Bundaberg Sugar Ltd v Australian Workers' Union, The

[2016] FWC 4524

[2016] FWC 4524

FAIR WORK COMMISSION

DECISION

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

Bundaberg Sugar Ltd
v
Australian Workers' Union, The;
"Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU); and
Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia
(C2015/8249)

Sugar industry
DEPUTY PRESIDENT ASBURY	BRISBANE, 6 JULY 2016

Application for Commission to deal with a dispute in accordance with a dispute settlement procedure – Dispute settlement procedure empowers the Commission to approve a roster and terms and conditions for employees working that roster where parties cannot agree – Approach of the Commission in exercising powers that interfere with rights of management to operate business efficiently – Reasonable basis for introduction of roster – Proposed roster and terms and conditions do not unreasonably impact employees – Roster and conditions approved in terms of employer proposal.

1. BACKGROUND

[1] The Bundaberg Regional Mills (Millaquin and Bingera) and Bundaberg Refinery Enterprise Agreement 2012 (the Agreement) provides at clause 6.9.1 that ordinary hours will be worked in accordance with one or other of two roster systems or such other roster as mutually agreed upon between the Company and the majority of employees directly affected or as may be approved by the Fair Work Commission. Roster 1 is a five day roster and Roster 2 is a seven day roster.

[2] Due to a downturn in its sales contracts, the employer party to the Agreement, Bundaberg Sugar Ltd (BSL), is seeking to implement a six day roster as set out in Attachment 1 to its submission. The proposed six day roster is annexed to this Decision. Employees in BSL’s sugar milling operations, represented by The Australian Workers’ Union (the AWU), the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) and the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (the CEPU) (collectively the Unions) have not agreed to the six day roster proposed by BSL.

[3] BSL has applied under s. 739 of the Act for the Commission to deal with a dispute in relation to the six day roster, in accordance with the Issues of Concern Procedure in Schedule 1 and as provided for in clause 6.9.1 of the Agreement. It is not in dispute that the Procedure, in conjunction with clause 6.9.1 of the Agreement, empowers the Commission to arbitrate and determine whether or not the six day roster should be approved and, if so, the terms and conditions that will apply to employees working the six day roster.

[4] I conducted a number of conciliation conferences in relation to the present dispute and a related bargaining dispute for a new agreement to replace the Agreement subject of these proceedings. In relation to the bargaining dispute, I issued a Statement setting out a range of proposals for terms and conditions under which the six day roster could be worked. I also informed the parties that prior to my appointment to the Commission, I conducted a case on behalf of sugar milling employers with respect to the implementation of rosters that this case was referred to and relied on by BSL in its submissions in this case. Notwithstanding these matters, the parties declined my offer to facilitate the reallocation of the matter to another member of the Commission and agreed that I arbitrate the dispute.

[5] Directions were issued in which I proposed the questions for Arbitration as follows:

“1. Does the Commission approve the roster system as proposed by Bundaberg Sugar Ltd? and

2. If yes, what are the terms and conditions that should apply to employees working that roster?”

[6] No party provided an alternate question for Arbitration and the parties directed their submissions to those questions. Evidence was given on behalf of BSL by Mr David Pickering, General Manager Operations 1 and Mr Giuseppe Barazza, Refinery Manager.2 Mr Pickering and Mr Barazza were not required for cross-examination. Evidence was also given in opposition to BSL’s application by Mr Gavin Duncan, Organiser for the AWU3.

2. THE MERITS OF THE PROPOSED ROSTER

[7] BSL is a grower, miller and refiner of sugar and related products. BSL owns two mills in the Bundaberg region – Millaquin and Bingera. These mills currently crush between 1.5 and 1.8 million tonnes of cane and produce around 250,000 tonnes of raw sugar per annum. Of this sugar tonnage, around 150,000 tonnes is processed in BSL’s refinery located at Millaquin.

[8] Mr Pickering’s evidence is that Millaquin and Bingera have low cane throughput by industry standards and therefore low utilisation of milling assets. BSL has also suffered a number of economic setbacks including closure of Fairymead Mill in 2005 due to low returns and cane supply issues; flooding in 2011 and 2013; drought in 2014; and a fire at Bingera Mill in 2014. Following critical reviews of its operations, which occur at least annually, there have been a number of positions made redundant. The Milling Operations Business Unit of BSL has achieved a positive profit before interest and tax on only two occasions in the last five years and on those occasions this result has been due to significant one off events such as proceeds from insurance for the 2013 flood event and a sale of shares.

[9] The sugar milling industry deals with a perishable product. The yield of a crop (referred to as CCS) peaks around September/October and it is important that it is harvested at this time. Once cane is cut, it must be processed within sixteen hours before it starts to degrade. The optimum level of time to process a crop is a balance between the cost of capital and operating costs versus the sugar lost due to lower CCS over a longer season. Generally the objective is to crush the crop within about 20-22 dry weeks. BSL has to pay CCS compensation to growers if the season is longer than 23 dry weeks. Paying overtime and weekend loadings to complete a season in less than 20 dry weeks is not economical for the Company.

[10] From an operating cost perspective, the least costly mode of operation is a five day, 24 hour a day, Monday to Friday roster with no weekend work and no weekend or overtime penalties. If the crop is small enough to crush in a five day mode (without weekend work), then this is the most economical option available. As a crop gets larger, the loss of CCS due to longer season length, and the associated penalties BSL would incur for this extended season length, makes five day operations uneconomical and can disadvantage growers in a subsequent season as the new crop has less time to grow.

[11] Mr Giuseppe Barazza, General Manager of BSL’s Refinery, said that the six day roster with overtime scheduled on a Sunday is the most efficient way to operate the Refinery when customer demands are of a certain size. The six day roster also provides flexibility to manage different customer demands, which can fluctuate significantly, both through the loss and gain of contracts and through the seasonal demands of clients. Over recent years the Bundaberg Refinery has endured intense competition and in 2013, lost two very significant supply contracts.

[12] Following the loss of those contracts the Refinery did not have enough throughput to maintain a seven day continuous roster and moved between that roster and a five day continuous roster. Moving between five and seven day operations is difficult, and when five day operations are implemented a full panel of employees must be made redundant or alternative work found for them. In 2014, Refinery management formed a view that a move to a 38 hour six day roster that kept four panels of employees employed, would better suit expected tonnage at that time and would put the Refinery in the best position to meet increased customer demand that it was hopeful of obtaining.

[13] A proposal was put to employees and their Unions to implement a six day roster at the Refinery. Employees suggested an alternative roster and a number of options, including the employee alternative, were voted on by employees. A majority of employees voted in favour of one of the six day roster options. The six day Refinery roster, as approved in the ballot of Refinery employees, is the same roster for which BSL seeks approval from the Commission in respect of the Mills. That roster continued until 16 January 2016, but was not able to be continued for all employees following further contract losses. Some packaging employees continue to work a six day roster and the remaining employees have reverted to a five day roster, with resultant redundancies.

[14] According to Mr Barazza, the six day operating mode provides the Refinery with the best productivity over the broadest range of throughput. If the throughput is there, it is the preferred operating mode and places the Refinery in the best position to win and deliver on new contracts. Mr Barazza also gave evidence of negotiations for a new enterprise agreement to replace the Agreement. According to Mr Barazza, there have been thirteen meetings and the six day roster has been discussed at each of them. The parties are at an impasse and Mr Barazza does not believe that they will reach agreement on this matter.

[15] BSL submits that its milling and refining operations are under significant financial constraints and that against this background it seeks to introduce a six hour roster as an option to use when it is economically most efficient. It is not intended that the six hour roster will operate indefinitely and it is not BSL’s preference. The preference of BSL is to have enough cane and contracts to run a seven day roster. BSL says there is an economic downturn in the sugar industry and that it has lost contracts. In these circumstances BSL requires the six day roster to optimise its operations.

[16] Mr Duncan said that he was notified of changes at the Refinery rosters by letter from BSL stating that there had been a downturn in customer demand. BSL informed Mr Duncan that it did not want to move back to a five day roster due to the impact this would have on jobs and wages and because it could be a premature move due to future sales forecasts. Mr Duncan also understood that it would be more difficult for BSL to move between a five and a seven day roster.

[17] Mr Duncan said that an original roster proposed to staff was not acceptable and that BSL proposed two options, which were put to a ballot of Refinery employees. That ballot closed on 15 August 2014. The result of the ballot was that 58% of staff voted for a six day roster and 42% voted to go to a five day roster and take their chances as they realised that the other option would be redundancy. According to Mr Duncan, the 58% of staff who voted to go to a six day roster believed that it was a temporary measure, as did Mr Duncan. Mr Duncan said that Refinery staff believed that the roster would revert to its former pattern after three or four months. Mr Duncan also said that “several” employees had subsequently stated that if they had another vote they would now opt for a five day roster and “take the package”.

[18] In relation to his evidence that Refinery employees believed that the six day roster would be temporary, Mr Duncan agreed that BSL management had never stated this to employees. BSL management had stated that they did not want to go back to a five day roster and said they were going to a six day roster until sales improved. It had also been stated to Refinery employees that it would be premature to go to a five day roster. In response to the proposition that there was no loss to employees when earnings from a five day roster without overtime are compared to earnings from a six day roster, Mr Duncan said that he had not undertaken a calculation in relation to this. Mr Duncan also said that he had been told by BSL that in relation to Refinery employees working the six day roster the reduction in earnings was between $8,000.00 and $10,000.00 per annum but had not done the calculations himself.

[19] Mr Duncan also agreed that it was BSL’s right to choose whether to operate a five day or seven day roster depending on how big the crop is going to be, or in the case of the Refinery, its throughput and customer demand and that BSL cannot control customer demand.

[20] In their submissions, the Unions distinguished the factual circumstances in the present case from those that existed when the Decision of the QIRC in Australian Sugar Milling Association v AWU 4 was handed down. In that case, the QIRC was considering whether the introduction of a seven day continuous shift roster should be approved. Relevant to the decision to approve such a roster was that:

• There had been 13 meetings between management of the mill in question and the Unions in relation to the introduction of the roster without agreement being reached;
• The tonnage of cane for the relevant crushing season and the need for it to be processed when CCS was at its maximum level;
• Possible health and safety issues arising from excessive overtime; and
• An increase in the level of employment to operate the roster.

[21] The AWU submits that none of these considerations apply in the present case. There is no evidence that the mill is close to its maximum level of production and the evidence is to the contrary. BSL also seeks to reduce hours rather than increase them, so that the essential consideration of health and safety is not relevant. There is no issue of excessive overtime and the implementation of a six day roster would reduce the amount of overtime being worked by employees, which is currently reasonable.

[22] The Unions also submit that the QIRC decision established that an employer is entitled to maximise returns provided that the conditions imposed on employees are not unreasonable. The Unions submit that the proposed six day roster and associated conditions would result in workers being placed in a prejudicial position whereby they will miss out on the entitlements associated with continuous shift worker status and also be excluded from entitlements enjoyed by day workers. According to the Unions the position advanced by BSL is to apply the terms and conditions that would otherwise apply to a continuous shift roster, less the benefit of an overtime shift at the end of the 28 day roster cycle and an additional week of annual leave as provided in the National Employment Standards and the Sugar Industry Award 2010. The Unions contend that BSL is “attempting to have its cake and eat it too”.

[23] The Unions also contend that the conditions of the six day roster proposed by BSL are not reasonable. Six day shift workers not be entitled to the benefits enjoyed by continuous shift workers, but they will also miss out on weekend penalties for day workers. In relation to the contention that the six day roster is more family friendly, the Unions submit that if an employee is required to work until 8.00 am on a Sunday (or any given day) the employee will be fatigued from that shift and sleep for most or all of that day. Further, under a seven day continuous shift roster, employees have the benefit of two full weekends off every four weeks and also receive an additional week of annual leave and an overtime shift which offsets the disadvantage of working an extra Sunday in each four week period. It is also submitted that BSL’s statement that it does not expect that employees will work public holidays carries little weight as it does not prevent or limit BSL requiring six day shift workers to work public holidays.

[24] The Unions also contend that there are no other sugar mills in Queensland operating a six day roster and mills work either a five or seven day roster. Accordingly, any decision made on the implementation of a six day roster will likely have a flow on effect across the industry and should a six day roster be approved by the Commission it is imperative that the terms and conditions related to it are appropriate in a workplace and industry context.

3. CURRENT AGREEMENT ROSTER PROVISIONS

[25] The Agreement provides as follows at clause 6.9.1:

“Unless otherwise provided in this Agreement, the ordinary working hours for shift workers shall not exceed 40 in any week or 8 in any one day and may be worked in accordance with one or other of the roster systems (1) or (2) as set out in Schedule 14 to this Agreement, or such other roster as mutually agreed upon between the Company and the majority of employees directly affected or as may be approved by the Commission.

Note: Exceptions include continuous shift work (clauses 6.10 and 6.11) and cane transport rosters (clause 6.12).

[26] Agreed rosters are set out in Schedule 14 of the Agreement as follows: Roster 1 is a three panel eight hour shift work, Monday to Friday (midnight Sunday to midnight Friday) roster with any weekend work being overtime. Roster 2 is a three panel eight hour shift work Monday 8.00 am to Saturday 8.00 am roster with weekend work after 8.00 am Saturday being overtime. An agreed continuous shift work roster (as provided for in clause 6.10(a)) is set out in Schedule 15 of the Agreement and is a four panel, seven day a week continuous roster with a combination of eight and twelve hour shifts and one rostered eight hour overtime shift in each four week cycle. By virtue of clause 6.10(b) of the Agreement, in any season where a continuous shift roster is commenced, it is required to be worked for the duration of the season. Where there is a decrease in crop due to the effect of a natural disaster, there is acknowledgement that a mill may be prevented from working a continuous roster in a subsequent season.

[27] Clause 6.1 of the Agreement defines “continuous shift work” as:

“…work that is continuous for 24 hours per day for an unbroken period of at least 28 days, except in the case of floods or breakdowns or shutting down for holidays. This means that employees cannot be attached at regular intervals for a period of seven days only, to an existing continuous shift roster which applies to other employees who are continuous shift workers with hours rostered over a 28 day cycle, and be classed as continuous shift workers purely because they work the same shift hours for one week as do the continuous shift workers. An employee who works continuous shift work is a shift worker for the purposes of the National Employment Standards.”

[28] Continuous shift workers (as defined) are paid for ordinary time worked on weekends at the rate of time and a-half and are paid afternoon and night shift allowances in addition to weekend penalty rates. Continuous shift workers are paid for overtime at the rate of double time and receive an additional week of annual leave by virtue of clause 7.2.2(b). Where employees work less than a full year as continuous shift workers, or for a crushing season only, they receive a proportion of the additional week of annual leave as set out in clause 7.2.2(b)(ii) and (iii). Employees working the five day rosters are paid for overtime at the rate of time and a-half for the first two hours and double time thereafter and do not receive an additional week (or proportionate amount) of annual leave.

[29] The Award that covers employees to whom the Agreement applies, is the Sugar Industry Award 2010 (the Award), whichprovides in relation to shift work as follows:

32.1 Ordinary hours of work—shiftwork

(a) Maximum weekly hours and requests for flexible working arrangements are provided for in the NES.

(b) By agreement between the employer and the majority of employees concerned, a roster system may operate on the basis that the weekly average of 38 ordinary hours is allowed over a period which exceeds 28 consecutive days but does not exceed 12 months.

(c) Employees terminating prior to taking any banked rostered day(s) off must receive one fifth of average weekly pay over the previous six months multiplied by the number of banked substitute days.

(d) By agreement 12 hour shifts may be rostered.

32.2 For the purpose of this award:

(a) A shiftworker is an employee who can be regularly rostered to work on Sundays and public holidays, where the employer operates shifts continuously rostered 24 hours a day seven days a week.

(b) Day shift means any shift between 8.00 am and 4.00 pm or otherwise by agreed roster.

(c) Afternoon shift means any shift finishing after 6.00 pm and at or before midnight.

(d) Night shift means any shift finishing after midnight and at or before 8.00 am or where the majority of hours worked in the shift fall between midnight and 8.00 am.

(e) Nominal crushing season means the period of 26 weeks commencing on the first Monday on June each year.

(f) Nominal slack season means that period that is not the nominal crushing season.

32.3 Ordinary hours of work—continuous shiftworkers

(a) Continuous shiftwork means work carried on with consecutive shifts of employees throughout the 24 hours of each of at least six consecutive days without interruption except for breakdowns or meal breaks or due to unavoidable causes beyond the control of the employer.

(b) Subject to clause 32.3(c), the ordinary hours of continuous shiftworkers are, at the discretion of the employer, to average 38 hours per week inclusive of meal breaks and must not exceed 152 hours in 28 consecutive days. Continuous shiftworkers are entitled to a 20 minute meal break on each shift which must be counted as time worked.

(c) Except at the regular changeover of shifts, an employee must not be required to work more than one shift in each 24 hours except where the additional shift is paid for at overtime rates.

32.4 Extra weekend payments for continuous shiftwork

For sugar mill workers where continuous shiftwork is regularly performed, on a three shifts per day basis, worked over a period of seven days per week, one and a half times the ordinary rate must be paid for all time worked up to eight hours in any shift between midnight Friday and midnight Sunday. Such payments will be in addition to any allowance payable for the working of an afternoon or night shift.

32.5 Afternoon and night shift allowances

(a) Employees other than field sector workers, whilst engaged on afternoon shift and night shift, must be paid a penalty rate for each such shift of 15% in addition to the adult minimum wages applicable.

(b) Employees other than field sector workers, required to work afternoon shift continuously or employees required to work afternoon and night shift, without rotation to day shift, must be paid 30% allowance instead of any other shift allowance.

(c) Field sector employees whilst engaged on afternoon shift and night shift, must be paid an additional penalty rate for each such shift as follows:

(i) Afternoon shift—12.5%; or

(ii) Night shift—15%,

of the adult minimum wages applicable to the particular employee’s employment classification as prescribed in the award.

32.6 Weekend shift on five day roster—sugar milling

(a) All ordinary time worked by any sugar milling employee on the final shift of a roster where the ordinary time falls entirely between 12 midnight Friday and 8.00 am Saturday in any week, must be paid for at the rate of time and a half. Such payments will be in addition to any shift allowance payable for the working of an afternoon or night shift.

(b) Where overtime crushing shifts are worked at weekends by sugar milling shiftworkers, all shiftworkers so engaged must be paid an allowance of the ordinary rate of 25% of their ordinary rates in addition to the appropriate overtime rates.

[30] By virtue of clause 32.10 of the Award, where more than one shift per day is worked, overtime is paid for at the rate of double time. For the purposes of the additional week of annual leave provided for in s. 87(1)(b) of the Act, a shift worker is defined as a seven day shift worker who is regularly rostered to work on Sundays and public holidays, where the employer operates shifts continuously rostered 24 hours per day seven days a week.

[31] BSL submits that its proposal that employees working between midnight Friday and 8.00 am on Sunday under the six day roster be paid at time and a-half plus applicable afternoon and night shift allowances, is consistent with the existing provisions of the Agreement and the historical agreement of the parties. BSL also submits that this quantum of penalty rate for work between these hours is fair and reasonable. In this regard, BSL points to the fact that the Agreement provides that continuous shift workers working ordinary time on weekends are paid at the rate of time and-half plus relevant shift loadings.

[32] This is consistent with a 1976 Decision of the QIRC introducing Roster 2 into the former Sugar Industry Award – State, where it was accepted that the final shift of that roster, which extends into Saturday morning, should be paid for at these rates. 5 The time and a-half payment for weekend work was continued when continuous shift work was introduced into that Award in 1986.6 BSL submits that the concept of having a weekend penalty paid in addition to afternoon and night shift allowances is industrially unusual, but has survived in each negotiation and is settled practice for ordinary time worked on weekends for shift workers in the industry with the parties having consistently valued shift work on a Saturday or Sunday as worthy of attracting a penalty loading of 150% plus any applicable shift loading. BSL seeks to preserve this arrangement.

[33] BSL also opposes the claim by the Unions for additional annual leave for employees working the six day roster. BSL contends that the historical decisions that have led to the additional week of annual leave for continuous shift workers make clear that the additional week is to compensate for the requirement to regularly work Sundays and Public Holidays. In the case of continuous shift operations in the sugar industry, this matter was dealt with in the 1986 Decision of the QIRC approving variations to the Sugar Industry Award – State to provide for continuous shift work.

[34] In that decision, the QIRC granted an additional two days of annual leave for continuous shift workers in the sugar industry. The two days was calculated by reference to the fact that in general industry, the additional week of annual leave for a continuous shift worker was calculated on the basis that such employees generally work 5/7 of all of the Sundays and public holidays in a year amounting to 34 Sundays and seven public holidays. In the sugar industry, continuous shift work is undertaken in the approximately 20 week crushing season only, amounting to a requirement for continuous shift workers to work 2/5 of the Sundays and public holidays in a year. The QIRC also noted that sugar industry employers pay a 25% annual leave loading and provide five additional days of annual leave per year for travelling time for annual leave purposes.

[35] BSL submits that in the present case, rather than requiring employees to work 15 out of 20 Sundays in a 20 week crushing season, the proposed six day roster requires them to work one Sunday morning in four or five Sunday mornings over 20 weeks. BSL further submits that because the six day roster is not a continuous roster and is being used because the factory does not have to operate continuously, BSL does not expect that it generally will require employees to work on public holidays.

4. THE PROPOSED ROSTER AND CONDITIONS

[36] BSL seeks that the Commission approve the six day roster that it proposes to implement. The conditions proposed by BSL to apply to employees working the six day roster are:

(a) All overtime is to be paid at double time;

(b) All ordinary time worked on a weekend (from midnight Friday to 8am Sunday) is to be paid at 150% plus any otherwise applicable afternoon and night shift allowance. (Afternoon shift attracts an 11% and night shift a 13% loading on ordinary hours);

(c) Employees do not accrue additional annual leave for working this roster.

[37] BSL submits that the proposed conditions in relation to overtime and ordinary time worked on weekends for employees working the six day roster are consistent with those attaching to continuous shift work and with established weekend penalty provisions under the Award and its earlier iterations. BSL also submits that there is no basis for providing employees working the six day roster with the additional week of annual leave that applies to continuous shift workers. The additional annual leave entitlement for continuous shift workers is based on the requirement that such employees work on 5/7 of Sundays and public holidays each year.

[38] Under the proposed six day roster, Milling employees will work five Sunday mornings, finishing at 8.00 am, and a maximum of one public holiday during the crushing season on the basis that only the Queen’s Birthday public holiday falls within the crushing season. This calculation also assumes that employees will not take annual leave in that period. 7 BSL does not expect that this public holiday will be worked. BSL also points to the fact that when the six day roster was worked in its Refinery, employees worked only two public holidays – the Queen’s Birthday and the Show Day holiday.

[39] Further, BSL contends that the proposed six day roster is more family friendly because:

• it has no embedded overtime shifts;
• it provides three Sundays off in a row;
• on the one Sunday in four required to be worked, the shift finishes at 8.00 am and an employee would still be able to enjoy a very good proportion of the amenity of that Sunday; and
• it provides two full weekends off in row, one of which is a four day weekend, plus another midweek three day break.

[40] BSL provides an additional week of annual leave (travel time) above the standard in general industry; annual leave loading of 25%; and 4.3 weeks above the State minimum for long service leave after ten years’ service. BSL submits that employees are not entitled to an additional week of annual leave (in addition to their present entitlement) on the basis of working the six day roster and that the extra time off (including on Sundays) that the six day roster provides, means that as a matter of fairness there is no need to compensate employees working that roster by providing them with more annual leave.

[41] BSL submits that its proposal that employees working between midnight Friday and 8.00 am on Sunday under the six day roster be paid at time and a-half plus applicable afternoon and night shift allowances, is consistent with the existing provisions of the Agreement and the historical agreement of the parties about appropriate penalty rates for ordinary work on weekends. BSL also submits that this quantum of penalty rate for work between these hours is fair and reasonable. In this regard, BSL points to the fact that the Agreement provides that continuous shift workers working ordinary time on weekends are paid at the rate of time and-half plus relevant shift loadings. Such a provision is also found in the Sugar Industry Award 2010 and its predecessor.

[42] BSL also submits that it is a matter of discretion whether the Commission approves the six day roster proposal or not and that in exercising the discretion the Commission should take into account the matters in s. 578 of the Act and the Objects of the Act which relevantly include:

• providing workplace relations laws that are fair to working Australians, are flexible for businesses, promote productivity and economic growth for Australia’s future economic prosperity and take into account Australia’s international labour obligations (s. 578(a));
• assisting employees to balance their work and family responsibilities by providing for flexible working arrangements (s. 578(d));
• achieving productivity and fairness through an emphasis on enterprise-level collective bargaining underpinned by simple good faith bargaining obligations and clear rules governing industrial action (s. 578(f)).

[43] BSL submits that the principles in relation to the exercise of discretion to approve the six day roster are clear and are set out in the Decision of Commissioner Nutter in Australian Sugar Milling Association v AWU (ASMA) 8. In that Decision, Commissioner Nutter said that as a basic principle, an employer has the right to organise a business in the way which it considers the most efficient, subject to that right not being exercised in a manner that is harsh, unjust or unreasonable and to workplace health and safety considerations.9

[44] Mr Duncan gave evidence directed at the argument that the terms and conditions associated with the proposed six day roster are unreasonable. Mr Duncan said that Milling employees, after seeing the impact of the six day roster on the pay packets of Refinery employees, have maintained opposition to the six day roster and consistently opposed it. This opposition has been continued in negotiations for an enterprise agreement to replace the Agreement where BSL has sought to make the introduction of a six day roster a corner stone of bargaining. To the best of Mr Duncan’s knowledge, no other sugar mill in Queensland has introduced a six day roster and the Commission’s decision in relation to BSL’s claim could potentially affect thousands of employees around the State. Mr Duncan maintained that the loss of income that had been estimated by Milling employees if the six day roster was implemented was up to $1,000.00 per month.

[45] Under cross-examination Mr Duncan agreed that since February 2013, Refinery employees had worked five, six and seven day rosters and that their income had varied as a result due to the overtime hours and the different numbers of hours in each roster type attracting weekend penalty payments and shift allowances. Mr Duncan also said that he had not undertaken the calculations with respect to loss of income from the six day roster but had relied on estimates provided by his members. In relation to the claim that six day shift workers should be granted an additional leave entitlement, Mr Duncan agreed that Refinery employees had made this claim and been informed that BSL did not agree to it before voting to implement the six day rosters. Mr Duncan also agreed that there had been Union representatives at a number of meetings in relation to attempts by BSL to reach agreement on the six day roster.

[46] The Unions submitted that employees working the proposed six day roster under the terms sought by BSL, would have less beneficial conditions than all other categories of employees. Six day roster workers would not be entitled to benefits enjoyed by continuous shift workers and would also miss out on weekend penalties afforded to day workers. The six day roster would require employees to work until 8.00 am on Sunday mornings which would result in fatigue and loss of enjoyment of Sundays. Seven day continuous shift workers have two weekends off work in every four weeks and also receive an additional week of annual leave. It was also submitted that little weight should be placed on the statement by BSL that it did not expect that employees would work public holidays as this did not prevent BSL requiring six day shift workers to work on public holidays.

[47] If employees reverted to a five day roster they would be paid for Sunday overtime at the rate of double time. The Unions submit that if the Commission does approve the implementation of the six day roster, then the terms under which that roster should be worked should be in accordance with one of the following options:

Option 1:

(a) All overtime is to be paid at double time;

(b) All ordinary time worked on a Saturday (from midnight Friday to midnight Saturday) is to be paid at 150% plus any otherwise applicable afternoon and night shift allowance. (Afternoon shift attracts 11% and night shift 13% loading on the ordinary hours);

(c) All ordinary time worked on a Sunday (from midnight Saturday to midnight Sunday) is to be paid at 200% plus any otherwise applicable afternoon and night shift allowance. (afternoon shift attracts 11% and night shift 13% loading on the ordinary hours);

(d) Employees do not accrued additional annual leave for working this roster.

Option 2:

All overtime is to be paid at double time;

All ordinary time worked on a weekend (from midnight Friday to 8am Sunday) is to be paid at 150% plus any otherwise applicable afternoon and night shift allowance. (afternoon shift attracts 11% and night shift 13% loading on the ordinary hours);

Employees accrue an additional week’s annual leave for working this roster.

[48] I assume that the claim by the Unions for “an additional week’s annual leave” is a claim for a proportionate amount of additional leave where the employee works the six day roster only during the crushing season or for part of a year.

5. CONSIDERATION

[49] This case involves the Commission deciding whether to exercise power given to it under the terms of an enterprise agreement to approve a roster for implementation and to also approve the terms and conditions under which the roster will be worked. In doing so the Commission is exercising a power of private arbitration given to it by the parties under the terms of the Agreement. The power under the terms of the Agreement is the power to approve the roster and conditions under which it is worked, rather than to determine those matters. This means that the Commission must consider the positions of the parties.

[50] In this case, it has not been necessary to consider whether the Commission has the power under the relevant terms of the Agreement to determine the matter in a manner different to that contended for by the parties; for example, by approving the roster and then determining different conditions for employees working that roster to those contended for by the parties. This question does not arise given the outcome of this matter and that the submissions of the parties did not address the point. I have proceeded on the basis that, at very least, the terms of the Agreement authorise the Commission to deal with the application by:

• Approving the roster and conditions proposed by BSL;
• Refusing to approve the roster and associated conditions proposed by BSL; or
• Approving the roster on the basis that the conditions for employees will be as sought by the Unions in either of their options.

[51] There is an established line of authority in relation to the circumstances in which the Commission will exercise powers in a way that interferes with the right of management to decide how to efficiently conduct its business. These cases are concerned with whether certain matters were “industrial matters” or matters involving “management prerogative” and whether the Commission should arbitrate to make an award in settlement of a dispute in circumstances where the decision would impact on the rights of the employer to make decisions about matters such as how work will be allocated or arranged. Some of those authorities were cited by Commissioner Nutter in the 1996 case referred to by BSL in support of its submissions in the present case.

[52] In Re: Cram and Others; Ex Parte NSW Colliery Proprietors’ Association Limited and Others 10 the High Court considered whether a dispute about manning and recruitment was an industrial matter that could be the subject of an award and rejected the proposition that managerial decisions stand wholly outside the area of industrial disputes and industrial matters. In holding that objections in earlier cases to the regulation and control of business by tribunals was not a matter going to jurisdiction, the Court observed that this matter is:

“...an argument why an industrial tribunal should exercise caution before it makes an award in settlement of a dispute where that award amounts to substantial interference with the autonomy of management to decide how the business enterprise shall be efficiently conducted. The evident importance of arming such tribunals with power to settle industrial disputes capable of disrupting industry is a powerful reason for refusing to read down the wide and general definition of industrial matters in the Commonwealth and State Acts by reference to any notion of managerial prerogatives as such”. 11

[53] There is also a general principle in cases involving issues described as managerial prerogative, that the Commission will examine all the facts and will not interfere with the right of an employer to manage, unless the employer is seeking something unreasonable or unlawful from employees. 12

[54] In the present case, the parties who negotiated the Agreement have given the Commission the power to approve a roster and conditions attaching to it in circumstances where they are not able to agree in relation to those matters. Those parties are a large employer and three major Unions, all with significant industrial/employee relations knowledge and expertise. The principles in the case law referred to above are well established, and form part of the context in which the parties made the Agreement. In my view, those principles are relevant to the determination of the present matter.

[55] However, it is also relevant that the power to approve the roster and associated conditions in the present case arises from an enterprise agreement. Here, the Commission is not determining a claim by employees or the Union for a term that relates to or impacts the right of an employer to manage its business. What the Commission is determining is whether to approve a roster, including the terms and conditions of employment for employees working that roster, in circumstances where both parties have agreed that the Commission has power to make such a determination. This requires me to consider the position or outcome sought by the party seeking to implement a change and to determine whether it is has a reasonable basis for doing so, and whether the change proposed unreasonably impacts employees. Relevant to that consideration are factors such as:

• the reasons for the proposed change;
• whether there are reasonable grounds for the proposed change;
• the impact on the party proposing the change if it is not achieved;
• whether reasonable efforts have been made to reach agreement in relation to a proposed change before the a request is made to the Commission to determine the matter;
• the reasons for any opposition to the proposed change;
• whether there is a reasonable basis for opposition to the proposed change;
• alternatives advanced by the parties and whether those alternatives are reasonable; and
• the impact of the proposed change on the opposing party.

[56] I have approached the consideration of these matters on the basis that it is not the role of the Commission to place itself in the shoes of the parties. Instead the Commission must objectively consider these matters. In doing so the Commission must have regard to the rights of employers to manage their businesses in a manner that promotes productivity and flexibility and the rights of employees to resist having an unfair, unreasonable, inflexible or unsafe outcome imposed on them.

[57] After considering the reasons advanced by BSL for the proposed roster, I accept that BSL has reasonable grounds for implementing a six day roster. The undisputed evidence of witnesses for the Company is that it has suffered economic setbacks, is facing difficulty in making a profit and has issues with the low level of its cane supply. It is not in dispute that cane is a perishable product and that a balance must be struck so that it is crushed in the optimum level of time, which involves a balance between capital and operating costs and the sugar lost due to a longer period of time over which the crushing is carried out.

[58] I accept the evidence of BSL’s witnesses that at the present time, a five day roster is not viable because it will extend the period of the crushing season and increase labour costs due to the need to work some overtime and/or weekends. I also accept that BSL must maintain flexibility to be able to respond if orders or cane supply increases and that it is operationally more difficult for BSL to move between a five and seven day roster than it is to move between a five and six day roster.

[59] I am satisfied that BSL has a reasonable operational basis for wishing to implement a six day roster and that if the Commission refuses to approve a roster allowing it do so there will be an adverse impact on the ability of BSL to conduct its business in the manner it believes is most efficient and which provides it with necessary flexibility. I am also satisfied that BSL has made reasonable attempts to discuss the proposed roster with employees and has considered their views in relation to the proposed six day roster before seeking that the matter be determined by the Commission. I also note that BSL has sought that the matter be conciliated by the Commission and that a number of options put to employees for consideration were not accepted. I do not accept the submission advanced by the Unions that BSL has failed to comply with its obligations to consult employees about the introduction of the proposed roster.

[60] The Unions, of behalf of employees, have indicated their opposition to the six day roster on a number of bases, which can be summarised as follows:

• the circumstances in the present case can be distinguished from those in earlier cases relied on by BSL where the QIRC approved rosters over the opposition of employees and Unions;
• the proposed six day roster is not reasonable because:

• employees moving to a six day roster will suffer a significant loss of income;



• employees will be prejudiced by missing out on the conditions associated with working a seven day continuous roster, including the additional annual leave provided for in the Agreement consistent with the NES;



• employees will be prejudiced compared to day workers who receive overtime for weekend work; and



• the terms and conditions proposed by BSL for the six day roster do not compensate employees for the loss of enjoyment of Sundays (which are important for families) and the potential that they will be required to work on public holidays notwithstanding BSL’s position.

[61] The Unions have provided two options for terms and conditions for employees if the Commission approves the six day roster. Those options differ from BSL’s proposal in the following respects. Under the Unions’ Option 1, ordinary time worked between midnight Saturday and midnight Sunday would be paid for at the rate of 200% plus afternoon and night shift allowances. The effect of Option 1 is that the last four hours of the shift ending at 8.00 am on Sunday morning, would be paid for at the rate of 200% rather than 150% as provided in BSL’s proposal. In relation to the Unions’ Option 2, employees would accrue an additional week of annual leave (or a proportionate amount of an addition week of annual leave) for working BSL’s proposed roster. As previously noted, BSL opposes an additional leave entitlement for employees working the six day roster.

[62] I do not accept that any of the matters raised by the Unions are sufficient for the Commission to find that the six day roster places unreasonable demands on employees or that those matters constitute reasonable grounds for the opposition to the proposed roster or for the Commission to refuse to approve it. The evidence about the loss of income from the implementation of a six day roster was not clear. There were no calculations provided to the Commission and no employee gave evidence about this point. I accept that loss of income will result from the fact that the six day roster does not require employees to work the same amount of overtime as they would when working the seven day roster, which prescribes an overtime shift. Employees will also work less time on weekends and fewer night shifts, which will also contribute to a loss of income.

[63] Offsetting this loss of income is the fact that employees will physically be working less time on weekends and less overtime while working the proposed six day roster. The proposed six day roster finishes at 8.00am on Sunday compared to the seven day roster where work continues throughout the whole of Sunday. When compared with the five day roster, which concludes at 8.00 am on Saturday, employees will be rostered over an additional 24 hours each week. However, the effect of this is offset by the fact that the five day roster is worked by three panels of employees while the six day roster requires four panels so that the impact of working into Sunday mornings is offset by the increased number of employees that impact is spread over. For the same reason, the impact of working into Saturdays which is spread over three panels on a five day roster will also be reduced. I also accept that the six day roster provides three Sundays off in a row and one Sunday where employees will finish work at 8.00am, which provides more family time than the six day roster.

[64] For employees with family responsibilities, weekend time to spend with family members will be greater under the six day roster than the seven day roster. To the extent that additional work on weekends will be required for employees who may have previously worked the five day roster, the impact of that additional work will be spread among a greater number of employees than would be the case if five day shift workers were required to work overtime on weekends to crush the amount of cane that BSL wishes to crush using a six day roster.

[65] Contrary to the submissions of the Unions I do not accept that it is preferable for employees to remain on a five day roster and “take their chances” in relation to redundancy. Given the economic downturn in the sugar industry, and industry generally, it is far from certain that an employee who is terminated due to redundancy will find alternative employment. The six day roster requires more employees than the five day roster and requires that four panels of employees be employed, which is the same number of employees that are required to work the seven day roster. This is a benefit which weighs in favour of the six day roster being approved.

[66] In relation to the claim for additional leave advanced by the Unions, I do not accept that BSL’s rejection of that claim is unreasonable with respect to employees who will be working the six day roster. I have reached this conclusion for the following reasons. Employees under the Agreement already enjoy an additional week of leave in the form of travelling time for annual leave purposes, in addition to the four week standard entitlement in the Award and NES.

[67] Further, for seven day continuous shift workers, a day is typically observed from midnight to midnight so that Sunday commences at midnight on Saturday and concludes at Midnight on Sunday. Under the Agreement, only seven day continuous shift workers are entitled to an additional week of annual leave (or a proportionate amount of such additional week). Such employees can be rostered over 24 hours on Sundays, from midnight Saturday to midnight Sunday. Under the six day roster proposed by BSL, the last shift of the roster each week concludes at 8.00am on Sunday. Accordingly, an employee rostered on the last shift of the six day roster, will work only four hours of the shift on a Sunday and will do so on only one Sunday in each four week period. In my view, the additional Sunday hours that employees on the six day roster proposed by BSL will be required to work, do not warrant any additional annual leave accrual.

[68] I am fortified in this view by the terms of the Award. Under the Award, continuous shift work is defined at clause 32.(3)(a) as work carried on with consecutive shifts of employees throughout the 24 hours of each of at least six continuous days. However, for the purposes of the additional period of annual leave provided for shift workers under the NES, the Award, at clause 33.2, defines a shift worker as a seven day shift worker who is regularly rostered to work Sundays and Public Holidays, where the employer operates shifts continuously rostered 24 hours a day seven days a week. Employees working the six day roster proposed by BSL do not meet the requirements for the definition of “continuous shift worker” in clause 32.3(a) of the Award, much less the definition of shift worker in clause 33.2 of the Award for the purposes of the additional annual leave entitlement.

[69] The Award provisions are consistent with the history of variations to the previous Sugar Industry Award – State (Qld) to provide for the implementation of seven day continuous shift work. It was made clear in the cases where those provisions were included in the State Award that the entitlement of shift workers to an additional period of leave was based on them being seven day continuous shift workers who were required to be regularly rostered to work on 5/7 of all of the Sundays and public holidays in a year. The evidence in the present case establishes that the roster proposed by BSL falls a long way short of placing this requirement on employees working the six day roster proposed by BSL.

[70] I do not accept that there is a reasonable basis for employees working the six day roster to be paid for work between midnight Saturday and 8.00 am Sunday at the rate of double time with shift allowances being paid in addition. Both the Agreement and the Award provide for ordinary work on weekends by continuous shift workers to be paid for at one an a-half times the ordinary rate with shift allowances being payable in addition. There is no basis for employees working the six day roster to receive a higher penalty rate for the last four hours of the final shift of the roster which concludes at 8.00 am on Sunday, than a seven day continuous shift worker, who can be required to work through the entire 24 hour period between midnight Saturday and midnight Sunday. The 150% payment plus shift loading that BSL proposes will be paid to employees working until 8.00 am on Sunday, is consistent with the Award and the Agreement.

[71] The Unions also contend that any decision by the Commission to approve a six day roster for BSL will likely have a flow on effect across the industry and it is imperative that the terms and conditions related to such a roster (if approved) are appropriate in a workplace and industry context. For the reasons set out above, I do not consider that the six day roster and the associated terms and conditions for employees working that roster as proposed by BSL are inappropriate. The present application concerns an agreement involving one employer in the industry. There is no evidence that there are similar provisions in any other enterprise agreements in the industry or that the decision in the present case will have any flow on effect. This case turns on its own facts and circumstances.

[72] I also note that by the application currently before the Commission, BSL is not seeking carte blanche to implement any six day roster it wishes. BSL is not seeking a provision that allows it to change the roster for which it seeks approval on a unilateral basis in the future. The roster proposed by the Company was tendered to the Commission and is annexed to this Decision. BSL seeks approval only of a particular six day roster and its proposed terms and conditions for employees relate specifically to that roster. If BSL wants to implement a different six day roster, then it will be necessary for it to seek the agreement of employees and in the absence of such agreement, to make a further application to the Commission. BSL has put evidence before the Commission in relation to its expectations of the requirements for employees to work Sundays and public holidays under its proposed roster.

[73] I note the concerns expressed by the Unions in relation to BSL requiring employees to work more public holidays than the estimate it provided to the Commission. In the event that this concern is realised, then it would be open to the Unions to make an application for the Commission to deal with a dispute about this matter under the Issues of Concern Procedure in Schedule 1 of the Agreement.

6. CONCLUSION

[74] In accordance with clause 6.9.1 of the Agreement, I approve the introduction of the six day roster and the terms and conditions of employees working that roster as proposed by BSL. The approved Roster is set out in the Annexure to this Decision. The terms and conditions for employees working that roster are as follows:

(a) All overtime is to be paid at double time;

(b) All ordinary time worked on a weekend (from midnight Friday to 8am Sunday) is to be paid at 150% plus any otherwise applicable afternoon and night shift allowance. (Afternoon shift attracts an 11% and night shift a 13% loading on ordinary hours);

(c) Employees do not accrue additional annual leave for working this roster.

DEPUTY PRESIDENT

 1   Witness Statement of Mr David Pickering, Exhibit 7.

 2   Witness Statement of Mr Giuseppe Barazza, Exhibit 8.

 3   Witness Statement of Mr Gavin Duncan, Exhibit 1.

 4   (1996) 152 QGIG 1861, which referred to B458 of 1986 (1986) QGIG at 458.

 5   B454 of 1975 and B226 of 1976 (1976) QGIG at 41.

 6   B458 of 1986 (1986) QGIG at 458.

 7   Witness Statement of Mr Giuseppe Barazza Exhibit 8.

 8   (1996) 152 QGIG 1861 – upheld on appeal in AWU v Australian Sugar Milling Association (1996) 153 QGIG 7.

 9   ASMA v AWU B1278 of 1996 QGIG 23 August 1996 1861 at 1863.

 10   Re: Cram and Others; Ex Parte NSW Colliery Proprietors’ Association (1987) 163 CLR 117.

 11   Ibid at 137.

 12   Monash College Pty Ltd v National Tertiary Education Industry Union [2012] FWA 4725.

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