Maritime Union of Australia, the v Patrick Stevedores Holdings Pty Limited
[2016] FWC 2335
•6 MAY 2016
[2016] FWC 2335
DECISION
| Fair Work Act 2009 | |
| s.739 - Application to deal with a dispute | |
| John Duggan and Others | |
| v | |
| Patrick Stevedores Holdings Pty Limited | |
| (C2015/4117) | |
| COMMISSIONER CAMBRIDGE | SYDNEY, 6 MAY 2016 |
Dispute settlement procedure - interpretation of terms of enterprise agreement - jurisdictional
challenges to proceedings - personal grievance procedure - dispute regarding alleged
unfairness in selection of particular individuals for redundancy - extensive consultation and
history of Commission involvement in significant workplace change - general approach of
employer endorsed - specific complaints examined - application refused.
[1] This Decision is made in respect of an application that was taken under section 739 of
the Fair Work Act 2009 (the Act) for the Fair Work Commission (the Commission) to deal
with a dispute in accordance with a Dispute Settlement Procedure (DSP). The application was
lodged at Sydney on 28 May 2015, and it was made by The Maritime Union of Australia (the
MUA or the Union), and taken against Patrick Stevedores Holdings Pty Limited (the
employer or Patrick).
[2] The MUA contended that the Commission was empowered to deal with this matter by
virtue of the combined operation of a Personal Grievance Procedure (PGP) and a DSP which
are respectively found at Schedules 3 and 1 of Part A of the Patrick Terminals Enterprise
Agreement 2012 (the Agreement).
[3] Patrick raised various jurisdictional challenges to the application. One of these
jurisdictional challenges involved an alleged lack of standing of the MUA. In brief, the lack of
standing of the MUA was asserted on the basis that, as the MUA was not an individual, it
could not activate the PGP in order to commence any process that could subsequently enliven
an application under s. 739 of the Act. This particular jurisdictional challenge was eventually
resolved when the application was amended, by consent of the MUA and Patrick, so that it
was recorded as having been taken by 61 named individuals rather than the MUA. (It should
be noted that no expressed consent of any of the 61 individuals for this alteration was
provided to the Commission.)
[4] Consequently, the application has been amended so that it has been recorded to have
been taken by the 61 individuals named in Appendix A to the application, and appearing in
Appendix A to this Decision (the applicants). Other jurisdictional challenges advanced by
Patrick are dealt with later in this Decision.
[2016] FWC 2335
[5] Thirteen of the applicants have also made related unfair dismissal applications under s.
394 of the Act, and a further five have made related general protections applications under s.
365 of the Act.
[6] The MUA and Patrick agreed that the issues which gave rise to the dispute
proceedings might benefit from conciliation provided by the Commission. The Commission
conducted extensive conciliation over three days, 5, 6 and 28 August 2015. The conciliation
involved, inter alia, the Commission providing an opportunity for six of the individual
applicants to explain the basis for their personal grievances. One further individual, who was
not one of the named applicants, also participated in the conciliation process, and provided the
Commission with an explanation of his personal grievance.
[7] The dispute was unable to be resolved by conciliation, and the matter has proceeded to
arbitration involving a Hearing conducted in Sydney on 15 and 16 December 2015. The MUA
was granted permission to be represented by Mr A Slevin, a barrister who (presumably)
appeared for the applicants. Mr Slevin called six individual applicants who each provided
statements, which were introduced into evidence. Each of the six applicants who were called
as witnesses, were cross-examined on the contents of their respective statements.
[8] Patrick was granted permission to be represented by Mr J Darams, a barrister, who
called one witness, Mr Timi Cheng, to provide evidence on behalf of the employer. Mr Cheng
1
| was cross-examined on the contents of an extensive statement | that he had made for these |
| proceedings. | |
| Background |
[9] The applicants were employees of Patrick with personal grievances arising from a
significant workplace change, which involved the introduction of automation technology at
the Patrick container stevedoring terminal located at Port Botany, New South Wales. The
background to the introduction of the automation at the Port Botany container terminal is set
2
| out in a related Decision | involving eight applications for unfair dismissal remedy, made |
pursuant to s. 394 of the Act. Each of the individuals who made the related unfair dismissal
applications are also named as eight of the applicants in this matter.
[10] The grievances of the applicants involved alleged unfair treatment arising from the
process that Patrick adopted in order to select employees who would be made redundant, or
redeployed to alternative positions, as a consequence of the introduction of the automation
technology and the associated restructuring of the terminal operations (the selection process).
The selection process was a significant aspect of detailed analysis and arbitrated
3
| determination in the Decision of Sams DP issued on 22 April 2014 | . |
[11] In abbreviated summary, the selection process can be described as an extensive matrix
of identified employee performance factors, which were assigned numerical values so as to
produce an overall score used for ranking employees in respect to particular identified roles.
The selection criteria which was eventually adopted for the selection process, involved a
number of common selection criteria across all roles, which were then coupled with various
specific selection criteria, developed for particular roles that had been identified under the
labour model anticipated following the introduction of the automation technology and the
associated restructuring.
[2016] FWC 2335
[12] Employees were invited to provide expressions of interest in respect of the various
roles that were identified in the post automation labour model, and then each employee was
scored in respect to their particular preferences. The individual scoring process involved up to
11 different shift managers providing scoring in the various aspects of employee performance.
A primary shift manager was identified for each “permanent” employee, and the primary shift
manager’s scoring was weighted over the other shift managers’ scores, so that an overall
performance score total was calculated, and thus each individual employee was ranked, one
against another.
[13] Following the implementation of the selection process, in excess of about 90
individual employees lodged personal grievances in accordance with the PGP contained at
Schedule 3 of the Agreement. In accordance with clause 7 of the PGP, the dismissals and
redeployment of employees arising from the implementation of the selection process, were
made on a provisional basis, pending the finalisation of the PGP.
[14] The grievances of, inter alia, the applicants were the subject of the “internal”
grievance and appeal processes envisaged by the PGP. The grievances of the applicants were
not resolved via the “internal” mechanisms of the PGP. Further, the outstanding grievances of
the applicants could not be resolved by way of the appointment of any mutually agreed
conciliator/arbitrator, or by any other agreed means. The applicants’ grievances then became
the subject of reference to the Commission pursuant to the DSP, via the asserted operation of
clause 8.3 of the PGP.
[15] In broad terms, the grievances of the applicants fell under four categories of
complaint. Firstly, the applicants complained that the scoring that they received from their
managers as part of the selection process, was subjective and erroneously contaminated by
particular managers having a lack of direct knowledge or familiarity with the particular
individuals that they scored. Further, in some instances, it was alleged that there had been an
erroneous selection of the primary shift manager. Secondly, complaint was made that certain
scoring criteria such as attendance and punctuality was not assessed on an objective basis, and
this was reflected by scoring which indicated a requirement for improvement in circumstances
where there had been no prior identification of any concern. Thirdly, scoring which involved
productivity was said to have unfairly disadvantaged certain employees who worked in areas
or gangs where it was more difficult to attain higher productivity rates. Fourthly, complaint
was raised that particular skills that had been utilised by one or more of the applicants, were
not recognised as part of the scoring for the selection process.
[16] Consequently, the applicants have raised individual grievances which asserted that the
selection process was infected by errors which resulted in unfairness to them. The MUA on
behalf of the applicants, has asserted that the circumstances of the applicants was
unambiguously contemplated by Sams DP in the Decision of April 2014, wherein it was
stated at paragraph [263]:
“[263] Secondly, any employee who believes that the selection procedure has been
inappropriately applied or incorrectly assessed, can lodge an individual grievance
under Sch 3 of the Agreement, thereby providing an individual appeal mechanism for
any employee who believes the selection procedure has produced the wrong result.”
[17] Patrick rejected the claims advanced on behalf of the applicants by the MUA, and it
contended that much, if not all, of the applicants’ complaints involved the selection process
[2016] FWC 2335
itself rather than any misapplication or error attendant with that process. In this respect,
Patrick asserted that the applicants’ grievances could not be entertained, as they represented
an attempt to re-agitate issues that had been determined by the Decision of Sams DP in April
2014. Further, Patrick asserted that in instances where the “internal” PGP had identified cases
of established error, those matters had been appropriately rectified.
[18] Notwithstanding the “internal” resolution of some of the grievances which had been
made following the implementation of the selection process, contest remained in respect to
the complaints which had been raised by the applicants. Consequently, the MUA made the
s.739 application which gave rise to these proceedings.
The MUA Case for the Applicants
[19] At the Hearing, Mr Slevin appeared on behalf of the MUA and the applicants. Mr
Slevin made submissions which elaborated upon a written outline of submissions which had
been filed on behalf of the MUA.
[20] Mr Slevin commenced his submissions by stating that the dispute essentially involved
an unfairness argument. Mr Slevin submitted that the applicants had legitimate complaint
about the selection process and in particular, the application of that process, which ultimately
resulted in the adoption of an incorrect ranking, which resulted in unfairness for the applicants
being selected for redundancy or displacement.
[21] Mr Slevin made detailed submissions about the particular nature of the aspects of the
applicants’ complaints. In this regard, the subjective scoring of the various shift managers
was said to be highlighted by the inconsistencies that could be drawn from an analysis of the
particular scoring of certain shift managers. The MUA had conducted an analysis of the
scoring of 11 identified shift managers, and it provided a statistical analysis which displayed
the standard deviation in scoring between the various shift managers. Further, in particular
circumstances, Mr Slevin submitted that the evidence demonstrated that certain shift
managers had scored individuals with whom they had very little familiarity, and that such
subjective scoring demonstrated a blatant unfairness.
[22] The submissions made by Mr Slevin addressed the second broad aspect of the
applicants’ complaints, whereby certain scoring reflected that an individual was not meeting
expectations in respect to particular performance criteria, such as attendance and punctuality.
However, there had been no previous identification of any concern regarding an individual
not meeting expectations in respect to these performance criteria. According to Mr Slevin, in
cases where the scoring of particular shift managers reflected that an individual did not meet
expectations and which could not be supported on any objective basis, such circumstances
resulted in clear unfairness.
[23] Mr Slevin also mentioned that the selection criteria which applied a productivity
measure was a factor that introduced a further level of unfairness. The unfairness arose,
according to Mr Slevin, for particular individuals who, because of the particular work that
they performed, did not have the same opportunity to attain higher productivity scores as
other employees.
[24] The fourth broad category of complaint of the applicants involved what Mr Slevin
referred to as a “simple error-type complaint”. Mr Slevin submitted that a number of the
[2016] FWC 2335
applicants had utilised particular skills which had not been recognised and included in the
scoring for those individuals. Particular reference was made to what was described as the
“pinman” skill, for which many of the applicants had not received any acknowledged score,
but which was a skill that they had exercised during the relevant period of assessment.
[25] Mr Slevin submitted that the evidence established that the particular scoring that the
applicants had attained via the selection process involved significant error and unfairness,
such that it should be recalculated in the absence of the identified errors. Mr Slevin stressed
that the redundancies and redeployments that occurred as part of the automation restructuring
at the terminal were made on a provisional basis pending the finalisation of the PGP.
Consequently, Mr Slevin urged that the complaints of the applicants should be upheld and
that Patrick be directed to recalculate the scores allocated to all employees, so as to remove
the particular errors which he said had been established in the application of the selection
process.
[26] Mr Slevin also made submissions which rejected the jurisdictional objections which
had been raised by Patrick. Mr Slevin submitted that the provisional basis upon which the
redundancies had been made clearly contemplated the prospect for recalculation of the
scoring used in the selection process. Further, Mr Slevin submitted that the Commission
should not be concerned with any potential practical difficulties that might arise from a
recalculation of all employees scoring under the selection process. Mr Slevin rejected that any
recalculation process would “lead to an enormous mess”.
[27] In conclusion, Mr Slevin submitted that the applicants had established that particular
aspects of the implementation of the selection process involved error and consequent
unfairness. Mr Slevin said that it was particularly telling that Patrick had not called any of the
shift managers to provide evidence to support the particular scoring that they had given, and
which was the subject of vigorous complaint by the applicants. Mr Slevin urged that the
Commission provide for rectification of the unfairness to the applicants by granting the
determination as proposed by the MUA, so that Patrick would be required to recalculate all of
the scores of all of the employees who had been subject to the selection process.
The Employer’s Case
[28] Mr Darams, barrister, was granted permission to appear on behalf of Patrick. Mr
Darams referred to and relied upon written submissions which had been filed on behalf of the
employer. Mr Darams made further oral submissions in elaboration of the earlier filed
material and in response to the submissions made on behalf of the MUA.
[29] The submissions made by Mr Darams firstly dealt with the three jurisdictional
objections that were raised by Patrick. Mr Darams acknowledged that the first of the
jurisdictional objections regarding the standing of the MUA to bring the application, would be
rectified by an amendment to name the individual applicants as the Parties in the proceedings.
[30] Mr Darams made submissions which pressed the second and third jurisdictional
objections raised by Patrick. In brief, the second jurisdictional objection asserted that the
particular subject matter of the complaints of the applicants was not a subject matter that was
contemplated by the terms of the DSP set out in Schedule 1 of the Agreement. In this regard,
Patrick submitted that the subject matter of the application sought to “revisit issues regarding
the operation, implementation and application of the respondents bespoke selection criteria.”
[2016] FWC 2335
According to Patrick, the unresolved grievances of the applicants were not a matter of
application of the NES or the terms of the Agreement, and therefore the Commission was
precluded from dealing with the dispute.
[31] The third jurisdictional objection that was raised by Patrick involved a particular
exclusion contained in clause 1.3 of the DSP found at Schedule 1 to the Agreement. The
particular exclusion contained in clause 1.3 prohibited the Commission from having any
power to arbitrate in relation to any dispute involving a “Company Policy”. Mr Darams
submitted that the complaints raised by the applicants involved the selection criteria and the
selection process, and therefore the dispute involved a “Company Policy” which could not be
arbitrated by the Commission.
[32] Mr Darams made further submissions which dealt with the merits of the application.
Mr Darams submitted that the complaints of the applicants were just an attempt to re-agitate
arguments that had previously been run and lost before Sams DP. According to the
submissions made by Mr Darams, the selection process had been a matter that involved long-
running superintendence by the Commission, and the current application was an attempt to
ask the Commission to impose another selection procedure, despite the resolution of those
issues during the earlier involvement of the Commission.
[33] Mr Darams also submitted that an examination of the particular complaints that had
been raised by the applicants were matters of detail in an extensive process. Mr Darams
submitted that the Commission should be reluctant to engage in dealing with what he said was
the minutiae of the selection process. Mr Darams referred to various Authorities which he said
established a reluctance for the Commission or other Tribunals or Courts, to be involved in
the minutiae of an elaborate and extensive process undertaken by Patrick, as part of the
introduction of automation and the associated restructuring.
[34] Mr Darams made further submissions which addressed the particular categories of
complaints raised by the applicants. According to the submissions made by Mr Darams, the
alleged subjectivity of the shift managers scoring should not be assessed through the prism of
one or two particular examples. Mr Darams stressed that Patrick had endeavoured to avoid
undue subjectivity by using an averaging or smoothing of the various shift managers scores. It
was further submitted that in many instances, a theoretical removal of certain shift managers
scores did not provide for sufficient change to the particular individual’s total score, such that
it would alter the outcome.
[35] It was also submitted by Mr Darams that no valid challenge could be made to the
particular scoring, by reference to an alleged absence of prior identification of any
inadequacy. Mr Darams submitted that the relevant scoring of shift managers would naturally
involve a degree of subjectivity, and that the relative scoring of one shift manager to another,
and the identified variances, was an aspect of the selection process that applied to all
employees and therefore, in that respect, everyone had been treated equitably and fairly.
[36] Similarly, according to the submissions made by Mr Darams, all employees were
given skill utilisation assessments based on the same company data, rather than any actual
utilisation of particular skills during the assessment period. Mr Darams acknowledged that
this was not a perfect process, but that it had applied equitably to all employees, and examples
where a particular employee may not have had a skill recognised because it was not identified
from the company data was something that applied generally.
[2016] FWC 2335
[37] Mr Darams further submitted that the applicants’ complaints about variances with the
potential to attain higher productivity scores involved, in practice, the suggestion of a
different method to calculate a productivity value in the scoring matrix. However, according
to Mr Darams, any method that may be chosen could have been open to criticism, and once
again although the particular method adopted may not have been perfect, there was no
suggestion that it was adopted with any mala fide.
[38] In conclusion, Mr Darams submitted that the dispute in this instance should be
determined on the basis that the jurisdictional objections of Patrick prevented the Commission
from any capacity for determination of the application. In the alternative, Mr Darams
submitted that an examination of the complaints of the applicants did not demonstrate that
there was anything unjustifiable about the decisions that were made in respect to any one of
the individual applicants. Further, Mr Darams stressed that the Commission should exercise
significant restraint in relation to cases which sought to have the Commission scrutinise the
detailed application of aspects of the selection process. Consequently, Mr Darams urged the
Commission to reject the assertion that the applicants had been treated unfairly, as had been
advanced by the MUA. Mr Darams urged that the Commission not make any Orders in
respect of the applicants’ grievances and that the application be dismissed.
Consideration
[39] This dispute has involved the personal grievances of 61 individuals who have been
affected by the introduction of automation technology and the associated restructuring of
Patrick’s Port Botany container terminal. The applicants have complained that particular
aspects of the selection process that Patrick used to determine the relative ranking of
employees in order to select employees who would be made redundant or redeployed to
alternative positions, amounted to unfair treatment.
[40] The applicants activated a complaints procedure which was established by certain
terms in the Agreement. Relevantly, the applicants complaint process commenced via clause
10.1 of the Agreement, which is in the following terms:
“10. EMPLOYEE CONCERNS AND REPRESENTATION
10.1 Any concern by an individual employee that the Company may have unfairly treated him / her may be progressed in accordance with the Personal
Grievance Procedure set out in Schedule 3.”
[41] The 61 applicants were part of a larger group of approximately 95 employees who
activated the PGP contained in Schedule 3 of Part A of the Agreement, which is in the
following terms:
“SCHEDULE 3- PERSONAL GRIEVANCE PROCEDURE
1. A personal grievance means a grievance that any employee may have against
the Company because of a claim:
1.1. that the employee has been passed over for selection to fill a promotional
position or for placement in a training course; or
[2016] FWC 2335
1.2. that the Company has taken some other action that is unjustifiable.
2. If an employee has a personal grievance they must lodge a written notice with
their Site Manager (Grievance Notice) within 14 days of being notified of the
alleged circumstances giving rise to the grievance and any notice must set out
the date(s) and details of the alleged grievance as well as the remedy being
sought by the employee.
3. The relevant site manager must promptly investigate each Grievance Notice
received, obtaining any additional information required from the applicant
and conducting further interviews and discussions with relevant parties
(including an employee representative and/or the Union) as required.
4. Within 7 days of receipt of a Grievance Notice, the employee shall be advised
by the relevant site Manager of the results of their initial grievance
application. The employee will also be advised that any appeal they wish to
make should be lodged in writing within seven days of that advice being given
to the employee.
5. The notice of appeal must be accompanied by written details of:
5.1. the grounds on which the appeal is lodged;
5.2. any evidence, such as training completed, experience gained, on which the
applicant wishes to rely; and
5.3. the outcome/s being sought by the employee.
6. Management shall reconsider all aspects of the case, and if requested, give the
applicant and any Union or employee representative the opportunity to put the
case personally.
7. Management shall advise the employee, and, if involved, the
employee/delegate/Union representative of it's reconsidered decision within
seven (7) days of the appeal being lodged. Meanwhile any selection or
appointment made shall be provisional only.
8. In the event that the concern cannot immediately be alleviated by management,
depending on the nature of the alleged grievance, one or more of the following
options shall be adopted as a means of its resolution:
8.1. further discussions between management, the employee and/or
Union/employee representatives;
8.2. reference to a mutually agreed conciliator/arbitrator;
8.3. reference to FWA in accordance with the avoidance of disputes procedure
set out in Schedule 1 of this Agreement.”
[2016] FWC 2335
[42] The PGP was implemented, but it did not resolve the concerns raised by the
applicants, and the MUA then used sub-clause 8.3 of the PGP, to refer the grievances to the
Commission via the DSP, which is found at Schedule 1 of Part A of the Agreement, and
which is in the following terms:
“SCHEDULE 1 -DISPUTE RESOLUTION PROCEDURE
In the event of a dispute arising in the workplace in regard to the application of this
Agreement or the National Employment Standards (other than under s65 (5) and 76
(4) of the Act), the procedure to be followed to resolve the matter shall be as follows:
1. The parties shall attempt to resolve the matter at the workplace level including
but not limited to:
1.1. The Employee, the Employee's delegate (if requested), and his or her
supervisor, meeting and conferring on the matter; and
(a) If the matter is not resolved at such meeting, the parties arranging further discussions involving more senior levels of management Employee
Representatives and Union officials (as appropriate).
(b) If the matter is not resolved at such a meeting the parties arranging further discussions involving more senior levels of management (as
appropriate).
(c) If the matter cannot be resolved at workplace level, the matter may be referred by either party to National level for discussion between the
parties, after which time either party may refer the matter to FWA for
conciliation.
(d) If the matter is referred for conciliation, both parties will participate in the process in good faith.
(e) Where the dispute has not been resolved within 7 days of the issue giving rise to the dispute being raised despite the foregoing procedures being
followed and subject to there being no industrial action occurring or
having occurred in relation to the issue at hand, then subject to Clause 1.3
either party may refer the matter to FWA for arbitration if necessary in
which case the decision will be accepted by the parties subject to any
appeal rights.
(f) Either Party may refer the dispute to FWA at any stage of the procedure if the procedure is not being followed or is otherwise inappropriate in the
circumstances.
(g) During the time when the parties attempt to resolve the matter, either at the workplace level, or through conciliation or arbitration, the parties
shall continue to work in accordance with their contract of employment
and obligations under this Agreement.
[2016] FWC 2335
1.2 The parties must co-operate to ensure that the dispute resolution
procedures are carried out as quickly as is reasonably possible.
1.3 Unless agreed by the Parties, FWA shall not have the power to arbitrate in
relation to any dispute involving a Company Policy, other than in relation
to a dispute over whether or not the a Party has complied with a Company
Policy, as required by this Agreement.”
The Jurisdictional Objections
[43] Patrick advanced three jurisdictional objections which asserted that the Commission
did not have power to determine the application. The first of the jurisdictional objections
which asserted that the MUA did not have standing to bring the application, was remedied
when, by consent, the application was amended so that it was shown to have been taken by
the 61 named individuals.
[44] The second jurisdictional objection contended that the subject matter of the dispute,
namely the personal grievances of the applicants, was not a dispute of a kind, or nature that
the DSP empowered the Commission to deal with. According to Patrick, the terms of the
referral provided by sub-clause 8.3 of the PGP was qualified by the words “depending on the
nature of the alleged grievance” and as the personal grievances of the applicants were not
matters regarding the application of the Agreement or the NES, the Commission was not
empowered to resolve the personal grievances.
[45] I have carefully considered the relevant terms of the Agreement, in context, and by
way of the application of the principles for construction of terms contained in an enterprise
agreement as established by the Full Bench Decision in The Australasian Meat Industry
4
| Employees Union v Golden Cockrell Pty Limited | (Golden Cockrell). |
[46] Arising from this consideration, I believe that the words contained in clause 8 of the
PGP, including sub-clauses 8.1, 8.2 and 8.3, have a plain and unambiguous meaning. That
meaning does not introduce any qualification to, or otherwise fetter, the right of an aggrieved
individual to, in the absence of agreement on the options provided for by sub-clauses 8.1 and
8.2, adopt the option provided by sub-clause 8.3, and have the grievance referred to the
Commission for determination under the terms of the DSP (Schedule 1).
[47] However, despite the construction that must apply for the terms of clause 8, and sub-
clause 8.3 in particular, of Schedule 3 of Part A of the Agreement, I doubt that it was
envisaged that the PGP would have application in circumstances such as those involving the
significant change and extensive job losses experienced as a consequence of the introduction
of automation technology, and the associated restructuring of the operations at the terminal.
Nevertheless, it is not unusual for the terms of an industrial instrument to have unintended
consequences and unpredicted application because of changed circumstances that were
understandably not contemplated at the time that the instrument was made.
[48] The third jurisdictional objection that was raised by Patrick sought to rely upon a
specific exclusion contained in sub-clause 1.3 of the DSP, which removed the power for the
Commission to arbitrate in relation to any dispute involving “Company Policy”. Patrick
contended that the selection process was a “Company Policy”, and thus the applicants’
grievances were captured by the exclusion established by sub-clause 1.3 of the DSP.
[2016] FWC 2335
[49] I have not been convinced that the selection process could be properly considered to
be a “Company Policy” as envisaged by sub-clause 1.3 of the DSP. The selection criteria
which was the subject of the applicants complaints, was described by Patrick itself as being “a
5
| bespoke procedure” | . Indeed, the selection process, although fairly sophisticated and |
somewhat complicated, was specifically tailored for the circumstances that arose with the
introduction of automation technology at the Port Botany container terminal. The final
manifestation of the labour model and the various components of the selection process, many
of which were examined in great detail in the Decision of Sams DP of April 2014, were
developed for one-off application surrounding the “cutover” on 29 March 2015 at the Port
Botany terminal.
[50] The bespoke selection process, confined in operation to the Port Botany container
terminal, and anticipated to have application only in respect to the cutover of 29 March 2015,
could hardly be considered to be a “Company Policy”. In any event, if the selection process
was a “Company Policy”, the nature of the applicants’ grievances could be considered to
satisfy the exception to the exclusion contained in sub-clause 1.3 of the DSP, involving
whether or not a party had complied with the “Company Policy”.
[51] Consequently, I have not been persuaded that the jurisdictional objections advanced by
Patrick establish any basis to prohibit the Commission from providing a determination of the
application, as amended.
The Merits of the Grievances
[52] Before examining the particulars of the applicants’ grievances, it is appropriate to
recognise a number of broad issues which underpin the context for consideration of the
complaints raised by the applicants.
[53] Firstly, the actual mechanisms that were used as part of the selection process and
which ultimately led to the numerical ranking of employees, including the applicants, were
analysed in detail in the Decision of Sams DP in April 2014. Consequently, to the extent that
any of the applicants’ grievances represented complaint about the actual mechanisms of the
selection process, those issues were settled, and not properly open to some alternative
determination of the Commission as currently constituted, in these proceedings.
[54] Consequently, as was identified by Sams DP at paragraph [263] of the 22 April 2014
Decision, the grievances of the applicants can only be determined insomuch as it could be
established “…that the selection procedure has been inappropriately applied or incorrectly
assessed”. There could be no doubt that many employees, including the applicants, believed
that the selection procedure produced the “wrong result”. However, for any grievance to be
successful, some error, misapplication, or other mistake in the application of the selection
procedure, as opposed to the selection procedure itself, would have to be established.
[55] A second, broad, contextual consideration arises from the understandable human
reaction to the loss of employment in genuine redundancy situations. In many instances, long-
standing, unblemished and cherished employment is lost through no fault of the individual
employee. Redundant employees can be justifiably aggrieved at having been selected,
irrespective of any particular process which was used as the basis for their selection.
Importantly however, if the selection process was transparent, genuinely merit based, and
[2016] FWC 2335
implemented without substantial error, the redundant individuals have little choice other than
to, reluctantly, except the outcome.
[56] As previously mentioned, the assessment of the applicants’ grievances in these
proceedings must be confined to the question of any demonstrated error in the implementation
of the selection process. There were four broad categories of complaints raised by the
applicants. Each of these categories of complaint must be examined so as to identify any
relevant error.
Shift Manager Subjectivity
[57] The selection process involved assessments made by up to 11 shift managers with, in
the case of “permanent” employees, the identification of a primary shift manager who’s
scoring counted for 50% of the final employee performance score, while the remaining 50%
of the score would be averaged across the other shift managers. In respect of Permanent
Irregular Roster (PIR) employees, because of the nature of their engagement, no primary shift
manager was identified and scores were averaged across all of the relevant shift managers.
[58] The MUA, on behalf of the applicants, conducted a detailed examination of the actual
scores provided by certain identified shift managers, and the Union produced a statistical
analysis of the range and standard deviation of the scoring, as between the various identified
shift managers. This analysis confirmed, inter alia, that certain shift managers generally
scored employees lower and could be described as “hard markers”. Logically, if a permanent
employee was assigned a primary shift manager who was a “hard marker” that employee’s
score would likely be lower than if they were assigned a primary shift manager who was a
“soft marker”.
[59] Concern about the subjective scoring of shift managers, primary and secondary, also
involved the alleged inappropriateness of the particular allocation of a primary shift manager,
and/or the scoring by shift managers who had, allegedly, little familiarity or knowledge of the
individual that was being scored. In some circumstances, it was claimed that an individual had
been scored by a shift manager who had never worked with the person that was being scored.
[60] As part of these proceedings, various recalculations of some of the applicants’ scores
were performed as a theoretical test, whereby some of the scores of particular shift managers
were removed or otherwise adjusted in order to contemplate what effect some of the alleged
subjectivity of shift managers would have on the outcome for particular individuals. In all
instances, the recalculations involving the theoretical removal of particular (allegedly)
subjective shift manager scores, did not result in an alteration to the outcome for the relevant
individual. There was only one circumstance where a recalculation which involved both the
removal of the allegedly subjective shift managers scores, together with further adjustments
for an alleged lack of skills recognition scoring, produced a potential for a different outcome.
[61] Notwithstanding the real prospect that there would be no practical alteration to the
result for the applicants even if, theoretically, their scores were adjusted to remove the
allegedly subjective shift managers scores, the nature of this aspect of the applicants’
complaints did not identify error in the application of the selection procedure. Patrick applied
the method of having particular scoring parameters within identified performance criteria
undertaken by numerous shift managers, weighted in some instances in respect to an
identified primary shift manager.
[2016] FWC 2335
[62] The potential for a level of subjectivity in the shift managers scoring was a recognised
aspect of the selection procedure. The mechanism which was developed by Patrick sought to
minimise the impact of the inherently subjective nature of the scoring process. By having up
to 11 shift managers scoring any individual employee, Patrick minimised the prospect of
particular personality issues, or other erroneous influences, operating unfairly against any of
the employees. The scoring process which involved up to 11 shift managers was designed to
minimise the level of subjectivity and produce a result that sought to properly reflect a
genuine merit based ranking.
[63] Further, it should be recognised that for every individual who believed that they were
scored by a shift manager who was a “hard marker”, or by one or more shift managers who
lacked familiarity, another individual may have similar complaints but perhaps in respect of
different shift managers. Consequently, any universal recalculation to potentially avoid the
perceived subjectivity of certain shift managers would introduce further subjectivity in the
form of various employees’ individual perception of the various shift managers. If, as was
proposed by the MUA, the scores of shift managers who did not directly supervise the work
of an employee were removed as part of any recalculation further complaint would inevitably
emerge if the shift managers score that was removed was a “soft marker”.
Scoring of Less than Three - Not Meeting Expectations
[64] The applicants complained about the alleged incongruity that arose when they
received scores of less than three in a particular job performance criterion, when there had
been no previous record of warning or concern regarding that job performance criterion. A
score of three indicated that the individual met expectations in respect to particular job
performance criteria.
[65] It is understandable that a person would be surprised to discover that they received a
score indicating that they did not meet expectations in respect to, for example, work
attendance, when they had never received any form of warning or other indication that their
work attendance was not satisfactory. However, when one examines the particular
terminology that was used in the scoring forms which were completed by shift managers, the
test that the shift managers were required to apply was not as simple as it might initially
appear.
[66] The shift managers were not making an assessment that was as clinical as either
meeting or not meeting an expectation in respect to a particular job performance criterion. The
shift managers were required to score an individual along a continuum between one and five,
where one equated with not meeting expectations, and five identified the individual as far
exceeding expectations. Consequently, the shift managers were required to provide a score
which recognised variable degrees as opposed to a yes or no or true or false election.
[67] The variation for scoring is reinforced by the terminology of the question asked and
for which the ranking is sought. For example, the question that was included on the employee
performance score form in respect to the attendance job performance criterion was;
“Attendance is outstanding and always follows standard procedures when unable to attend
for work.” Therefore, the question is not whether or not the employee meets attendance
expectations, but rather, an assessment involving a ranking between one and five as to any
outstanding attendance and associated practices.
[2016] FWC 2335
[68] Consequently, a detailed examination of the assessments undertaken by the shift
managers cannot be properly compared with employment history records which include an
absence of prior recorded problem. The scoring of the shift managers which ranked some
individuals beneath expectation, that is less than a score of three, cannot be translated into
some error said to have arisen from the absence of any prior record of identified concern or
inadequacy. The assessments made by the shift managers as part of the selection process
involved entirely different considerations to those that would be relevant to the ordinary day-
to-day identification of any job performance concerns.
Productivity Discrepancies
[69] The selection for crane driving positions included scoring based on certain
productivity results. The productivity results were obtained from data which produced figures
that were applied on a gang by gang basis. The applicants’ made complaint that the
productivity results unfairly impacted upon certain gangs, who were often required to perform
the more difficult functions which necessarily involved a lower number of container
movements.
[70] The MUA proposed that the productivity scores should be recalculated to reflect the
average of the container movements performed on each individual vessel, as opposed to a
gang by gang basis. The proposed rectification of this particular aspect of the applicants’
grievances clearly reflected that it was an attempt to revisit a particular component of the
mechanism of the selection process, rather than an identification of some error or
misapplication of the selection process.
[71] During the proceedings, the Parties recognised that there were a variety of different
mechanisms that could be used to establish some productivity scoring and that the various
mechanisms each had strengths and weaknesses. In some cases, one mechanism may
advantage some employees and disadvantage other employees. Broadly speaking, there was
not one particular mechanism which could be said to be perfect or necessarily better than
another.
[72] Importantly however, the selection process had determined to use a mechanism which
derived a productivity measure on a gang by gang basis, and the evidence did not disclose any
identified error or misapplication in this particular component of the selection process.
Skill Recognition
[73] A number of the applicants claimed that they had not been given scores in respect of
particular skills for which they should have been recognised. The most notable omission was
the score that was indicated for the skill of pinman. There was also an absence of any score
for recognition of particular clerical skills, which were said to have been utilised in the
relevant assessment period.
[74] The evidence disclosed that the absence of any scoring connected with recognition for
the pinman skill and that for certain clerical skills, arose from the means by which Patrick
identified skill utilisation of individuals in the relevant assessment period. Patrick used its
payroll records as the means to identify whether any particular individual had utilised certain
skills during the assessment period.
[2016] FWC 2335
[75] The payroll records were apparently not entirely reflective of the actual utilisation of
certain skills. In the case of the pinman skill, the payroll records made no identification of the
utilisation of that skill during the assessment period. As a result, no employee was identified
as utilising the pinman skill, and therefore nobody received any score at all for utilisation of
the pinman skill. Similarly, certain clerical skills were apparently not identified via the use of
the payroll data.
[76] The absence of any identification and recognition for the utilisation of these skills,
although conceivably an error in the intended application of the selection process, were
matters of universal impact rather than errors that could be identified as having perpetrated a
particular unfairness on an individual or group of individuals, such as the applicants.
Consequently, although this aspect of the applicants’ grievances appeared to have established
some apparent misapplication of what was contemplated to be part of the selection process, it
would seem to be futile to attempt to review all of the scores, when no one achieved any
particular advantage (or disadvantage) from the absence of any scoring for the pinman skill.
Further, the selection process envisaged that payroll records would be used as the means to
identify skills recognition, and it was only subsequently found to have been somewhat
inadequate.
Conclusion
[77] The determination of the dispute in this instance has involved a requirement for the
Commission to examine the personal grievances of a selected group of the 61 individual
applicants. These grievances involved complaints about the selection of the applicants for
redundancy in circumstances where the employer was implementing significant workplace
change, including the introduction of automation technology, and the associated restructuring
of its container terminal operations at Port Botany.
[78] The applicants were aggrieved because they believed that their selection for
redundancy involved unfair treatment. The applicants had activated “internal” personal
grievance procedures, which had failed to satisfy their complaints and they (or more
accurately the MUA on their behalf), subsequently referred the grievances to the Commission
via the DSP in the Agreement.
[79] The application made via the DSP was the subject of jurisdictional challenge from
Patrick. Upon examination of the various aspects of jurisdictional challenge, the Commission
has determined that the jurisdictional objections are without foundation. The Commission has
proceeded to determine the applicants’ grievances via the power of private arbitration
provided by the combined operation of the PGP and the DSP terms of the Agreement.
[80] The Commission has examined the various aspects of the applicants’ personal
grievances. The particular matters of complaint included, in summary: (a); the alleged
subjectivity of shift managers scoring; (b); scoring of a figure less than three without record of
prior concern; (c); aspects of alleged unfairness in productivity scoring; and (d); the absence
of scoring for recognition of particular skills.
[81] The Commission has concluded that the various grievances raised by the applicants do
not contain error, misapplication or other mistakes such that unfairness was perpetrated or
visited upon the applicants, such that the Commission should intervene. However, the
[2016] FWC 2335
grievances of the applicants were not entirely without foundation. In the particular
circumstances of this case, which involved the introduction of significant workplace change,
there would always be an understandable level of dissatisfaction with the result of any process
that was used for selecting those employees who would be made redundant.
[82] The selection process, and the implementation of that process by Patrick, was not
perfect but it would be unrealistic to expect such a significant workplace change to occur
without fault or residual complaint. A balanced and comprehensive analysis of the selection
process and its implementation, has established that it should be firmly endorsed. The
selection process and the manner of its ultimate implementation (following the further
6
| Decision of Sams DP | ), should be recognised as a comprehensive, transparent and objectively |
fair system for undertaking the difficult and unpleasant task of determining which employees
were to have their employment terminated for entirely no fault of their own.
[83] It should be noted that various commendable aspects of the selection process, and its
ultimate implementation, can be attributed to the diligence and persistence of the MUA, its
officials, and its delegates at Patrick, Port Botany. The redundancies arising from the
introduction of automation at Port Botany terminal would always be resisted and challenged
by the MUA. That challenge, although inevitable, and at times acerbic, ultimately contributed
to a redundancy selection process which was, although not perfect, a process without
significant fault, such that all of the affected employees should be confident that it ultimately
established a fair, merit based outcome.
[84] As a consequence of the conclusions that have been reached, the Commission has
determined that the grievances of the applicants have not involved any unfair treatment or
other basis to warrant the intervention of the Commission. In the circumstances, the
Commission declines to disturb the determinations that were made by Patrick in respect to the
restructuring of the Port Botany terminal, following the introduction of automation
technology.
[85] Therefore, the determination and Orders sought by the MUA on behalf of the
applicants are refused, and the application is dismissed accordingly.
COMMISSIONER
Appearances:
Mr A Slevin of Counsel, with Mr A Jacka appeared for The Maritime Union of Australia on
behalf of the applicants.
Mr J Darams of Counsel with Mr M Stokes of Seyfarth Shaw Australia appeared for Patrick
Stevedores Holdings Pty Limited.
[2016] FWC 2335
Hearing details:
2015.
Sydney:
December 15, 16
Printed by authority of the Commonwealth Government Printer
<Price code C, PR579028>
[2016] FWC 2335
[2016] FWC 2335
1
Exhibit 15.
2
Darren McCarthy and Others v Patrick Stevedores Holdings Pty Ltd [2016] FWC
3
Maritime Union of Australia v Patrick Stevedores Holdings Pty Limited [2014] FWC 2651.
4
The Australasian Meat Industry Employees Union v Golden Cockrell Pty Limited [2014] FWCFB 7447.
5
Exhibit 15 @ paragraph 15.
6
Maritime Union of Australia v Patrick Stevedores Holdings Pty Limited [2015] FWC 1280.
2