The Australian Workers' Union v BlueScope Steel (AIS) Port Kembla
[2015] FWC 3214
•22 MAY 2015
| [2015] FWC 3214 [Note: An appeal pursuant to s.604 (C2015/4327) was lodged against this decision - refer to Full Bench decision dated 27 August 2015 [[2015] FWCFB 5615] for result of appeal.] |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.739 - Application to deal with a dispute
The Australian Workers' Union
v
BlueScope Steel (AIS) Port Kembla
(C2014/5556)
The Australian Workers’ Union
V
Bluescope Steel (AIS) Port Kembla
(C2014/5383)Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia
v
BlueScope Steel (AIS) Port Kembla
(C2014/1256)
COMMISSIONER RIORDAN | SYDNEY, 22 MAY 2015 |
s.739 Application to deal with a dispute.
[1] This decision is in relation to a proposed reorganisation of the workforce by Bluescope Steel (AIS) Pty Ltd (Bluescope) in three of its areas of production, namely, the Plate Mill, the Hot Strip Mill and Hot Coil Processing and Dispatch.
[2] Put simply, Bluescope is seeking to introduce a Trade Operator Model into its workforce. This model would allow suitably trained tradespersons to perform traditional Operator tasks on the production line, in each of the identified areas, for up to 50% of their working time. If Bluescope is able to introduce this flexibility into its workforce, then a number of Operator positions would be surplus to requirements. These redundant positions would provide a significant on-going financial benefit for Bluescope.
[3] The Australian Workers’ Union, Port Kembla Branch, the Australian Manufacturing Workers’ Union, NSW Branch and the Communication Electrical and Plumbing Union, NSW Branch (the Unions) have all opposed the proposed restructure.
[4] The Trade Operator Model restructure had its genesis with the “Hours of Work” proposal to introduce twelve hour shifts into the Plate Mill.
[5] Relevantly, my decision in that matter [2015] FWC 710 of 30 January 2015 was overturned and quashed by a Full Bench of the Commission on 2 March 2015 [2015] FWCFB 1798.
[6] This decision of the Full Bench provides clarity and certainty in relation to the decision making powers of the Commission in relation to the provisions of the Bluescope Steel Port Kembla Steelworks Agreement 2012 1(the Agreement).
[7] After allowing the parties an opportunity to digest the decision of the Full Bench, I listed the matter for submissions on 24 April 2015 in relation to the effects of this decision on the current matter.
[8] I thank the parties for their written and oral submission in relation to this issue. In reaching my decision, I have taken into account all of the detailed submissions, evidence and documents that have been tendered by the parties during these lengthy proceedings.
[9] The Full Bench decision raises a threshold issue which must be resolved before any consideration of the substantive matter.
[10] Relevantly, the Full Bench said:
“[12]It is of course appropriate, when construing a particular provision in an enterprise agreement to have regard to the terms of the agreement as a whole. In some circumstances the proper construction of a particular clause can only be understood by considering other clauses in the agreement.
[13]In the agreement under consideration it is clear that Clause 35.2 is a general provision relating to the introduction of change. As a matter of construction a specific provision dealing with a particular topic will normally override a more general provision dealing with the same topic.”
Agreement Provisions
[11] There are a number of important clauses in the Agreement which must be considered and given their plain and ordinary meaning:
“5. No Extra Claims
Parties to this Agreement will not make any further claims prior to the nominal expiry date of the Agreement. This does not however prevent the implementation of change or raising and progressing of issues where provided for by the terms or processes of this Agreement.
6. Rates of Pay
The minimum rates of pay for any classification, subject to the other provisions, are set out in:
6.1(b) Table 2 - Graded Trades Rates of Pay
Description | Rate of pay per 38 hour week effective from the first full pay period on or after 23 October 2012 $ |
1. Electrical Trades (inclusive of a tool allowance of $16.00 per 38-hour week) | |
Electrical Tradesperson (E) Base Level | 938.40 |
Electrical Tradesperson (E) Level 1 | 971.60 |
Electrical Tradesperson (E) Level 2 | 1011.80 |
Electrical Tradesperson (E) Level 3 | 1051.50 |
Electrical Tradesperson (E) Level4 | 1094.70 |
Electrical Tradesperson (E) Level 5 | 1120.30 |
Electrical Tradesperson (E) Level 6 | 1183.60 |
2. Mechanical Trades (inclusive of a tool allowance of $16.00 per 38-hour week) | |
Graded Tradesperson (M) Base Level | 915.00 |
Graded Tradesperson (M) Level 1 | 946.60 |
Graded Tradesperson (M) Level 2 | 985.10 |
Graded Tradesperson (M) Level 3 | 1023.90 |
Graded Tradesperson (M) Level 4 | 1065.60 |
Graded Tradesperson (M) Level 5 | 1090.00 |
Graded Tradesperson (M) Level 6 | 1150.30 |
3. Refractory Installation Bricklayers | |
Refractory Installation Bricklayer - Base Level | 950.20 |
Refractory Installation Bricklayer - Level 1 | 968.00 |
Refractory Installation Bricklayer - Level 2 | 1010.00 |
Refractory Installation Bricklayer - Level 3 | 1030.70 |
Refractory Installation Bricklayer - Level 4 | 1061.90 |
32. Contract of Employment
32.4 Performance of Work - Employees must perform such work as the Company may, from time to time reasonably require. An employee who does not perform or attend for his or her duty will lose his or her pay for the actual time of non-attendance or non-performance. This does not apply to approved paid leave in accordance with this Agreement.
35. Procedure for Resolving Claims, Issues and Disputes
35.1 Dispute Resolution Procedure
35.1.1 This procedure applies with respect to disputes about matters arising under this Agreement and in relation to the National Employment Standards.
35.1.2 At all stages of the procedure, a party to the dispute may appoint another person, organisation or association, which may include a Union, to accompany or represent them in relation to the dispute.
35.1.3 In the first instance, the parties to the dispute must try to resolve the dispute at the workplace level, by discussions between the employee or employees and relevant supervisors. The relevant supervisor will take all reasonable steps to reply to the employee as soon as possible. If the reply cannot be given by the end of the next ordinary working shift, a progress report will be given.
35.1.4 If the matter is not resolved according to clause 35.1.3 above, the matter will be referred to the appropriate line manager who will attempt to resolve the matter. The relevant line manager will take all reasonable steps to reply to the employee as soon as possible. If the reply cannot be given by the end of the next ordinary working shift, a progress report will be given.
35.1 .5 If still unresolved, the matter will be referred to the appropriate Departmental Manager for review. The Departmental Manager will take all reasonable steps to reply to the employee as soon as possible. If the reply cannot be given by the end of the next ordinary working shift, a progress report will be given.
35.1.6 If the matter remains unresolved following the review, then the matter will be referred to Human Resources.
35.1.7 If still unresolved, the matter will be referred to the Fair Work Commission (FWC) by either party for resolution, which will include conciliation and, if necessary, arbitration. The parties will abide by the outcome of such proceedings, subject to any right of appeal from any such decision of FWC.
35.1.8 If the matter goes to arbitration before FWC, FWC may exercise its procedural powers in relation to hearings, witnesses, evidence and submissions which are necessary to make the arbitration effective.
35.1.9 From the time a dispute first starts to when it is resolved, work shall continue as directed by the Company.
35.1.10 This clause 35 does not apply to an issue that would genuinely place at risk the health and/or safety of the employee(s) concerned. In such cases the Company may direct employees to perform alternative work.
35.2 Introduction of Change Including Outsourcing
35.2.1 Principles concerning the management of change
The parties agree to the following key principles concerning the management of change:
(a) The parties recognise and accept that change is an inevitable and increasingly necessary part of the steel industry.
(b) Change must be ongoing to ensure that the Company remain viable and employee expectation concerning security of employment can be satisfied.
(c) In considering the desirability and business case for any proposed change the tests to be applied are requirements for the change to be:
● safe;
● efficient;
● legal; and
● fair.
(d) The parties commit to consult and abide by the dispute settling procedures provided in this Agreement in the event that proposed changes are not agreed. In support of this commitment there will be both detailed communication and strong reinforcement by the Company and Unions in respect of these procedures. Subject to any disagreement being dealt with in accordance with agreed procedures, and in the case of significant change 35.2.3, the change will be able to be implemented.
(e) All parties share an intent that there be "zero industrial action" and to that end will actively ensure that employees, delegates and officials will, on each and every occasion where a dispute arises and is not resolved, follow the applicable dispute settling procedure and not take industrial action.
35.2.2 Processes for introduction of Change
(a) Where changes are "significant in nature", as defined in this subclause, they shall be the subject to the processes set out in 35.2.3.
(b) Changes which are not "significant in nature" shall be introduced in accordance with the principles set out in subclause 35.2.1 and the provisions of the Agreement. Disputes in relation to such changes shall be dealt with in accordance with Clause 35.1 Procedure for Resolving Claims, Issues and Disputes.
(c) A changes is "significant in nature" for the purposes of this clause if the change will have substantial effects on:
(i) the composition, operation or size of the workforce in a section or department of the operations of the Company;
(ii) the skills required of employees;
(iii) the opportunities for promotions of employees;
(iv) the security of employment of employees;
(v) the hours of work of employees;
(vi) the location of work of employees;
(vii) shift pattern changes; and
(viii) outsourcing of work (meaning the engagement on a permanent basis of another organisation to perform work which has previously been performed by employees of the Company. In this respect outsourcing differs from the use of contractors to meet intermittent work load requirements or to provide specialist skills on a short term or as needs basis).
(d) Where a change is otherwise provided for in this Agreement it will not be regarded as significant in nature for the purposes of this clause.
35.2.3 Processes for introducing change which is significant in nature and for resolving associated issues and disputes
(a) The provisions of this subclause set out the terms and order of the procedure which shall govern the introduction and management of change which is significant in nature.
(b) A change will be determined to be significant where it meets the definition as set out in clause 35.2.2(c).
(c) Consultation will commence in relation to workplace change as defined when:
(i) the Company has developed an idea regarding a workplace change that, if implemented, would result in a change which is significant in nature, and
(ii) the idea has been developed sufficiently as to justify the time and effort required to allocate resources and to develop a working proposal, and
(iii) a "Task Brief" bas been prepared in at least broad terms that includes the:
● objectives of the change;
● issues that may arise if the change was progressed to implementation;
● criteria for appraisal of the idea;
● impact the idea may have on employees, customers and the business; and
● milestones in the review process.
(d) Consultation will commence with a notification in writing to employees and their unions (letter 1) as to the broad objectives of the change and the possible effect the change is likely to have on employees.
(e) Consultation is the process through which employees contribute to problem-solving and decision making. It provides for employee and union input before Company management finally decides on action affecting its employees.
(f) Employees and their unions will be provided with the opportunity to comment and input into the proposed change. This will not limit any party from proposing alternative ideas that may result in the objectives of the business being achieved.
(g) The consultation process must be fair, comprehensive and genuine.
(h) Following consideration of all aspects of the change, including consultation with employees, the Company will advise employees and the relevant unions in writing (letter 2) as to whether or not the Company will proceed with the introduction of the change. The advice will include:
(i) confirmation on the introduction of the change (as finally determined) and the nature of that change;
(ii) the date of the introduction of the change;
(iii) the impact the change will have on employees; and
(iv) what steps are to be put in place to manage the impact that the changes will have on employees.
(i) A decision by employees or the unions not to participate in such discussions brings to an end the consultation process.
(j) Where agreement is reached as to a change, the change may be implemented immediately and the parties are to promptly record the terms of the agreement in writing.
(k) Where there is disagreement as to the change to be implemented, a party to the consultation process must give written notice to the other parties that it disputes the implementation of the change and must follow the Procedure for Resolving Disputes as per clause 35.1.7. Where a matter is referred to FWC as part of the disputes procedure, implementation of the change will be subject to the outcome of such proceedings, during which time the status quo will remain.
(l) For workplace change, (including the number or composition of employees engaged on any task), the consultation process may provide for the change to be introduced on a trial basis by agreement. Discussions between the parties as to how the trial arrangements should be implemented. An appropriate monitoring system will be established to ensure that the proposed changes are safe, efficient, legal and fair. The period of the trial will be determined in advance, with a return to the status quo in the event that it is shown that the trial fails the safe, efficient, legal and fair test.
(m) Definition:
For the purposes of clause 35.2, the term Workplace Change does not include:
Matters that involve the requirement for employees to work in accordance with the reasonable direction of the Company; normal day to day operations and work within the employee's recognised skills, competence, training and safe working practices.
Company decisions regarding significant capital investment, business growth etc. In these circumstance the Company is to provide the information in writing to employees and their unions as referred to in points (i) to (i v) of clause 35.2.3(h).
35.2.4 Nature of Consultation
Consultation involves:
(a) All parties being prepared to put forward considered views in respect of desired improvements and alternatives as to how such improvements could be achieved;
(b) An opportunity being given to all affected parties to fully understand the nature and impact of those views before any final decision on implementation of changes is made by the Company;
(c) Fair consideration being given to the issues and concerns raised by the parties before any final decision on implementation of change is made.”
The Fair Work Act
[12] Section 739 of the Fair Work Act, 2009 (the Act) states:
“739 Disputes dealt with by the FWC
(1) This section applies if a term referred to in section 738 requires or allows the FWC to deal with a dispute.
(2) The FWC must not deal with a dispute to the extent that the dispute is about whether an employer had reasonable business grounds under subsection 65(5) or 76(4), unless:
(a) the parties have agreed in a contract of employment, enterprise agreement or other written agreement to the FWC dealing with the matter; or
(b) a determination under the Public Service Act 1999 authorises the FWC to deal with the matter.
Note: This does not prevent the FWC from dealing with a dispute relating to a term of an enterprise agreement that has the same (or substantially the same) effect as subsection 65(5) or 76(4) (see also subsection 55(5)).
(3) In dealing with a dispute, the FWC must not exercise any powers limited by the term.
(4) If, in accordance with the term, the parties have agreed that the FWC may arbitrate (however described) the dispute, the FWC may do so.
Note: The FWC may also deal with a dispute by mediation or conciliation, or by making a recommendation or expressing an opinion (see subsection 595(2)).
(5) Despite subsection (4), the FWC must not make a decision that is inconsistent with this Act, or a fair work instrument that applies to the parties.
(6) The FWC may deal with a dispute only on application by a party to the dispute.”
Contentions
[13] The Unions submitted that the Trade Operator Model proposal is not legal because it is not contemplated in the classification structures of the Agreement. Therefore, it is a material change to the terms and conditions of employment as per the Agreement. Therefore, it is a further claim which does not satisfy the No Extra Claims provision of the Agreement.
[14] The Unions also submitted that the proposals were not safe, efficient or fair. Further, the Commission would exceed its jurisdiction if it allowed the proposed restructure to be implemented.
[15] Bluescope submitted that there was no specific provision in the Agreement that prevented Bluescope from proposing the introduction of the Trade Operator Model.
[16] Further, that the Trade Operator Model proposal is an attempt to better utilize the working time of the electrical and mechanical tradespersons. Put simply, the proposal improves productivity and profitability.
[17] Finally, Bluescope argued that clause 32.4 of the Agreement expressly empowers the Company to direct the employees to work in such a manner which does not result or require the introduction of a new classification.
Determination
[18] I am obligated to follow the guidance of the recent Full Bench decision. In doing so, I also highlight the decision in The Australian Meat Industry Employees Union v Golden Cockerel Pty Limited 2which provided an appropriate summary and checklist to be followed in the interpretation of Awards and Agreements:
“1. The Acts Interpretation does not apply to the construction of an enterprise agreement made under the Act.
2. In construing an enterprise agreement it is first necessary to determine whether an agreement has a plain meaning or contains an ambiguity.
3. Regard may be had to evidence of surrounding circumstances to assist in determining whether an ambiguity exists.
4. If the agreement has a plain meaning, evidence of the surrounding circumstances will not be admitted to contradict the plain language of the agreement.
5. If the language of the agreement is ambiguous or susceptible to more than one meaning then evidence of the surrounding circumstance will be admissible to aide the interpretation of the agreement.
6. Admissible evidence of the surrounding circumstances is evidence of the objective framework of fact and will include:
(a) evidence of prior negotiations to the extent that the negotiations tend to establish objective background facts known to all parties and the subject matter of the agreement;
(b) notorious facts of which knowledge is to be presumed;
(c) evidence of matters in common contemplation and constituting a common assumption.
7. The resolution of a disputed construction of an agreement will turn on the language of the Agreement understood having regard to its context and purpose.
8. Context might appear from:
(a) the text of the agreement viewed as a whole;
(b) the disputed provision’s place and arrangement in the agreement;
(c) the legislative context under which the agreement was made and in which it operates.
9. Where the common intention of the parties is sought to be identified, regard is not to be had to the subjective intentions or expectations of the parties. A common intention is identified objectively, that is by reference to that which a reasonable person would understand by the language the parties have used to express their agreement.
10. The task of interpreting an agreement does not involve rewriting the agreement to achieve what might be regarded as a fair or just outcome. The task is always one of interpreting the agreement produced by parties.”
[19] The Graded Trades Manual provides the agreed classification structure for tradespeople working for Bluescope at the Port Kembla Steelworks. Annexure “DM-1” of Exhibit U7 provides a copy of this Agreement as of 5 December 2014. This document identifies itself as being a review of the registered Graded Trades Manual of 1996. As a result, I have concluded that the concept of the “’Graded Trades” has been in existence for some nineteen years.
[20] The objectives and benefits provisions of the Graded Trades Manual identify its purpose, namely:
“2.0 Objectives of the Models
The Graded Trades Models are designed to:
1. Enhance BlueScope by providing an efficient maintenance system with appropriately trained/skilled employees.
2. Build on the existing skills and training of apprentices and tradespeople by enhancing technical knowledge.
3. Develop a “whole of job” concept through multi skilling.
4. Develop a team focus through self supervision and coaching (not directing).
5. Provide more fulfilling career opportunities.
6. Improve efficiency and productivity.
7. Remove demarcation.
8. Delegate responsibility.
9. Improve the efficiency of the industry.
10. Provide more varied, fulfilling and better paid positions.
11. Develop strands for different disciplines defined by the appropriate cross skill training and Diploma and Advanced Diploma for trades.
3.0 Benefits of the Models
3.1 Workscope
The tradesperson will be able to undertake a greater proportion of a maintenance task through the use of lifting, electrical, fitting, hydraulic and welding skills.
The tradesperson will be able to undertake a broader range of tasks in respect of their principal discipline as well as those tasks related and ancillary to their principal discipline.
Employees will be expected to work up to their level of skill and competence and accept other employees applying skills that traditionally have only been applied by their trade.
Once training has been completed it is expected that skills will be applied on the job. This applied to all skills acquired prior to reclassification to the next level.
3.3 Autonomy
A tradesperson, once skilled in understanding a piece of equipment or process, will work with less supervision. Past practices train a tradesperson to use their skill on individual components. At times, close supervision was required to maintain work continuity. Through an understanding of the “total” machine, a tradesperson is able to perform comprehensive maintenance tasks with minimal supervision. This also places responsibility (and accountability) on the tradesperson for the quality of application of skills.”
[21] Despite the ambiguity of a number of these phrases providing some hope to Bluescope of the foresight of the negotiators some twenty years ago, a detailed analysis of the document shows that the level of agreed flexibility extends between the different trades and trades assistants but not to the production operators. A level 4 Graded Tradesperson (Mechanical) is required to:
“8. Apply overall knowledge and understanding of operating principles of the systems equipment on which trades people are required to perform work (including instructing others, problem solving and reporting).”
[22] It does not require the tradesperson to operate the machine. A similar provision exists for the Level 4 Graded Tradesperson (Electrical).
[23] I have taken the opportunity to look at both the Metal and Engineering Training Package for MEM 30205 - Certificate III in Engineering - Mechanical Trade and the Electrotechnology training package for UEE 30811 Certificate III in Electrotechnology Electrician. Neither of these training packages contain modules relating to the duties of an Operator on a production line.
[24] The Structural Efficiency Principles of the National Wage Case Decision of the late 1980’s introduced the concepts of mutli and cross skilling. This flexibility required employees to perform work that was “incidental and peripheral” to the core work function. This scenario provides the background for the negotiation of the Graded Trades Model. The suggested Operator duties for the Tradesperson in the Trade Operator Model could not be regarded as being “incidental or peripheral”, or in any way “related and ancillary to their principal discipline” as required by the National Wage Case or the Graded Trades Manual.
[25] If the issue at hand were merely the reduction in the number of Operators that were required to operate the plant at an appropriate level of production then the threshold question would be satisfied. However, the use of the Trade Operator Model requires the tradesperson to perform work that is not incidental, peripheral or even ancillary to a maintenance task, it requires them to be actually rostered on to the production roster for up to 50% of their shift. The tradesperson will only be able to leave their production role during their “rostered time” to attend to any core maintenance function with the approval of their Supervisor. I cannot find the capacity for such a change in duties, skills and qualifications in the provisions of the Agreement. There is certainly no classification or competency in the Graded Trades Model to satisfy this level of cross-skilling.
[26] Although it may be convenient and appropriate in 2015, in applying the tests of Golden Cockerel, I find that the Graded Trades Manual does not provide for the classification of Trade Operator.
[27] I do not accept the argument that clause 32.4 allows for Bluescope to direct employees to perform work for which they are not properly classified or remunerated. If such a capacity existed, then Bluescope would be able to direct an experienced union delegate to work in their Human Resources Department due to their industrial relations skills, or an Operator who is a qualified Motor Mechanic to work on their mobile plant. Such a proposition is nonsensical. Bluescope only has the capacity to direct an employee to work in accordance with their contract of employment. To this end, the skills, competency and training for a tradesperson is governed by the Graded Trades Manual.
[28] I am then left with the question of whether clauses 5, 6 and 35 allow for the Commission to exercise its arbitral powers.
[29] I accept the argument that the proposed introduction of the Trade Operator will have an impact on the composition, operations or size of the workforce in the affected departments of Bluescope. The proposed changes are therefore “significant in nature”. I note that extensive consultation has occurred between the parties.
[30] The recent Full Bench decision made it abundantly clear that the Commission cannot make a decision which is “inconsistent with the enterprise agreement itself”.
[31] As such, I find that the maintenance classification structure (clause 6.1.b) is a “settled” issue for the term of the 2012 Agreement. The application and veracity of the Graded Trades Manual is not in dispute. This document makes no provision for a Trade Operator Classification. It confines its application to maintenance functions only. The Trade Operator Model proposal from Bluescope is an extra claim which does not enliven the exception provision of the No Extra Claims Clause, or the general provisions contained in the Agreement.
[32] The concept of Trade Operator or Operator Maintainer has been successfully introduced throughout the world, including Australia. Such a classification was successfully introduced at ICI in Port Botany some twenty years ago. Whilst I note that Bluescope has committed that no trades apprentice will be trained in the Operator role during their apprenticeship, (thereby maintaining the integrity of their training), I do have some concerns about the possible “deskilling” of highly competent trades people if this proposal were to be implemented. Such an outcome is a natural consequence if tradespeople are taken away from their trade to perform production work for half of their working life. Whilst BlueScope’s proposal is not without merit, I find that it would require an amendment to the current classification structure in order to be implemented and therefore not legal.
[33] I encourage the parties to return to the negotiating table to further discuss this issue.
[34] It may be prudent for the parties to investigate the introduction of the Operator Maintainer/Trade Operator Model in the current Enterprise Bargaining Agreement negotiations.
COMMISSIONER
1 [2013] FWCA 5308
2 [2014] FWCFB 7447
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