Chalam Thanika v Morgan Technical Ceramics Australia Pty Ltd
[2018] FWC 6730
•2 NOVEMBER 2018
| [2018] FWC 6730 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.739—Dispute resolution
Chalam Thanika
v
Morgan Technical Ceramics Australia Pty Ltd
(C2018/3014)
| Commissioner McKinnon | MELBOURNE, 2 NOVEMBER 2018 |
Alleged dispute about any matters arising under the enterprise agreement – leading hand – whether substantive position – whether change in leading hand arrangements was major change for the purposes of consultation term.
Morgan Technical Ceramics Pty Ltd (MTC) designs and manufactures a wide range of advanced ceramic materials. It is a subsidiary of a global UK based company which also designs and manufactures a wide range of materials. It has approximately 100 employees in Australia including approximately 53 employees at its Notting Hill site.[1]
Chalam Thanika is employed as a Machinist - C8 Engineering Tradesperson by MTC. He has applied to the Commission under section 739 of the Fair Work Act 2009 (Act) for assistance in relation to a dispute under the Morgan Technical Ceramics Australian Manufacturing Workers Union Workplace Agreement 2016[2] (the Agreement). The Agreement is a single enterprise agreement made by MTC and its employees in manufacturing classifications C14 to C6 at its premises in Notting Hill. The “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) is covered by the Agreement.
Section 739 of the Act empowers the Commission to deal with certain disputes under enterprise agreement dispute settlement terms. Clause 3.3 of the Agreement contains a process for the resolution of disputes in relation to matters arising under the Agreement and/or the National Employment Standards (NES). Disputes that are unable to be resolved at the workplace can be referred to the Commission once all agreed steps for resolving it have been taken. The Commission can mediate and/or conciliate the dispute and if that fails to resolve the dispute, it can resolve the dispute by arbitration. There is no dispute that the Commission can deal with this dispute by arbitration under clause 3.3.
The dispute is about whether Thanika was employed as a ‘leading hand’ under the Agreement and whether MTC was required to, and did, comply with its obligation to consult with him about a decision to no longer recognise him as a leading hand.
Thanika says he was employed in the substantive position of ‘leading hand’ after a promotion in 2010 and is entitled to remain as a leading hand and receive the leading allowance under the Agreement. MTC says there is no substantive position of leading hand and that the leading hand allowance is payable to employees who are required to perform leading hand duties.
The Agreement
The Agreement contains a number of terms that are relevant to this dispute. It also deems terms of the Metal, Engineering and Associated Industries Award 1998 listed in Annexure A to the Agreement as part of the Agreement. None of those ‘deemed terms’ appear relevant to the present dispute.
Clause 1.6 of the Agreement provides that it applies to MTC at its Notting Hill premises and “to all employees who are employed to perform work described in levels C14 to C6 of the classification structure referred to in clause 5.2 of this Agreement.”
Clause 3.2 of the Agreement provides for consultation about major changes to production, program, organisation, structure or technology that are likely to have significant effects on employees. For changes of that kind, once MTC has made a definite decision to introduce the change, it is required to:
notify the employees who may be affected by the proposed changes and their representatives;
as early as practicable after the definite decision and notice to employees of the change, discuss with employees affected and their representatives, among other things:
a.the introduction of the changes referred to in Clause 3.2.1(a)(i);
b.the affects the changes are likely to have on employees;
c.measures to avert or mitigate the adverse affects of such changes on employees;
d.give prompt consideration to matters raised by the employees and/or their representatives in relation-to the changes;
e.for the purposes of the discussion, provide in writing to the employees concerned and their representatives, all relevant information (other than confidential information that if disclosed, would be against MTC’s interests) about the changes including:
i.the nature of the changes proposed;
ii.expected effects on employees; and
iii.any other matters likely to affect employees.
f.provide the information in languages other than English for employees of non-English speaking background; and
g.take reasonable steps to mitigate adverse effects of change upon employees.
"Significant effects" is defined and includes termination of employment, major changes in the composition, operation or size of the company's workforce or in the skills required, the elimination or diminution of job opportunities, promotion opportunities or job tenure; the alteration of hours of work; the need for retraining or transfer of employees to other work or locations and the restructuring of jobs. It does not include certain matters dealt with in ‘the award’ ‘as it stood at December 1996’. No party made submissions to the effect that matters dealt with in the award as at December 1996 were relevant to this dispute and I proceed on the basis that they are not.
Clause 4.1 of the Agreement deals with employer and employee duties. MTC can direct employees to carry out duties that are within the limits of the employee's skills, competence and training, consistent with the classification structure of the Agreement, except duties designed to promote de-skilling. MTC can direct an employee to carry out such duties and use such tools and equipment as may be required as long as the employee has been properly trained in the use of such tools and equipment. Any direction to perform work must be consistent with MTC’s responsibilities to provide a safe and healthy working environment.
Clause 5.2 contains the classification structure for the Agreement. It provides as follows:
“5.2.1 The parties agree to the need to maintain the competency based classification structure consistent with the provisions of the award. This will incorporate a continuing review mechanism to address both currently identified issues and those issues that arise in the development of the structure.
The parties agree that fundamental to the effectiveness of this new classification structure is a commitment to:
·The development of a more highly skilled and flexible workforce
·The provision of career opportunities consistent with the future workload needs of the Company
·The removal of barriers to employees using skills acquired and required by the Company
·The development of work teams that will have sufficient skill mix to maximise flexibility and efficiency available when carrying out tasks to which the team is assigned
·The opportunity for reclassification of people consistent with business needs on proof and application of additional skills or evidence of qualifications beyond their existing classification level.
5.2.2 The determination of classifications shall be as provided for in the National Metal and Engineering Industry Competency Standards Implementation Guide 1999 as published by the Manufacturing, Engineering and Related Services Advisory Body Ltd, as varied from time to time and the Carpenter in-house application of version 4 of that Guide and the Monash Site classification letter of understanding dated September 1999.
Any issues associated with the application and administration of the structure will be addressed as and when they arise via the site consultative committee. Any issues associated with the use of the competency standards will be addressed as and when they arise by the competency assessors panel.”
From clause 5.2.3, the Agreement deals with the classification structure. Classification definitions are read in conjunction with other provisions in the Agreement and external documents relevant to the establishment of industry competency standards. Relevant classifications include those in the “C8 Wage Group”, including C8 Engineering Tradesperson Special Class Level I, Engineering Technician Level II and Special Class Engineering Tradesperson Level I, which is a:
“(i) Special Class Engineering Tradesperson (Electrical/Electronic) Level I; or
(ii)Special Class Engineering Tradesperson (Mechanical) Level I; or
(iii)Special Class Engineering Tradesperson (Fabrication) Level I;
who has completed the minimum training requirements specified in Section 1.1 of this Schedule or equivalent.
An Engineering Tradesperson Special Class Level I works above and beyond a tradesperson at C9 and to the level of his/her skills, competence and training performs work within the scope of this level.”
The work of an employee in the C8 Wage Group includes:
· Providing trade guidance and assistance as part of a work team;
· Assisting in the provision of training in conjunction with supervisors and trainers;
· Understanding and implementing quality control techniques;
· Working under limited supervision either individually or in a team environment;
· Operating lifting equipment incidental to his/her work; and
· Performing non-trade tasks incidental to his/her work.
An Engineering Technician Level II is an employee who has the equivalent level of training of a C8 Engineering Tradesperson Special Class Level I or equivalent so as to enable the employee to apply skills within the scope of this level. The skills exercised by the Engineering Technician Level II are in defined technical fields including draughting, planning or technical tasks requiring technical knowledge. At this level the employee is required to exercise judgment and skill in excess of that required at C9 under the supervision of technical or professional staff.
Clause 5.2 also contains a classification for 'Trainer/Supervisor/Coordinator Levels I and II as follows:
“A Trainer/Supervisor/Coordinator Level I is an employee who is responsible for the work of other employees and/or provision of structured on-the-job training. Such an employee has completed a qualification at AQFIII level or above, of which at least one third of the competencies are related to supervision/training, or equivalent. Notwithstanding the above definition an employee who is mainly engaged to perform work supervising or coordinating the work of other employees and who has sufficient additional training beyond that of those coordinated or supervised so as to enable the employee to perform work within the scope of this level shall be classified at this level.
…
A Trainer/Supervisor/Coordinator Level II is an employee who is responsible for the supervision and/or training of Trainers/Supervisors/Coordinators Level 1. Such an employee has completed an AQF IV or V qualification or equivalent of which at least 50% of the competencies are in supervision/training.”
Clause 1.4.3(d) of the Agreement defines "Supervisor/Trainer/Coordinator Field" as including employees who are:
“(i) Responsible for the work of other employees and/or provision of on-the job training including coordination and/or technical guidance; or
(ii) Responsible for supervision and/or training of other supervisors or trainers; or
(iii) Responsible primarily for the exercise of technical skills, as defined, up to the level of their skill and competence and who are additionally involved in the supervision/training of other employees.”
Clause 5.4 of the Agreement provides for allowances and special rates as follows:
“5.4.1 All-purpose Allowances
The following allowances shall apply for all purposes of the Agreement. All allowances are to be increased in line with the percentage increases of this Agreement
5.4.1(a) Leading Hands
Leading hands in charge of three or more people shall receive the relevant weekly amount as set out below. The following provisions expressly exclude the entitlement of employees to leading hand allowances I clause 5.9.1(a) of the Metal, Engineering and Associated Industries Award 1998 Part 1
In charge of:
3 to 10 employees $70.60
11 to 20 employees $102.70
5.4.1(b) Trainer/Supervisor/Coordinator Technical
A Trainer/Supervisor/Coordinator - Technical is an employee who is responsible primarily for the exercise of skills in technical fields as defined, up to the level of his/her skill and competence and who is additionally involved in the supervision/training of other technical employees. Such an employee shall receive not less than 107% of the rate of pay applicable to the employee's technical classification.”
Clause 8.10 deals with internal advertising of vacancies. It requires MTC, when positions become available, to advertise them on site noticeboards so that existing employees have the opportunity to apply.
The model consultation term also applies as a term of the Agreement.
Background
The MTC business is divided into 6 broad management functions, including Production. The Production function consists of the Automotive, Green, Maintenance, Finishing and Packing areas.
There are two shifts each work day in the production area. Day shift operates from 6:10 AM to 3:00 PM. Afternoon shift operates between 2:45 PM and 11:30 PM. There is a handover between 2:45 PM and 3.00 PM and after handover, afternoon shift employees pick up from where dayshift employees have left off.
Since 29 September 2008, there have been two leading hands on the day shift in the Finishing area. Thanika was a fill in leading hand for both day shift and afternoon shift from 29 September 2008. In addition to his role of machinist, his responsibility as leading hand was “to all planning and management of both shifts and work with the schedule to prioritise jobs and allocate resources.” That included dealing with the allocation of work across teams based on job requirements, as well as job and machine issues, leave requests, absences, make up time and overtime, and other similar matters.[3]
On 24 November 2010, Thanika applied to become full-time leading hand with responsibility for “Sig cell and Manuals”. He applied by submitting his resume to Brett Hunter, Operations Manager and attending an interview for the role.[4]
His appointment to the role was confirmed in an email from Mr Hunter on 6 December 2010.[5] The email said:
“I am pleased to announce that Chalam Thanika has been promoted to the position of Leading Hand.
Chalam has responsibility for Sig cell and Manuals on both shifts.
Deva has responsibility for NC & packing on both shifts.
I have attached a copy of the revised organisation chart your reference.
Please join me in congratulating Chalam on his new appointment.”
In the Sig group, in addition to Thanika, there are three employees on dayshift and one or two employees on afternoon shift.[6] In addition, there are two contractors working on dayshift.
According to Thanika, his additional duties as leading hand were supervising and assisting workers in the Sig cell and Manuals sections, allocating work, approving leave applications and forwarding them to the manager for approval, signing timesheets and checking payroll information. MTC says the additional duties are as follows:
· meet with schedulers once or twice per week to discuss the schedule of work
· assign tasks to trades persons in their area at the commencement of each shift
· be available to answer questions asked by trades persons
· assist engineering with estimating new jobs and job cost analysis
· check employees in their team are recording their working hours properly
· open up on dayshift and lock up the site on afternoon shift.[7]
In March or April 2018, there was a conversation between Thanika, Deva Narasimman and Guy Dawson, Productivity Manager, about problems they were having on afternoon shift. Narasimman suggested that one of the leading hands on dayshift could move to afternoon shift to help with its management.[8]
Dawson and Stephen Thompson, Managing Director, subsequently decided that MTC no longer required two dayshift leading hands in the finishing area.[9]
Dawson approached Narasimman and Thanika again a few days later and asked them to think about who would like to move to afternoon shift. Following the conversation, both Thanika and Narasimman refused the move to afternoon shift. [10]
On 4 May 2018, Dawson told Thanika that he was no longer leading hand on dayshift. He advised that he could move to afternoon shift if he wanted to stay as a leading hand. Thanika said he did not want to move to afternoon shift.
An email was subsequently sent to all employees advising “a change to the structure of the site operational leadership.”[11] The purpose of the change was to “improve responsibility and communication between shifts and areas so that everyone knows who is the right person to contact on a day to day basis and when the full-time leading hand is away.”
There were three changes. Firstly, Dawson was to take over the running of site operations, with all leading hands reporting to him. Secondly, Mohammed was to concentrate on the administrative side of things with an imminent Pronto upgrade. Thirdly, MTC was reverting to the “practices we had many years ago of having “full-time” and “fill in” leading hands”.[12] It meant having designated leading hands for both the permanent and fill in roles rather than a combination of permanent, rotating and ad hoc leading hands on shifts.
One consequence of the decision to have designated leading hands on each shift was the reduction in full-time leading hands on dayshift in the finishing area from two to one, and the removal of that responsibility from Thanika.
The email set out resulting leading hand vacancies and invited applications to Dawson. The vacancies were as follows:
· Green and Powder prep area:
oLdayshift fill in leading hand
oafternoon shift full-time leading hand
oafternoon shift fill in leading hand
· Finishing area:
odayshift fill in leading hand
oafternoon shift full-time leading hand
oafternoon shift fill in leading hand
Responsibilities of the leading hand role were described as “scheduling jobs, team leading, area safety, training of others and running machines.”[13]
On 16 May 2018, there was a meeting between MTC, Thanika and the AMWU about his removal from leading hand duties, and the consequent loss of an allowance of $122 per week plus company phone. The dispute was not resolved.
Consideration
In The Australasian Meat Industry Employees Union v Golden Cockerel Pty Limited[14], a Full Bench of this Commission set out the relevant principles to be applied in the construction of enterprise agreements. These principles were revised in “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) v Berri Pty Limited.[15] The starting point is to consider the ordinary meaning of the words used, having regard to their context and evident purpose. The search is for the objective common intention of the makers of the enterprise agreement, having regard to the language used to give effect to their agreement.
The terms in dispute in this matter have a plain meaning. Employees are employed in the classifications set out in the Agreement. A leading hand allowance is payable to employees who are performing leading hand duties - that is, acting in charge of three or more people.
There is no classification of ‘leading hand’ in the Agreement. There is a classification of “Trainer / Supervisor / Coordinator”, who is responsible for the work of other employees and/or the provision of structured on-the-job training. Employees in that classification are entitled to an additional allowance of 107% of the rate of pay applicable to their technical classification. That allowance is paid in specific recognition of the nature of the classification and role. In the same way, the leading hand allowance is paid in recognition of the requirement to act in charge of three or more people while employed in one of the classifications in the Agreement.
Under clause 4 of the Agreement, MTC can direct employees to carry out duties that are within the limits of their skills, competence and training, consistent with the classification structure of this Agreement, except duties designed to promote de-skilling.
MTC can direct an employee to carry out such duties and use such tools and equipment as may be required as long as the employee has been properly trained in the use of such tools and equipment. That includes a direction not to carry out certain duties.
Thanika points to the formal process adopted to appoint him to the role of leading hand. In my view, all that indicates is that, consistent with MTC’s obligations to advertise internal vacancies under the Agreement, MTC gave all employees the opportunity to indicate their interest in leading hand duties. In practical terms, it placed them ‘in charge’ of their team and in that way separated them from the team for the purpose of undertaking leading hand duties.
Obligation to consult
The next question is whether MTC was required to, and did, comply with its obligation to consult with him about a decision to no longer recognise him as leading hand.
The answer depends on whether the decision comprised, or was part of, a “major change in production, organisation, structure to technology” that is likely to have significant effects on employees.
The decision was to “revert to the practice of many years ago” of having “full-time” and “fill in” leading hands. It did not change the requirement for leading hands to be allocated to shifts. It did not result in an increase or reduction in the number of employees. All it did was adopt a more formal structure, by designating one person as the full time leading hand and one person as the fill in leading hand for each shift in each area. The purpose of the change is to ensure employees know who to contact on a day to day basis, including when the full time leading hand is away.[16]
I am not satisfied that the change to Thanika’s duties was a ‘major change’ within the ambit of clause 3.2 of the Agreement or clause 1(a) of the model consultation term.[17] While one consequence of the change will be a reduction in Thanika’s take home pay, not every change which may disadvantage an employee will fall within the ambit of clause 3.2 and the model consultation term.[18] The loss of leading hand allowance is commensurate with what will also be his reduced responsibilities at work.
Given my finding that the change was not a major change for the purposes of the Agreement, it is not necessary to deal with whether the change was likely to have significant effects on employees.
Conclusion
While Thanika was employed as a ‘leading hand’ under the Agreement, his classification was that of Machinist (C8 Engineering Tradesperson) and his role as leading hand was subject to the further direction of MTC to no longer perform leading hand duties.
MTC was not required to consult with Thanika about the decision to no longer recognise him as a leading hand under clause 3.2 of the Agreement or the model consultation term.
The dispute is determined accordingly.
COMMISSIONER
Appearances:
J Gardner for the Applicant
A Pollock for Morgan Technical Ceramics Pty Ltd
Hearing details:
2018.
Melbourne:
August 20.
<PR701928>
[1] Exhibit 3, Statement of Steve Thompson, [5]
[2] AE421956
[3] Exhibit 1, Statement of Chalam Thanika, Attachment CT 1
[4] Exhibit 1, Attachment CT 2
[5] Exhibit 1, Attachment CT 3
[6] Exhibit 3
[7] Exhibit 3
[8] Exhibit 1; Exhibit 4, Statement of Guy Dawson
[9] Exhibit 3
[10] Exhibit 4
[11] Exhibit 1, Attachment CT 4
[12] Exhibit 1, Attachment CT 4
[13] Exhibit 1, Attachment CT 4
[14] [2014] FWCFB 7447
[15] [2017] FWCFB 3005
[16] Exhibit 1, Attachment CT 4
[17] Port Kembla Coal Terminal Ltd and Another v Construction, Forestry, Mining and Energy Union and Others (2016) 248 FCR 18; Tsiftelidisv Crown Melbourne Ltd[2016] FWCFB 4675 at [32] –[34]
[18] Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Jemena Asset Management Pty Ltd [2016] FWC 6494
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