The Australian Workers' Union v ACI Operations Pty Ltd T/A O-I Adelaide

[2010] FWA 7222

Note: An appeal pursuant to s.604 (C2010/4982) was lodged against this decision.

[2010] FWA 7222

FAIR WORK AUSTRALIA

DECISION

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

The Australian Workers' Union
v
ACI Operations Pty Ltd T/A O-I Adelaide
(C2010/492)

SENIOR DEPUTY PRESIDENT O'CALLAGHAN ADELAIDE, 16 SEPTEMBER 2010

Matter in dispute relates to utility days.

[1] This decision arises from an application made by the Australian Workers’ Union (AWU) under section 739 of the Fair Work Act 2009 on 12 August 2010. This application was the subject of an extensive conference with me on 2 September 2010. The matter in dispute related to the operation of the O-I Adelaide Plant Certified Agreement (Glassworkers) 2009 (the Agreement) and in particular, the extent to which ACI Operations Pty Ltd trading as O-I Adelaide (O-I) was entitled to require employees who were not scheduled to undertake planned training activities to work on days nominated by the Agreement as utility days.

[2] The parties were unable to reach agreement on this issue and proposed that this substantive issue should be referred to Fair Work Australia for arbitration pursuant to the dispute resolution provisions of the Agreement.

[3] An interim issue was also the subject of disagreement. This related to the application of the Agreement dispute resolution provisions and the extent to which these provisions require the continuation of the arrangements which currently apply whilst the matter in dispute is being determined. The parties were unable to reach agreement on what arrangements should apply whilst the matter was being determined by Fair Work Australia. This matter was also referred to Fair Work Australia for determination in advance of the substantive matter in dispute.

[4] Dates for the provision of written material by both parties were agreed. In addition, I sought confirmation from both parties about the extent to which there was no disagreement that, having convened the conciliation conference, I should then undertake the arbitration of these issues. This confirmation was provided. These arrangements were then confirmed by way of a statement issued on 2nd September 2010 which invited the provision and exchange of information by 10 September 2010 on the interim issue and by Directions issued on 3 September 2010 addressing the provision of submissions on the substantive issue.

[5] Subsequent to the conference, I received correspondence dated 8 September 2010 from Ms Segbedzi of Zeitz Workplace Lawyers, representing O-I. This correspondence asserted that the Agreement was not an "enterprise agreement" within the meaning of the Fair Work Act 2009 (the FW Act) but was a pre-reform certified agreement made under the Workplace Relations Act 1996 (the WR Act) that was extended and varied pursuant to Schedule 7, Part 2, clause 2A of the WR Act. The Agreement is a WR Act instrument within the meaning of the Fair Work Act (Transitional Provisions Consequential Amendments) Act 2009, which became a ‘transitional instrument’ pursuant to Schedule 3, Part 2, Item 3 of the TPCA Act. Ms Segbedzi asserted that the application, made under the Fair Work Act was without foundation and should be withdrawn. Further, that Fair Work Australia had no jurisdiction to arbitrate this dispute under the FW Act.

[6] The AWU responded to this correspondence on the same day. The AWU conceded that the agreement was not made under the Fair Work Act and advised that part 2 of the application had been incorrectly completed with respect to the type of instrument concerned. The AWU requested that section 586 of the FW Act be utilised to amend the original application.

[7] On 9 September 2010 Ms Segbedzi responded on behalf of O-I, to the effect that "the admission of an ‘incorrectly ticked box’ is an admission of a substantial jurisdictional error". Ms Segbedzi asserted that the conciliation on 2 September 2010 and subsequent directions and statement were without jurisdiction. Ms Segbedzi asserted that section 586 of the FW Act was not able to be utilised to correct the error because the application should have been made under the WR Act. As a consequence it was argued that the application should be withdrawn or dismissed for want of jurisdiction. Ms Segbedzi asserted that if Fair Work Australia was minded to allow a correction to the application, O-I further objected to the matter proceeding on the basis that the agreement was a pre-reform agreement made under the WR Act but was varied and extended on 1 July 2009. As such, she asserted that the Agreement became a "collective agreement" and therefore a workplace agreement under the WR Act. Accordingly it was asserted that the agreement was no longer a certified agreement made under the WR Act on or before 26 March 2006.

[8] The AWU responded to this correspondence on 10 September 2010. In this correspondence the AWU refuted the O-I position and sought some direction from Fair Work Australia.

[9] Having considered this material I issued further directions to the parties on 10 September 2010. In this advice I noted that the Agreement was a certified agreement made under the Workplace Relations Act 1996. I also noted that Schedule 19 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 appeared to confirm the continued operation of the WR Act with specific reference to disputes to be dealt with by the former Australian Industrial Relations Commission. I advised that I considered this section effectively preserved the operation of the former section 170LW of the WR Act relative to an agreement of this nature. I noted that the AWU application was made pursuant to Form F10 and that this form provided for applications to be progressed pursuant to either the FW Act 2009 or the WR Act, depending on the advice provided relative to the type of instrument involved. I concluded that it was most likely that the AWU had erroneously recorded the Agreement as an agreement reached under the FW Act and that an error of this nature was appropriately remedied by section 586 of the FW Act. I advised that:

“[7] Absent any objection to the contrary, I intend to make that correction, which will have the effect of establishing section 170LW of the former Workplace Relations Act as the basis for the application, with effect from 5.00 pm Monday, 13 September 2010.

[8] In the event that an objection to this approach is received before that time, this issue will be listed for hearing, possibly by telephone, soon after that date.

[9] If there is no objection to the approach proposed, I will extend the time for any written submissions on the preliminary issue relative to the effect of the custom and practice provisions of the dispute resolution provision within the Agreement, until 5.00 pm on Tuesday, 14 September 2010.”

[10] No advice relative to those directions was received within the designated time period.

[11] On 14 September 2010 I received further correspondence from Ms Segbedzi. This stated:

“We refer to the Directions of FWA issued 10 September 2010.

We wish to advise that our Client has taken the opportunity to re-consider its position in light of the Tribunal’s rulings as to jurisdiction. Pursuant to section 105 of the pre-reform WR Act, we are instructed that our client wishes to object to the Tribunal as currently constituted exercising arbitration powers in relation to the dispute.

As such, our client will not be filing any submissions pursuant to the Directions.”

[12] Early on 15 September 2010 I received submissions from the AWU which were prefaced by an apology that these had been delayed by an administrative error. The AWU curiously requested that these submissions not be filed with O-I. I have taken it that this request reflects concern that, should the matter be reallocated, O-I would then have the advantage of considering the AWU submissions without having made any of its own.

[13] For the sake of completeness I note that a further advice was received from the AWU on 15 September 2010 to the effect that the AWU requested that I provide advice to clarify the O-I reference to section 105 of the WR Act.

[14] Consequently, this decision now deals with three related issues. Firstly there is the O-I objection to my exercising arbitration powers. Secondly, the issue of how the AWU submissions should be addressed and thirdly, the operation of the Agreement dispute resolution procedures.

[15] Ms Segbedzi’s correspondence refers to section 105 of the pre-reform WR Act. In this respect I have concluded that she in fact intended to refer to section 105 of the WR Act as it operated prior to March 2006. Prior to that date section 105 of the WR Act provided that a member of the Commission who had exercised conciliation powers in relation to an industrial dispute should not exercise arbitration powers if a party to the arbitration proceeding objects. The amendments made in March 2006 substantially changed the WR Act and this section was not preserved in the same form. More particularly, Schedule 19 of the Fair Work (Transitional Provisions and Consequential Amendments) Act does not preserve section 105 of the WR Act as it existed prior to March 2006.

[16] Consequently, I do not consider that section 105 of the pre-March 2006 WR Act provides a legislative basis upon which O-I can found a request that I disqualify myself from further involvement in these proceedings.

[17] I have considered the extent to which the principles of natural justice dictate that I should do so. In this regard I note that, in the course of the 2 September 2010 conference I made no findings or assessments of the competing claims. The parties willingly acceded to my involvement in the arbitration and the changed O-I position appears to emanate from the directions I issued on 10 September 2010. There is nothing in the Agreement dispute resolution provisions which supports the position that I should disqualify myself at this point.

[18] In these circumstances I am not persuaded that I should disqualify myself from further involvement in the arbitration of this matter and I decline to do so.

[19] The directions issued on 10 September 2010 made clear the requirement that submissions relative to the interim issue as to the effect of the custom and practice provisions of the disputes resolution procedure in the Agreement should be forwarded to my office by 5.00 pm on Tuesday, 14 September 2010. I have concluded from the correspondence from Ms Segbedzi that O-I will not be forwarding submissions. The AWU submissions were received before 9.00 am on 15 September 2010. Had these submissions been provided to O-I I would have taken them into account on the basis that there is a reasonable explanation for the delay and, given the position adopted by O-I, no disadvantage to the employer. However, absent these submissions being provided to O-I, I have not considered them in reaching a conclusion.

[20] This leaves the final issue, relative to the operation of the Agreement dispute resolution procedure. Clause 13 of the Agreement states:

“13. AVOIDANCE OF INDUSTRIAL DISPUTES

The parties to this Agreement shall observe the Avoidance of Disputes and Grievance Procedure.

It is a fundamental requirement of this Agreement that this Clause be observed in its entirety by all parties to this Agreement.

On all occasions, any issue, grievance or dispute over any matter between the parties to this Agreement shall be settled in accordance with this procedure without resorting to any industrial action. This shall apply whether the matter in dispute relates directly to a matter dealt with by this Agreement, or not.

Where an issue, grievance or dispute arises, the matter will be initially discussed and resolved between the employee (and if the employee so desires, an employee representative) and the employee’s immediate supervisor.

If the issue, grievance or dispute remains unresolved after discussions outline above, the employee (and if the employee so desires, an employee representative and /or union official) and more senior management as appropriate (including Employer Organisation if required) shall discuss and resolve the matter.

Notification of an employee grievance shall be made in the first instance in writing. Such written notification shall be dated, briefly describe the grievance and copies of such notice shall be given to the Supervisor.

If the dispute still remains unresolved, either party may refer the dispute to the Australian Industrial Relations Commission or where agreed a private arbiter for conciliation and, if necessary arbitration.

The parties agree to be bound by the decision of the Australian Industrial Relations Commission or where applicable the agreed private arbiter.

While all the above steps are being undertaken, no industrial action of any nature, either directly or indirectly are to be placed on the performance of work whether subject to this Agreement or not.

The employer shall ensure that all practices applied during the operation of the procedure are in accordance with safe working practices and consistent with established custom and practice at the workplace.

This dispute resolution procedure does not apply to Occupational Health and Safety matters. It is expected that the Occupational Health & Safety Representatives will follow the relevant procedures in the resolution of any health and safety matters.”

[21] The agreement provides for a 35-hour week. It provides for rostered utility days consistent with the 35-hour week and for the continuation of use of these utility days to meet and satisfy ongoing identified job-related training needs. The matter which is fundamentally in dispute between the parties goes to the extent to which employees can be required to work on these utility days. The parties have the opportunity to make submissions with respect to this substantive issue in accordance with the directions which have previously been issued.

[22] The interim issue currently before me goes to the extent to which the dispute resolution provisions of the Agreement require that O-I maintain existing arrangements whilst this substantive issue is being resolved.

[23] The advice provided to me at the conference on 2 September 2010, is to the effect that the existing practice and custom is that employees who are not required to participate in specified training activities have not been required to attend at work on rostered utility days. O-I made it clear at the 2 September 2010 conference that whilst the substantive issue was being resolved it considered that it had the ability to require employees to report for work on rostered utility days. The parties referred to correspondence from O-I to employees covered by the Agreement which required a change in the operation of utility days from the practice of the previous few years.

[24] I consider that the Agreement dispute resolution provisions prohibit any industrial action whilst a matter is being resolved and require O-I to ensure safe working practices and, critical to this issue, that these practices are consistent with established custom and practice at the workplace.

[25] I am satisfied that the custom and practice at the workplace is such that employees have not been required to report for work on rostered utility days where there is no training scheduled. It may be that the determination of the fundamental issue in dispute changes this custom and practice, but until such time as that issue is determined, I consider that the Agreement dispute resolution provisions require O-I to maintain that custom and practice. It follows that any instructions from O-I to employees covered by the Agreement should not be implemented in so far as this requires a change in the custom and practice which currently operates.

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