Construction, Forestry, Mining and Energy Union v Penrice Soda Products Pty Ltd
[2013] FWC 9194
•21 NOVEMBER 2013
[2013] FWC 9194 |
FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.739 - Application to deal with a dispute
Construction, Forestry, Mining and Energy Union
v
Penrice Soda Products Pty Ltd
(C2013/4801)
SENIOR DEPUTY PRESIDENT O'CALLAGHAN | ADELAIDE, 21 NOVEMBER 2013 |
Application to deal with a dispute - reorganisation of work - claim for redundancy payments - termination of employment - repudiation of contract - obligations under enterprise agreement.
[1] On 18 June 2013 the Construction, Forestry, Mining and Energy Union (CFMEU) lodged an application pursuant to s.739 of the Fair Work Act 2009 (the FW Act) and the dispute resolution provisions of the Penrice Osborne Process & Day Workers Enterprise Agreement 2011 (the Agreement). The matter in dispute related to whether Power Technicians employed under the Agreement were entitled to the Agreement redundancy provisions.
[2] The matter was the subject of conciliation proceedings but was not resolved. The parties agreed that it should be referred for arbitration pursuant to clause 25 of the Agreement. Notwithstanding this, the parties were unable to agree on what arrangements should apply to Power Technicians pending the outcome of this arbitration.
[3] Both parties made submissions about this interim situation and, on 18 July 2013 I issued an Interim Decision 1 in which I concluded2 that the training then being provided to the Power Technicians should continue on a without prejudice basis and that the Power Technicians should undertake the functions addressed in that training, again on a without prejudice basis, pending determination of the primary issue in dispute.
[4] The hearing of the substantive matter was delayed at the request of the parties, but ultimately this hearing and an inspection proceeded on 28 and 29 October 2013. At this hearing Ms Dooley appeared for the CFMEU and Mr Manos, of counsel, for Penrice Soda Products Pty Ltd (Penrice).
The background to the matter in dispute
[5] Penrice manufacture, supply and export soda ash, sodium bicarbonate, quick lime and limestone from a manufacturing facility in Osborne, South Australia. Penrice also has a cogeneration power facility. The Soda Ash production facility was closed in early 2013 with the consequent loss of a significant number of manufacturing positions.
[6] Until the restructuring of the plant in 2013 the Power Technicians primarily worked in the Engine Room/Powerhouse. They monitored the operation of plant and equipment, primarily through a Distributive Control System (DCS) in a Control room in the Powerhouse. It is common ground that after the restructuring, the Power Technicians were relocated to a control room in the kiln area, some 200m away. They have been required to undertake maintenance of the remaining components of the equipment they were previously responsible for and to undertake various other functions. The Power Technicians are required to continue to hold their first class engine drivers certificates and high-risk licences to do this remaining work. That traditional work is generally undertaken from a control room based in the kilns area. In addition, the Power Technicians are now generally required to:
• monitor and adjust plant associated with the kilns using the Distributive Control System,
• perform routine checks of plant and equipment associated with the kilns,
• resolve issues and intervening faults associated with the kilns area via the Distributive Control System and manual intervention as required,
• empty limestone and coke from train carriages using equipment for that purpose,
• dump ‘back stone’ from the plant,
• undertake some shovelling of spillages, and
• break clinker that forms at the base of the kilns.
[7] The Power Technicians have now (with one exception) been trained or are completing training to undertake these revised duties and are doing so on a without prejudice basis consistent with my interim decision.
[8] The matter referred to me for determination is:
• Does the reorganisation of the Power Technician positions and/or proposed work function changes, including related training, entitle those employees to redundancy under the Agreement?
• In addressing this issue the parties may consider what is the scope of the pre-reorganisation Power Technician positions.
[9] The jurisdiction of the Commission to determine this issue is not disputed. Clause 25 of the Agreement refers to the functions of the former Fair Work Australia in the following terms:
“Fair Work Australia may deal with the dispute in 2 stages.
a) Fair Work Australia will first attempt to resolve the dispute as it considers appropriate, including by mediation, conciliation, expressing an opinion or making a recommendation;
and
b) If Fair Work Australia is unable to resolve the dispute at the first stage, Fair Work Australia may then:
a. arbitrate the dispute; and
b. make a determination that is binding on the parties.
Note If Fair Work Australia arbitrates the dispute, it may also use the powers that are available to it under the Act. A decision that Fair Work Australia makes when arbitrating a dispute is a decision for the purposed of Div 3 of Part 5.1 of the Act. Therefore, an appeal may be made against the decision.
While the parties are trying to resolve the dispute using the procedures in this term;
a) an employee must continue to perform his or her work as he or she would normally unless he or she has a reasonable concern about an imminent risk to his or her health or safety;
and
b) an employee must comply with a direction given by the employer to perform other available work at the same workplace, or at another workplace, unless;
a. the work is not safe; or
b. applicable occupational health and safety legislation would not permit the work to be performed; or
c. the work is not appropriate for the employee to perform; or
d. there are other reasonable grounds for the employee to refuse to comply with the direction.
The parties to the dispute agree to be bound by a decision made by Fair Work Australia in accordance with this term.”
[10] I am satisfied that the references to FWA should now be read as references to FWC.
[11] Whilst the Agreement has reached its nominal expiry date, it remains in effect as a consequence of s.54 of the FW Act.
[12] The Agreement is extremely complex and is further complicated by numerous redundant provisions, clauses carried over from earlier iterations and contradictory and repetitive provisions. Notwithstanding this, I have particularly noted the following Agreement provisions.
• Clause 7 Structural Efficiency - which, amongst other provisions, establishes that employees are to carry out duties within the limits of their skill, competence and training consistent with the classification structure of the Agreement provided that those duties are not designed to promote de-skilling.
• Clause 10 Measures to Achieve Gains and Productivity, Efficiency and Flexibility - which establishes a commitment to continuous improvement. Without limiting this concept it embraces discussions about the integration of maintenance, process and production staff functions and the removal of all demarcations.
• Clause 35 Acting Supervisor - which provides payment for employees appointed as acting Shift Manager or Area Superintendent and differentiates between Process Technicians, Power Technicians and employees generally.
• Clause 39 Training - which refers collectively to Process Technicians and Power Technicians in relation to a commitment to develop training programs to achieve the needs of an Operations Control Centre and for employees in these categories to have their own training matrix.
• Clause 42 Rotation - which differentiates between Process technicians in that each Power Technicians shift is self-regulating in terms of job rotation.
• Clause 43 Classification Structure - this clause asserts that the Agreement will establish two categories within each of the Process and Power Technicians group. It sets out the basis for this commitment and the skill expectations of Power Technicians to be classified as Operations Control Centre Power Technicians. That classification was apparently intended to operate in that the Operations Control Centre which was not ultimately established.
• Clause 48 Confined Space Entry - which establishes that each shift will have trained and qualified Power Technicians who will issue Confined Space Entry clearances.
• The Agreement refers to wage rates in the context of two classification structures. It is apparent that the previous Agreement classification was common to the Power and Process personnel. The current classification structure differentiates between Process Technicians and Power Technicians but then establishes the same pay rates. The classification definition then combines the two functions.
• Redundancy - the Agreement adopts and recites the entire redundancy provisions established in the Penrice Soda Products Redundancy Agreement 1998, initially approved by the South Australian Industrial Relations Commission. This redundancy agreement has application to employees at the Osborne site, the Penrice Angaston Mine and the Dry Creek Salt Fields. I have referred to this as the Redundancy Agreement. Again, it is difficult to reconcile with the primary Agreement. The particularly relevant provisions are:
- such employment is in respect to the same employment category.
- such offer does not subject the employee to unreasonable geographic disadvantage. The question of unreasonable geographic disadvantage to be jointly determined by the unions and Penrice. In the event there is disagreement, this matter will be decided by an independent third party.
“15.1 Introduction
The Agreement is made between signatory unions (hereinafter referred to as “the unions”) and Penrice Soda Products Pty Ltd (hereinafter referred to as “Penrice”) subject to the following:
(a) The Agreement recognises as a basic philosophy the intent of the Agreement is to ensure continued employment within Penrice. Concentration will be placed on training and redeployment as an alternative to cash payments. Redundancy is regarded as a last resort and will only occur as a result of circumstances outside the control of Penrice. Penrice acknowledges its responsibility to provide security of employment for all its employees covered by this Agreement, through effective forward planning and the use of efficient management practices such as;
(i) the identification of industry changes and downturns in business. These changes will include new products and technology, the phasing out of old products and technology, and changes and downturns caused by loss of competitiveness. The identification of changes will take place at a point in time which will allow for agreed training, retraining and relocation programmes to be properly implemented.
(ii) the establishment and maintenance of a Training and Employment History in order to
facilitate (i) above.
(iii) negotiations with the unions on a State basis for agreements on relocation of workers
affected by industry changes/downturns, the framework for which will be agreed between Penrice and the signatory unions.
(b) The Agreement will have effect only when the circumstances of termination are such that a redundancy situation exists within the terms of the definitions contained therein.
(c) Employees transferring to other positions will be paid the appropriate rates for such positions.
(d) Employees remaining in the service of Penrice will do so for as long as required by Penrice.
15.2 Definitions
(a) “Redundancy" is defined as termination of employment where the whole or main reason for termination is that Penrice's need for the employees to do work of a particular kind has diminished or ceased, but it will not include or apply to termination of employment in the following circumstances:
....
(iii) Any case where the employee has refused an offer of alternative employment within Penrice at any of its establishments, providing that:
....
(c) "Alternative employment" means employment in the same or other Penrice establishments and includes any period while undergoing training for a new position. Where the all-purpose wage rate for the new position is less than that which prevailed for the previously held position, then an ex-gratia payment will be made to compensate for the base rate difference for a period of up to six months.
....
15.5 Alternative employment within Penrice
(a) Wherever it is possible to effect a transfer, the parties to the Agreement will ascertain by interviewing each redundant employee whether or not the employee wishes to be transferred to another location within Penrice.
(b) Where an employee accepts a transfer in a case where Clause 15.2 (a) (iii) does not apply, the parties will be covered by the Redundancy Agreement if within twelve weeks of the transfer:
(i) the employee does not wish to continue with-the job and leaves the service of Penrice; or
(ii) Penrice decides that the employee is not suited to the new job to which he/she was transferred, and no other alternative employment which is acceptable to the parties, can be found.
15.6 Retention of employees
Should a redundancy arise, it is difficult to foresee what the exact circumstances would be, and. therefore consultation between Penrice, the employee and the unions as to any special need to retain particular employees because of skills or capacity to meet the on-going needs of the employer will take place.
During the process of consultation with the unions and employees, Penrice will ascertain from the area/operations affected by the need for redundancy, expressions of interest from those employees wishing to be made redundant.
Having established this position and all other things being equal, Penrice will retain in each area and classification, persons of capacity and experience over persons lacking capacity and experience.
The Submissions
[13] The CFMEU position put on behalf of the five Power Technicians is that these employees are entitled to redundancy payments under the Agreement because the Penrice reorganisation meets the definition of redundancy and avoids the exclusions that are in that definition. In considering the concept of redundancy the CFMEU refers to the conclusion of the High Court in Amcor Ltd v CFMEU. 3 The CFMEU argues that the necessary "agreed" training for the positions to be an alternative to redundancy has not been established, and that whilst redundancy is a last resort, it must be considered in the context that alternative work must be of a particular kind. In this respect, the CFMEU rely on the evidence of the Power Technicians relative to work they did before the reorganisation and the work now being asked of them.
[14] The CFMEU asserts that, on the approach adopted by Bleby J in Advertiser Newspapers Pty Ltd v Industrial Relations Commission of South Australia and Grivell 4 (Grivell) the Power Technicians had been demoted and that Penrice had unilaterally directed them to undertake quite different work in a function which repudiated the employment contracts. In this respect the CFMEU advised that the Power Technicians had not accepted the revised work but were undertaking it pursuant to the interim decision which confirmed the "without prejudice" operation of the current arrangement.
[15] In terms of the exclusions to redundancy in clause 15.2(a) of the Redundancy Agreement, the CFMEU asserts that these exclusions do not apply. Specifically, relative to clause 15.2(a)(iii), the employees were not offered alternative employment but were effectively instructed to undertake very different functions and that those functions were so different that they constituted alternative employment consistent with the position adopted by Elkaim DCJ in Smith v OneSteel Ltd and Another. 5
[16] The Penrice position was that the reorganisation of the Power Technician functions and work did not entitle them to redundancy on the basis that there has been no termination of employment. Penrice asserted that termination of employment was an essential prerequisite for redundancy and that the approach adopted in Easling v Mahoney Insurance Brokers Pty Ltd 6 was appropriate. Penrice asserted that it was able to make the work arrangement changes as it had done in the past, and that these changes were consistent with the Agreement provisions in that there was no repudiation of the employment contracts.
[17] In the alternative, Penrice asserted that, even if there has been a termination of the Power Technicians employment, the employees are not entitled to redundancy because of clause 15.2(iii) of the Redundancy Agreement so that, in this context, the restructured roles would constitute offers of alternative employment in the same employment category.
The Evidence
[18] The evidence of the Power Technicians was generally consistent.
[19] Mr Boote is a Power Technician. His evidence went to his employment history at Penrice since 1991 and the duties he undertook as a Power Technician prior to July 2013, in contrast to the duties he was now required to fulfil. Additionally, Mr Boote’s evidence went to the process followed by Penrice to implement and require these changes, including discussions with Penrice about possible changes to the Agreement redundancy arrangements.
[20] Mr Young is a Power Technician who has been employed by Penrice since 1988. His evidence detailed his employment history and career progression to the Power Technician function. He detailed the changes to the Power Technician functions which have applied since 1988, the implementation of the July 2013 restructure and the training and tasks now required of him.
[21] Mr Newbound is a Power Technician who also commenced with Penrice in 1988. His evidence went to changes in the Power Technician functions since that time, including the effect of the 1998 co-generation arrangement which resulted in a reduction in the number of Powerhouse personnel from 17 to 10 employees, with a further reduction to 6 employees in 2002. Notwithstanding these changes, Mr Newbound’s evidence was that the Power Technician function remained based in the Powerhouse. Mr Newbound gave evidence about the implementation of the changed structure in 2013, including discussions about possible changes to voluntary redundancy arrangements. His evidence detailed the training and functions he was now generally required to undertake. He confirmed the continuing High Risk License requirement and the extent to which his experience of the current role to date was that it was substantially more physically demanding and required him to operate under supervision in an area where his knowledge and expertise is limited.
[22] Mr Cornish commenced with Penrice in 1991. His evidence went to working arrangements relative to the Powerhouse since that time, including a number of restructuring initiatives. Mr Cornish's evidence went to his lack of understanding about the Penrice process functions and the extent to which the work now required was different and inconsistent with his traditional functions. Mr Cornish's evidence went to the implementation of the 2013 restructure. Mr Cornish has been absent on sick leave from June 2013, suffering from anxiety, stress and depression.
[23] Mr Shand is a Power Technician and has been employed by Penrice since 1984. His evidence detailed the work done in and around the Powerhouse since that time, his career progression and the changes to the Powerhouse work. Mr Shand’s evidence was that, prior to the 2013 restructure he spent around 60% of his time monitoring the Engine Room Control Room and 40% outside on the Powerhouse attending to operational tasks 7 and that he operated in a self-directed manner. Since the restructure, Mr Shand estimated he spends 20% his time doing his normal duties and 80% undertaking new duties, primarily associated with the operation of the kilns. His evidence went to discussions about possible redundancy and possible changes to voluntary redundancy arrangements which were not ultimately implemented.
[24] I note that all of the Power Technicians agreed that the only change to pay rates subsequent to the 2013 restructure was the addition of a "clinker allowance" pursuant to the Agreement terms.
[25] Ms Brokenshire is the Penrice General Manager, Human Resources and Company Secretary. Her evidence went to the changes made by Penrice in 2013. She asserted that the Power Technicians continue to be required to monitor and regulate the reduced amount of plant in and around the Powerhouse as an essential requirement for operation of the plant.
[26] Ms Brokenshire’s evidence was that it was possible that Penrice may require operation of the Engine Room at a higher capacity such that increased Power Technician work of the traditional nature is required.
[27] Ms Brokenshire detailed her understanding of the work required of the Power Technicians in the kilns area. She disputed various of the Power Technicians evidence. Ms Brokenshire’s evidence went to other cross-skilling arrangements and the training, reporting and working arrangements for the Power Technicians. She gave evidence about consultations and discussions with Penrice employees and specifically, the Power Technicians about the workplace changes and possible redundancies. Her evidence was that none of the Power Technicians were made redundant but requests were made to that effect.
[28] Mr Piccinin is the Penrice General Manager Chemical Operations. His evidence was that the status and the seniority of the Power Technicians has always been regarded as equal to that of the Process Technicians. Mr Piccinin’s evidence summarised the changes which Penrice had made to the Powerhouse manning arrangements since 1991. His evidence confirmed that some 20% of the plant previously monitored by the Power Technicians remained operational but that Penrice required the expertise and the qualifications of the Power Technicians on a daily and emergency basis.
[29] Mr Piccinin’s evidence went to the arrangement of work in the kiln area and the additional duties now allocated to the Power Technicians. His evidence addressed training and anticipated skills acquisition issues together with initial difficulties with a temporary lime screening plant which has now been replaced with a permanent plant. Mr Piccinin’s evidence also went to the consultation undertaken with the Power Technicians.
[30] Mr Tyczenko is the Penrice Production Manager. His evidence confirmed the duties undertaken by the Power Technicians before the 2013 restructure in contrast with the functions now allocated to them. He also confirmed the significance of the remaining traditional work on the basis of the additional functions allocated to the Power Technicians. He addressed the training provided and initial issues such as the temporary lime screening plant. Mr Tyczenko’s evidence was that he disputed the evidence of the Power Technicians with respect to the extent of the physical demands associated with the revised duties.
Findings
[31] In considering the Agreement provisions I have applied the normal principles of interpretation with primary emphasis on the plain words of the Agreement. 8
[32] Clause 15.2 of the Redundancy Agreement defines redundancy fundamentally as a termination of employment. Hence, termination of employment is an essential component of any claim for redundancy.
[33] Penrice do not regard the employment of the Power Technicians as being terminated. The issue is whether the Penrice restructure represented changes to the employment contracts of the Power Technicians of a magnitude such that those employment contracts have in fact been terminated. In this context, I have considered how the Power Technician employment contracts are defined.
[34] Each of the Power Technicians were promoted into that classification from other positions within Penrice. The Agreement combines the Process/Power Technician definition in the following terms:
“PROCESS/POWER TECHNICIAN
Employees at this level perform work involving discretion and judgement up to their level of training and skills including the following tasks and activities:
1.1 Assists in co-ordinating and working with a team of employees, including assisting in job planning and implementation
1.2 Liaises with other Co-ordinators, Engineering Trades employees and Managers in the efficient and safe operation of plant and equipment
1.3 Acts independently to complete all tasks and jobs using significant problem solving and decision making skills
1.4 Authorised to issue clearance certificates for maintenance etc of plant and machinery, consistent with the work area
1.5 Operates, sets up, controls and adjusts production machinery/plant including lubrication as required and operating maintenance covering running adjustment and removal of equipment fastenings
1.6 Applies and understands computer techniques as related to production operations, including sound knowledge of the Mincom system
1.7 Prepares reports of a technical nature
1.8 Job planning and implementation, including full use of systems
1.9 On an individual basis and by agreement, acting as or relieving in supervisory positions with completion of relevant courses in supervisory and employee management skills
1.10 Assist with employee selection interviews as required.
1.11 Co-ordinates and assists in the provision of on-the-job training
1.12 Operation of lifting equipment (not requiring certification)
1.13 Housekeeping and associated duties
In addition, employees will perform a group of activities consistent with the section in which they work i.e. OCC - Operation Control Centre or Satellite (Refer to Classification Structure Clause 43).
In performing these duties, the employee can work without direct supervision and is required to have fault finding and very good decision making skills. The tasks undertaken can require working from and following complex instructions and procedures.
The employee will also possess good keyboard and computer skills and have an extensive knowledge of the production process operations. The employee will also possess mechanical knowledge and skills.
The employee will have very good interpersonal, leadership and communication skills along with the ability to develop and maintain very good safe working practices. The employee is responsible for the quality and safety of his/her own work and performs quality checks on the work of others.”
[35] This definition is indicative of a substantial degree of flexibility and scope for change. A further guide to the extent of significant actual and anticipated flexibility in the duties of the Power Technicians as Penrice employees is to be found in the Redundancy Agreement itself. Clause 15.1(a) may be summarised on the basis that it requires Penrice to redeploy and retrain employees, and engage in extensive planning to ensure that termination of employment is only a last resort. The Power Technicians were among the majority of the Penrice employees who endorsed that Agreement and derived income and job security from it.
[36] Further, the evidence of the Power Technicians and the Penrice managers indicates that additional tasks and changes to work arrangements have occurred with respect to the Power Technicians over at least the past 15 years. This has extended to new and different equipment and functions. It is worth noting the Agreement provisions do not place restrictions on alternative work which might be asked of the Power Technicians, with the exceptions that it refers to the obligation that employees carry out duties as within the limits of their skill, competence and training consistent with the classification structure of the Agreement, provided those duties are not designed to promote de-skilling. Further, the Redundancy Agreement excludes from the definition of redundancy, a situation where any employee refuses an offer of alternative employment within Penrice, at any of its establishments, providing the employment is in respect to the same category and does not subject the employee to unreasonable geographic disadvantage. Finally clause 15.5(b)(ii) provides for redundancy rights to be preserved for a period of time after a transfer where either Penrice or the employee decided not to continue with that transferred position.
[37] In this instance, it is clear that the Power Technicians have not agreed to the changed functions, and are undertaking them only on the basis of my interim decision. If the changes required of the Power Technicians were of such an entirely different nature to the functions those employees previously undertook, then it might be argued that the functions imposed on those employees effectively ended the pre-existing employment relationship. In this context, the concept of repudiation of the employment contract takes effect.
[38] The CFMEU has referred me to Grivell’s case. That matter was determined under the South Australian Workplace Relations legislation as it existed in 1999. Leaving aside the substantial relevance of the difference in the legislative concept of dismissal in as much as the State and its contemporary Federal legislation variously relied on the Termination of Employment Convention, Bleby J observed: 9
“Another method by which a dismissal in the sense discussed may be effected is by way of repudiation of the contract by the employer. For example, the employer, either without notice or with inadequate notice, terminates the services of the employee by sending the employee away or refusing to continue to employ the employee in the position in which the employee is employed. It may also come about by the employer refusing to comply with a fundamental condition, such as refusing to pay the employee at the same rate or to pay the employee at all. It is now well accepted that contracts of employment subject to that type of repudiation are in no different position from any other contract. The repudiation does not, in itself, automatically terminate the contract. The contract continues on unless and until the employee accepts the repudiation: Automatic Fire Sprinklers Pty Ltd v Watson [1946] HCA 25; (1946) 72 CLR 435; Consolidated Press Ltd v Thompson (1952) 52 SR (NSW) 75. In the latter case, Street CJ said at 80:
"The point at issue in Watson's Case was whether, upon dismissal without justification, an employee could recover wages for the period in which he continued to present himself and offer to serve, or whether he could only recover unliquidated damages for the breach of contract. The question is so stated by Dixon J. himself, and the conclusion he reached was that the wrongful dismissal operated to discharge the employee from the obligation to render any further service, although the employee remained ready and willing to serve, and as wages or salary were only to be paid for service, it was not competent for him to claim to recover the amount which he would have earned as wages had work been made available for him. It is implicit throughout his Honour's judgment that the contract still remained open notwithstanding the breach by the employer due to the wrongful dismissal, but the right to recover wages had gone and only damages could be recovered. Latham C.J., in the course of his reasons, states the principle by saying: 'An employer terminates the employment of a servant when he dismisses him, though, as I say hereafter, such a dismissal does not put an end to the contract between the parties.... The contract of employment is, upon any view, still in existence. But if, under the contract, wages cannot be earned without work, the continued existence of the contract cannot entitle the servant to wages without work.' (1946) 72 C.L.R. at 454-455. Again, his Honour says: 'I agree that the contract cannot be terminated by a wrongful unilateral act.... One party to a contract cannot by a wrongful unilateral act bring the contract to an end. If an employer wrongfully dismisses a servant he breaks, but does not terminate, the contract....'. (1946) 72 C.L.R. at 456-457. Williams J. says: 'The employer cannot discharge the contract of employment by a unilateral breach.' (1946) 72 C.L.R. at 476."
[39] The CFMEU has also compared the current Power Technicians circumstances to those of Mr Smith. 10 In that matter, Mr Smith was a furnace operator who claimed redundancy payments on the basis that his job function was unilaterally changed to involve the painting of railway tracks. In determining the issue in favour of Mr Smith the Court had regard to the relevant redundancy provision which referred to "acceptable alternative employment"11 and the extent to which the alternative job had no connection with the employee’s demonstrated skill and experience.12 I have considered both of those factors in the circumstances applicable to the Power Technicians.
[40] Penrice referred me to Easling v Mahoney Insurance Brokers. In that matter Doyle CJ stated:
“9 In my respectful opinion the issue is whether the original agreement gives the employer the right to make the changes that have been made, and if it does, then neither a varied contract nor a new contract arises.”
[41] Some further assistance can be found in the Federal Court decision in Unsworth v Tristar Steering and Suspension Australia Ltd. 13 In that matter Gyles J considered the situation of employees who were given little or no work as an alternative to being made redundant. While the circumstances of that matter and the claim at issue are quite different, the following observations are relevant:
“28 What, then, of the alternative case, based upon the change in duties and, in particular, the lack of productive work that was available. As I have said, I accept that many of the employees who gave evidence found the experience unpleasant and some psychological damage was done to some of them. Again, the difficulty for the applicant’s case is that Tristar was essentially passive so far as the particular employees are concerned. The work available was constrained by commercial considerations – there is no suggestion that it was contriving not to win work for some ulterior purpose. The decisions which it took in relation to premises, plant and equipment were the result of the commercial realities. The same can be said concerning the arrangements with the continuing employees. They were given such tasks as were available. None of the affected employees was obliged to stay. If conditions were intolerable, then none was the subject of a long-term contract. No doubt, voluntary redundancy would have been available to most, if not all, of them.
29 There is a respectable argument that an employee cannot be indefinitely denied work to do if work of an appropriate kind is available (Blackadder v Ramsey Butchering Services Pty Ltd [2005] HCA 22; (2005) 221 CLR 539, particularly per Callinan and Heydon JJ at [80]; Squires v Flight Stewards Assn of Australia (1982) 2 IR 155 at 164; Downe v Sydney West Area Health Service (No 2) [2008] NSWSC 159 at [410]–[431]). No such appropriate work was available here.
30 There may be circumstances where the conduct of the employer towards an employee is such that the employee, upon leaving, can assert that he or she has been constructively dismissed, triggering whatever rights the employee may have upon dismissal (Westen v Union des Assurances de Paris (1996) 88 IR 259 at 261; Brackenridge v Toyota Motor Corporation Australia Ltd [1996] IRCA 628; (1996) 142 ALR 99 at 106; in the case of position redundancy see Commonwealth Bank of Australia v Finance Sector Union of Australia [2002] FCAFC 193; (2002) 125 FCR 9 at [27]; cf Martech International Pty Ltd v Energy World Corp Ltd [2007] FCAFC 35 at [19]). In the present case, that may have included a claim pursuant to cl 21.5. That case could have been pursued by or on behalf of these employees. That course was adopted in Finance Sector Union of Australia v Commonwealth Bank of Australia [2001] FCA 1613, (2001) 111 IR 241 (although set aside in the result on appeal Commonwealth Bank of Australia v Finance Sector Union of Australia [2002] FCAFC 193; 125 FCR 9). Rather, the choice was made here to seek to use the freedom of association provisions to, in effect, act as a means of specific enforcement of cl 21.5.
31 In short, whatever the employees suffered by way of psychological distress was not caused by any act of Tristar. Rather, the choice they made to continue in employment was the operative reason for the prejudice (Maritime Union of Australia v CSL Australia Pty Ltd [2002] FCA 513, (2002) 113 IR 326 at [53] and [54]). In my opinion, none of these employees was injured, nor was the position of any of them prejudicially altered by any act of the employer as required by s 792.”
[42] In Commonwealth Bank v FSU 14 the Full Federal Court considered termination of employment in a redundancy situation where there was a quite different definition of redundancy in the relevant Award. This definition referred specifically to "position redundancy". Nevertheless, the Court stated:
“27 One is that redundancy within cl 42 means a position redundancy, not an employee redundancy. The usual meaning of “redundancy” in an employment context is “denoting or relating to an employee who is or becomes superfluous to the needs of the employer” (Macquarie Dictionary, 3rd ed). There are numerous indications, both within cl 42 and in other parts of the Award, which indicate that an officer of the Bank is appointed to an actual nominated position with nominated duties. The primary application of cl 42 is where, as a result of reorganisation, the nominated position becomes redundant and is abolished. That was the case in Hawkins. There is no finding that that occurred here, and the evidence indicates to the contrary. We accept that there may be circumstances where leaving the nominal position in place, but substantially altering the duties, could amount to making a position redundant. To hold otherwise would be to prefer form over substance. There is no room for application of that principle where the duties remain, in substance, the same. Indeed, it follows from Hawkins (No 2) that the formal abolition of a position will not amount to a position redundancy unless the change in duties is substantial enough to amount to a change of position. The test for position redundancy which cl 42 chooses is that the work to be done by the holder of the position is no longer required to be done, and it is common ground that that means no longer required by the Bank. We do not agree that (leaving aside any question of sham) the requirement by the Bank can be second-guessed. “Require” is used in the sense of demanded or called upon or enjoined. The agreed facts make it clear that the Bank did continue to require that the work be performed.”
[43] I have considered the changed duties of the Power Technicians in this context. In doing so I have taken into account that the Power Technicians have, or are near to completing their training, and I have accepted the evidence of Mr Tyczenko that: 15
“23. In order to be able to perform the work in kilns area, the Process/Power Technicians have had to undergo a period of training. This training is on-the-job training conducted by Kilns Operators and the Team Leaders. The training provided to the Process/Power Technician takes their pre-existing skills and knowledge into account. They are not starting from scratch or being treated like someone who has never worked at Penrice or as part of this process. A number of the Process/Power Technicians’ skills from the engine room work are readily transferable to the work in the kilns area. For example, their knowledge of the DCS monitoring systems continues to be used, so does their general problem-solving and troubleshooting skills, their ability to interpret trends to identify early warning signs, and their general knowledge and understanding of Penrice’s processes and procedures. Although they are working on a different process, much of the work is still conceptually similar to what they have always been doing.”
[44] I have also noted that the permanent lime screening plant which is now operational has reduced the extent of manual work which applied immediately after the reorganisation took effect.
[45] The evidence of the Power Technicians confirms that 20% of the post-reorganisation work remains effectively unchanged. The monitoring of the kilns through the DCS computer system is work of a comparable nature, particularly when the current training is completed. The emptying of the trains, again, subject to training completion is work of a character or category consistent with the previous role undertaken by the Power Technicians. The work associated with clearing spillages, breaking clinker and dumping back stone is work of a more manual nature but I am unable to conclude that these functions are of such significance as they represent repudiation of the Power Technicians employment contracts, or that they are tasks which Penrice is unable to request of the Power Technicians. Additionally, I do not consider that Penrice’s requirement that the Power Technicians undertake the tasks breaches any specific provisions of the Agreement. The new structure is not a transfer but an alteration to the functions to be undertaken by the Power Technicians.
[46] Further, the evidence before me establishes that Penrice had limited options open to it consequent upon the restructure. The traditional Powerhouse plant maintenance functions require the completion of each shift by appropriately qualified and trained operatives. Under the Agreement, these employees must be classified as Power Technicians. The proposition that Penrice cannot allocate other functions to the Power Technicians is tantamount to limiting Penrice to engaging Power Technicians and paying them as such when there is insufficient traditional work for those employees to do. This appears to be fundamentally inconsistent with the objectives and provisions of the Agreement.
[47] A final consideration is relevant to this matter. Had Penrice made the Power Technicians redundant without pursuing alternative functions for them to undertake, I consider that it would most likely have breached the obligations in clause 15.1(a) of the Redundancy Agreement to regard redundancy is a last resort in situations outside of the control of Penrice. The capacity for Penrice to find an alternative to making the Power Technicians redundant existed and Penrice correctly acted to meet the obligation on it in that respect.
[48] For these reasons I have concluded that the Power Technicians have not been dismissed. There has been no repudiation of the employment contracts and accordingly there is no entitlement to redundancy payments. Having considered the scope of the pre-reorganisation Power Technician functions, the revised Power Technician positions and/or proposed work function changes, including related training, do not entitle those employees to redundancy under the Agreement.
Appearances:
L Dooley for the Construction, Forestry, Mining and Energy Union.
A Manos counsel for Penrice Soda Products Pty Ltd.
Hearing details:
2013.
Adelaide:
October 28 and 29.
1 [2013] FWC 4804
2 [2013] FWC 4804, para [17]
3 2005 HCA 10, para 12
4 [1999] SASC 300
5 [2013] NSWDC 18
6 [2001] 78 SASR 489
7 Exhibit CFMEU6, para 48
8 See Kucks v CSR Ltd 1996 66 IR 182 at 184 and Short v Hercus (1993) 40 FCR 511
9 [1999] SASC 300, para 32
10 Smith v OneSteel Ltd [2013] NSWDC 18
11 Smith v OneSteel Ltd [2013] NSWDC 18, page 18, para 20
12 Smith v OneSteel Ltd [2013] NSWDC 18, page 18, para 30
13 [2008] FCA 1224
14 (2002) 125 FCR 9
15 Exhibit P5, para 23
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