"Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU) v Visy Board Pty Ltd
[2013] FWC 323
•22 JANUARY 2013
Note: An appeal pursuant to s.604 (C2013/3101) was lodged against this decision.
[2013] FWC 323 |
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
Visy Board Pty Ltd
(C2012/5739)
COMMISSIONER BULL | SYDNEY, 22 JANUARY 2013 |
Right to withdraw from unregistered site agreement, work practices, consultation and reasonable notice requirements, managerial prerogative, equity and good conscience.
[1] The Tribunal has been asked to resolve by arbitration a dispute between the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (the AMWU) and Visy Board Pty Ltd (the Respondent).
[2] The matter in dispute concerns the variation and or cancellation of unregistered site agreements that have been operating at the Respondent’s Warwick Farm site.
[3] Employees at the Respondent’s Warwick Farm site are employed under the terms of the Visy (Smithfield, Warwick Farm, Dandenong, O’Connor, FAG Carole Park) Enterprise Agreement 2010 1(the Enterprise Agreement). The nominal expiry date of the Enterprise Agreement is 30 September 2013. Pursuant to subclauses 4.2 and 4.3 of the Enterprise Agreement all the provisions of the Graphic Arts, General Award 2000 and the Metal, Engineering and Associated Industries Award 1988 as they stood on 1 March 2006 are incorporated into the Enterprise Agreement, with the terms of the Enterprise Agreement prevailing to the extent of any inconsistency. The AMWU pursuant to s.201(2) of the Fair Work Act 2009 (the Act) is covered by the Enterprise Agreement.
Jurisdiction of FWA
[4] On 23 October 2012, the AMWU filed a s.739 application for Fair Work Australia (FWA) to deal with a dispute in accordance with clause 23 - Dispute Resolution Procedure of the Enterprise Agreement. The relevant provisions of the dispute procedure read as follows:
23.1 Disputes/grievances arising out of the implementation and/or operation of this Agreement and/or its provisions and the operation of the NES shall be dealt with in the following manner;
...
23.7 If the matter is not resolved by conciliation the parties will submit the matter to arbitration by Fair Work Australia.
(emphasis added)
[5] The Tribunal’s jurisdiction only applies where the dispute arises out of the implementation of the Enterprise Agreement. Both parties agree that the site agreements subject to dispute are not part of the Enterprise Agreement, being that they are unregistered written/oral agreements. On enquiry by the Tribunal as to its jurisdiction to hear the matter Mr Adam Walkaden on behalf of the AMWU drew the Tribunal’s attention to clause 36 - Facilitative Provision of the Enterprise Agreement which states the objective of management is to maximise the involvement of employees in continuous improvement activities.
[6] Mr Walkaden on behalf of the AMWU characterises the Respondent’s changes to the unregistered site agreements as falling under this provision, i.e. management’s attempts at continuous improvement. The Facilitative Provision clause provides that if a dispute arises out of the implementation or operation of the provision it will be handled in accordance with the Dispute Resolution Procedure. It is this circuitous background that is said to form the basis of the Tribunal’s jurisdiction to arbitrate the dispute. The Respondent supports the position advanced by the AMWU. While the dispute procedure is silent on appeal rights following initial arbitration by FWA, both parties have advised the Tribunal that appeal rights also exist under the dispute resolution procedure.
[7] The Tribunal’s jurisdiction in similar circumstances was raised in the recent Full Bench decision of “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) v Visy Paper Pty Ltd T/A Visy Recycling 2(Visy Recycling) where the Full Bench stated at paragraph [47] that while having some reservations they were prepared to accept that the jurisdiction of the Tribunal was established. While it is arguable that the second and final paragraphs of the Facilitative Provision clause of the Enterprise Agreement limits its operation to matters arising out of the Agreement only, I accept in the absence of any argument to the contrary, that the Tribunal is vested with jurisdiction to determine the dispute on the grounds submitted by the parties.
Background
[8] The Respondent’s Warwick Farm site is a manufacturing facility for corrugated packaging and is one of two sites in New South Wales. The Warwick Farm site engages approximately 120 employees of which 110 are covered by the Enterprise Agreement. The parties acknowledge the existence of two “site agreements”, which relate to payments to employees at the Warwick Farm site which are in addition to the terms and conditions of the Enterprise Agreement. These additional payments comprise of a “wash up allowance” and a “continuous running payment”. For the purposes of this decision it is necessary to define and trace the history, where possible, of these two payments.
Wash Up Allowance
[9] The wash up allowance comprises a daily payment of $6.50 to all employees covered by the Enterprise Agreement at the Warwick Farm site. Employees are required to wash up at the end of a shift in their own time. Mr Bubb-Edwards an employee of the Respondent and an AMWU delegate (Deputy Father of the Chapel) stated that there is a definite need for employees to wash up, with employees being exposed to ink, oil, grease and dust.
[10] The payment commenced in May 2003, and was introduced to encourage employees to remain working up until the end of their shift as opposed to leaving their work station early to wash up. Presumably this arrangement was seen as a benefit to the Respondent in terms of productivity. Prior to the introduction of the allowance there was a five minute allocation of time for washing up before the end of each shift. 3
[11] The amount of $6.50 has not been increased since its introduction over nine years ago.
[12] A memorandum dated 16 May 2003 and signed by the Respondent’s NSW State Manager outlining the conditions attached to the wash up allowance was tendered in evidence 4 and is reproduced below:
[13] An extract of the memorandum is posted on the Respondent’s notice board under the heading Visy Board Warwick Farm Site Agreements 5.
Continuous Running Payment
[14] The origins of the continuous running payment are somewhat clouded. It is understood by the Respondent that the current arrangements were introduced in 1998 where a payment was made to production employees who work on a machine known as the corrugator. There are approximately 25 employees in receipt of the corrugator allowance.
[15] The corrugator payment is in the form of a 45-minute payment at time and one-half and is conditional upon the continuous running of the corrugator. The corrugator is said to be the only machine that runs continuously, 6 that is, it does not stop for employees to take meal breaks. This means that employees working on the corrugator must stagger their meal breaks and/or be relieved. When the corrugator stops it creates waste which imposes significant costs on the Respondent’s business.7
[16] The practice is that the corrugator employees are entitled to take a 30-minute meal break but receive an additional 45-minute payment at time and one-half valued at around $40.00 per shift. As a result of the requirement to keep the corrugator working through the meal break, unlike the rest of the workforce, corrugator employees do not all enjoy a meal break at the same time.
[17] The AMWU submits that the corrugator allowance commenced as early as 1980. The evidence of Mr Ante Kurta, an employee and operator was that in 1980 he commenced with the Respondent and worked on the corrugator. Mr Kurta stated that the corrugator did not stop running for employees to take meals and employees would not have a meal break, but eat their meals while working on the corrugator. For this inconvenience, they would receive a payment of 45-minutes at ordinary time, which the Respondent submits is equivalent to the 30 minute meal break being paid at time and one-half. 8
[18] It appears that in 1998 this practice changed where employees were able to take their 30-minute meal break, which was previously not taken and for reasons now not known to either party. The 45-minute payment at ordinary time increased to 45-minutes at time and one-half.
[19] Some further background to the continuous running payment is provided in an unsigned document tendered by the AMWU. Mr Bubb-Edwards having reviewed the files kept by the AMWU found the unsigned document titled Agreement between Visy Board Warwick Farm & Corrugator operators Warwick Farm.
[20] A copy of the document is reproduced below:
[21] While this document is unsigned and its authorship unknown, it is the only written record of the payment of this allowance and does appear to shed some light on the origins of the payment. The Respondent points out that the document does not record the current payment of 45-minutes at time and one-half, but refers only to “the appropriate penalty rate”.
Notice of Change of Practice
[22] In a memorandum to all employees dated 21 August 2012, the General Manager Operations Visy Board NSW, Mr Gerard Schouten advised that the wash up and continuous running payments would cease to be paid from the pay week commencing 4 September 2012. The basis for this change was said to be that these arrangements were removed under the reduction of working hours from 40 hours to 35 hours per week negotiated in 1983. No detail was provided in the memorandum on how any new wash up procedures would operate.
[23] Contrary to the memorandum the payments did not cease on 4 September 2012 as the course of action to be adopted by the Respondent was disputed by the AMWU. Following discussions between the parties Mr Schouten issued a further memorandum dated 3 September 2012, advising all employees that the cessation of the two payments would be put on hold pending further discussions with the AMWU.
[24] Following these discussions Mr Schouten issued another memorandum dated 12 October 2012, stating that in an attempt to limit the financial impact on employees, the wash up allowance would cease on 29 October 2012, and the continuous running payment would cease on 5 February 2013. On 25 October 2012, a conciliation conference was held before the Tribunal and a supplementary memorandum was issued by Mr Schouten on 26 October 2012, advising that:
● the wash up allowance would cease on 29 October 2012 for employees who had access to wash up amenities and the remaining work areas would be provided with new wash up stations by 12 November 2012.
● a new practice would be introduced where a siren would sound three minutes from the end of each shift signalling the beginning of personal wash up time for employees.
[25] On 10 December 2012, via the Respondent’s solicitors, the Tribunal was advised that workers at all work sites were from 30 October 2012, washing up during the final three minutes of their shift.
AMWU Submissions
[26] Mr Walkaden on behalf of the AMWU submitted that neither the wash up allowance nor the continuous running payment could be ceased at will by the Respondent. It was put that without the AMWU’s agreement the payments must continue. 9
[27] The AMWU rely on the Full Bench decision in Visy Recycling and in particular the last sentence of paragraph [64] of the decision which states:
Nevertheless, having regard to equity, good conscience and the merits of the matter as we are required by s 578(b) of the Act, we consider that the parties ought to be held to their bargain.
(emphasis added)
[28] The AMWU also point to the Full Bench decision in Qantas Airways Limited v Australian Municipal, Administrative, Clerical and Services Union 10 (Qantas v ASU) where the Full Bench stated that the Commission should do all it can to encourage parties to honour their agreements.11 A similar sentiment was expressed by the Full Bench in Cochlear Limited v AMWU12 (Cochlear) at paragraph 35.
[29] The AMWU argue that permitting a party to withdraw from agreements whether registered or unregistered is contrary to the objects of the Act. 13
[30] The AMWU submit that even if the employer is able to unilaterally withdraw from its previous agreements, that to do so in this case would not be a proper exercise of managerial prerogative. It was argued that to cease the two payments is an unjust and unreasonable exercise of managerial prerogative on the basis that their termination would cause employees financial detriment.
[31] Mr Walkaden submitted that employees were more than happy to revert back to washing up during ordinary working hours provided the previous practice was fully implemented, being a five minute wash up period. 14
[32] It is further put that the Respondent failed to consult with the workforce or the union in any meaningful way and did not comply with its obligations under clause 24 - Consultation In The Workplace of the Enterprise Agreement.
[33] The AMWU argued that the Respondent had provided undertakings to its workforce during the negotiations for the Enterprise Agreement and subsequently that the two payments would not be removed. The AMWU submitted that the future of the two payments should be a negotiating item for the replacement of the existing Enterprise Agreement.
[34] In prosecuting its case the AMWU called two employees whose evidence went to the history of the payments and negotiations of the Enterprise Agreement.
Evidence of Mr Bubb-Edwards
[35] Mr Richard Bubb-Edwards commenced with the Respondent in 1980 at its Warwick Farm site. Mr Bubb-Edwards is an electrician and an AMWU delegate as the Deputy Father of the Chapel for the last eight years. He confirmed that his position with the Respondent pays well and that the conditions are good. 15
[36] Mr Bubb-Edwards evidence was that prior to the introduction of the wash up allowance in May 2003 employees would cease work five minutes prior to their finishing time and commence to wash up. Employees are exposed to ink, oil, grease and dust, making it necessary for employees to wash up on completion of their shift.
[37] The wash up agreement has been placed on the Respondent’s notice board under the heading of the Visy Board Warwick Farm Site Agreements. Mr Bubb-Edwards accepted that if employees are able to wash up in work time there is no justification for payment of the wash up allowance. 16
[38] Mr Bubb-Edwards referred to a memorandum written by the Warwick Farm Manufacturing Manager, Mr Adam Covington dated 10 February 2012. The memorandum states that it is written to clarify the position on the payment of the “Continuous Running Allowance”. The second paragraph states:
At the Company’s sole discretion the allowance is to be paid when crews rotate through their breaks allowing the Corrugator to continuously run for a whole shift.
[39] In reference to a memorandum sent out by the Warwick Farm Manufacturing Manager, Mr Adam Covington, dated 10 February 2012, which stated inter alia that the continuous running payment was at the company’s sole discretion. Mr Bubb-Edwards stated that he questioned Mr Michael Bown the Warwick Farm Operations Manager who advised that the reference to “sole discretion” did not mean the company could remove the payment without the AMWU’s agreement. 17
[40] The details of the continuous running payment are not contained on the Respondent’s notice board. 18
[41] Mr Bubb-Edwards also stated that during the negotiations for the Enterprise Agreement the NSW General Manager, Mr John Lymberis, confirmed in a memorandum to all employees dated 13 October 2010, that the wash up allowance would continue to be paid. 19
[42] Mr Bubb-Edwards acknowledged that during the negotiations for the Enterprise Agreement, the AMWU claimed that the various site agreements be incorporated into the Enterprise Agreement and that this claim was not agreed to by the Respondent.
[43] In researching the history of the continuous running payment, Mr Bubb-Edwards, discovered amongst the AMWU’s files an unsigned document titled Agreement between Visy Board Warwick Farm & Corrugator operators Warwick Farm, but he did not have any personal knowledge of the drafting of this document.
[44] In respect of the attendance bonus which was removed by the Respondent, Mr Bubb-Edwards stated that no objection was taken by the AMWU as it was something the Respondent put in and something the Respondent took out. 20
Evidence of Mr Kurta
[45] Mr Ante Kurta also commenced work with the Respondent in 1980 at its Warwick Farm site. Mr Kurta initially worked on the corrugator where he remained for a period of nine years. Mr Kurta’s evidence was that the corrugator did not stop operating for employees to take meal breaks. The corrugator employees would eat their meals and have a drink but at all times would remain working on the machine through their meal break. This practice appears to be confirmed by the unsigned agreement discovered by Mr Bubb-Edwards wherein it states:
In October 1998 the union delegate (FOC) raised the issue of Corrugator operators not taking their lunch/meal break, and instead being paid for working through. This apparently has been the custom and practice at Warwick Farm for some years.
[46] Mr Kurta’s recollection was that for the inconvenience of not taking his 30-minute meal break he was paid an additional 45-minutes at ordinary time. The payment was only made where the corrugator ran continuously. The evidence of Mr Kurta is that a continuous running allowance was paid as early as 1980 and continued to be paid despite the reaching of the 35 hour week agreement between the parties in 1983.
[47] Mr Kurta also recalled that prior to the introduction of the wash up allowance, employees would cease work five minutes prior to their finish time and wash up. Working as an ink maker at the end of his shift, Mr Kurta’s hands are usually covered in ink and he often has ink on his face which also goes through his work clothes onto his body.
Visy Board Submissions
[48] Mr Brotherson of Counsel for the Respondent submitted that the continuous running payment and the wash up allowance were payments made at the sole discretion of the Respondent. It was submitted that the payments being unregistered (with any statutory body) were legally unenforceable and that due to the Warwick Farm site’s parlous financial state their continuation could no longer be supported. It was also argued that the arrangements were agreed with the AMWU who were not acting as an agent for its members. 21
[49] The Respondent argued that its decision to cease the payments was a reasonable and valid exercise of managerial prerogative in context of the financial difficulties facing the Warwick Farm site. It further submitted that all the required consultation obligations to cease the payments were complied with.
[50] It was stated that the wash up allowance was introduced to encourage employees to remain at their work stations until the end of their shift and has been paid since May 2003. The cessation of this payment is not unjust or unreasonable as the Respondent will allow employees to wash up prior to the conclusion of their shifts.
[51] The continuous running payment was conditional upon the unbroken running of the corrugator. Corrugator employees currently take a 30-minute meal break but are paid an additional 45-minutes at time and one-half, where through the provision of relief employees or staggered meal breaks the corrugator continues to operate.
[52] The Respondent argues that the arrangements for both allowances post date the introduction of an agreement which introduced the 35 hour week to the site (down from 40 hours) in June 1983. The 35 hour week agreement was also unregistered but is referred to in the existing Enterprise Agreement at Appendix 7 at clause 4 wherein it states:
4. 35 Hour Week Work Practices
Arrangements for working the 35 hour week are summarised in existing site agreements.
[53] The 35 hour week agreement 22under the heading Work Practices makes a number of references to the Warwick Farm plant operating continuously. For example, at subclause 2.3, it states that all machinery will be available for continuous running and at subclause 2.6; that continuous running is to be undertaken during meal breaks. No additional payment is provided for continuous running other than the employees pay rates are not reduced as a result of the reduction in hours from 40 to 35 per week.
[54] On the basis of the 1983 unregistered 35 hour week agreement the Respondent argues that the continuous running of the corrugator is not dependent on any additional payment and further that the provisions of the Graphic Arts, General Award 2000 which are incorporated into the Enterprise Agreement 23 provide for the staggering of meal breaks to allow for continuous running (see clause 6.3.5(c)).
[55] It is submitted that as part of the cost cutting measures required at the Warwick Farm site the Respondent consulted with its workforce and the AMWU. While some cost cutting initiatives were agreed to, there was no agreed outcome on the cessation of the two allowances.
Evidence of Mr Schouten
[56] Mr Gerard Schouten is the Respondent’s, General Manager Operations - New South Wales, and commenced employment with the Respondent in October 2010. Mr Schouten has overall responsibility for the technical, financial and manufacturing operations of the Respondent in New South Wales.
[57] Mr Schouten’s evidence was that in the financial year to 30 June 2011, the Warwick Farm business had incurred losses for a second consecutive year which totalled in excess of $1 million which brought into question the financial viability of the Warwick Farm site. The Respondent had lost some major contracts because customers were sourcing cheaper ways to have their packaging manufactured overseas. 24
[58] In August 2011, a review was undertaken to look at ways to keep the site operational by reducing costs and improving efficiency. Mr Schouten acknowledged that the Respondent as a private company did not make its profit and loss statements publicly available due their commercial sensitivity. 25
[59] In March 2012, the Respondent determined that the Warwick Farm site would remain open but remain under review.
[60] Mr Schouten was involved in the review which also focussed on avoiding job cuts. A number of measures to improve the financial viability of the Warwick Farm site have already been implemented, these include:
● closure of the staff canteen;
● reducing the number of products;
● limiting waste;
● reducing customer credits;
● reducing/freezing the salaries of salaried staff in NSW and initiating staff redundancies; and
● removing the absenteeism bonus payment.
[61] Until February 2012, the Respondent operated a scheme where employees would be paid an attendance bonus dependent on the amount of sick leave taken during the year. On 28 February 2012, the Respondent by way of memorandum from Mr Brad Hinds, General Manager of Visy Board NSW, 26 advised the workforce that the attendance bonus would cease. The cancellation followed a review of the scheme and the Respondent’s conclusion that it could no longer be sustained. No objection was taken by employees to the cancellation of this scheme.27 Mr Schouten stated that the removal of the attendance bonus was worth approximately $1,000 per employee per annum.28
[62] Two further initiatives sought to be introduced were the cessation of the wash up allowance and the continuous running payment. The wash up allowance currently costs the Respondent $150,000 to $160,000 per annum. The continuous running payment costs the Respondent approximately $200,000 per annum with the relevant employees receiving approximately $40.00 per shift. With the cancellation of the wash up allowance employees will revert to washing up during their shift thus removing the justification for payment of an allowance.
[63] In attempting to reduce costs, consideration was given to adjusting manning levels, reducing the number of shifts and closure of the Warwick Farm site.
[64] Mr Schouten’s evidence was that the Respondent’s memorandum to employees from the Warwick Farm Manufacturing Manager dated 10 February 2012, confirmed the company’s position that the continuous running payment was paid at the discretion of the company.
[65] In August 2012, it was ultimately decided to terminate the two “discretionary” payments. On 17 August 2012, a meeting was conducted with AMWU delegates who were told of the decision to remove the two payments and that a memorandum would be issued to confirm this change. On 21 August 2012, a memorandum was issued to all employees advising that the changes would commence from 4 September 2012.
[66] Following further discussions with the AMWU, Mr Schouten prepared another memorandum dated 3 September 2012, addressed to all employees stating that the implementation date of the changes would be put on hold to allow further consultation to occur. 29 At the Warwick Farm site monthly barbeque which was held on 14 September 2012, Mr Schouten explained to employees the company’s rationale behind the decision to bring an end to the two payments.
[67] Following more discussions with the AMWU site delegates and officials, Mr Schouten advised employees at a site barbecue on 12 October 2012 that the termination of the two payments would go ahead but with deferred implementation dates. A further memorandum was issued by Mr Schouten on the same day advising all employees that the wash up arrangements would continue until 29 October 2012, and the continuous running payments until 5 February 2013.
[68] Mr Schouten’s evidence was that on a rough estimate the removal of the wash up allowance would cost each employee around $1,400 per annum or 1.1% to 1.5% of their wages. 30
[69] Mr Schouten submitted that the deferral of the cessation of the continuous running payment until February 2013 would allow the affected employees to continue to receive the payment until after Christmas. On 26 October 2012, following a conciliation conference before the Tribunal held on 25 October 2012, Mr Schouten issued another memorandum to all employees which detailed how the new wash up arrangements would be introduced including that the dispute over the cessation of the two payments had been referred to Fair Work Australia for arbitration.
Conclusions
[70] It is clear that over the years local agreements/arrangements have been made between the parties concerning the Warwick Farm site which have operated side by side with the various applicable awards/registered enterprise agreements. It is the unilateral termination by the Respondent of two of these local agreements that goes to the core of this dispute.
[71] It is agreed and accepted by both parties that the two payments do not form part of any registered agreement or award entitlement.
[72] The decision to terminate the wash up allowance and the continuous running payment is said by the Respondent to contribute to efforts to protect jobs and avoid closure of the site and is consistent with a previously reached agreement on the introduction of the 35 hour week to the Warwick Farm site. 31
[73] The AMWU argument is that in respect of the two unregistered agreements there can be no unilateral change by either party without agreement. Mr Walkaden relies on the Full Bench decision in Visy Board 32 to sustain this position. While either party must consult with each other, a variation or termination of an unregistered agreement cannot occur unless agreement is reached.33
35 Hour Week Site Agreement
[74] The Respondent argues that the two payments are contrary to an agreement reached between the parties in 1983 to introduce a 35 hour week, down from 40 hours per week.
[75] Mr Schouten’s memorandum to employees of 21 August 2012 advises of the cancellation of the two payments “on the basis that there has been an agreed concession commencing from the acceptance of the 35 hour week agreement ...” 34
[76] At Appendix 7ofthe Enterprise Agreement titled NSW Appendix it refers at clause 4 to 35 Hour Week Work Practices. Clause 4 goes on to state “Arrangements for working the 35 hour week are summarised in existing site agreements.” The Respondent argues that this reference is in relation to the unregistered document made in 1983 titled Industrial Agreement between Visy Board Pty Ltd Warwick Farm Division and Employees of the Warwick Farm Plant members of the Printing and Kindred Industries Union (NSW) and officers of the Printing and Kindred Industries Union (35 hour week agreement)
[77] The 35 hour week agreement sets out the introduction and operation of a 35 hour week for the Warwick Farm Plant. The then National Wage Case Principles of the Australian Conciliation and Arbitration Commission operated to allow the Commission to deal with agreements and unopposed claims for a reduction in standard hours to 38 where the Commission was satisfied that as much as possible of the required cost offset is achieved by changes in work practices. Opposed claims for a 38 hour week were to be rejected and claims for a reduction in weekly hours below 38 even with full cost offsets were prohibited under the principles. 35
[78] In view of the then existing wage fixing principles the agreement to reduce working hours from 40 hours to 35 hours per week even with full cost offsets could not be registered before the Commission and still remains an unregistered agreement between the parties.
[79] The AMWU submits that at least with respect to wash up time the provisions in the 35 hour week agreement have been replaced with the wash up agreement made in May 2003. The AMWU further submits that clause 4 of Appendix 7 of the Enterprise Agreement is not referring to the 35 hour week agreement negotiated in 1983.
[80] I accept the Respondent’s position that clause 4 of Appendix 7 of the Enterprise includes reference to the 35 hour week unregistered agreement.
[81] The 35 hour week agreement states that the introduction of shorter working hours depends upon the company and the union agreeing to changes in work practices, work methods and related issues which will reduce costs and improve productivity, to offset the additional cost to the company of shorter working hours. The over-riding considerations include the company having the capacity to run the plant continuously. Reference is made to continuous running during meal breaks and the staggering of meal breaks at the company’s discretion. Personal wash up time is to be kept to a minimum to facilitate continuous running of the plant. 36
[82] The evidence of Mr Kurta who was in receipt of an allowance as early as 1980 for running the corrugator continuously was that he received an additional allowance for this, which continued despite the introduction of the 35 hour week agreement in 1983. As such the position of the AMWU must be accepted, in that the payment of an allowance for the continuous running of the corrugator does not post date the 35 hour week agreement, although the current payment which was introduced in 1998 is substantially greater.
[83] Despite the clear intentions of the 35 hour week agreement a corrugator payment continued to be paid and was later substantially increased in 1998 and a wash up allowance was introduced 2003. It does not appear plausible that these events could have occurred in ignorance of the 35 hour week agreement. No evidence was made available to the Tribunal from either party as to how the existing allowances were determined, whether it be the calculation of $6.50 to wash up in one’s own time or the payment of 45 minutes at time and one half for the corrugator to operate continuously during meal times.
[84] Without the full knowledge of the history of the two payments I do not consider that it is now appropriate for the Respondent to rely on the 1983 unregistered 35 hour week agreement to argue that the decision to end the arrangements for the two payments is consistent with the 35 hour week agreement. This does not however impact on the ability of the Respondent to terminate the payments which is discussed below.
Unilateral Termination of Payments
[85] The decision of the Full Bench in Visy Board appropriately states that parties ought to be held to their bargain having regard to equity, good conscience and the merits of the matter. 37 This is not in my view to be read as a statement of principle that parties to unregistered agreements are bound in perpetuity by the terms of the unregistered agreement unless given relief by the other party.
[86] The Full Bench comments in Qantas v ASU and those in Cochlear relate to agreements made under statute. At paragraph 35 of Cochlear the Full Bench state:
It is self-evident that it is in the public interest that parties to an agreement abide by the terms upon which they had agreed. The principal object of the Act, as was the case with the pre-reform Act, is to provide a framework for cooperative workplace relations. Nothing could be more inimical to that object than to have parties reneging on their commitments as embodied in agreements made under the Act.
(emphasis added)
[87] The AMWU submitted that some employees accepted employment on the basis of the payments, although no witness gave such evidence. 38 There was no evidence that the payments formed part of any employees’ contract of employment through a direct representation from the Respondent either in written or oral communications. There is evidence of the Respondent making certain representations that the allowances will continue. However, I do not consider this evinces an intention to create legal obligations by the Respondent.
[88] It was not shown that employees are advised of such a condition of employment on engagement. In my view, the evidence taken as a whole does not establish that there was a deliberate intention on the part of the Respondent that the two payments be incorporated as a condition of employment into the employment contract of any employee (See comments of Senior Deputy President Polities in Media, Entertainment and Arts Alliance and Sydney Opera House 39).
[89] The fact that an employer has adopted a particular practice with the acquiescence of its workforce for a significant period does not mean the employer is committed to that practice indefinitely.
[90] As stated, the two matters in dispute are agreements that have not been made under any industrial relations legislation. The AMWU’s submission is that change to these agreements can only occur by agreement between the parties; where there is no agreement there can be no change. I am unable to find any support for the AMWU’s argument that this Commission or its predecessors have upheld the position that parties are unable, regardless of the circumstances to unilaterally withdraw from agreements made that have not been registered before the Tribunal. Nor do I find that the Full Bench decision of Visy Paper is authority for that proposition.
[91] It would be a perverse outcome where either party to a registered enterprise agreement has the ability to terminate that agreement without the other party’s acquiescence via the procedures set out in the Act 40 but are not able to do so for an unregistered agreement. This is particularly more so where the objects of the Act encourage the registration of enterprise agreements.41 Agreements made and registered under the Act or its predecessors are given the protection of not being subject to unilateral change by either party but must be amended, varied or terminated subject to a legislated process.
[92] I am not able to accept the AMWU position when having regard to the authorities cited above. The greatest protection against arbitrary termination of site agreements is to have them made in accordance with the relevant industrial legislation. Despite the AMWU’s claim that all site agreements be incorporated into Enterprise Agreement this was not acceded to by the Respondent and the 2010 Enterprise Agreement was registered without reference to the wash up allowance or the continuous running payment.
Managerial Prerogative
[93] Employee entitlements may arise from a relevant award/enterprise agreement, site agreement, custom and practice and or managerial prerogative. The Respondent argues that its intentions in this matter to cease the existing arrangements fall within its managerial prerogative and it has deliberately refrained from enshrining the two site agreements into the Enterprise Agreement.
[94] Various decisions exist which consider the role of industrial tribunals and managerial prerogative. A Commission in Court Session of the Western Australian Industrial Relations Commission (WAIRC) stated in The Federated Engine Drivers’ and Firemen’s Union of Workers of Western Australia v Robe River Iron Associates 42:
Managerial prerogative is not a sword which can be wielded in wanton disregard of the industrial consequences nor is it a shield to hide behind. An employer has a responsibility to manage fairly. Almost every initiative that an employer may take can be clothed in the ubiquity of managerial prerogative. To espouse this principle does not relieve the employer of the obligation to justify the effect where a change is instituted to some long standing custom or practice. Managerial prerogative is not a short cut to arbitration without consultation on the assumption that the union will carry the onus of proving that the long standing arrangement should continue.
(emphasis added)
[95] In another matter before the WAIRC in Central Norseman Gold Corporation Limited v The Australian Workers' Union, West Australian Branch, Industrial Union of Workers 43 the Commission was asked to deal with a dispute where the employer wished to withdraw from an agreement relating to payments towards power costs of employees in company housing. In determining whether the cessation of the payment was fair and reasonable, Gregor C (as he then was) stated:
If such discussions had not taken place, there would be valid grounds to criticise the employer that it had tried to change longstanding agreements without the level of consultation which is essential as far as this Commission is concerned when changing such agreements. It follows from this that it is well accepted that agreements made between parties for industrial relations purposes can be changed. In fact, it occurs every day when the parties are confronted with changed circumstances. Changed circumstances can affect both the employer and the employee, the critical issue being that if a party wishes to change an agreement that they must give appropriate notice to enable discussions to take place and the opportunity for resolution of any disagreement, if it exists at the end of those discussions, in accordance with the terms of the Industrial Relations Act.
(emphasis added)
[96] In a matter before the Commonwealth Conciliation and Arbitration Commission in Shell Refining (Australia) Pty Ltd v The Australian Workers Union 44, Clarkson C stated in respect of a dispute before the Commission that the employer has the right and duty to manage and organise its employees efficiently and economically.
[97] A Full Bench of the Australian Industrial Relations Commission in Australian Federated Union of Locomotive Enginemen v State Rail Authority of New South Wales 45 (XPT case) in addressing managerial prerogative said:
It seems to us that the proper test to be applied and which has been applied for many years by the Commission is for the Commission to examine all the facts and not to interfere with the right of an employer to manage his own business unless he is seeking from the employees something which is unjust or unreasonable.
[98] Vice President Lawler in Construction, Forestry, Mining and Energy Union v HWE Mining Pty Ltd 46held that an exercise of managerial prerogative that is contrary to an industrial settlement could in appropriate circumstances be found to be unjust or unreasonable within the meaning of the principles of the XPT case.
[99] The High Court in Construction, Forestry, Mining and Energy Union v Australian Industrial Relations Commission 47 stated with respect to unregistered agreements that the general law will apply:
The parties to an industrial situation are free to agree between themselves as to the terms on which they will conduct their affairs. Their agreement has effect according to the general law. If their agreement is certified, it also has effect as an award. To the extent that an agreement provides in a manner that exceeds what is permitted either by the Constitution or by the legislation which gives the agreement effect as an award, it cannot operate with that effect. But the underlying agreement remains and the validity of that agreement depends on the general law, not the legislative provisions which give it effect as an award
(emphasis added)
[100] As can be seen from the above authorities an employer is free to manage its business in the most effective manner possible and industrial tribunals will not interfere unless the employer’s actions are unjust or unreasonable. Many conditions/arrangements with a historical basis outside the award or registered agreement may have been won in circumstances that no longer exist or are no longer appropriate. An employer should not be required to maintain practices that may jeopardise its operations particularly where those practices were agreed and implemented in a different economic environment. In this instance the Respondent relies on a significant change to the economic operations of the Warwick Farm site to justify the removal of the two payments.
Implied contractual term
[101] While not specifically put by the AMWU, I have considered whether the arrangements entered into between the AMWU and the Respondent has resulted in any of the Respondent’s employees having an implied term in their contacts of employment concerning the two payments. For any of the Respondent’s employees to have a legally binding entitlement to the wash up allowance or continuous running payment outside their Enterprise Agreement, the entitlement must exist either by express agreement between the employee and the Respondent, or by way of an implied term. Terms can be implied as representing the imputed intention of the parties or by custom. 48
[102] In BP Refinery (Westernport) Pty Ltd v Shire of Hastings 49, the Privy Council set out five requirements to be considered before a court can imply a term into a contract, it must:
(1) be reasonable and equitable;
(2) be necessary to give business efficacy to the contract so that no term will be implied if the contract is effective without it;
(3) be so obvious that it goes without saying;
(4) be capable of clear expression; and
(5) not contradict any express terms of the contract.
[103] Applying the tests above, the contract of employment is entirely effective without such payments and it cannot be assumed that the parties would regard the payments as so obvious as to go without saying. As such, I cannot hold that the two payments are implied into an employee’s contract of employment as per the dicta in BP Refinery (Westernport) Pty Ltd v Shire of Hastings.
[104] In addition to the above, the High Court has held that contractual terms can also be implied through custom or usage, which in an employment relationship, equates to custom and practice. In Con-Stan Industries 50, Gibbs CJ, Mason, Wilson, Brennan and Dawson JJ said:
“The circumstances in which trade custom or usage may form the basis for the implication of terms into a contract have been considered in many cases. The cases have established the following propositions:
(1) The existence of a custom or usage that will justify the implication of a term into a contract is a question of fact...
(2) There must be evidence that the custom relied on is so well known and acquiesced in that everyone making a contract in that situation can reasonably be presumed to have imported that term into the contract... (The custom) must be so notorious that everybody in the trade enters into a contract with that usage as an implied term. It must be uniform as well as reasonable, and it must have quite as much certainty as the written contract itself.
(3) A term will not be implied into a contract on the basis of custom where it is contrary to the express terms of the agreement...:
(4) A person may be bound by a custom notwithstanding the fact that he had no knowledge of it. ... in modern times nothing turns on the presence or absence of actual knowledge of the custom; that matter will stand or fall with the resolution of the issue of the degree of notoriety which the custom has achieved... .”
(Citations omitted)
[105] It is noted that the requirement for implication of a term through custom and usage as explained by the High Court in Con-Stan Industries does not include the necessity that the implied term give business efficacy to the contract so that no term will be implied if the contract is effective without it.
[106] In the decision of Hawkins v Clayton 51, the tests in BP Refinery (Westernport) Pty Ltd v Shire of Hastings were applied by Deane J who added that a contractual term may be implied by past practice:
"The most that can be said consistently with the need for some degree of flexibility is that, in a case where it is apparent that the parties have not attempted to spell out the full terms of their contract, a court should imply a term by reference to the imputed intention of the parties if, but only if, it can be seen that the implication of the particular term is necessary for the reasonable or effective operation of a contract of that nature in the circumstances of the case. That general statement of principle is subject to the qualification that a term may be implied in a contract by established mercantile usage or professional practice or by a past course of dealing between the parties.”
(emphasis added)
[107] The facts relating to an established practice concerning the two payments elicited before the Tribunal in this matter are as follows:
Wash up allowance
[108] By way of a written memorandum dated 16 May 2003, the Respondent’s NSW State Manager, decreed that employees would receive a wash up allowance of $6.50 per day subject to remaining at their work station until completion of their shift. The allowance was confirmed again on 13 October 2010, by the Respondent’s NSW General Manager.
Continuous running payment
[109] The parties have not reduced to writing an agreement for the payment of an amount for the continuous running of the corrugator. A payment was a made in 1980 of 45 minutes at ordinary time where the corrugator ran continuously and employees did not take a meal break. In 1998, employees were able to take their meal break and where the corrugator ran continuously a payment of 45-minutes at time and one-half was made. In a memorandum to employees dated 10 February 2012, the Respondent confirmed the payment of a “Continuous Running Allowance” paid at the company’s “sole discretion”, provided the corrugator ran continuously for a whole shift.
[110] Whether these practices have become implied contractual terms of employment for the Respondent’s employees depends on the satisfaction of tests to be applied. In order to establish a custom it is necessary to establish a clear course of conduct. 52
[111] The evidence before the Tribunal is that a practice of paying a wash up allowance by the Respondent to its employees has existed for over nine years and a practice of paying a continuous running payment has existed for over 14 years. In my view, there is an existing practice which is well known to the Respondent, the AMWU and the Respondent’s employees. The two payments while in excess of the terms of the Enterprise Agreement are not contrary to the Enterprise Agreement in the sense that the payments are in breach of the Enterprise Agreement.
[112] As stated by the High Court in Con-Stan Industries the existence of a custom or usage that will justify the implementation of a term into a contract is a question of fact. In my view it can be argued that the two payments meet the tests as outlined by the High Court in Con-Stan Industries and have thus become implied contractual terms. However, whether this is the case or not does not prevent the Respondent from varying or terminating the payments subject to meeting certain other requirements.
[113] In The King v Alexander; Ex Parte Campbell 53 Latham CJ stated that variation of a “practice” by one party or the other, though not unlawful, may easily lead to industrial disputes and so become an appropriate matter for reference to a Board which is appointed to deal with industrial matters.
[114] It is important to note that during the negotiations for the 2010 Enterprise Agreement, the AMWU sought to have all site agreements included in the Enterprise Agreement; this was rejected by the Respondent. 54 Thus the statutory termination provisions applying to registered enterprise agreements have no application to the two payments in dispute.
[115] In the absence of the payments being part of a registered agreement, there remains unaffected the entitlement of the Respondent at general law, to terminate at will, the agreements on the giving of reasonable notice to the employees if they are implied contractual terms (see Byrne v Australia Airlines Ltd). 55If the payments are not implied terms and the cessation of the payments is as argued by the Respondent a legitimate exercise of managerial prerogative, their termination should be done in a manner which is not unjust or unreasonable. Further in dealing with disputes the Tribunal must take into account equity, good conscience and the merits of the matter.
[116] The reasonableness of the period of notice will depend upon the circumstances existing when the notice is given. 56 The two agreements operate subject to their terms, but they do not provide an immutable entitlement for either party. Where no term is specified in an agreement it is not to be implied that the parties intended to enter into an agreement of unlimited length. Whether common law contracts have been established between the parties raises the question of whether there was an intention to create legal obligations and what consideration existed, privity of contract issues also arise.57 In any event, in the interests of equity and good conscience, in my view, it is appropriate to apply the principles of contract construction. To give both agreements business efficacy a term of reasonable notice must be implied.
Justification for Continuous Running Payment
[117] The Enterprise Agreement makes no reference to when meal breaks are to be taken, so it is necessary to refer to the Graphic Arts, General Award 2000 and the Metal, Engineering and Associated Industries Award 1998 (the Awards) as they stood on 1 March 2006, which are incorporated into the Enterprise Agreement by the operation of clause 4.2.
[118] The Graphic Arts, General Award 2000 makes specific reference to meal breaks which are extracted below:
6.1.6 Fixation and change of hours
6.1.6(a) The daily hours of each employee, including the meal period, will be as determined by the employer, provided that the employer will not alter the usual daily working hours of any employee unless and until the employee has had one week’s notice of the alteration which is to be made.
...
6.3 MEAL BREAKS
...
6.3.4 The meal period of any employee on day work will be between the hours of 11.00 am and 2.00 pm.
6.3.5 The usual time of an employee’s meal period may be altered:
6.3.5(a) By the employer after the employee has had one week’s notice of the alteration which is to be made; or
6.3.5(b) ...
6.3.5(c) By an employer where a change is necessary in order to meet a requirement for continuous running of a machine in which case notice of alteration will not be required. Provided that such a change will not be effected in circumstances where the employee has an existing commitment that prevents the meal period being altered.
6.3.5(d) By agreement between an employer and an employee in which case notice of alteration will not be required provided that such agreement is not for the sole purpose of avoiding the penalty prescribed by clause 6.3.3. This agreement is not subject to 2.3.
(emphasis added)
[119] The Metal, Engineering and Associated Industries Award 1998 also provides for meal breaks and at subclause 6.3.3 states:
6.3.3 An employer may stagger the time of taking a meal and rest breaks to meet operational requirements.
[120] As can been seen above, the Enterprise Agreement via the incorporated Awards does not prevent the staggering of meal breaks by the employer and specifically provides for this to occur without any additional payment, provided appropriate notice is given where required.
[121] As such, the need to reach a separate arrangement outside the Enterprise Agreement to stagger meal breaks is not required nor is an allowance required to be paid to employees whose meal breaks are staggered. No party was able to explain why the corrugator employees receive the payment of 45-minutes at time and one-half, when the employees receive their meal break and the Enterprise Agreement provides for staggered meal breaks. The payment of an allowance where employees did not take a meal break as was Mr Kurta’s evidence has some logic, but this practice has ceased and meal breaks are now taken.
Determination of Dispute
[122] While I have not upheld the AMWU’s argument that the agreements cannot be terminated without their acquiescence, in the circumstances to ensure that the termination of the agreements is not an unjust or unreasonable exercise by the Respondent, a period of reasonable notice must be imported into the agreements in order to bring their operation to an end.
[123] It is my view that for either party to withdraw from the two agreements they need to discuss and consult in the first instance and failing agreement provide an appropriate period of reasonable notice. The consultation process has been conducted and exhausted and the dispute remains unresolved particularly in respect of the continuous running payment.
[124] On the evidence presented, I find that the consultation process undertaken by the Respondent since delaying its initial decision of 21 August 2012, to terminate the payments has met its Enterprise Agreement obligations, where they apply.
Wash Up Allowance
[125] Following the consultation process between the parties, the dispute in respect of the termination of the wash up allowance amounts to its removal on just terms. The AMWU argue that if the Respondent wishes to reintroduce employees washing up in work time at the end of their shift, the previously granted period of five minutes should apply and not the three minutes now decreed by the Respondent.
[126] Mr Bubb-Edwards who gave evidence for the Applicant stated that the reversion to employees washing up prior to the end of their shift was opposed on the basis that this was not the previous practice. The previous practice was for a period of five minutes being allocated for employees to wash up. The new procedure providing for three minutes wash up time is not reflective of the status quo ante.
[127] The provision of wash up time is not an unusual arrangement in many industries where employees are not in a state at the end of their shift to leave their work site without first needing to wash up. The Respondent does not argue that wash up time is unnecessary but wishes to substitute the payment of an allowance for the reintroduction of time during ordinary working hours for employees to wash up. The period of time to be allocated is three minutes. No reasons were given by the Respondent as to why three minutes was now an appropriate wash up period as opposed to the previous five minute period allocated.
[128] The allowance paid per shift is $6.50 which the Respondent states is double the pay rate for five minutes work. The amount of $6.50 has not been increased since its inception in 2003. The parties agree that prior to the introduction of the wash up allowance a period of five minutes was allocated for washing up before the end of a shift. The calculation of the amount of the $6.50 on its introduction in 2003 as noted above was not able to be explained, suffice to say it equates to a period greater than five minutes paid at ordinary time.
[129] In taking into account the merits of the claim, I conclude that as a matter of good conscience and equity the Respondent’s right to restore the wash up time during working hours in lieu of payment of an allowance should occur on the basis of what was traded off in 2003 for the payment of the allowance, namely five minutes of working time and not the three minutes now imposed on the workforce.
[130] The practice of three minutes wash up time which was phased in from 29 October 2012 should be replaced with a period of five minutes. The Tribunal will deal with the retrospective adjustment of wash up time if the parties cannot resolve the matter amongst themselves.
Continuous running payment and reasonable notice of termination
[131] The abolition of the continuous running payment is opposed in its entirety by the AMWU. My conclusion in this matter that its cessation is not prohibited nor is it an unreasonable exercise by the Respondent, leads to a determination as to whether in the circumstances a reasonable period of notice has been provided to terminate the payment.
[132] Where a contract is terminable on reasonable notice the reasonableness of the period of notice depends upon the circumstances existing when the notice is given: Winter Garden Theatre (London) Ltd v Millenium Productions Ltd (at 199-200); Australian Blue Metal Ltd v Hughes (at 99); W K Witt (WA) Pty Ltd v Metters Ltd and General Industries Ltd [1967] WAR 15 at 23-24; Decro-Wall International SA v Practitioners in Marketing Ltd (at 370; 224; 376-377; 229; 381; 234); Crawford Fitting Co v Sydney Valve & Fittings Pty Ltd(1988) 14 NSWLR 438.
[133] Relevant factors existing at the time the notice was provided include:
● respondent’s justification for its removal;
● the financial impact on employees and amount of time to make any necessary adjustments;
● length and history and basis for the payment; and
● previous commitments given by Respondent to retain the payment.
[134] The evidence demonstrates that the Respondent is now in a precarious economic environment which is being faced by the manufacturing sector as a whole. The Warwick Farm site has operated at a loss for two consecutive years and I accept that the termination of the two payments is not a pernicious exercise of managerial prerogative but a measure amongst many, taken to avoid redundancies or the site’s closure.
[135] The length, history and basis for the continuous running payment have been discussed above. The payment is made to 20 to 25 employees and equates to around $40.00 per day, per employee and costs the Respondent approximately $200,000 per annum. On this basis employees’ receiving the allowance would average approximately an additional $8,000 per annum, a significant sum.
[136] As the authorities establish the reasonableness of the notice is to be examined at the date the notice is given, this would include giving consideration to the other changes introduced by the Respondent.
[137] The removal of the continuous running payment is not the only adjustment to employees’ wages and conditions in recent times. The review of the Warwick Farm site operations has resulted in the following changes to employee wages and conditions:
● attendance bonus cancelled, $1,000 per annum (February 2012);
● subsidised staff canteen closure (September 2012);
● wash up allowance ceased, $6.50 per day, $1,400 per annum (29 October 2012); and
● continuous running payment to be terminated $40.00 per day $8,000 per annum (5 February 2013).
[138] These reductions must be balanced against a 4.5% Enterprise Agreement wage increase effective from the first full pay period on or after 1 October 2012.
[139] The Applicant’s submissions referred to the financial detriment to be incurred by employees as a result of the cessation of the two payments. In considering the financial impact on its employees the Respondent submits that it has taken this factor into consideration in delaying the termination of the continuous running payment until 5 February 2013.
[140] The first notification regarding the termination of the wash up allowance and continuous running payment was via the Respondent meeting with AMWU delegates on 17 August 2012. A subsequent memorandum dated 21 August 2012, was sent to all employees advising that the wash up and continuous running payments would cease from the pay week commencing 4 September 2012.
[141] The termination of both payments was put on hold while discussions occurred with the AMWU, the outcome being that the wash up allowance would commence to cease on 29 October 2012, and the continuous running payment would cease on 5 February 2013. This was advised to employees by way of memorandum dated 12 October 2012.
[142] Much can be said for the argument of the AMWU that during the Enterprise Agreement negotiations, employees were given to understand that no other benefits or entitlements were to be removed during the life of the Enterprise Agreement. In a memorandum dated 13 October 2010, addressed to all employees and signed by the Respondent’s NSW General Manager, it stated that the wash up allowance is guaranteed as per the ‘present conditions’. The Respondent states that the present conditions have changed where employees are no longer required to wash up in their own time.
[143] On 7 October 2010, a Visy EBA Negotiation Update sent to employees by the General Manager - Visy Board NSW, stated that the proposed 2010 EBA maintains all your current terms and conditions of employment. 58It would be reasonable for employees to understand the reference to current terms and conditions as meaning benefits arising from unregistered site agreements.
[144] The Respondentargues that the 7 October 2010 advice was simply an update. The update was not the final outcome and that the two payments were not part of the Enterprise Agreement and the claim that unregistered agreements be inserted in the Enterprise Agreement was rejected indicating that the agreements were not in the same category as the terms and conditions contained in the Enterprise Agreement.
[145] In taking into consideration all the factors surrounding the termination of the continuous running payment, I regard a three month notice period as being reasonable in the circumstances. A three month period would be adequate for the affected employees to make the necessary adjustments to their financial arrangements where they had come to rely on the additional income provided by the continuous running payment.
[146] Hence the initial two week notice period of termination of the two payments provided by the Respondent to employees on 21 August 2012 was unreasonable in the circumstances.
[147] It is my conclusion that both payments can be terminated by the Respondent having engaged in the necessary consultation, the provision of reasonable notice and on just terms.
[148] The reintroduction of wash up time during working hours should occur on the basis that a period of five minutes is allocated to employees to enable the wash up to occur.
[149] In respect of the continuous running payment, as a result of the discussions with the AMWU the appropriate consultation has now been undertaken and the proposed deferred operative date of 5 February 2013 meets the reasonable notice requirement of three months taking the Respondent’s memorandum to employees of 12 October 2012, as the date the final notice was given.
COMMISSIONER
Appearances:
A Walkaden for the AMWU
K Brotherson of Counsel for the Respondent
Hearing details:
2012.
Sydney:
6 December.
7 December.
1 AE884867 PR507978
2 [2012] FWAFB 7072 PR528063
3 See paragraph 23 of Mr G Schouten’s Witness Statement Exhibit R4, Para 18 of Mr R Bubb-Edwards Witness Statement Exhibit A1
4 Attachment to Statement of Mr Bubb-Edwards Exhibit A1 at RE1
5 Witness Statement of Mr Bubb-Edwards Exhibit A1 at paragraph 21
6 Witness Statement of Mr Bubb-Edwards Exhibit A1 at paragraph 24
7 Witness Statement of Mr Schouten at paragraph 37 Exhibit R4
8 Exhibit A3 at paragraph 8-10
9 Transcript at PN 1116
10 Print R2578, 5 March 1999
11 Ibid at paragraph 52
12 [2009] AIRCFB 27, PR985266
13 AMWU Outline of Submissions in Reply at paragraph 30
14 Transcript at PN 1204
15 Transcript at PN 98
16 Transcript at PN 265
17 Paragraph 28 of Mr Bubb-Edwards Statement Exhibit A1
18 Transcript at PN 165
19 RE8 of Mr Bubb-Edwards Statement Exhibit A1
20 Transcript at PN 143-153
21 Paragraph 28.1 of Respondent’s Outline of Submissions Exhibit R6
22 GS1 of R4 witness Statement of Mr Schouten
23 See subclause 4.2 of the Enterprise Agreement
24 Mr Schouten Witness Statement at paragraph 43 Ex R4
25 Transcript at PN 706
26 Exhibit R2
27 Transcript at PN 153
28 Transcript at PN 427-8
29 See Exhibit R4 at GS6
30 G Schouten Witness Statement at paragraphs 30-31 Exhibit R4
31 Respondent’s Outline of Submissions at paragraph 21
32 Transcript at PN 1116
33 Transcript at PN 2244-45
34 Exhibit R4
35 National Wage Case 1983 Print F2900
36 Clauses 2.6 and 2.8 of the 35 hour week agreement
37 Visy Board at paragraph 64
38 Mr Bubb-Edwards understood that the site agreements formed part of his conditions of employment, paragraph 14 of Exhibit A1
39 Print M9086, 7 February 1996
40 See s.226 of the Act
41 See ss.3(f) and 171 of the Act
42 CR 676 of 1986
43 431 of 1987
44 127 CAR 1022 at 1023
45 (1984) 295 CAR 188 at 191
46 2011 FWA 8288
47 203 CLR 645 at 658 [34]
48 Automotive, Foods, Metals, Engineering, Printing and Kindred Industries Union v Skilled Engineering Ltd [2003] FCA 260 at paragraph 12
49 (1977-78) 16 ALR 363
50 Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur (Australia) Ltd [1986] 160 CLR 226 at 236
51 (1988) 164 CLR 539 at 573)
52 Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur (Australia) Ltd [1986] 160 CLR 226 at 238
53 ALJ Vol 17 May 14 1943
54 See paragraph 31 of statement of Richard Bubb-Edwards Ex A1
55 1995 185 CLR 410 at 429
56 IOOOF Building Society Pty Ltd v Foxeden Pty Ltd [2009] VSCA 138 (2009) 23 VR 536 at 552
57 See Ryan and Another v Textile Clothing & Footwear Union Australia and Another 66 IR 258 at 297
58 Exhibit A1 at RE7
Printed by authority of the Commonwealth Government Printer
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