Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v BlueScope Steel Limited T/A BlueScope Lysaght
[2012] FWA 10591
•17 DECEMBER 2012
[2012] FWA 10591 |
|
DECISION |
Fair Work Act 2009
s.739—Dispute resolution
“Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU); Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia
v
BlueScope Steel Limited T/A BlueScope Lysaght
(C2012/5051)
Manufacturing and associated industries | |
DEPUTY PRESIDENT MCCARTHY | PERTH, 17 DECEMBER 2012 |
Alleged dispute about any matters arising under the enterprise agreement and the NES;[s186(6)] .
Background
[1] This matter concerns an application lodged by the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (the AMWU) and the Communications, Electrical, Electronic, Energy, Plumbing, Postal and Allied Services Union of Australia (the CEPU) (collectively the Unions) for Fair Work Australia (FWA) to Deal with a Dispute in Accordance with a Dispute Settlement Procedure (the DSP) in a single enterprise agreement.
[2] The dispute concerns the terms of the BlueScope Lysaght Forrestfield Enterprise Agreement 2010 - 2013 (the 2010 Agreement). It is an Agreement approved by me on 26 May 2010. 1 The single enterprise is BlueScope Steel Limited T/A BlueScope Lysaght (BlueScope). The DSP in the 2010 Agreement provides for a number of steps to be progressed in dealing with a dispute. There is no dispute that the first three of those steps have been completed without the dispute being resolved. The fourth of those steps provides that either party may refer the grievance to FWA for conciliation and/or arbitration. Conciliation endeavours have not resolved the dispute and hence the application has proceeded to arbitration. There is not dispute about the jurisdiction for FWA to undertake that task.
[3] The application lodged identifies the matter in dispute as being the provisions of Clause 11.2.a. Method of Achieving 38 hour week and Clause 9.6.c. Change in Roster System of the 2010 agreement.
[4] Clause 11.2. of the 2010 Agreement is headed Method of Achieving 38 Hour Week and in 11.2.a. provides:
“The parties agree that a uniform approach to working a 38 hour week arrangements at the Forrestfield site shall be implemented upon the making of this Agreement.
The following methods are expressly agreed as being acceptable under this Agreement on the basis that at any time only one method of achieving a 38 hour week shall be implemented across the Forrestfield site:
11.2.a.i. Rostered Day Off (RDO) system
Employees will be entitled to one Rostered Day Off in each 4 week period through such employees actually working 8 ordinary hours each day, with 0.4 of an hour each day accruing for the purposes of an entitlement to a paid Rostered Day Off over a 20 day cycle.
11.2.a.ii. Other
The parties agree that any other method of working hours may be implemented in which employees actually work a 38 hour week (for example, by working less than 8 ordinary hours per day; or working less than 8 ordinary hours on one or more days of the week), or, for seven day and continuous shift employees, any roster pattern in which employees work less than 5 shifts per seven day period, or less than 20 shifts per 28 day cycle, with an average of 38 hours actually worked per week over such cycle.”
[5] Clause 9.6.c. of the 2010 Agreement provides:
“Change of Roster Systems
9.6.c.i. Changing to a new type of roster system is considered a significant change. The Company will provide a minimum of 28 days notice of such change. In addition to the consultation procedure outlined above, the Company will adhere to these guidelines when implementing the roster changes;
9.6.c.i.1. Where time permits, the Company will ask for volunteers to implement the change.
9.6.c.i.2. Where no volunteers are available, the Company will discuss the changes with employees having the appropriate skills mix and review individual cases of hardship before nominating appropriate employees to implement the change.
9.6.c.i.3. The changes will be reviewed with the employees affected within three (3) months of the implementation.
9.6.c.i.4. Where changes require increased manning, and employees request to return to their original work patterns, the Company will consider the recruitment of new employees/contractors to fill this position and accelerate training.
9.6.c.i.5. Employees will be expected to actively assist with the training to accommodate a timely return to original work patterns with minimal impact to the business.
9.6.c.ii. Where it is proposed to introduce seven day or continuous shift arrangements during the life of this Agreement, the Company commits to introduce such shift arrangements by agreement with the majority of employees affected. However, the parties acknowledge that agreement will not be unreasonably withheld.”
[6] Prior to 2006 BlueScope had two work sites in Metropolitan Perth. One was located at Osborne Park, and the other was located at Myaree. The industrial instrument regulating the terms and conditions at those sites was the BHP Steel Lysaght Western Australian Enterprise Agreement 2002 (the 2002 Agreement) an agreement registered in the Western Australian Industrial Relations Commission (WAIRC). An Award or awards of the WAIRC (the Sheetmetal Workers Award and possibly the John Lysaght Award) also covered either or both sites. The Myaree and Osborne Park sites applied two different methods of applying the 38 hour week. At Myaree the employees had a Rostered Day Off (RDO) system and at Osborne Park there was not an non-RDO system. It was clear in the 2002 Agreement that the Western Australian operations would be integrated into one site and provisions in the agreement dealt with the intentions of how the transition to one site would be achieved and what was hoped to be achieved from it.
[7] The term of the 2002 Agreement expired on 30 June 2004. Negotiations for a new agreement began in May 2004. In August 2004 BlueScope wrote a Memorandum (the 2004 Memorandum) to all employees indicating that the point had been reached with the EBA process where there was a need to unify the working hours patterns between the two sites for implementation at the Forrestfield site. The Memorandum outlined in some detail the pattern of work arrangements and the introduction of a third shift. The proposal involved discontinuing the RDO system, payout of existing RDO balances and a one off $700 payment. The proposal was voted on and rejected by employees in January 2005. It was evidenced that only the RDO System was voted on. Employees wished to retain the RDO system.
[8] An agreement was reached in January 2006. Negotiations for a replacement agreement commenced in late 2008 and continued through 2009, which resulted in an agreement being reached and that agreement being approved by me on 26 May 2010. The terms of the provisions in the 2010 Agreement now in question are essentially the same as those in the 2006 Agreement.
[9] Since 2006 the method of working the 38 Hour week has involved one RDO each four weeks. In May 2011 BlueScope proposed that the method of working the 38 Hour week be changed by eliminating RDO’s. However employees have objected and argued that a majority agreement by employees must first be obtained before that change could be made. In October 2011 BlueScope endeavoured to achieve the change and issued a Notice to employees proposing a vote of employees for a trial of that change. To date no change has been made to the RDO system.
Consideration
The Contentions
[10] The unions in the application contend that:
1. The agreed meaning and effect of these words (in clause 11.2.a. in the agreement) is that immediately following the making of the Agreement, the parties agree to a uniform approach to working the 38 hours that is either inclusive of the accrual of RDO’s or without the accrual of RDO’s which shall then be implemented and;
2. The agreed meaning and effect of these words (in clause 11.2.a. in the agreement) is that once this decision has been implemented - and in this instance it was decided to implement a system of accruing RDOs, that such implementation can not be revisited, save for the agreement of all parties.
[11] BlueScope contends that BlueScope may at any time implement one of the systems contemplated under clause 11.2.a. provided that the system is applied across the entire site.
The Provisions in the Agreement
[12] It is not necessary for me to outline the appropriate approach to be taken in consideration of this application. Essentially it involves the interpretation of the terms of the agreement. The approach to be taken to interpretation of a single enterprise agreement was recently canvassed in Cape Australia Holdings Pty Ltd T/A Total Corrosion Control Pty Ltd v Construction, Forestry, Mining and Energy Union 2 and that is the approach I will follow.
[13] What the Unions contend is that the wording of the Agreement must be read in the context of the events leading up to the making of it. Essentially they are arguing that the understanding they had when the 2006 Agreement was made was that the system of working a 38 hour week was on the basis of a full RDO off every 4 weeks.
[14] The Unions acknowledge that the wording of clause indicates that change to the roster system is possible. They argue that the clause does not expressly stipulate how such a change is to be facilitated, nor that BlueScope may determine which method of achieving a 38-hour week applies. Therefore they submit that in the absence of express direction as to how a change may be facilitated, that the clause and its interpretation is informed by the context of its formation. That context they contend supports their view that a majority agreement of employees is required before the method of achieving a 38-hour week can be changed.
[15] The provision must be read in the context of the words used in the agreement and the context and framework of the agreement as a whole. Certainly the development and formation of the agreement can be an aid to that interpretation but it is the agreement itself that first must be examined.
[16] A starting point in the Agreement is clause 7. Managing Supply. The clause has the character of what the objects of the instrument are. Those objects include recognition for continual improvement and workplace flexibility. Specific mention is made of the need to have flexible work arrangements across all shifts, including specific examples and considerable detail for a clause of this nature of the types of changes that could be involved in meeting those objectives. Specific mention is also made of the need to have the ability to change shift patterns and start and finish times, whilst recognizing the need to discuss potential changes with employees and aim to balance employees needs with those of the business.
[17] Clause 9. is headed Contract of employment and deals mainly with types of employment permitted under the agreement and obligations in respect of Redundancy. Consultation obligations in respect of proposed change are also prescribed under this clause. Under clause 9.6. obligations to consult over various matters involving change are prescribed. Clause 9.6.c. has provisions that deal with Change of Roster Systems. Under 9.6.c.i. obligations are placed on BlueScope such as giving 28 days notice of a change, allowing for volunteers to implement change, reviewing change after implementation, recruitment and training. Separately under 9.6.c.ii. if seven day or continuous shift arrangements are proposed then BlueScope may only introduce those arrangements by agreement with employees affected. Significantly no other types of changes to working arrangements are mentioned here with that condition precedent to implementing a change.
[18] Clause 11. then deals with Hours of Work, Shift Work and Overtime. Clause 11.1.a. is a standard hours provision that prescribes that ordinary hours of work will be an average of 38 hours per week Monday to Friday. Start and finish times are “determined” and involve a consideration of operational requirements. Changes can be made to start and finish times “after adequate consultation has taken place” with the employees affected. There is clearly here no condition requiring employee agreement.
[19] Clause 11.b.ii. deals with Non Continuous Shift Work. Two types of shift work are provided for here. For Monday to Friday shift work afternoon and night shifts are expressly allowed and any changes in shift patterns for those shifts are also allowed without it being conditional on employee agreement. The other type of shift work provided for here is seven day shift work and subject to agreement with the majority of employees affected. A majority of employees affected are required to agree to those types of shifts as a condition precedent to them being implemented.
[20] Clause 11.b.iii. provides for continuous shift work to be able to be worked. It is in similar terms to clause 11.b.ii. where a majority of employees affected must agree.
[21] Clause 11.2. is headed the Method of Achieving a 38 Hour Week. The clause is outlined above in paragraph [4]. The first sentence of the clause provides that a “uniform approach” to working the 38 hour week shall be implemented. The second sentence of the clause provides that following “methods” of working the 38 hour week are “expressly agreed as acceptable” but only one method can be applied at any one time. This is a clear expression that either of the “methods” may be used but only one can be used at any one time.
[22] The first method is provided in clause 11.2.a.1. under the heading of Rostered Day Off (RDO) System. This method provides for an RDO once every four weeks with 0.4 of an hour each day accumulating over 19 days for the 20th day to be rostered off.
[23] The second method is headed “Other”. It provides that “any other method of working hours may be implemented”. It then goes on to provide that for working a 38 hour week clearly being a reference to working 38 ordinary hours of work in a calendar week. The examples given are working less than 8 ordinary hours on all days worked or less than 8 ordinary hours on some but not all of the days worked. In the case of seven day or continuous shift workers the clause refers to work patterns and rosters more relevant to that type of work.
[24] Importantly there is no mention of agreement by a majority of employees being required for any of the types of working the 38 hour week allowed, nor for changes to the system once a system had been in place. Rather what is required is that only one system can operate at any one time. Thus there is no condition precedent such as those provided in Clause 11.1.b., nor similar to that mentioned in Clause 9.6.c.ii.
[25] Clause 11.2.b. then provides arrangements for organizing and scheduling of RDO’s “Where it is agreed” to utilize an accrued RDO system. This is the only reference I can find to any mention of “agreement” regarding an RDO system. It could be argued this is indicative of clause 11.2.a. meaning that agreement must be reached with a majority of employees before an RDO system can be implemented. However it also could be argued that it infers only that a system of working a 38 hour week that involves actual RDOs must be agreed. However I don’t think much weight can be attached with the use of the phrase ‘where it is agreed’ to the meaning of Clause 11.2.a.
The History of the negotiations regarding RDO’s
[26] The history of the provisions is relevant. The starting point is the 2004 Memorandum. Clearly BlueScope at that juncture flagged its desire to work a 38 Hour week without RDO’s. Employees rejected that proposal and terms surrounding it in a vote in January 2005.
[27] There appears to have been a pause in developments and the next event seems to have been a few months later when a first draft of a proposed agreement was provided. The draft was an attempt to consolidate the terms of the Sheetmetal Workers Award, The John Lysaght Award and the agreement into the one instrument. That draft indicated in effect that only the expressly agreed methods of working a 38 hour week could be implemented at the Forrestfield site and only one of those methods could apply at any one time. Whilst the draft expresses that the following methods (in the plural) were expressly agreed only one method was prescribed namely one that involved one RDO in each 4 week period.
[28] On 29 July 2005 BlueScope management conducted a question and answer session with all employees concerning the negotiations. The employees were instructed to provide questions and BlueScope committed to answering them. A question asked was “ Is the Company going to determine whether we have RDO’s or not?” An answer given was that Clause 7(2) of the new Award states that the site will adopt a standard method of working the 38 hour week. 3
[29] Another answer given was that “The clause states that there are two acceptable methods of achieving this standard approach to the 38 hour working week. The first option is the RDO system. The second option is any other agreed system. A vote has been already been held & the majority of employees have elected to have an RDO. While the second option allows the parties to adopt alternative arrangements if agreed at some future time, the RDO option allows the existing arrangements to continue. The new Award reflects the existing flexibility under both JLA and Sheetmetal.”
[30] Evidence was given by Mr Guy Bell, an employee delegate for the AMWU since May 2002, and involved in negations since that time. He says this answer meant that the clause had been (and presumably would be) worded in such a way that only one system of achieving a 38 hour week could be in place at one time. He also stated that “it was clear to him that a majority agreement was required to change the method of achieving a 38 hour week.”
[31] On 7 and 8 November a number of feedback sessions were conducted between BlueScope management and BlueScope employees. A summary of the positions of the parties shows that BlueScope did not accept the position of the Unions that agreement must be reached to change the RDO system. A summary document stated “Rostering principles rejected. Changes to start and finish times as well as shift patterns may take place after adequate consultation with affected employees”.
[32] Mr Bell’s evidence is that all parties accepted the RDO system at that point and the actual wording was then developed. However the audit trail of the drafts does not seem to be consistent with that evidence.
[33] Importantly the summary documents indicate that BlueScope’s position in respect of an RDO system of working a 38 hour week was one of consultation obligations but managerial discretion to implement if agreement could not be reached.
[34] Indeed documents produced and Mr Bell conceded in evidence showed that BlueScope’s position was that “Changes to start and finish as well as shift patterns may take place after adequate consultation.” Clearly that means that consultation was compulsory but agreement was not.
[35] A further draft was produced and whilst it is unclear exactly when, that draft has the same RDO provisions under a clause headed “Rostering Principles” but in Clause 14. Eventually that provision became clause 10.2. in the 2006 Agreement. It was retained in the same form in the 2010 as clause 11.2. there was some early discussion in the negotiations for the 2010 agreement about RDO’s but there appears to have been little of significance and certainly nothing that one could regard as any sort of indicator of intended meaning nor deliberate non disclosure of a change intended.
[36] It is also clear that since the 2006 agreement only one system of working the 38 hour week in respect of RDO’s has been operating, namely 8 hour days being worked for 19 days of a four week cycle and the 20th day being an RDO.
Conclusion
[37] It is the terms of Clause 11.2.a. that give it its meaning and I can see nothing in it that indicates any obligation or restriction on BlueScope on operating the 38 hour week for employees in whichever way it wishes, providing that only one method is used at any one time. If that method is sought to be changed the BlueScope is obliged to consult over that change and balance any adverse effects on employees against the needs of BlueScope. But they are the only obligations. In other words if a majority of employees do not agree then providing BlueScope meets the other obligations then a change to working the 38 hour week can be made.
[38] My view is fortified by those provision in the agreement where agreement of a majority of employees or employees affected is required by the making an express provision clearly stating that condition must be met. My view is also supported by the terms of Clause 7.
[39] It also appears to me that the evidence does not support the main contention of the Unions that the development and negotiations surrounding the development of the clause for the 2006 agreement and the continuation of it in the 2010 agreement establish that the condition precedent they assert was agreed or can be inferred to have been agreed or undertaken to apply for the life of the agreement. To the contrary, I am of the view that the evidence shows is that it was expressly not agreed.
[40] It seems to me that what has happened is that BlueScope chose not to implement a Non-RDO Roster and the Unions have implied that was an undertaking by BlueScope that they committed to not change without employee approval. However the evidence establishes that BlueScope did not waive or forego its ability to implement a change to the way it applies the 38 hour week for non seven day or continuous shift workers.
[41] I find that the 2010 Agreement does allow BlueScope to implement the changes to the operation of the 38 hour week without a majority of employees being required to agree before such a change could be made.
DEPUTY PRESIDENT
Appearances:
Ms P Lim for the Applicant “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU)
Ms N Ireland for the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia
Mr H. Skene on behalf of the Respondent
Hearing details:
2010.
Perth:
November, 16.
Final written submissions:
Applicant: 26 November 2012
Respondent: 26 November 2012
1 PR997501
2 [2012] FWAFB 3994
3 It is apparent that what was meant was “Agreement”.
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