Foster's Australia Limited T/A Carlton and United Breweries Limited v United Voice

[2014] FWC 2163

[2014] FWC 2163 [Note: An appeal pursuant to s.604 (C2014/4128) was lodged against this decision - refer to Full Bench decision dated 2 July 2014 [[2014] FWCFB 4104] for result of appeal.]

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.418—Industrial action

Foster’s Australia Limited T/A Carlton and United Breweries Limited
v
United Voice
(C2014/3701)

DEPUTY PRESIDENT KOVACIC MELBOURNE, 2 APRIL 2014

Application for an order that industrial action by employees stop.

[1] This decision concerns an application pursuant to s.418 of the Fair Work Act 2009 (the Act) for an order that industrial action by employees of Foster’s Australia Limited T/A Carlton and United Breweries Limited (CUB - the Applicant) stop. The employees concerned are employed by CUB at its Abbotsford Brewery in Melbourne and are members of United Voice (UV - the Respondent). The order is sought against UV and its officers, employees, agents and delegates and employees of CUB whose employment is covered by the Foster’s Australia Limited Abbotsford Brewery United Voice Enterprise Agreement 2012-2015 1 (the Agreement) and who are engaged to work at the Abbotsford Brewery and are members or are eligible to be members of UV. The Agreement has a nominal expiry date of 31 March 2015.

[2] The application was made by CUB on 31 March 2014 and listed for urgent hearing later that day.

[3] Mr J. Tuck appeared with permission for CUB. Mr S. Kemppi represented UV. Evidence was given for CUB by Mr Gary Woodburn, General Manager, Southern Operations; Mr Marko Lukic, Main Packaging Hall Manager; and Mr Sebastian Siccita, Packaging Manager. UV did not call any evidence.

[4] For the reasons set out below I am satisfied industrial action is happening and is likely to continue at the Brewery. As such, I am required by the terms of the Act to make an order that the action stop and not occur. The order will operate for a period of six months.

Background

[5] Around May 2011 CUB foreshadowed a number of changes at the Abbotsford Brewery, including a change to the way the quality function is performed in the packaging area. Specifically, the change to the quality function involves doing away with a standalone quality position and integrating the quality function into the role of operators. The change is yet to be implemented but has been operating for several years on one of the packaging lines at the Abbotsford Brewery, the B3 line.

[6] Since February 2014 CUB has been engaged in discussions with employees and UV delegates regarding the implementation of this change. The change, if implemented, will result in the standalone quality position on each packaging line where the role exists becoming redundant. The change was to be the subject of a work trial which was scheduled to commence on 31 March 2014 on the can line and the B1 packaging line. The work trial was to be undertaken on the day shift only and continue for a period of one week after which the proposed change would be assessed, though the trial would be monitored throughout.

[7] On the morning of 31 March 2014, a UV delegate, Mr Henderson, informed Mr Lukic that the parties were in dispute regarding the trial and that as such, consistent with the Agreement’s Disputes Settlement Procedure (see below), the status quo prevails. As operators were not prepared to participate in the trial on the can line, it did not commence. On the B1 packaging line, the trial did commence. However, in a meeting with Mr Siccita which commenced at 1pm on 31 March 2014 Mr Koder, a UV delegate and elected health and safety representative (HSR), issued a provisional improvement notice (PIN) based on alleged safety concerns stemming from the trial. The safety concerns related to fatigue and stress among other issues.

[8] Clause 40 of the Agreement deals with Workplace Rosters and Manning and states at subclause 40.3 that:

“Appendix I sets out the relevant principles that will apply in determining manning levels in Packaging.”

Subclause 40.4 of the Agreement refers to Appendix J which sets out the manning levels that existed in the packaging area at the commencement date of the Agreement.

[9] The relevant elements of Appendix I are:

“APPENDIX - I Manning

The parties recognise that manning numbers may need to change from time to time. In order to facilitate discussions on this issue the parties have agreed that the following principles will apply in these discussions:

• At all times production lines will be run in a safe manner.



• Operators will be fully trained in the tasks they are assigned to do.



• ...



• At any time during the life of this Agreement the Company may initiate discussions with the Union [sic UV] to discuss manning arrangements to take into account changes in technology or operational requirements. The union will not unreasonably withhold their consent to changes in manning numbers to take into account changes in technology or operational requirements.



• Work trials will be conducted prior to any ongoing changes being implemented, unless it is agreed by operators in the work area that a trial is not required. The manner in which the work trial will be conducted will be discussed in the work area and with the relevant Union representative. ...” (underlining added)

[10] Clause 9 and Appendix C of the Agreement set out the Disputes Settlement Procedure. Among other things, Appendix C states that:

“Whilst the parties are attempting to resolve the matter the status quo will prevail.” 2

[11] The proposed change to the way the quality function is performed in the packaging area is one of a number of significant changes which are being progressed at the Abbotsford Brewery. The other changes include the introduction of SAP reporting, a new information technology platform which will operate throughout SABMiller (the owner of CUB), and changes to logistics arrangements at the Brewery (following a $7million investment by CUB).

[12] On 27 March 2104, two paid meetings of UV members at the Abbotsford Brewery resolved:

(i) that employees would not join any committees or project groups to help implement the SAB Manufacturing Way;
(ii) that Short Interval Control charts were not to be completed;
(iii) to remove casuals from the Abbotsford site;
(iv) not to agree with the quality and brewing proposed redundancies; and
(v) to refuse to act up into staff roles as per clause 32 of the Agreement. 3

[13] As a result of concerns about potential disputation over the various changes at the Abbotsford Brewery, on 21 March 2014 CUB filed an application under s.739 of the Act. That application was the subject of a conference before Commissioner Blair on 28 March 2014. At the conclusion of that conference, Commissioner Blair issued a Note to Parties which stated:

“[1] Following discussions between the parties on Friday 28 March 2014, the following points were confirmed:

1. The Union confirms that it would not be encouraging their members to take unprotected industrial action.

2. The Union could not guarantee that a health and safety representative (HSR) will not exercise their right as a HSR to identify an OH&S issue.

3. The Company reserves their right to lodge a s418 application if they believe there is unprotected industrial action happening, threatened, impending or probable, or is being organised. This includes any OH&S issue that the Company believes not to be genuine.

4. The parties are to meet every Thursday with delegates in attendance. Those meetings will be for a two hour time period.

5. There will be a report back to the Commission the Friday following each Thursday meeting. The first meeting will occur on Thursday 3 April 2014 and the report back to the Commission will be on Friday 4 April 2014 at 1.00pm.”

CUB’s Submissions and Evidence

[14] CUB set out the background to the proposed change to the quality function in the packaging area and the discussions with employees and UV representatives which had occurred in the lead up to the trials. CUB submitted that the change would require operators to perform three quality tests - a pasteuriser test, a rinser test and an alcohol test. The first two of these tests were to be performed once each eight hour shift, while the last test was only to be performed when there was a change in product. The first two tests were described as taking 10 minutes and 5-7 minutes respectively. CUB highlighted that these tests were already performed by operators on the B3 packaging line and had been done so for several years without any safety issues arising. CUB also submitted that none of these tests were physically demanding. CUB further submitted that consistent with the Agreement work trials were part of business as usual at the Abbotsford Brewery.

[15] Under cross examination Mr Woodburn set out the background to the proposed change and associated discussions with employees and UV representatives, including the conference convened by Commissioner Blair on 28 March 2014. As to the work trial, Mr Woodburn outlined the process for the trial, with observers selected to observe the process with a daily debrief and an assessment at the end of the trial. Mr Woodburn stated that the observers selected tended to be HSRs. Mr Woodburn indicated that the trial had commenced on the B1 packaging line on 31 March 2014, but had not commenced on the can line where issues of pay and grades were raised as in dispute by the UV delegate who asserted that as a result the status quo, i.e. the pre-trial situation, prevails. On the issue of grades, Mr Woodburn indicated that there is a Brewery Employee - Packaging Grade 5 working on the B3 packaging line, but not on the can or B1 and B2 packaging lines. As to the B1 packaging line trial which had commenced on 31 March 2014, Mr Woodburn was not aware of any issues having been raised while the trial was underway. Mr Woodburn also indicated that a safety risk audit conducted on 28 March 2014 had not identified any safety risks associated with the trials.

[16] Mr Lukic under cross examination provided a comprehensive overview of the events prior to the commencement of the trial on the can line. By way of background, Mr Lukic’s evidence was that he had been discussing the change/work trial with Mr Henderson for a month and last Thursday had informed him that the trial would commence on 31 March 2014. Mr Lukic indicated that his main task on the morning of 31 March was to form a team for the trial, with a meeting convened for 6.15am that morning to discuss this issue. The team was to be comprised of a number of persons, including Mr Henderson. As the discussions commenced, Mr Henderson indicated that the trial could not proceed as the parties were in dispute and the status quo was to prevail. When asked by Mr Lukic for reasons, Mr Henderson responded that there were a lot of unanswered questions regarding the trial. Mr Lukic referred to last Friday’s conference before Commissioner Blair as providing clearance for the trial to proceed. However, Mr Henderson indicated that he was not aware of the issues discussed in that conference. Mr Lukic indicated that some operators were willing to proceed with the trial but that following a discussion which Mr Henderson had with operators the trial did not proceed as no one was willing to participate.

[17] In response to questions from Mr Kemppi, Mr Lukic confirmed that Mr Henderson had previously raised with him the issue of pay and classifications regarding the trial, adding that he had responded to Mr Henderson on these issues.

[18] Similarly, Mr Siccita outlined the discussions which had occurred in the lead up to the work trials and provided a detailed overview of the events regarding the B1 packaging line trial. As to the discussions, Mr Siccita indicated that he had convened four meetings with UV representatives to discuss the trials. Those meetings commenced in February 2014 and detailed the requirements for the trials. Mr Siccita further indicated that as those meetings continued, the attendance of UV delegates declined. For instance, Mr Henderson did not attend the last two meetings. Mr Siccita said that he understood that Mr Henderson had been told by UV not to attend the meetings. Mr Siccita also stated that he had written to Mr Kemppi regarding the trials, adding the UV had not prior to the trials indicated that its position was that the trials should not proceed until the issues regarding pay and grades are resolved.

[19] With regard to the B1 packaging line trial, Mr Siccita confirmed that the trial had commenced as scheduled on the morning of 31 March. However, at around 12.30pm that day he received a message from Mr Koder indicating that he wished to see Mr Siccita at 1pm (Mr Koder was rostered to work afternoon shift which commenced at 2pm). The meeting proceeded as requested with Mr Koder indicating that he had safety concerns regarding the trial and was concerned that operators were being put at risk as they had not been trained and did not have people to guide them through the process. Mr Siccita referred to a safety desk top audit which he initiated and which was conducted on 28 March 2014 and did not identify any safety risks with the trial, stating to Mr Koder that he saw no imminent risk to safety and that the trial would continue on 1 April 2014. Mr Koder then provided Mr Siccita a PIN which prompted Mr Siccita to ask for details of the evidence relied upon to support the PIN. Mr Siccita stated that Mr Koder did not provide any such evidence. Mr Siccita’s unchallenged evidence was that Mr Koder indicated that he had been told to handover the PIN and that Mr Koder responded to a question from Mr Siccita asking what would occur with the PIN if he indicated that the trial was not continuing on 1 April by saying that the PIN would remain in his pocket (Mr Siccita had handed the PIN back to Mr Koder).

[20] In conclusion, CUB submitted that with regard to the statutory requirements for an order to stop unprotected industrial action, it had standing to bring such an application and that the evidence establishes that industrial action which is not protected was occurring. As such, it submitted, the Commission must make an order. CUB requested the order be made as a matter of urgency and, given the various changes which are being progressed at the Abbotsford Brewery, submitted that it should operate for a period of 12 months.

UV’s Submissions

[21] In short, UV rejected the assertion that industrial action was occurring and submitted that the parties were in dispute. As such, in accordance with the Agreement’s Disputes Settlement Procedure the status quo is to prevail, with the status quo being the pre-work trial situation. As to the PIN issued by Mr Koder, UV submitted that this was not relevant and that no weight should be attached to it. UV also referred to s.19(2)(c) of the Act, which states that industrial action does not include “action by an employee if the action was based on a reasonable concern of the employee an imminent risk to his or her health or safety”, adding that UV did not press that issue. UV further submitted that it is difficult to believe that Mr Lukic could have felt he had satisfactorily addressed the concerns raised by Mr Henderson regarding classifications and pay levels for operators performing the quality tasks.

Legislation

[22] The application by CUB is made pursuant to s.418 of the Act, which relevantly provides:

“418 FWC must order that industrial action by employees or employers stop etc.

(1) If it appears to the FWC that industrial action by one or more employees or employers that is not, or would not be, protected industrial action:

(a) is happening; or
(b) is threatened, impending or probable; or
(c) is being organised;

the FWC must make an order that the industrial action stop, not occur or not be organised (as the case may be) for a period (the stop period) specified in the order.

Note: For interim orders, see section 420.

(2) The FWC may make the order:

(a) on its own initiative; or
(b) on application by either of the following:

(i) a person who is affected (whether directly or indirectly), or who is likely to be affected (whether directly or indirectly), by the industrial action;
(ii) an organisation of which a person referred to in subparagraph (i) is a member.

(3) In making the order, the FWC does not have to specify the particular industrial action.

(4) If the FWC is required to make an order under subsection (1) in relation to industrial action and a protected action ballot authorised the industrial action:

(a) some or all of which has not been taken before the beginning of the stop period specified in the order; or
(b) which has not ended before the beginning of that stop period; or
(c) beyond that stop period;

the FWC may state in the order whether or not the industrial action may be engaged in after the end of that stop period without another protected action ballot.”

[23] Also relevant is s.19 of the Act which deals with the meaning of industrial action in the following terms:

“19 Meaning of industrial action

(1) Industrial action means action of any of the following kinds:

(a) the performance of work by an employee in a manner different from that in which it is customarily performed, or the adoption of a practice in relation to work by an employee, the result of which is a restriction or limitation on, or a delay in, the performance of the work;
(b) ban, limitation or restriction on the performance of work by an employee or on the acceptance of or offering for work by an employee;
(c) a failure or refusal by employees to attend for work or a failure or refusal to perform any work at all by employees who attend for work;’
(d) the lockout of employees from their employment by the employer of the employees.”

[24] I turn now to consider the elements of s.418.

Is industrial action happening, threatened, pending or probable?

[25] The threshold issue in determining whether or not industrial action is happening, threatened or probable concerns the interaction of the Agreement’s Disputes Settlement Procedure and the provisions of Appendix I regarding work trials.

[26] As previously mentioned, Appendix I sets out a number of principles agreed between the parties which are to be followed in circumstances where the parties are discussing changes to manning levels as is the case in this matter. The most relevant principle in the context of this application is the following:

“ Work trials will be conducted prior to any ongoing changes being implemented, unless it is agreed by operators in the work area that a trial is not required. The manner in which the work trial will be conducted will be discussed in the work area and with the relevant Union representative.”

[27] What is clear from the principle is that work trials are a precursor to any ongoing changes being implemented. The only exception being that a work trial is not required in circumstances where operators agree that it is unnecessary, which is not the case in this matter. Beyond this, the principle requires that the manner in which the trial will be conducted be discussed in the work area and with the relevant union representative. The evidence in this matter indicates that such discussions have occurred over a period of around four weeks. Importantly, nowhere in the principle is the agreement of the work area or union representatives required regarding the work trial. CUB however acknowledges that Appendix I also provides that UV consent to changes in manning numbers is required before those changes can be implemented on an ongoing basis and that the “... union will not unreasonably withhold their consent ...” in this regard. Based on this interpretation of the principle, I find that work trials are part of business as usual at the Abbotsford Brewery.

[28] The practical effect of this finding is that the status quo is that work trials proceed subject to the principles set out at Appendix I.

[29] The principles at Appendix I also refer to production lines being run in a safe manner. The uncontested evidence of Mr Siccita suggests that the PIN issued by Mr Koder in respect of the B1 packaging line trial is simply a ruse to impede the trial. If this is proven to be the case this is of serious concern. However, in the absence of Mr Koder agreeing to withdraw the PIN, CUB has foreshadowed an intention to raise the matter with WorkSafe Victoria, the relevant regulator.

[30] Another principle is that employees are fully trained to perform the tasks assigned to them. While in the context of a trial this would effectively pre-empt the outcome of the trial, the evidence indicates that appropriate measures were put in place to support operators during the course of the trial.

[31] Further, it is worth noting that UV’s interpretation of status quo in this matter, if accepted, would effectively give it a power of veto regarding work trials which is not evident anywhere in the terms of Appendix I. Furthermore, I do not consider that the conduct of the work trials in any way inhibits UV’s capacity to seek to resolve the issues it has raised regarding pay and classifications in accordance with the Agreement’s Disputes Settlement Procedure.

[32] I turn now to the issue of whether the decision not to participate in the work trial on the can line constitutes industrial action. Given my view above that the conduct of work trials is the status quo, I consider that a refusal to participate in the work trial to be industrial action within the meaning of s.19(1) of the Act. In particular, I consider the decision not to participate to involve “the adoption of a practice in relation to work by an employee, the result of which is a restriction or limitation on, or a delay in, the performance of the work.” Given that the Agreement is yet to pass its nominal expiry date, such industrial action constitutes unprotected industrial action. Further, I consider that the industrial action is likely to continue until such time as UV’s issues regarding pay and grades are progressed.

[33] While based on the material before me I am unable to form a definitive view about the genuineness of the safety issues raised in respect of the trial on the B1 packaging line, given CUB’s evidence that it will seek to challenge the PIN issued by Mr Koder, I consider it appropriate for that challenge to run its course. In any event, a finding on whether or not that action constitutes industrial action is not critical in respect of determining the application given my finding regarding the disruption to the can line trial.

Is the industrial action being organised?

[34] Little material was lead on this point by CUB, other than referring to a conversation between Mr Henderson and Mr Kemppi over the weekend of 29 and 30 March 2014. CUB was unable to provide any detail of the nature of the conversation.

[35] On the other hand, Mr Kemppi disputed that UV was organising industrial action, referring to the Note to Parties issued by Commissioner Blair on 28 March which stated that “The Union confirms that it would not be encouraging their members to take unprotected industrial action.” Further, that Note to Parties also stated that “The Union could not guarantee that a health and safety representative (HSR) will not exercise their right as a HSR to identify an OH&S issue.”

[36] Beyond this, Mr Kemppi confirmed that he did have a conversation with Mr Henderson over the weekend but provided no details.

[37] More compelling, however, is CUB’s characterisation of what was resolved at the paid meetings UV held with its members at the Abbotsford Brewery on 27 March 2014, in particular the resolution “not to agree with the quality and brewing proposed redundancies.” That characterisation was not challenged by UV at the hearing. In essence those meetings resolved to pursue a number of actions intended to frustrate the change process at the Brewery. Of particular significance is that the industrial action which is occurring in respect of the work trials is consistent with the specific resolution mentioned above regarding the quality redundancies. Further, drawing on the Note to Parties issued by Commissioner Blair on 28 March 2014, UV was clearly alive to the prospect of safety issues being raised by a HSR regarding the trial when it attended the conference convened by Commissioner Blair.

[38] Against that background, I am satisfied that UV was aware of the likely course of events regarding the conduct of the work trials.

Conclusion

[39] As I have found that industrial action is happening and is likely to continue I am required by the terms of the Act to make an order that the action stop and not occur. As previously mentioned, in view of the various changes which are to be progressed at the Brewery over the next 6-12 months, CUB sought an order which would operate for a period of 12 months. I consider such a period too long, believing six months a more appropriate period in the circumstances. Accordingly, together with the publication of this decision I make an order which will remain in place for a period of six months.

DEPUTY PRESIDENT

Appearances:

J. Tuck for Foster’s Australia Limited T/A Carlton and United Breweries Limited.

S. Kemppi for United Voice.

Hearing details:

2014.

Melbourne.

March 31.

 1   AE895398

 2   Ibid, Appendix C at ix)

 3   Form F14 - Application for an Order to Stop etc. (Unprotected ) Industrial Action at 8

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