015

 9   Transcript 242-246

 10 (1959) 101 CLR 298

 11   PN 603-605

 12   Clause 6 - Transfield Services (Australia) Pty Ltd (Port Kembla Steelworks) Facilities Maintenance Enterprise Agreement 2012-2015

 13   [2013] FWCA 5308

 14 Fair Work Act, 2009

 15 (2003) 202 ALR 494 FCAFC

 16 [2005] QIRC 44; 178 QGIG 348.

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