BlueScope Steel Limited T/A BlueScope v Australian Workers' Union, The

[2017] FWC 2258

[2017] FWC 2258

FAIR WORK COMMISSION

DECISION

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

BlueScope Steel Limited T/A BlueScope
v
Australian Workers' Union, The
(C2017/2066)

Manufacturing and associated industries
COMMISSIONER RYAN	MELBOURNE, 1 MAY 2017

Alleged dispute about use of contractors - jurisdiction.

[1] Dispute resolution procedures in enterprise agreements are often poorly drafted in relation to the procedure to apply to a dispute which has not been raised by an individual employee. Most disputes procedures seem to have been drafted from the premise that disputes in the workplace are only raised by employees or unions. Most disputes procedures do not provide a detailed procedure for dealing with disputes raised by the employer. Such is the case in the present matter where BlueScope Steel Limited (BlueScope) has notified the Commission of a dispute arising under the terms of the BlueScope Steel Western Port Enterprise Agreement 2014-2017 (the Agreement).

[2] In the present matter the Australian Workers Union (AWU) has challenged the jurisdiction of the Commission to deal with the dispute notified by BlueScope.

[3] The dispute resolution procedure is found in clause 11 of the Agreement and is in the following terms:

“11 . DISPUTE RESOLUTION PROCEDURE

11.1 The need for a Dispute Resolution Procedure ("DRP") that enables the resolution of disputes by measures based on consultation, co-operation and discussion, and arbitration to avoid interruption to the performance of work and the consequential loss of production and supply to our customers is recognised in this Agreement.

11.2 In the case of a dispute, the DRP will be adhered to.

11.3 While the procedure is being followed, work will proceed in accordance with the reasonable direction of the Company, the employee's recognised skills, competence, training and safe working practices.

11.4 If a dispute arises under the Agreement, or in the course of employment, or in relation to the National Employment Standards in the Fair Work Act ("NES"), the procedure for resolution is as follows (a flow chart of the process is contained at clause 11.12).

11.5 Discussion between the employee(s) and the appropriate Supervisor involved in the issue.

The Supervisor will advise the employee(s) of their right to have a representative, who may be a Union delegate, present.

11.6 If the matter is unresolved, the issue is referred to the Operations Manager of the relevant area or his/her representative. The employee may invite a representative, who may be a Union delegate, to be involved in discussions.

11.7 If the matter remains unresolved it must be referred to the Human Resources Department in writing by the person(s) raising the grievance. The employee(s) may choose to do this by appointing another person, who may be a Union delegate, to represent the employee.

11.8 Appropriate Union Officials (or other employee representatives) may be involved in this process at any stage.

11.9 If the matter is still unresolved and the employee(s) or Company wishes to pursue it further:

11.9.1 The matter may be referred by the employee(s), the Union, or the Company to the FWC for conciliation;
11.9.2 In the event that the matter is not resolved by conciliation, the matter may be referred by the employee(s), the Union or the Company for arbitration by the FWC.

11.10 Whilst a matter is in dispute and the DRP is being followed, the practices which previously prevailed will continue. This will not apply in the event that the dispute is over a formal warning or a termination of employment (other than in the case of redundancy). A dispute about the prevailing practice will be resolved as per the DRP.

11.11 After formal discussions and agreement between the Company and the Union, "safety persons" (including asset protection), may be utilised, if necessary.

11.12 DRP Flow Chart


Note: At each stage of the process, work continues whilst the matter Is being discussed

11 13 It is also agreed that further Improvement can be gained, with education being an important factor.To achieve this. the following steps will be put in place:

11.13.1 The DRP may be included as a component in the Union delegates' training course;

11 13.2 Supervisors will be trained in the DRP;

11.13.3 Information about the operation of the DRP will be provided to all employees and delivered at crew meetings by the Supervisor and Union delegate(s):
11.13.4 A copy of the DRP and explanation will be given at the induction of new employee.”

[4] The substantive issue in dispute is that BlueScope wants to engage a labour hire provider to provide 4 workers to meet a short term spike in workload but this is opposed by the AWU and employees who want the spike in workload to be covered by the use of overtime.

[5] BlueScope contended that the dispute can properly be referred to the Commission as BlueScope has met the necessary requirements of the dispute resolution procedure through having discussions with employees, on-site union delegates and AWU officials without the dispute being resolved.

[6] The AWU contended that the Commission lacks jurisdiction to deal with the alleged dispute due to two separate issues.

[7] Firstly, the AWU contended that the jurisdiction of the Commission to deal with a dispute pursuant to clause 11 of the Agreement is dependent upon BlueScope having complied with each step of the dispute resolution process set out in clause 11. The AWU contended that:

“A construction of the dispute resolution procedure that did not require BSL to follow all the steps of the dispute resolution procedure prior to seeking determination of the matter by the Commission would be antithetical to the resolution of disputes through consultation, co-operation and discussion.”

And

“the AWU submits that any party to the Agreement, including BSL, is required to comply with each of the steps described at 12(a) to 12(d) before the Commission can arbitrate the matter, and where those steps have not been complied with, the Commission is not authorised to deal with that matter pursuant to section 739 of the FW Act.”

[8] Secondly, the AWU contended that the subject matter of the dispute “is about the operation of clause 13.1.3 specifically:

“(a) Whether or not clause 13.1.3 of the Agreement requires the agreement of the AWU prior to the use of contractors on site; and

(b) Whether the AWU is unreasonably withholding agreement to the use of contractors on site.”

and that this issue was not the subject of discussions between BlueScope and employees or the AWU. The AWU contended that BlueScope simply had not followed the steps of the disputes procedure in clause 11 in relation to the issue alleged to be in dispute and that based upon authority the Commission did not have jurisdiction to deal with the dispute.

[9] Any consideration of the Commission’s jurisdiction to deal with the notified dispute must start from the premise that clause 11 of the Agreement meets the requirements of s.186(6) of the Act which provides as follows:

“186(6) The FWC must be satisfied that the agreement includes a term:

(a) that provides a procedure that requires or allows the FWC, or another person who is independent of the employers, employees or employee organisations covered by the agreement, to settle disputes:

(i) about any matters arising under the agreement; and
(ii) in relation to the National Employment Standards; and

(b) that allows for the representation of employees covered by the agreement for the purposes of that procedure.”

[10] Where BlueScope raises a dispute about matters arising under the Agreement the procedures in clause 11 must enable that dispute to be referred to the Commission or to another person who is independent of the employers, employees or employee organisations covered by the agreement, to settle the dispute.

[11] Where, as is the case with clause 11 of the Agreement, a disputes procedure deals extensively with the procedure which applies to disputes raised by an individual employee, then the Commission needs to determine which part of the disputes procedure meets the requirements of s.186(6) in relation to a dispute raised, other than by an individual employee.

[12] It is clear from the plain language of clause 11 of the Agreement that sub-clause 11.9 unambiguously provides for unresolved disputes to be referred to the Commission by either employees, the AWU or BlueScope, with the Commission having both conciliation and arbitration powers in respect of the matter in dispute.

[13] The jurisdictional challenge raised by the AWU goes, not to the operation of clause 11.9 but rather, to whether clause 11.9 can only be utilised if the procedure set out in clauses 11.2 to 11.8 has been met.

[14] The issue of whether procedures for dealing with dispute at the workplace can operate as a bar to having an unresolved dispute referred to the Commission has been dealt with by the Commission in other matters. I note the decision in TWU v Torrens Transit Services P/L 1 which is relied on by the AWU. I also note the decision in AMWU v Unilever Australia Trading Ltd 2 which takes a very different approach to the decision relied on by the AWU. There is clearly tension between these two decisions. This would appear to be a case where reasonable minds differ! I intend to adopt and apply the later decision to the present matter.

[15] The plain language of clauses 11.1, 11.2, 11.3 and 11.4 make it clear that the procedure outlined in clause 11 is to be followed. The procedure for resolving disputes is essentially the steps set out in clauses 11.5, 11.6, 11.7 and 11.9. The issue arising in this matter is whether BlueScope can refer a dispute to the Commission if the procedure set out in clauses 11.5, 11.6 and 11.7 have not been followed, and followed in sequence.

[16] The practical issue arising from the language of clause 11.5 is that the issue which is in dispute was not a matter which would be able to be resolved by any amount of discussion between a Supervisor and any employee or group of employees. Practically speaking clause 11.5 could not have been initiated by either an employee or a Supervisor and even if such discussions occurred there was no utility in having such discussions.

[17] In the context of the issue in dispute it is possible that the steps in clauses 11.6 and 11.7 could have been used to resolve the issue in dispute. If that is the case then did BlueScope engage in discussions which would meet the procedural steps of clauses 11.6 and 11.7?

[18] BlueScope identified in its application the communications and discussions which took place in relation to BlueScope’s intention to use labour hire to cover a spike in workload.

“BlueScope met with the AWU site delegate on Tuesday 11 April 2017 at our regular Monthly AWU meeting.

During the meeting:

(a) BlueScope and the AWU discussed BlueScope's use of 4 contractors to undertake ancillary Pack line tasks at the Metal Coating Line Coated Coil Packline (MCL CCP) from the beginning of May to the end of June 2017 under clause 13.1 .3 of the Agreement (the Arrangement); and

(b) BlueScope provided the AWU with a communication pack.

The Arrangement was to be reviewed by Site Delegates, Crew Delegates and the AWU organiser on Wednesday 12 April 2017 at the regular Monthly AWU Delegate morning meeting. BlueScope requested the Site Delegate provide feedback on the same day (which was anticipated prior to lunch time). No feedback was provided voluntarily until the afternoon of 12 April 2017 when the site delegate was requested to provide such feedback in person to James Wallington, Senior HR Adviser at BlueScope.

On the afternoon of 12 April 2017, Mr Wallington requested the Site Delegate provide confirmation of approval for the Arrangement. The Site Delegate stated to Mr Wallington that no approval was being given for the Arrangement and that further information was required. When Mr Wallington asked what information was required, the Site Delegate was unable to confirm what information specifically was needed.
Mr Colin Heath, AWU Organiser contacted Mr Wallington via phone on 13 April 2017 and indicated verbally that he had not had time to consider this matter and furthermore that he was not satisfied that overtime, internal secondments or fixed term contracts could not be utilised to meet BlueScope’s needs to cover a spike in workload.

Mr Wallington repeated BlueScope's earlier provided explanations of why the business has determined to utilise contract labour in this instance and offered to email through our detailed pack to confirm the requirements. Mr Wallington further expressed BlueScope's need to have a formal response by COB Thursday 13 April 2017 to progress discussions with the Contractor Labour Hire company to make the necessary arrangements. Mr Wallington subsequently sent a letter to Colin Heath on 13 April 2017 restating these points.

On the morning of 18 April2017, Mr Wallington again requested the AWU's formal response from Colin Heath via email.

On the afternoon of 18 April 2017, Mr Heath replied to Mr Wallington stating that "in response your urgent need for packers my information is that if you put out a site wide request for operators to do overtime shifts you will easily get the trained labour you need for the 8 week period".

[19] On any reading of the events between 11 and 18 May 2017 it is clear that the discussions which took place meet the requirements of clause 11.6 and 11.7 of the Agreement. As the issue in dispute had not been resolved through discussions which met the procedural steps of clause 11.6 and 11.7 then it was open to BlueScope to refer the matter in dispute to the Commission under clause 11.9 of the Agreement.

[20] Having said that, the contention of the AWU that the matter which was discussed is not the matter which is the subject of the dispute notification needs to be addressed. The issue raised by BlueScope with employees and the AWU was BlueScope’s intention to bring in labour hire to cover a spike in workload. BlueScope could not get agreement from the employees or the AWU to the use of labour hire to cover the spike in workload. The dispute is clearly about the proposal of BlueScope to utilise labour hire rather than full time employees to cover a spike in workload. Whether the dispute is identified by reference to clause 13.1.3 or by reference to the position of the parties it is still the same dispute. The contention of the AWU that BlueScope did not discuss with employees or the AWU the operation of clause 13.1.3 is not material. The issue of the proper operation of clause 13.1.3 would still have been a central element of the dispute even if the dispute notification had not specifically mentioned this clause. That must be so because the very essence of the dispute, the non-acceptance by employees and the AWU of the proposal from BlueScope to use labour hire to cover a spike in workload, would require consideration of the various terms of the Agreement and especially of clause 13.

[21] Whilst the procedural steps in clause 11 which require discussions at the workplace level cannot act as a jurisdictional bar to the Commission dealing with a dispute about a matter arising under the terms of the Agreement, non-compliance with a procedural step would permit the Commission to exercise its discretion not to deal with the matter until the procedural steps had been complied with. In the present matter the Commission is satisfied that BlueScope has followed the procedural steps of clause 11 as far as is possible in relation to the subject matter of the dispute. The Commission is properly seized of jurisdiction to deal with the matter in dispute.

[22] There is no jurisdictional bar to the Commission proceeding to arbitrate the matter in dispute and the AWU challenge to the jurisdiction of the Commission is dismissed and the matter will proceed to arbitration in accordance with previous timetabling agreed by the parties.

COMMISSIONER

 1   [2013] FWC 7318.

 2   [2016] FWC 7600.

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