BlueScope Steel (AIS) Port Kembla v The "Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU)
[2017] FWCFB 2106
•24 May 2017
| [2017] FWCFB 2106 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.604 - Appeal of decisions
BlueScope Steel (AIS) Port Kembla
v
The "Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU); Australian Workers' Union (AWU)
(C2017/1317)
| VICE PRESIDENT CATANZARITI DEPUTY PRESIDENT CLANCY COMMISSIONER JOHNS | MELBOURNE, 24 May 2017 |
Appeal against decision [2017] FWC 335 of Commissioner Riordan at Sydney on 21 February 2017 in matter number C2016/6680. Permission to appeal refused.
On 21 February 2017, Commissioner Riordan issued a decision[1] which found that BlueScope Steel (‘Appellant’) could not implement certain changes to the Steel Treatment Department. These changes would include a reduction of 6 operators employed in the Steel Treatment Department, as well as require tradespeople from the Slab-making Department to perform certain functions during peak business periods that were usually performed by operators in the Steel Making Department (‘changes’). The Commissioner found that the changes were ‘significant in nature’ as defined by the Bluescope Steel Port Kembla Steelworks Agreement 2015 (‘the Agreement’) at cl.35.2.2(c) and consequently, the Appellant had failed to fulfil the consultation requirements as set out in the Agreement at cl.35.2. Accordingly, the Commissioner found that the Appellant could not make the changes without adequately fulfilling these consultation requirements. It was recommended that the parties return to the consultation process regarding the proposed changes.
On 3 March 2017, the Appellant lodged a Notice of Appeal, appealing the Decision made by the Commissioner.
We heard the appeal on 4 April and reserved our Decision. At the hearing Mr K Brotherson sought permission to appear for the Appellant, there were no objections from the Respondents, and given the complexity of the matter and having regard to section 596 of the Act, permission was granted for the Appellant to be represented. Ms Lucy Saunders appeared for the AMWU (Respondent) and Mr G Beard appeared for the AWU (Second Respondent).
Decision
The Commissioner found that the proposed changes were ‘significant changes’ under the Agreement cl.35.2.2(c), for the following reasons:
They require maintenance employees to learn and utilise new skills for at least 20% of their hours at work.
The tasks to be performed by Tradespersons under the change, are not incidental and peripheral to their existing roles and not within their existing skill set, competence of training.
They will substantially alter the composition and operation of the Slab-making Department and will change the way that the Shift maintenance Department operates.
Implementation of the Trade Operator Model (TOM) by the Appellant was considered a change ‘significant in nature’ in a previous decision of the Commission on the scope of duties of tradespersons in the Hot Mills Business (HMB decision).[2]
As a result of these findings, the Commissioner concluded that the maintenance employees and their unions were entitled to be consulted in accordance with cl.35.2.3 of the Agreement.
Having come to this conclusion, the Commissioner found that it was not necessary to address the question of whether the changes satisfy the criteria under cl.35.2.1(c) of the Agreement, that is, whether the proposal was safe, efficient, legal or fair.
Accordingly, the Commissioner found that the Appellant had not complied with the introduction of change processes contained in cl.35.2.3 of the Agreement, and the consultation process was not fair, comprehensive or genuine for maintenance employees. As a result, the Commissioner suggested that parties recommence consultation in relation to the proposed changes.
The Appeal
At the core of this Appeal, is the question of whether the changes are ‘significant in nature’ as per cl.35.2.2(c) of the Agreement, and as a result, whether cl.35.2.3 should apply to the consultation process or whether the changes are not ‘significant in nature’ and cl.35.2.1 applies, which would require the Commissioner to have had applied the test in cl.35.2.1(c) of the Agreement and determine whether the changes are “safe, efficient, legal and fair”.
Appellant permission to appeal submissions
The Appellant requests permission to appeal on the grounds that:
- The decision involved important questions concerning the proper interpretation, scope and application of important clauses of an enterprise agreement.
- The introduction of workplace change being sought in this matter is designed to assist the economic viability of a major employer.
- The introduction of change provisions in the Agreement have not been subject to Full Bench consideration.
- The Commissioner made legal and factual errors in the Decision at first instance, which in the interest of justice require correction.
Appellant’s submissions
The Appellant submitted 8 main grounds of appeal, which we summarise as follows.
First, the Appellant asserts that the Commission does not have the power to prevent or halt the decision to introduce the changes, only the power to arbitrate about its implementation. In making this assertion, the Appellant states that the Commission may deal with disputes where an enterprise agreement includes a dispute settlement procedure, however, that this power is limited by ss 739(3) and (5) of the Act, which state that the Commission must not exercise power relating to a term of an enterprise agreement, where that power is limited by the term, or is inconsistent with the Act or any applicable industrial instruments.
The Appellant then argues that in order to remain consistent with clauses 35.2.1 and 35.2.3 of the Agreement, the Commissioner was limited to making a decision only on the implementation of change. In this circumstance the Appellant argues that the relevant test for implementation is laid out in cl.35.2.1(c), which is whether the change is; safe, efficient, legal and fair.
Subsequently, the Appellant contends that the Commissioner erred by not addressing this test but rather determining the matter with reference to a ‘threshold question’ of whether the change was to be considered significant or not.
Second, the Appellant argues that the tasks required of tradespersons from the Shift Maintenance Department are not ‘significant changes’ as per the Agreement,[3] and as such the Appellant was not required to engage in consultation at any earlier stage than when they had done, and that they were not required to re-establish the work team process to involve both the Steel Treatment operators and Shift Maintenance Department employees.
In making this argument, the Appellant highlights that it adequately carried out its consultation requirements as per cl.35.2.1 of the Agreement. After Letter 1 was issued, consultation with the maintenance employees from the Shift Maintenance Department occurred and was carried out by their managers. This consultation covered specifics of what may be required from the maintenance employees in the Steel Treatment Department. The Appellant argues that this process fulfils the applicable consultation requirements from the Agreement.
Third, the Appellant contends the Commissioner’s finding that consultation in the Steel Treatment Department as regards the changes was not fair, comprehensive or genuine for maintenance employees. The Appellant claims that this conclusion arises from the view that “maintenance employees were entitled to participate in the work team process”, which the Appellant claims is an artificial construction of the Agreement.
The Appellant argues that this conclusion denies the Agreement its practical operation, and in coming to this conclusion, the Commissioner incorrectly applied the principles established in The Australian Meat Industry Employees Union v Golden Cockerel Pty Ltd.[4] The Appellant claims that the Commissioner should have taken a practical approach to the consultative requirements under the enterprise agreement. To strengthen this argument, the Appellant referred to a prior decision of Vice President Hatcher in relation to the same Agreement, and the Appellant highlights the Vice President’s finding that the enterprise agreement requires ‘substantial compliance’ with provisions. According to the Appellant this approach is also consistent with the principles in Kucks v CSR.[5] In applying this reasoning, the Appellant argues that the work team process was correctly established and included the ‘relevant employees’, which are those from the Steel Treatment Department. That at some later stage of this consultative process it emerges that maintenance employees from the Shift Maintenance Department may perform certain tasks in Steel Treatment, does not render as invalid, the original work team process or the separate consultation that had occurred in the Shift Maintenance Department.
At the core of this appeal ground, the Appellant is arguing that they at the very least, ‘substantially complied’, and to the extent that was practical in the circumstances, with the consultation processes applicable to the changes.
Fourth, the Appellant claims that the Commissioner acted outside of the power available to him under the Act and the Agreement, by basing his decision on two or more changes, outside of the relevant change that was the subject of dispute. The Appellant argues that the Steel Treatment change was the subject of the dispute, which is the loss of 6 employees in the Steel Treatment Department, and that among other things, the Commissioner was incorrectly persuaded by the AMWU’s position against the implementation of the TOM. The Appellant describes this implementation as “the potential introduction of the trade operator model across Slab making that the Company was not yet determined to implement”. The Appellant argues that the Commissioner erroneously conflated the TOM change with the Steel Treatment change.
Fifth, the Appellant argues that it did comply with all of the applicable consultative requirements in the Agreement regarding both Departments (Steel Treatment, Shift Maintenance), and that even in the case where the wrong approach to consultation was taken (which the Appellant does not accept), the Appellant argues that its approach to consultation with operators and tradespersons was extensive enough to ensure ‘substantial compliance’ with whatever the correct approach may be.
Sixth, the Appellant argues that the Commissioner erred by accepting that the TOM impacts the operation and composition of the workforce, as well as the skills required of employees. The Appellant argues that the Commissioner incorrectly placed emphasis on the potential amount of time (20%) that the tradespersons may spend performing tasks in the Steel Treatment Department, rather than considering whether the ‘principle purpose’ of the employees’ engagement had changed, which the Appellant states is the correct test to be applied. The Appellant argues that this test is not dependent on the time spent on a task or any aspect of the work in isolation from the totality. The Appellant also argues that the changes utilise time available to and existing skills of employees, and as a result the changes do not have a substantial effect on any employees. In conjunction with this appeal point, the Appellant argues that the Commissioner erred in concluding that the changes require tradespersons to acquire new skills, since the changes call on existing skills.
Seventh, the Appellant claims that the Commissioner applied the incorrect test when considering whether a change is significant in nature, by applying ‘substantial and significant change’ as the threshold, rather than considering whether there are substantial effects on one or more of the criteria in cl.35.2.2(c). The Appellant claims that in applying the latter test, there are no substantial effects on any of the criteria resulting from the changes, when applied to tradespersons.
Eighth, the Appellant argues that the Commissioner erred by drawing a comparison between the changes in question and the HMB matter in which the introduction of a TOM was considered to be a ‘significant change’. [6] The Appellant states that this approach ignores the requirement of the Agreement that each change be assessed on its own facts and merits. As a result, the Appellant claims that the Commissioner held a preconceived view of the TOM in this instance, rather than evaluating the changes on their merits.
The Appellant requests that permission to appeal be granted and the decision at first instance be quashed, allowing the Appellant to make the changes.
Respondent permission to appeal submissions
The Respondent requests that permission to appeal be denied for the following reasons:
The Appellant does not make out an adequate case of appealable error.
The dispute raises no issues of general application or importance.
The Appellant being a major employer does not in itself attract the public interest for appeal.
Respondent submissions
The Respondent states that the subject of dispute is the Appellant’s decision to implement the TOM in the Shift Maintenance Department, and the Appellant’s decision to reduce operator positions by six in the Steel Treatment Department. The Respondent claims that these matters should be considered together.
The Respondent argues that the Appellant’s only substantial challenge to the Decision was on the Commissioner’s application of the cl.32.2.2(c) test on the facts. The Respondent argues it was a discretionary decision by the Commissioner to apply cl.32.2.2(c), and that the Appellant’s challenge on these grounds does not lead to a House v King error.
The Respondent claims that the change will have a significant effect on the operation of the Shift Maintenance department, the skills required of employees and their opportunities for promotion. The Respondent argues that as a result the change is ‘significant in nature’ as per cl.32.2.2(c)(i) – (iii), and that the Commissioner did not err in finding the changes to be ‘significant in nature’.
The Respondent claims the Appellant’s assertions that cl.35.2.2(c) is not satisfied can be summarised in five grounds, all of which the Respondent claims, have no merit. First, the Respondent argues that the ‘principle purpose test’ is irrelevant to the question of whether the TOM is a change ‘significant in nature’ for the purposes of cl.35.2.2. Second, the Respondent states that the Commissioner at [35] correctly attributes the 20% additional utilisation figure as applicable across the whole of Slab-making, rather than just Steel Treatment. The Respondent says that the Commissioner may have made a drafting mistake at [39] but that this mistake is not grounds for appeal. Third, the Respondent argues that requiring a person to perform 20% more work than previously required has a ‘significant effect’ on the employee. Fourth, the Respondent argues that the Commissioner did not err by comparing the current proposal to the HMB matter where the TOM was considered a ‘significant change’. Fifth, the Respondent highlights that the skills required for the implementation of the changes are ‘new skills’ on any view of the facts.
The Respondent indicates that where the Appellant relies on a view expressed by Vice President Hatcher about the need to remove demarcation between trade workers and operators, that this view did not form part of a formal recommendation or direction, and that this view does not claim that such changes can be made without proper consultation.
The Respondent argues that the Appellant did not consult with the Shift Maintenance employees at all, and that the argument by the Appellant that they have ‘substantially complied’ was erroneous, and also was not advanced at first instance and should not be considered at appeal.
The Respondent argues that where the changes are considered to fall within cl.32.2.2(c), as the Commissioner found at first instance, then the changes will not be ‘legal’, ‘efficient’ or ‘safe’ when cl.35.2.1(c) is applied.
The Respondent argues first that permission to appeal should be refused and the appeal dismissed. In the event that permission to appeal is granted by the Commission, the Respondent argues that the decision at first instance be quashed and the changes considered not legal, efficient or safe, and therefore incapable of being introduced.
Second Respondent submission (AWU)
The Second Respondent argues that the Commissioner was correct to classify the changes as significant in nature and to subject the changes to the consultation requirements of cl.35.2.3 of the Agreement. The Second Respondent states that unions such as the CEPU and other relevant unions were entitled to participate in the process.
The Second Respondent otherwise supports the submissions put by the Respondent.
The Second Respondent requests that permission to appeal be refused and the appeal be dismissed.
Consideration – Permission to Appeal
An appeal under s.604 of the Act is an appeal by way of rehearing, and the Commission’s powers on appeal are only exercisable if there is error on the part of the primary decision maker[7]. There is no right to appeal and an appeal may only be made with the permission of the Commission. Section 604 provides:
(1) A person who is aggrieved by a decision:
(a) made by the FWC (other than a decision of a Full Bench or an Expert Panel); or
(b) made by the General Manager (including a delegate of the General Manager) under the Registered Organisations Act; may appeal the decision, with the permission of the FWC.
(2) Without limiting when the FWC may grant permission, the FWC must grant permission if the FWC is satisfied that it is in the public interest to do so.
Note: Subsection (2) does not apply in relation to an application for an unfair dismissal (see section 400).(3) A person may appeal the decision by applying to the FWC.
Subsection 604(2) requires the Commission to grant permission to appeal if satisfied that it is “in the public interest to do so”. The task of assessing whether the public interest test is met is a discretionary one involving a broad value judgment.[8] In GlaxoSmithKline Australia Pty Ltd v Makin a Full Bench of the Commission identified some of the considerations that may attract the public interest:
“… the public interest might be attracted where a matter raises issues of importance and general application, or where there is a diversity of decisions at first instance so that guidance from an appellate court is required, or where the decision at first instance manifests an injustice, or the result is counter intuitive, or that the legal principles applied appear disharmonious when compared with other recent decisions dealing with similar matters.”[9]
It will rarely be appropriate to grant permission to appeal unless an arguable case of appealable error is demonstrated. This is so because an appeal cannot succeed in the absence of appealable error.[10] However, the fact that the Member at first instance made an error is not necessarily a sufficient basis for the grant of permission to appeal.[11]
It is clear from the Agreement at cl.35.2.2(a) – (b), that changes must be classed as ‘significant in nature’ or not ‘significant in nature’ in order to decide on whether the changes before they are implemented, are subject to the requirements of cl.35.2.3 or cl.35.2.1 of the Agreement. The Commissioner in making his decision took into account cl.35.2.2(c) of the Agreement, and considered whether the changes have ‘substantial effects’ on the relevant factors laid out in that sub-clause. This is made clear at [28] and [35] – [39] of the Decision, the Commissioner considered the relevant clauses and made his decision on the facts. We are not satisfied that there is an arguable case of error in relation to this part of the Decision.
The Appellant also argues that the Commissioner should have applied the ‘principle purpose’ test when considering the effect of the TOM on the workforce and the skills required of employees. We disagree with this submission and agree with the submission put by the Respondent on this point; the ‘principle purpose’ test is not applicable to the specific question of whether the TOM is a change ‘significant in nature’ for the purposes of cl.35.2.2(c). We are not satisfied that there is an arguable case of error in relation to this part of the Decision.
The Appellant argues that it had “substantially complied” with the consultation requirements and that the Commissioner denied the Agreement its practical operation by finding that the work team process that had already occurred was invalid for not including the maintenance employees. Firstly, the Commissioner did not find that the work team process that had already occurred was invalid. At [42] in the Decision, the Commissioner found that the maintenance employees were entitled to participate in the work team process, then the Commissioner stated that as a result, the Appellant should recommence consultation in relation to this proposal. The work team process that occurred was not labelled invalid, and there are multiple ways that the Appellant could have integrated maintenance employees into this consultation process. If there was confusion about what the Commissioner at first instance meant in paragraph [42], this should have been taken to the Commissioner for clarification, rather than brought to appeal. Secondly, the argument that the Appellant has ‘substantially complied’ with all consultation requirements, was not advanced at first instance and as such, cannot be considered on its merits at appeal. We are not satisfied that there is an arguable case of error in this instance.
The Appellant argues procedural fairness was not afforded since the Commissioner erroneously conflated the TOM change with the Steel Treatment change. The Appellant claims that the dispute should have been limited to the changes in the Steel Treatment Department that is the reduction of 6 employees. The Appellant claims that the introduction of the TOM was only a proposal that the Appellant was not yet determined to implement, and that the Commissioner was incorrectly persuaded by the AMWU’s arguments against the TOM, which in turn led to an error in the Decision. We are not satisfied that the subject of the dispute was as narrow as the Appellant argues. On the evidence, the changes in the Steel Treatment Department includes the proposal that the reduction of 6 employees may require tradespersons from the Shift Maintenance Department and shift staff employees to undertake operator tasks during peak periods of workload in the Steel Treatment Department. The TOM change clearly is a proposal that stems from the Steel Treatment change, it is not fanciful for the Commissioner to consider such a proposed change occurring from the determined change. The Appellant should have reasonably apprehended that this issue might become a live issue, and we are not satisfied that there is an arguable case of error in this instance.[12]
The Appellant argues that the Commissioner erred by drawing comparisons with the HMB decision in which the introduction of a TOM was considered a ‘significant change’.[13] We disagree with this submission, the Commissioner is entitled to consider evidence of matters in common contemplation and constituting a common assumption.[14] Further, the Commissioner did consider the relevant facts and merits of the proposed changes throughout the entire Decision, and we are not satisfied that there is an arguable case of error in this instance.
We have considered all the material before us, and we are not satisfied that the grounds of appeal and permission to appeal put forward by the Appellant involve any issues which attract the public interest.
Conclusion
For the reasons set out above, we are not satisfied for the purposes of section 604(2) of the Act that it would be in the public interest to grant permission to appeal.
Permission to appeal is refused.
VICE PRESIDENT
Appearances:
K Brotherson, of Counsel, for the Appellant
L Saunders, for the Respondent (AMWU)
G Beard, for the Second Respondent (AWU)
[1] [2017] FWC 335
[2] BlueScope Steel (AIS) Pty Ltd v The Australian Workers' Union; Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia and the Australian Manufacturing Workers' Union [2015] FWCFB 5615.
[3] Agreement, cl 35.2.3
[4] [2014] FWCFB 7447.
[5] (1996) 66 IR 182, 184.
[6] BlueScope Steel (AIS) Pty Ltd v The Australian Workers' Union; Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia and the Australian Manufacturing Workers' Union [2015] FWCFB 5615.
[7] This is so because on appeal the Commission has power to receive further evidence, pursuant to s.607(2); see Coal and
Allied v AIRC (2000) 203 CLR 194 at [17] per Gleeson CJ, Gaudron and Hayne JJ.
[8] O’Sullivan v Farrer (1989) 168 CLR 210 per Mason CJ, Brennan, Dawson and Gaudron JJ; applied in Hogan v Hinch (2011) 85 ALJR 398 at [69] per Gummow, Hayne, Heydon, Crennan, Kiefel and Bell JJ; Coal & Allied Mining Services Pty Ltd v Lawler and others (2011) 192 FCR 78 at [44] -[46].
[9] [2010] FWAFB 5343 at [27], 197 IR 266.
[10] Wan v AIRC (2001) 116 FCR 481 at [30].
[11] GlaxoSmithKline Australia Pty Ltd v Makin[2010] FWAFB 5343 at [26]-[27], 197 IR 266; Lawrence v Coal & Allied Mining Services Pty Ltd t/as Mt Thorley Operations/Warkworth[2010] FWAFB 10089 at [28], 202 IR 288, affirmed on judicial review in Coal & Allied Mining Services Pty Ltd v Lawler (2011) 192 FCR 78; NSW Bar Association v Brett McAuliffe; Commonwealth of Australia represented by the Australian Taxation Office [2014] FWCFB 1663 at [28].
[12] United Voice v Restaurant and Catering Association of Victoria [2014] FCAFC 12, [18] – [19].
[13] BlueScope Steel (AIS) Pty Ltd v The Australian Workers' Union; Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia and the Australian Manufacturing Workers' Union [2015] FWCFB 5615.
[14] Australian Meat Industry Employees Union v Golden Cockerel Pty Ltd [2014] FWCFB 7447.
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