National Union of Workers v Queensland Property Investments Pty Ltd T/A Woolworths Ltd

[2015] FWC 5719

[2015] FWC 5719

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739 - Application to deal with a dispute

National Union of Workers
v
Queensland Property Investments Pty Ltd T/A Woolworths Ltd
(C2015/4604)

COMMISSIONER ROE MELBOURNE, 20 AUGUST 2015

Resolution of dispute in accordance with the dispute resolution procedure of the National Union of Workers – Queensland Property Investments Pty Ltd Melbourne Regional Distribution Centre Enterprise Agreement 2013. Dispute concerning whether operational changes proposed by Woolworths which will reduce the number of afternoon shift employees are consistent with the Agreement.

[1] The dispute concerns the implementation of operational changes proposed by Woolworths. The NUW say that the proposal is not consistent with the Queensland Property Investments Pty Ltd Melbourne Regional Distribution Centre Enterprise Agreement 2013 (the Agreement) because it would breach Clause 6.3.5(a) of the Agreement.

“6.3.5 Use of casuals

(a) The Company intends to maximise the use of weekly employment, consistent with operational requirements. Casual employment will not be used to displace full time or part-time employment”

[2] The parties agree and I am satisfied that the disputes resolution procedure of the Agreement has been followed, that the dispute has not been able to be resolved by conciliation, that the dispute is one that is within the scope of the disputes resolution clause and that I am able to resolve the dispute by arbitration.

[3] Woolworths propose to cease picking of product in the warehouse whether on the manual or automated line after 8pm on Tuesdays, Wednesdays and Thursdays throughout much of the year. This will significantly reduce the number of workers required on afternoon shift on those days. Woolworths say that there has been a shift in the volume of goods required by the Woolworths stores from Tuesdays, Wednesdays and Thursdays to the other days of the week. Woolworths also say that it can generally handle the volume of manual and automated work on Tuesdays, Wednesdays and Thursdays within the hours of 6am and 8pm. They say that to do so is more efficient because it is cheaper, in that it avoids payment of afternoon shift penalty, and also because it enables better flow of work, particularly in the automated area.

[4] The Tuesday to Thursday work is currently covered as follows:

● Day shift from 6am to 4pm.
● The afternoon shift from 3pm to 12.30am.
● On almost all days there are a significant number of casual employees, particularly in the period from 4pm to 8pm.
● There is a small night shift.

[5] Woolworths intend to increase the number of employees in the period 6am to 8pm in order to improve the work efficiency and also to maximise the work done during this period.

[6] The NUW submit that full time and part time employees on the 6am to 4pm shift cannot work additional hours between 4pm and 8pm under the Agreement. Clause 6.1.5(b)(ii) states that additional hours for full time employees “can be worked Monday to Friday on the same shift (i.e. day/afternoon) as the full time employee’s contracted shift.” Woolworths argue that a day shift is defined as a shift which finishes before 8pm and an afternoon shift is a shift which finishes after 8pm. Accordingly if the contracted or usual shift is 6am to 4pm the day shift worker can work additional hours from 4pm to 8pm. I am satisfied that day shift employees are not prohibited from working additional hours from 4pm to 8pm. However, it is not in contention that currently full time and part time employees do not generally work additional hours between 4pm and 8pm. The full time employees generally seek to work additional full shifts. Most of the additional hours between 4pm and 8pm are being worked by casuals.

[7] Woolworths propose to reduce the number of permanent afternoon shifts working on Tuesday by 28, Wednesday by 34 and Thursday by 42. They intend to increase the number of permanent afternoon shifts on Monday by 2 and on Friday by 48. Some employees have volunteered for redundancy and this will provide some additional shift opportunities on afternoon shift on Monday and Friday. Woolworths propose to increase the number of day shifts from 6am to 4pm on Monday to Friday by 10 on each day and also to increase the number of 6am to 4pm shifts on Saturday by 20 and on Sunday by 15. Woolworths propose to introduce an additional 15 shifts on each day Monday to Friday from 10am to 8pm and also to introduce an additional 20 10am to 8pm shifts on Saturday.

[8] The Agreement provides that full time employees work day shift from 6am to 4pm and afternoon shift from 3pm to 12.30am. In addition different rosters within the span of hours can be worked by individual agreement. The span of hours for day work is from 6am to 8pm. There is an additional penalty payment of 30% for afternoon shift which is a shift finishing after 8pm and at or before 12.30am (Agreement Clauses 6.1.2, 8.1 and 8.3). An afternoon shift worker cannot be moved to another shift without their agreement (Agreement Clause 6.1.3(a)).

[9] Full time and part time employees could therefore only be rostered on the proposed 10am to 8pm shift by agreement. Woolworths’ stated objective is to have all lines in the warehouse for automated and manual work fully staffed during the period 6am to 8pm in order to ensure that there is generally no need for that work after 8pm. Woolworths propose to significantly reduce the numbers on the 3pm to 12.30am shift. However, Woolworths want the automated lines fully staffed during the period 6am to 8pm. The reduction in afternoon shift numbers will reduce the number of full time and part time employees in the period 4pm to 8pm. The reduction will be 28 on Tuesday, 34 on Wednesday, and 42 on Thursday. 15 new shifts from 10am to 8pm are being created on each of those days. It follows that even if all the new 10am to 8pm shifts are filled by new or existing full and/or part time workers there will be a further increase in the “additional hours available” for 4pm to 8pm shifts as follows: 13 on Tuesday, 19 on Wednesday and 27 on Thursday. Woolworths gave evidence that on occasion the numbers currently rostered on the day shift are less than optimal. This suggests that the number of 4pm to 8pm shifts available as additional hours may be greater.

[10] If there are insufficient volunteers amongst new or existing full time or part time workers to work rosters between 10am and 8pm and/or additional hours work between 4pm and 8pm, it will be necessary to employ an increased number of casuals from 4pm to 8pm. Almost all additional hours shifts from 4pm to 8pm are currently worked by casuals.

[11] The Agreement includes a preference hierarchy defined as follows:

“4.17 "Preference Hierarchy" means the following hierarchy, which applies throughout this agreement unless otherwise specified:

(a) Full-time employees;
(b) Part-time employees;
(c) Company casuals;
(d) Indirect-casuals.”

[12] The preference hierarchy applies to the allocation of higher duties, additional hours, flex up hours for part time workers, overtime, and public holiday work. It also has a role in recruitment.

[13] Additional hours which are likely to become available are advertised. Employees indicate a willingness to work and the available work (which may be less than the advertised work) is then allocated according to the preference hierarchy. The goals of the booking system are to offer more full length shifts and to minimise overlapping and shorter shifts. The Agreement Clause 7 which regulates the booking system includes the following note:

“Note: The Company can overlap shifts, only after all employees wishing to work hours or extended shifts have been accommodated” (Agreement Clause 7).

[14] Mr Soueid, NUW delegate, gave evidence that:

● He was not aware of any reduction in the volume of work on Tuesday, Wednesday and Thursday.
● On some occasions there were a significant number of casuals working beyond 8pm on Tuesday, Wednesday and Thursday.
● There had been a significant increase in the number of casuals in the past two years working between 4pm and 8pm on those days. Even though this was the quietest time of the year, in the period from 19 June to 2 August 2015 the number of casual shifts offered for booking were between 47 and 97 on each Tuesday, Wednesday and Thursday in that period. Most of those shifts were worked and in fact often the number engaged exceeded the number offered. In June 2013 the number of casuals engaged on Tuesdays was between 0 and 20, on Wednesdays between 0 and 37 and on Thursday between 0 and 13.
● The work done by the afternoon shift was not generally delivered until the next morning and therefore there was no reason why it needed to be finished by 8pm.
● There is plenty of work to be done on the afternoon shift and there is no reason why the manual and bulk sorting work needs to be done before 8pm. This work is generally done on the afternoon shift after 8pm now.
● At present it is generally the case that the automated work is finished by 8pm. However, Mr Soueid says that this is because the number of casuals working from 4pm to 8pm have increased.
● The night shift could start later leaving more work for the afternoon shift workers.
● He was not aware of any reduction in the number of employees on day shift so as to hold back work for afternoon shift.

[15] Mr Wilson, operations manager for Woolworths, gave evidence that:

● There had been a shift in volume requirement away from Tuesday, Wednesday and Thursday to the other days of the week. However, he could not specify the magnitude of the shift.
● The “family grouping” approach had been recently introduced which required the products of the same supermarket aisle to be packed together on a pallet or pallets. This reduces stores work at the supermarket.
● There is an optimum crew of one picker per aisle (22 in total) and 39 sorters and 14 in transport. If these numbers are maintained the system is working most quickly and efficiently. If these numbers are not maintained then product in the “family grouping” approach may not be properly synchronised. This is because each family grouping is a separate partial store order and a worker does not get the direction to work on the next partial store order until they have almost completed the first partial store order. The partial store order may involve product from different aisles. The picker in one aisle may finish their part of the partial store order before those in other aisles if there are not pickers in each aisle.
● It is generally possible on 40 weeks of the year to finish the automated picking work between the hours of 6am and 8pm.
● In the past the day shift headcount has been reduced in order to leave work for the afternoon shift workers. However, this is very inefficient.
● If on Tuesday, Wednesday and Thursday the production line is fully staffed between 6am and 8pm then all picking work can generally be completed.
● In order to maintain the output of the picking line after 4pm and finish the work by 8pm, Woolworths have been offering employees additional work between 4pm and 8pm. Most of this work is being done by casuals. Mr Wilson said that on occasion no casuals have been required but he could not recall the occasion and he accepted that it was not common.
● The overall proportion of casual workers used in the facility has not increased since 2013. However, the number of casuals used between 4pm and 8pm has increased.

[16] The parties agreed, and I accept, that I should adopt the approach to interpreting the Agreement set out by the Full Bench in AMIEU v Golden Cockerel Pty Ltd. 1

[17] The NUW argues that the effect of the changes being introduced by Woolworths is to increase the use of casuals between 4pm and 8pm at the expense of the afternoon shift employees. The NUW argues that this is not operationally necessary.

[18] It is well accepted that if a company has sound business reasons to shift work from one time of day to another then a job which is confined to that time can in some circumstances be regarded as redundant.

[19] It was accepted by Mr Wilson for Woolworths that the number of casual employees engaged between 4pm and 8pm has increased in recent times. The NUW argue that this has been done to reduce the amount of work available to the afternoon shift. Mr Wilson says that in order to ensure that the afternoon shift has adequate useful work Woolworths have rostered less than the desired number of workers on day shift and that this leads to inefficiencies particularly with the “partial store order” system.

[20] I am satisfied that:

● There has been a shift in volumes from Tuesday, Wednesday and Thursdays to other days of the week. The fact that Woolworths are proposing to increase significantly the number of shifts on Friday afternoon shift and on Saturday and Sunday day shifts supports this finding. I accept the evidence of Mr Wilson on this point.
● There has been an increase in the use of casual employees in the period from 4pm to 8pm on Tuesdays, Wednesdays and Thursdays.
● The automated work is generally able to be completed by 8pm on Tuesday, Wednesdays and Thursdays.
● The capacity to generally complete the work by 8pm has occurred partly because of a shift in work from Tuesday, Wednesday and Thursdays to other days of the week and partly due to the increased use of casual employees in the period from 4pm to 8pm.
● There are inefficiencies created by running the automated line with less than the full staffing complement particularly due to the increased need to use the “family grouping” for stores. I accept the evidence of Mr Wilson in this respect.
● There are cost savings to the company if the automated and manual picking work is completed by 8pm.
● There are bona fide business reasons to generally finish automated and manual picking by 8pm and to reduce the numbers rostered on afternoon shifts on Tuesday, Wednesday and Thursday.
● Because most deliveries are done the next day, it is possible for manual and other work to continue to be done on the afternoon shift and it would also be possible to shift the starting time of the night shift to provide more work for the afternoon shift. I accept the evidence of Mr Soueid in this respect. However, just because it is possible does not mean that Woolworths is required to do it.

[21] The first sentence of Clause 6.3.5: “The Company intends to maximise the use of weekly employment, consistent with operational requirements.” is aspirational. I am not satisfied that Woolworths is breaching this requirement.

[22] The second sentence however is mandatory, not aspirational. It provides that “Casual employment will not be used to displace full time or part-time employment.” This requires me to consider if the effect of the change proposed by Woolworths is to displace full or part time employment with casual employment. I consider that it must be a consequence of the change proposed to be inconsistent with the provision. If Woolworths made reasonable efforts consistent with the provisions of the Agreement to use full time or part time employment but employees do not choose to take up those opportunities then it could not be said that casual employment was being used to displace full time or part time employment.

[23] The NUW argue, and I accept, that it is not simply the changes which will occur after the latest changes are implemented which must be considered but also the changes which have already occurred as part of the process of implementing the goal of completing the picking work by 8pm. It is not in contention that one of these changes has been an increase in the use of casual employment in the period 4pm to 8pm.

[24] The first sentence of Clause 6.3.5 is a commitment to maximise the use of weekly employment provided it is consistent with operational requirements. Considered in this context the words “casual employment will not be used to displace full time or part-time employment” are about preventing changes where casual employment is being used to replace existing full time and part time employment.

[25] The NUW argue that read in context the words, “casual employment will not be used to displace full time or part-time employment”, mean that casual employment will not be used to displace full time or part time afternoon shift employment. They argue that, because afternoon shift workers cannot be obliged to move to day shift, if any of the current afternoon shift work is done by casuals at another time then this effectively means that they are being displaced by casual employees.

[26] Considered in context the provision in 6.3.5 is about the promotion and protection of full time and part time employment. There is no reason why it should not be given its natural meaning which is to look at the displacement of full time and part time employment by casual employment. I am not satisfied that it should be read as a general prohibition on changes to workforce composition or shifts. The word “employment” is used rather than “jobs” or “employees.” This word “employment” suggests a focus beyond a specific job on a specific shift.

[27] On the other hand the words “casual employment will not be used to displace full time or part-time employment” are not just a reference to the overall use of casual as opposed to full time or part time employment. If this was intended different words such as “the proportion of full time or part time employment will not be reduced” would have been used. The words “used” and “displaced” are active words which clearly refer to organisational changes which may be proposed during the life of the Agreement. The provision is intended to prevent those changes from involving the use of casual employment to displace full time and part time employment.

[28] It is necessary to consider whether or not finishing picking and packing work by 8pm will mean that casual labour displaces full time or part time employment. The use of casual labour between 4pm and 8pm has increased. It is now proposed to increase the number of shifts on afternoon and day shifts throughout the week by 230 and to decrease the number of afternoon shifts on Wednesday, Thursday and Friday afternoon by 104. A net total of 126, 9.5 hour, shifts are being created. Of course the creation of the new shifts may result in some changes to the pattern of additional hours work offered at times other than 3pm to 12.30am on Tuesday, Wednesday and Thursday. However, I do not take this into account as this is not a change to full and part time employment. To the extent that casual employment rather than full and part time employment has been regularly used for these additional hours the use of casual employment may be decreased by the creation of these shifts. I doubt that this consideration would be significant and consistent. I have not taken it into account.

[29] The data provided by Mr Soueid showed an average of about 60 casuals per day in the 4pm to 8pm period on Tuesdays, Wednesdays and Thursdays last month. In 2013 the work by casuals was not insignificant although it was considerably less. If we assume an increase of 50 shifts per day then that is a total of 150 additional casual four hour shifts per week. I am satisfied that this increase should be considered as a consequence of the proposed change to finish the work by 8pm on the three days in question.

[30] As discussed earlier, there are insufficient new 10am to 8pm shifts being created to offset the decrease in the afternoon shift now being proposed. This will result in a minimum net addition to the number of 4pm to 8pm shifts of 59. If these are all filled by casuals this will bring the total increase in casual four hour shifts to 209 per week. This is a total of 836 hours. The number might be greater than that because Woolworths want to fully staff the automated lines from 6am to 8pm. However, the total additional casual hours is likely to be less than the total increase of 126, 9.5 hour shifts or 1,197 hours being created for full and part time employees.

[31] I am satisfied that if the new shifts are filled by full time and part time employees and full and part time employees have the opportunity consistent with the preference hierarchy to work the increased additional hours from 4pm to 8pm then the overall effect is likely to be no reduction in full time and part time employment.

[32] If a significant proportion of the new shifts are filled by casuals, and not full time and part time employees, then there will definitely be an increase in the use of casual labour and a reduction in the use of full time or part time labour. I am satisfied that one of the reasons for the change is to save the costs of the afternoon shift penalty payments. Casual labour from 4pm to 8pm is cheaper than full time or part time work which attracts the afternoon shift penalty of 30%. I am satisfied that if reasonable efforts are not made to fill the new shifts by full and part time workers and if as a result most of the new shifts are filled by casuals this would be casual employment being used to displace full time or part time employment contrary to Clause 6.3.5.

[33] The significant increase in the number of additional hours shifts from 4pm to 8pm is a key concern of the NUW. As discussed earlier the Agreement requires that those additional hours be offered first to full and part time employees. However, those employees generally seek additional full shifts not 4 additional hours. I am satisfied that day shift employees are not prevented from working the additional hours and must be provided first option to work the hours under the preference hierarchy.

[34] The NUW argue that the proposal to offer the additional hours from 4pm to 8pm is contrary to the note in the additional hours clause 7 referred to earlier. “Note: The Company can overlap shifts, only after all employees wishing to work hours or extended shifts have been accommodated” (Agreement Clause 7).

[35] It is clear that the note relates to the use of additional hours to overlap regular shifts. This is to reinforce the priority given to offering additional hours as full length shifts. The NUW submit that the 4pm to 8pm shift is an overlapping shift, given that the specified or contracted shifts are 6am to 4pm and 3pm to 12.30am. The NUW say that 4pm to 8pm work can only be offered after all employees wishing to work hours or extended shifts have been accommodated. The NUW say that the existing afternoon shift employees clearly want to work the hours as part of their normal shift. Woolworths argue that the note is a guide not an enforceable term of the Agreement. Woolworths also argue that additional hours provisions only relate to shifts which are required or available; that is where and when there is demand for labour. Woolworths argue that the additional demand for labour in this case is between 6am and 8pm. Woolworths say that they will be offering additional hours within the span of 6am to 8pm. Presumably to be consistent with the Agreement Woolworths will accommodate those wishing to extend their shift within the span of 6am to 8pm and those wanting to work available full additional shifts within that span prior to offering stand alone 4pm to 8pm additional hours shifts.

[36] I am satisfied that Woolworths is required by Clause 7 to maximise the opportunity for full shifts and to avoid short and overlapping shifts when organising the available additional hours. However, it is the available additional hours which are to be organised and there is no requirement to create additional hours which are not required by the business. Woolworths say that the available additional hours are mainly between 6am and 8pm on the specified days. The Agreement requires that those who want to work available full shifts or available additional hours on their own shift are to be accommodated before stand alone 4pm to 8pm shifts are offered.

[37] I am not satisfied that the provisions of the Agreement concerning additional hours prevent the new shifts and the increase in additional hours from 4pm to 8pm from being mainly filled by full and part time employees. As a consequence the change will not necessarily result in displacement of full time or part time employment. The provisions of the Agreement referred to earlier concerning additional hours being on the normal contracted shift and the note concerning overlapping shifts may have some impact on the number of casual employees when additional hours work is required but they do not alter this conclusion.

[38] I am therefore satisfied that the proposal to complete picking work by 8pm will not be inconsistent with Clause 6.3.5 if Woolworths make reasonable efforts which are consistent with the Agreement to fill the new shifts by full time and part time employees and to organise and offer additional hours to full and part time employees consistent with the Agreement. I am satisfied that it is Woolworths’ intention to generally fill the new shifts by full time or part time employees and to organise and offer additional hours consistent with the Agreement. However, it is not clear that there are adequate mechanisms to ensure that this will occur.

[39] I determine that, subject to implementation of the following, the Woolworths change proposal is not inconsistent with Clause 6.3.5. I determine that the following process should be implemented to ensure that the implementation is not inconsistent with Clause 6.3.5.

a) Woolworths to confirm in writing to the NUW within three days of this decision its intention to fill the 230 shifts created by the change with full and part time employees. Either party can seek a relisting of this matter should this not be the case.

b) The parties should meet within the next seven days to discuss the process for implementing the Woolworths’ proposal in a manner which maximises full and part time employment consistent with operational requirements. The objective of the meeting is to ensure that there are reasonable opportunities consistent with the Agreement to fill the new positions created by the change by full time and part time employees and to organise and allocate additional hours likely to be created consistent with the Agreement. At the meeting the parties are to consider, amongst other things, the following:

• How Woolworths propose to fill the new shifts by full time and part time employees.



• How can likely available additional hours from 6am to 8pm best be organised and offered consistent with the Agreement?



• Having regard to the Agreement provision in respect to additional and flex hours, what is the likely use of additional hours by full time or part time employees to meet requirements from 4pm to 8pm after the implementation of the changes?



• What is the likely use of casual employees from 4pm to 8pm after the implementation of the proposed changes?



• How is it intended to accommodate those afternoon shift employees who wish to move to work on different days/hours and those who are seeking to move to other sites?

c) The use of casual employment during the period 6am to 8pm and 4pm to 8pm in particular should be monitored regularly over the next twelve months in consultation with the NUW.

COMMISSIONER

Appearances:

Mr D Mujkic appeared for the NUW

Mr R West of Counsel appeared for the Respondent.

Hearing details:

2015

Melbourne

August 7

Final written submissions:

Respondent’s final written submissions filed 11 August 2015.

NUW’s final written submissions filed 14 August 2015.

 1   [2014] FWCFB 7447.

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