The Australian Workers' Union v BlueScope Steel (AIS) Pty Ltd
[2021] FWC 4341
•21 JULY 2021
| [2021] FWC 4341 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.739 - Application to deal with a dispute
The Australian Workers' Union
v
BlueScope Steel (AIS) Pty Ltd
(C2020/8505)
COMMISSIONER RIORDAN | SYDNEY, 21 JULY 2021 |
Application to deal with a dispute arising under the BlueScope Port Kembla Steelworks & Springhill Enterprise Agreement 2019.
Introduction
[1] On 20 November 2020, the Australian Workers’ Union, NSW Branch (the Applicant) lodged an application (the Application) pursuant to s.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. The dispute relates to a proposal by BlueScope Steel (AIS) Pty Ltd (the Respondent) to restructure the Energy Services Department (the Department) at its Port Kembla Steelworks. The Applicant stated that whilst there had been agreement over a range of issues through the consultation process, there remained a dispute regarding the introduction of a new “Process Controller” role and its impact on existing Operator classifications within the Department.
[2] A number of Conferences were conducted in the matter, however the matter was unable to be conciliated and proceeded to arbitration. Permission to be represented by a lawyer was granted pursuant to s.596 of the Act 1 to both parties. The Applicant was represented by Mr A Neilson of Panetta Lawyers and the Respondent was represented by Ms A DeBoos of Kingston Reid.
[3] The matter was primarily heard on 15 March 2021. Following further consideration of the evidence, I determined that some additional matters should be put to Mr Hodges, a witness for the Respondent. On 30 April 2021, a resumed hearing was held where I put several additional questions to Mr Hodges. To allow both parties to address any issues arising from these additional questions, a final hearing in the matter was conducted on 11 May 2021.
Establishing jurisdiction
[4] The relevant enterprise agreement is the BlueScope Port Kembla Steelworks & Springhill Enterprise Agreement 2019 (the Agreement). The dispute resolution procedure contained in Clause 35.1 reads as follows:
“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 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.
35.1.7 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. The matter shall be dealt with by a Member of the FWC jointly nominated by the parties to the dispute if available or otherwise a Member of FWC nominated by the President of FWC.
35.1.8 From the time a dispute first starts to when it is resolved, work shall continue as directed by the Company.
35.1.9 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.”
[5] The dispute concerns a matter arising under the Agreement. There is no question that the matter was the subject of dispute at the workplace level. The Applicant is a party to the Agreement. 2 In the circumstances, I am satisfied that the Commission has the power to resolve the dispute by way of arbitration.
Relevant provisions of the Agreement
[6] The principal issue in contention in this matter is whether the proposed change satisfies Clause 36.1(c) of the Agreement, known as the ‘SELF’ test. Clause 36.1 of the Agreement provides as follows:
“36.1 Principles concerning the management of change including Outsourcing
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 remains 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 will enable early genuine consultation to facilitate the timely and efficient implementation of change, where it satisfies the test above.
(e) 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. At the conclusion of the processes, including dispute settlement if required, the change will be able to be implemented with no resort to industrial action.”
[7] Also relevant are the provisions of the Agreement that concern the process for the introduction of workplace change. The Agreement distinguishes between workplace change that is a ‘significant change’ and change which is not a ‘significant change’. The definition of ‘significant change’ is set out in Clause 36.3 which provides:
“36.3 Definition
Significant Change
A change is a "significant change” if the change will have substantial effects on:
(a) the composition, operation or size of the workforce in a section or department of the operations of the Company;
(b) the skills required of employees;
(c) the opportunities for promotions of employees;
(d) the security of employment of employees;
(e) the hours of work of employees;
(f) the location of work of employees;
(g) shift pattern changes;
(h) 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).”
[8] Clause 36.4 provides the process for the introduction of change that is not ‘significant change’. It provides as follows:
“36.4 Process for introduction of “change” that is not “significant change”
A change is not a significant change if it is:
(a) a change provided for in this Agreement; or
(b) matters that involve the requirement for employees to work in accordance with the reasonable direction of the Company; or
(c) normal day to day operations and work within the employee's recognised skills, competence, training and safe working practices; or
(d) a Company decision regarding significant capital investment, business growth etc. In these circumstances the Company will advise employees according to the steps set out in 36.6(g).
Change which is not "significant change” as defined here will be introduced in accordance with the Principles Concerning Management of Change set out above. Disputes in relation to such changes shall be dealt with in accordance with the Dispute Settlement Procedure.”
[9] Clause 36.6 provides the process for the introduction of change that is ‘significant change’. It provides as follows:
“36.6 Process for introduction of change which is “significant change” and for resolving associated issues and disputes
The provisions of this subclause set out the terms and order of the procedure which shall govern the introduction and management of significant change.
(a) When the Company has an idea or concept which could result in a significant change, the Company will commence a consultation process by notifying in writing employees and their union of the idea or concept that could be implemented. The written communication will outline the idea or concept and the possible effects that the idea or concept could have on employees.
(b) A consultation team will then be established to consider the idea or concept and any issues arising from that idea or concept. The team will discuss the idea or concept using interest based problem solving techniques. The consultation team will include representatives of the Company and representatives of employees and unions nominated by the relevant employees.
(c) The consultation process will consider of all aspects of the idea or concept. As a priority, the consultation will consider the impacts on employees and what steps are to be put in place to manage the impacts on employees.
(d) Consultation will not limit any party from proposing alternative ideas that may result in the objectives of the business being achieved.
(e) The Company is not under any obligation to disclose commercially sensitive information.
(f) A decision by employees or the unions not to participate brings the consultation process to an end.
(g) When consultation is concluded, the Company will advise and provide written notification to employees and the relevant unions what change is intended to be implemented, the arrangements to manage the impact of the change, the date the change will commence, the impact the change will have on employees, and what steps are to be put in place to manage the impact that the changes will have on employees.
(h) Where agreement is reached on a change, the change may be implemented immediately and the terms of the agreement will be documented.
(i) For any 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. There should be discussion 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 working arrangements that existed immediately prior to the proposed change in the event that it is shown that the trial fails the safe, efficient, legal and fair test.
(j) Where there is disagreement on 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. Given that consultation has already taken place, the written notice of the party disputing the change will include a copy of that party’s application referring the matter to the Fair Work Commission in accordance with the steps in the Dispute Settlement Procedure…”
Background
[10] The dispute relates to the Respondent’s decision to implement a restructure of the Department, arising out of the progression of ‘Project Zenith’, an ongoing energy services automation project.
[11] Consultation in relation to the proposed restructure began in January 2020, when BlueScope issued a notification letter to the affected employees and the AWU. Whilst there has been agreement on a range of issues, the dispute in this matter is about the introduction and expansion of the ‘Process Controller’ role. In particular, the Respondent’s proposal that the role sit outside the classification structure of the Agreement. The role is proposed to be a ‘staff’ (non-Agreement) role rather than a ‘wages’ (Agreement covered) role.
Outline of the Applicant’s submissions and evidence
Submissions of the Applicant
[12] The Applicant submitted that the questions for the Commission to determine, are as follows:
(1) Does the proposed change amount to a “significant change” within the meaning of clause 36.6 of the Agreement?
(2) Is the proposed change safe, efficient, legal and fair as required by clause 36.1(c) of the Agreement? 3
Question 1 – Significant Change
[13] With respect to whether the change constitutes a ‘significant change’ within the meaning of the term under the Agreement, the Applicant submitted that the proposed change will have a substantial effect on each of the matters in Clauses 36.3(a)-(c), Clause 36.3(e) and Clause 36.3(g), as set out above.
[14] The Applicant rejected the Respondent’s argument that the proposed change is excluded from the significant change definition by virtue of clause 36.4(3), which provides that a significant capital investment decision is not capable of constituting a significant change.
[15] The Applicant submitted that the proposed restructure of the Blower Station is a significant change because it satisfies each of the criteria as set out in clause 35.3 of the Agreement. The Applicant submitted the industrial restructure of the section is not the same as the Respondent’s decision, through Project Zenith, to automate its operation. According to the Applicant, the significant capital investment decision does not necessitate or logically require specific industrial outcomes. It is the Applicant’s submission that those outcomes are separate and distinct from the significant capital investment decision itself.
[16] The Applicant submitted that for these reasons, the significant change procedures in clause 36.6 of the Agreement applies to the proposed change.
Question 2 – SELF test
[17] As set out in clause 36.6, the criteria for the implementation of change is whether it is safe, efficient, legal and fair (the SELF test). The SELF test applies whether or not the change is significant in nature.
[18] The Applicant submitted that the proposed change does not meet the criteria.
[19] In advancing its contention, the Applicant’s submissions first addressed the ‘legality’ requirement. The Applicant submitted that there are two questions that arise when considering whether the proposed change is ‘legal’.
[20] The first question to arise is whether the Respondent has complied with the significant change provisions of the Agreement. The Applicant submitted that it had not because the written notification to employees did not fully or properly consult about the impact of the proposed change on employees. The Applicant submitted that it was still unclear what the consequences of the restructure will be, namely, the Applicant provided an example of the surplus operators placed into the Relief Day Crew. The Applicant submitted that it was still unclear what arrangements would be made for these employees.
[21] The second question to consider when determining whether the Respondent had complied with the ‘legal’ requirement is whether the Respondent was entitled to determine whether the new role falls within the classification structure of the Agreement. The Applicant referred to the decision of Fonterra Brands (Australia) Pty Ltd v AMWU[2015] FWCFB 3912 where the Full Bench (Watson VP, Lawrence DP and Lewin C) (Fonterra Brands) said:
“The task of determining the appropriate classification involves making findings of fact as to the requirements of the roles and applying those facts to the proper scope of the Agreement classifications. Often this is a difficult task, especially when the agreement operates on notions implied by practice and local understandings. Further, duties may be comprehended by more than one classification or be outside the scope of all classifications. In such circumstances it is necessary to determine the substantial character of the role by reference to the level of responsibilities and the duties of the position to determine the most appropriate classification from the range of classifications in the agreement.” 4
(my emphasis)
[22] The Applicant referred to the decision in BlueScope Steel (AIS) Pty Ltd v AWU[2015] FWCFB 5615, where a Full Bench of the Commission (Hatcher VP, Drake SDP and Roberts C), considered the operation of BlueScope’s classification structure, in the context of a dispute of the introduction of a new Trades Operator Position. In that case, in overturning my decision, the Full Bench drew an inference from the existence and nature of a separate Graded Trades Manual, which did not form part of the Agreement, as follows:
“[21] The inference we draw from this is that the parties did not intend that the classifications in the Agreement have any settled definition for the term of the Agreement. Had they had such an intention, the Agreement would have included classification definitions. Rather, there was an intention to continue a well-established practice whereby the practical working of the classification system, including the duties and skills required of each classification, were to be dealt with through the independent process of the Graded Trades Model and Manual. That process allowed for updating and revision in a manner detached from the Agreement itself. Thus the Graded Trades Model and Manual only inform the classifications in the Agreement to the extent that they represent the current agreement as to how those classifications are to be practically implemented.”
(my emphasis)
[23] The Applicant noted that although the Decision of the Full Bench applied to trades position rather than operator positions, the Applicant submitted that the Decision equally applies to this matter. The Applicant submitted that a document known as the Employee Development Model – Ironworker Structure – Restructuring Proposal and the Operations Handbook played a similar role in the context of the Blower Station to that of the Graded Trades Manual in the context of trades classification under the Agreement.
[24] However, the Applicant submitted that if the Applicant decided to revoke the Graded Trades Manual it would not be the case that the Respondent was entitled to remove Tradesperson roles from the scope of the Agreement. Such a proposition would offend s.194(ba) of the Act. Similarly, the Applicant put, operator work could not be unilaterally removed from the scope of the Agreement as the result of a restructure. The Applicant submitted that consideration must be given to the duties required to be performed by the Process Controllers in the context of the duties performed by the Operators currently within the Blower Station.
[25] The Applicant stated that there had been three versions of a Process Controller role description put forward by the Respondent, namely:
(1) the July 2020 version;
(2) the October 2020 version; and
(3) the December 2020 version 5
[26] The Applicant submitted that the earlier versions of the role description were akin to an Operator role with the only change being a new title. The intermediate version was also essentially a wages role. The final version, which was issued after the notification of the dispute, adds a substantial amount of engineering complexity which had not been previously mentioned.
[27] The Applicant submitted that it is clear from the evidence that the current Operators perform the following duties which are taken from the Process Controller role description:
(1) Continuous monitoring and supervision of the entire production process;
(2) Constant analysis and review of process trends and changes;
(3) Optimisation and tuning of process parameters to constantly achieve dynamic customer requirements, reliable operation and energy efficiency;
(4) Response to abnormal conditions to bring the process back into normal operating condition using process knowledge and skills;
(5) Take the lead on non-routine problem solving as the prime technical expert on shift;
(6) Provide routine reporting of process performance, plant problems and troubleshooting data 6
[28] The Applicant submitted that it follows, therefore, that the Process Controller role falls within the classification structure of the Agreement and that it would not be legal for the Respondent to exclude it from the scope of the Agreement. The Applicant submitted that for this reason, the proposed restructure does not satisfy the legality criterion of the SELF test.
[29] With respect to the ‘fairness’ requirement of the SELF test, the Applicant claimed that the proposed change is not fair for the following reasons:
“(1) It results in a significant, permanent decrease in wages employee staffing levels in the department.
(2) It provides substantial uncertainty for the wages employees who will be moved into surplus Relief Day Crew positions, with no medium-term job security.
(3) It amounts to a unilateral effort by BlueScope to alter the classification structure in circumstances where the company has made no genuine effort to engage in the classification review process agreed to by the parties as part of the resolution of the 2019 bargaining” 7
[30] With respect to the ‘efficiency’ requirement of the SELF test, the Applicant submitted that the change was not efficient because there was no efficiency associated with making the role a staff position rather than a wages position. At best, the change could be described as ‘neutral’ with respect to efficiency.
[31] Finally, the Applicant submitted that the proposal, at least as it relates to work on night-shift, is unsafe on the basis that the plant technician will be the only licensed person on the night shift which means that the Respondent cannot comply with the Australian standards in relation to its licensed attendant obligations on a 24/7 basis.
Evidence of Christopher Newbold
[32] Mr Newbold has been an AWU Organiser since May 2019, prior to this he was employed by the Respondent for approximately 25 years. Mr Newbold is the primary AWU Organiser at the BlueScope Steelworks at Port Kembla. Mr Newbold submitted a statement dated 11 February 2021 and a statement in reply dated 10 March 2021. He was not required for cross-examination.
[33] Mr Newbold gave evidence regarding the consultation process. Mr Newbold’s evidence was that during the course of the consultation, the AWU and BlueScope reached agreement about a number of issues, including the number of positions and the role description for the Plant Technician role, which is an Agreement covered role. However, the AWU and BlueScope were not able to reach agreement over the new Process Controller position. The basis of the disagreement was that the AWU did not believe BlueScope was permitted to make these positions “staff” rather than “wages” roles.
[34] Mr Newbold’s evidence was that the AWU provided a list of duties performed by Operators in the Blower Station to BlueScope on or around 19 July 2020 as part of the consultation process. Mr Newbold stated that the Process Controller position description had changed substantially since the first version was provided. Mr Newbold said that, in the most recent role description, the Respondent had tried to make the position look more like a Process Engineer role to justify the transformation of the position into a staff role.
[35] Forming part of Mr Newbold’s evidence was the three versions of the role description. The December 2020 document, titled ‘Role Descriptions Guidelines – Option B” is two pages in length. There is black text and dark red text. The text that is black is the content from the October 2020 version, while the dark red text is additional text. Although lengthy, it is necessary to set out the document below. The dark red text in the document has been underlined below.
“Role Descriptions Guidelines – Option B
Process Controller
The role directly supervises and coordinates a complete integrated plant process, using remote DCS control for complex operation of plant and equipment. This role uses the DCS (ABB or Yokogawa) to complete detailed process analysis and make changes and adjustments to the process control settings to meet downstream process demands and optimise efficiency and effectiveness of all processes. A Process Controller will also fill the role of the Departmental. Emergency Controller on shift and be nominated as the Senior Process Controller for that shift.
The controller is there to monitor the efficiency and customer deliver of the required process parameters. They are required to be analysing the data with new software tools to tune and optimise the automatic systems. They will have sets of analysis reports to complete each shift. They will be required to use the control system and be changing such things as tuning parameters and delivery set points.
The primary tasks include
• Continuous monitoring and supervision of the operational performance and efficiency of all individual process units, including such things as heat exchangers, pumps, cooling elements, turbine modelling, condensers, combustion systems, control loops, fans, fuel distribution and allocations, power consumption models, water chemistry and compressor optimisation. This involves using both the existing trends, and a range of new software models to perform modelling and analysis. This could include anything from turbine adiabatic efficiency to excess air calculations. The range and type of parameters and calculations is not limited and will continue to evolve.
• Constant analysis and review of overall process trends and changes. Similar to above. This general task is currently carried out by operators, Team Leaders, Controllers and Engineers
• Optimisation and tuning of process parameters to constantly achieve dynamic customer requirements, and energy efficiency. The Controller will be required to make adjustments to the automated processes and systems. These will include, but not be limited to – PID settings, biases, valve characterisations, Set Points, Min/Max limits. The controller will make proactive adjustments based on analysis to ensure the process stays at optimum efficiency. The Plant Technician will continue to make any adjustments to the equipment as defined in their role description.
• Work with Plant Technicians in response to abnormal conditions to allow the process back into normal operating condition using process knowledge and skills.
• Take the lead on non-routine problem solving as the prime technical expert on shift. The Process Controller is the Shift Leader for their overall process on shift. They are fully accountable for the outcomes regarding delivery and optimisation of the process.
• Provide routine shift reporting of process performance and efficiency. Routine and no routine reporting includes preparation and commentary on process trends, charts, analysis and performance. This is in addition to the normal shift reporting of actions and handover items which continue for all shift employees.
• Involvement in ongoing safety, project and improvement work as required. Expected to lead projects, modification and updates to the control system display functionality, sequencing and protocols.
• Utilise their knowledge in areas such as boiler or turbines operations, process control theory, control logic and sequencing, water chemistry, process control theory, combustion principles, process safety systems, as well as general process understanding of heat exchange, cooling water systems, Water treatment and distillation, chemical dosing, high speed turbine and compressors. Learn and grow in engineering based knowledge of process and control systems and apply that knowledge to the operation of the process.
• Independent learning and follow up on new tools and process. Process Controller will be specialised in their area and expected to continue to develop and adapt to new tools and processes.
The Process Controllers will be based in the new remote control centre and report to the Senior Process Engineer for their area. The role is a specialist role that is focussed on one process area. There is no expectation that people will be rotating routinely through the different area as these require different sets of knowledge and accreditation.”
[36] Mr Newbold was of the view that the job performed by the Process Controller under the new structure will actually resemble the work currently performed by Operators.
[37] In Mr Newbold’s statement in reply, he stated that it was his understanding that the introduction of the Process Controller role will result in a consequent reduction in Crew Operator positions (Crew Operator positions will be renamed Plant Technician as part of the proposed restructure). Mr Newbold stated that, despite the statements of Mr Hodges that there will be no redundancies, the AWU held concerns that the potentially surplus employees will not be given any productive work to do, resulting in employees leaving the roles and the Department voluntarily. Mr Newbold disputed any assertion that the AWU had agreed that two of the three Process Controller positions should not be covered by the Agreement. He stated that the position had been maintained by the AWU throughout the consultation that the position should be covered by the Agreement.
Evidence of Jaimie De Lazzari
[38] Mr Delazzari is a Steelworker employed by the Respondent. Mr Delazzari provided a statement dated 29 January 2021. He was not required for cross-examination.
[39] Mr De Lazzari stated that the majority of his colleagues with whom he had discussed the restructure voiced concerns about the company’s directions. Mr De Lazzari stated that he was of the view that if the proposal was to proceed, the company would eventually “water down” the job duties and take the role back to what it originally was under the previous arrangement.
[40] In his opinion, the work is currently being performed by Agreement covered employees and there was no need for the creation of a staff role.
Evidence of Lance Turner
[41] Mr Turner is employed by the Respondent as an Operator at the Blower station. Mr Turner has worked for the Respondent for 28 years. Mr Turner provided a statement dated 11 February 2021. He was not required for cross-examination.
[42] Mr Turner gave evidence about the changing nature of the work performed and the staffing structure of the Blower Station. He stated that there is no objection to staff roles, as they create a career pathway and progression for wages employees. However, the Operators do object to replacing wages roles with staff roles. Mr Turner estimated that 90% of the duties set out in the original position description for the Process Controller role were already performed by the current Operators. Mr Turner stated that the role appeared to be an Operator role with only a change in title. Mr Turner stated that the position description had been adjusted by Bluescope throughout the consultation process.
[43] In Mr Turner’s opinion, the creation of the role was an industrial tactic by the Respondent that undermined the principles of collective bargaining.
Evidence of Paul Gronau
[44] Mr Gronau has been employed by the Respondent for 29 years. In addition to his role with the Respondent, he serves as a senior delegate of the AWU and Health & Safety Representative. Mr Gronau provided a statement dated 29 January 2021. He was not required for cross-examination.
[45] Mr Gronau’s evidence was that he and his colleagues with whom he had spoken are concerned about the proposed change. Mr Gronau stated that he had concerns the Respondent wanted to change an Agreement position to a staff position through a change of title only.
Outline of the Respondent’s submissions and evidence
Submissions of the Respondent
[46] The Respondent submitted that the questions for determination put by the Applicant are incorrect. The Respondent submitted that the correct questions for determination, and the way in which they should be answered, are as follows:
“Did the Respondent comply with its consultation obligations under the EA in relation to the proposed restructure which is the subject of this matter? Yes.
Is the Process Controller position, which the Respondent proposes as part of the restructure, covered by the EA? No.
Does the proposal satisfy the SELF tests? Yes.” 8
[47] In the Respondent’s submission, it was unnecessary for the Commission to answer the question, as suggested by the Applicant, as to whether the change amounted to ‘significant change’. The Respondent submitted that the proposal was expressly excluded from being considered a ‘significant change’ under the Agreement due to Clause 36.4(d). The Respondent provided a summary of the steps it took to consult properly and submitted that it clearly provided employees and the Applicant with the relevant information in writing to permit meaningful consultation to occur. It is the Respondent’s position that it complied with its consultation obligation and the proposal is not illegal on that basis.
[48] In advancing its position, the Respondent referred to the evidence of Mr Hodges to show that the decision to restructure the business is a decision regarding a significant capital investment of $8 million. The Respondent submitted that the decision to create the Process Controller role is aimed at realising the most value from the Respondent’s investment. According to the Respondent, in this sense, the proposal cannot be a significant change as defined by the Agreement because it is in regard to a significant capital investment.
[49] However, the Respondent submitted that regardless of which clause regarding change is enlivened, it complied with the consultation obligations of the Agreement and applied the SELF test.
[50] The Respondent stated that Mr Ian Hodges, the Energy Services Department Manager of the Respondent, had been tasked with an automation driven restructure process around two years ago. An outcome of the restructure was fewer Operators and the introduction of Process Controllers in the Department. The Respondent submitted that equivalent roles exist at BlueScope, for example, the Energy Distribution Process Plant has an equivalent role titled ‘Energy Centre Controller’. None of the equivalent roles are covered by the Agreement.
[51] The Respondent submitted that the consultation period lasted from January 2020 until December 2020 and that, from the Applicant’s own evidence, the Respondent could be seen to have complied with its consultation obligations under the Agreement.
[52] The Respondent submitted that whilst the Applicant had made assertions regarding the safety and efficiency of the proposed change, no evidence had been provided. Following the authority in AWU v BlueScope Steel (AIS) Pty Ltd[2016] FWC 3848 at [36], the Respondent submitted that the onus falls on the Applicant to establish that a proposal fails to meet the SELF test criteria.
[53] With regards to the efficiency requirement of the SELF test, the Respondent submitted that the evidence of Mr Hodges established there would be:
(a) Reduced Co2 emissions;
(b) Optimum electricity generation; and
(c) Reduced water consumption. 9
[54] Regarding the safety requirement of the SELF test, the Respondent submitted that the evidence of Mr Hodges established that the proposal would increase safety because it would reduce human interaction with machinery, particularly on the night shift.
[55] Noting the above regarding safety and efficiency, the Respondent submitted that the crux of the dispute largely turns on whether the proposal meets the ‘Legal’ and ‘Fair’ components of the SELF test.
[56] The Respondent submitted that the first limb of the ‘legality’ argument raised by the Applicant was in relation to whether the Respondent failed to comply with the applicable consultation obligations. The Respondent submitted that on its face, the proposal considered in this matter satisfies the definition of significant change under the Agreement, because it involves a restructure of the composition of the Energy Services Department. However, the Respondent submitted that the Agreement expressly states that a change is a not a ‘significant change’ if it is Company decision regarding significant capital investment.
[57] In response to the Applicant’s submissions regarding the consultation requirements, the Respondent submitted the Applicant appeared to rely on a technical deficiency in the initial notification letter to substantiate its claim of illegality. The Respondent stated that a similar proposition was put to Vice President Hatcher in Australian Workers’ Union v BlueScope Steel (AIS) Pty Ltd[2016] FWC 3848. In that case, the Vice President said:
“[58] However I consider what is required (under both the 2015 Agreement and the 2012 Agreement) is substantial compliance, not strict compliance, in that the information sharing and consultation required by the clause must in substance occur before any final decision is made to introduce the proposed significant changes. For example, the “Letter 1” referred to in clause 35.2.3(f) of the 2015 Agreement is required to “outline the broad objectives of the change and the possible effects that the change is likely to have on employees, to enable further Consultation”. The substantive purpose of the requirement is to provide affected employees with relevant information in writing so as to permit meaningful consultation to occur. Provided that the relevant information is provided, it does not seem to me that it was intended that the subsequent implementation of a proposed change can be regarded as not “legal” because, even though there was meaningful consultation, the information was not contained in a single document, or the document containing the information was not described as being the Letter 1 for the purposes of clause 35.2.3(f). An overly technical approach would defeat the intention of clause 35.2 overall to “facilitate the timely and efficient implementation of change” (clause 35.2.1(d)) without adding anything of substance to the benefits of consultation conferred by the clause” 10
[58] The Respondent provided a summary of the steps it took to consult with the Applicant and submitted that it clearly provided employees and the Applicant with the relevant information in writing to permit meaningful consultation to occur. It is the Respondent’s position that it complied with its consultation obligations and the proposal is not illegal on that basis.
[59] The Respondent submitted the second-limb of the Applicant’s legality argument, in that the proposal constitutes an ‘opt out’ that somehow renders the proposal illegal, is fundamental flawed.
[60] The Respondent stated that the provision concerns unlawful terms of the Agreement, which, by virtue of s.253 of the Act, are not enforceable. The Respondent submitted that the Applicant had not identified any unlawful terms and that the reference appeared to be misplaced and based on the incorrect notion that an employer cannot lawfully restructure its workplace to remove Agreement covered roles and replace them with non-Agreement roles. The Respondent submitted that this position is self-evidently incorrect. The Respondent submitted that it is not unlawful to remove some EA positions and create non-EA positions. The Respondent submitted that it is also not unlawful to restructure roles that results in employees moving between instruments.
[61] The Respondent submitted that the Applicant’s claim on illegality on this point must be rejected.
[62] The Respondent submitted the third limb of the Applicant’s illegality argument is whether the Process Controller role should properly be considered an Agreement covered position. In advancing its argument, the Respondent referred to clause 3.2 of the Agreement:
“This Agreement applies to BlueScope Steel (AIS) Pty Ltd and BlueScope Steel Limited (collectively described as the “Company” or “BlueScope”) and all employees of the Company at Port Kembla and Springhill employed in the classifications set out in this Agreement.”
[63] Clause 3.4.2 of the Agreement states that it does not apply to salaried staff, other than those in the classes covered by clause 6 – Rates of Pay.
[64] It is the Respondent’s submissions that in order to determine whether the Process Controller position is covered by the Agreement, the Commission must determine:
(a) Whether the Process Controller position is a classification set out in the Agreement;
(b) If it is such a classification, whether the Process Controller is ‘salaried’; and
(c) If both of these questions are answered in the affirmative, whether the Process Controller position is one of the classes covered by clause 6- Rates of pay.
[65] The Respondent submitted that it is not in dispute that the Process Controller position is not currently within the Blower Station section of the classification structure. The Respondent submits the relevant classifications are:
(a) Shift Crew Operators levels 2 to 5;
(b) Relief Crew Operators levels 2 to 5; and
(c) Day Crew Operators levels 1 to 5. 11
[66] The Respondent submitted the classification ‘Process Controller” is not one of these three classification. Referring to the criteria it established and set out above in paragraph [62], the Respondent submits the answer to whether the position is a classification set out in the Agreement is ‘no’.
[67] The Respondent referred to the Applicant’s argument where it relies on the Operations Handbook to support its claim that Process Controller is a wages positions and covered by the Agreement. The Respondent rejected the Applicant’s submissions that the Operations Handbook is given effect by virtue of Clause 40 of the agreement as an existing department arrangement.
[68] The Respondent submitted that the Operations Handbook is not incorporated into the Agreement through clause 40, but rather the Agreement notes that the Company and employees have agreed on various working arrangements prior to the Agreement’s operation. The Respondent submitted that the Agreement is not intended to displace existing Department Arrangement, however such Arrangements may be varied through consultation in accordance with clause 36 of the Agreement. Further, the Respondent submitted that the Handbook helps determine the duties and responsibilities of those classification listed in 3.32, however it also serves to reinforce the view that the Process Controller classification is not a classification covered by the Agreement.
[69] The Respondent relied on the evidence of Mr Hodges to demonstrate the position of Process Controller is not the same as a Plant Operator position, which fall into the Crew Operators classification. According to the Respondent, the substantial difference include:
(a) knowledge and skill required to perform the role;
(b) position’s principal purpose;
(c) level of responsibility and accountability;
(d) duties required to be performed; and
(e) degree of specialisation. 12
[70] It is the Respondent’s submission that the two roles are plainly different. The Respondent submitted that the statement of Mr Turner supports the position of the Respondent as Mr Turner conceded that by the conclusion of consultation, the Process Controller position included ‘engineering duties’, which are not part of the Operator role.
[71] It is the Respondent’s submissions that the Applicant’s claim on illegality on this point must also be rejected.
[72] With respect to the ‘fairness’ issues, the Respondent accepted the proposal will result in a decrease in the wages employee staffing levels. However, in circumstances where there is no reduction in overall numbers, the Respondent submitted that it is not clear how this is a matter that goes to fairness.
[73] The Respondent further submitted that the transition process involves a closed application pool from internal candidates for the roles of Process Controller. The Respondent accordingly submitted that the Applicant’s claim regarding job security is therefore misplaced.
[74] The Respondent submitted that the statements of Mr De Lazzari and Mr Gronau only contained broad opinions which should not be regarded as evidence at all.
Evidence of Ian Hodges
[75] Mr Hodges is employed by the Respondent as the Energy Services Operations Manager at its Port Kembla site. In his role, he is responsible for the overall operation of the Energy Services Department.
[76] Mr Hodges stated that the Project Zenith automation process involves:
“• Increased separation of people from process hazards;
• Minimising the operating interventions (i.e. the need for people to physically interact with plant equipment);
• Improved energy conversion and generation; and
• Improved water efficiency.” 13
[77] The project will result in most energy production processes functioning automatically. Mr Hodges evidence was that the current structure of having four Operators on site at all times was not an efficient use of resources. A new operating model is necessary to best fit the requirements of the Respondent. The new structure will contain the following new or modified roles:
(a) Process Controllers;
(b) Plant Technicians;
(c) Plant Owners;
(d) Plant Technical Coordinators; and
(e) Process Engineers. 14
[78] The new structure would reduce the number of employees on night shift, reduce the number of Operators and create new Process Controller roles.
[79] Mr Hodges gave evidence regarding the differences between the Plant Technicians and Process Controllers. The Process Controller role will operate with greater autonomy, whereas the Technicians will be supervised by a Team Leader.
[80] Secondly, Process Controllers would need a greater degree of technical knowledge, such as tertiary qualifications in the trades, engineering, science or process and/or equivalent experience. Mr Hodges stated that he recognised many existing Operators already possess a good knowledge of some of these aspects, given their experience and capability. He was confident this knowledge could form the basis for further training if Operators wished to be chosen for Process Controller roles
[81] Thirdly, the role would be more specialised than the current Operator role. Process Controllers are to work exclusively in the Steam Production, Energy Distribution or Energy Generation processes with no cross-over.
[82] Fourthly, Mr Hodges stated that the classification of Process Controller already exists within BlueScope’s enterprise. The role is not and has never been an Agreement covered role.
[83] Fifthly, the core function of the existing Operator is to be the licensed attendant for the operation of the boiler, turbine and associated plant and equipment. Under the new structure, ‘Plant Technicians’ will fill that function, not Process Controllers.
[84] Sixthly, the seniority of Operators is based on their ability to undertake specific tasks. They do not include the advanced process control skills or tasks that will be required by the Process Controller.
[85] Mr Hodges stated that the role of ‘Plant Technician’ in the new structure is Agreement covered and similar to the existing Operator position. Mr Hodges stated that the Process Controllers will work closely with Plant Technicians, but their roles are fundamentally different. They will each be based in the same control room, with a specific station available for Plant Technicians that will be next to the Process Controllers. However, the work required to be performed is different. Mr Hodges stated that the Plant Technicians, like Plant Operators, will not always need to understand how the control system is functioning in the way that it is. They just need to know how to perform the discrete functions on it in order to do their job effectively. Mr Hodges recognised that there are some Operators who have developed this knowledge and that they will make good Process Controllers.
[86] In cross-examination at the Hearing on 15 March 2021, Mr Neilson put to Mr Hodges that the role was fundamentally changed in December 2020. Their exchange is as follows:
“Yes, and you fundamentally changed the role description in December 2020, didn't you?---No.
Did you change the role description in December 2020?---We added information to the role description.
Yes, and one of the things that you added was the requirement for engineering knowledge, for example?---Well, we further explained what we were meaning in that area, yes.
It seems as though, Mr Hodges, that what you - and I don't mean to be flippant about this but what you seem to have in your head, or what you intend are sometimes very different to what's reflected on paper and is what is communicated to people. Is that fair to say?---No.
No? So when you say that the role, for example, was just being, I think to paraphrase, you fleshed out by the update in December 2020 and I drew your attention, in particular, to the engineering requirements, where was that in the previous role descriptions?---Can I - sorry, can I just ask which bit you're referring to, which - - -
Sure. So in IH5, it seems to me and I have a coloured version, that the text that's brown or red, depending on whichever way you want to look at it, are changes that you've made?---They're additions that we were asked to put in, yes.
No, they're changes that you've made to say what the role is going to be, isn't it?---Yes. Yes they are additions to - we were asked to clarify some of those earlier words.
Yes, and the reason that you did that was because the union kept insisting that there was no difference between the operator role and the process controller roles, and so you had to continually update the position descriptions to try to demonstrate that there was some difference?---No.
And so when you came to IH5, one of the things that you added in there and you'll see this at the bottom of the page, "learn and grow in engineering based knowledge of process and control systems and apply that knowledge to the operation of the process." Now that obligation wasn't reflected in anything previously, was it?---I believe it was.
Where?---So I believe that's part of the very first paragraph that "the role directly supervises and co-ordinates the complete integrated process using remote (indistinct) control for complex operation of plant and equipment." I believe it was also implicit in the second paragraph. "They are required to be analysing the data with new software tools to tune and optimise the automatic systems."
Why do you have to have engineering knowledge to do all of those things?---I'm not quite sure of the question.
I asked you about, learn and grown in engineering based knowledge?---Yes.
And I said that that wasn't something that was reflected in the earlier role descriptions, and you said that it was. And you pointed me to those two paragraphs?---Yes.
And I just asked you why you had to have particular engineering knowledge to do those things?---I guess I can give examples, if that's all right.
Feel free, it's your answer?---So tuning and automatic control system requires engineering knowledge. Optimising an automatic system requires engineering knowledge. Analysis, detailed process analysis of heat exchange and performance, turbine efficiency and other issues like that requires engineering knowledge, which we are willing to teach but it is engineering knowledge.
And so the existing cohort of employees don't have those skills, is that correct?---They aren't required to have those skills. Some of them have experience and have developed that knowledge over time. There are some skills that none of them will have that we are prepared to train them in.” 15
[87] Following this exchange, I asked Mr Hodges to provide further information about the skills he said people did not have and what skills that were required to learn. Our exchange is as follows:
No, no. No, no. I'm not worried about what they don't have at the moment. What I want to know is what skills they're required to learn?---Yes. Sorry, Commissioner. It's just that some of them have those skills, some of them don't. That's why I'm just hesitating with that answer.
Okay, so they've picked them up on performing their current job, have they, or are these new starters to BlueScope?---Or they've picked them up in their trade in their previous experience. A number of our operators have come from trade backgrounds and they may have picked up some knowledge along the way which they can apply.
Yes?---So I just don't - - -
So is it right to say though, and I don't want to suggest an answer to you but is it right to say, when you use the word, "engineering", are you really talking about a trade competency there, either electrical or mechanical?---When I use the word, "engineering knowledge", I'm talking about a understanding, for example, of process control loops and the tuning of those process control loops; the proportional, integral gain.
The premier trade does all that. You're telling me the electrician doesn't do PLCs and the like?---They'll do some PLC work but not typically programming the PLC or adjusting the tuning parameters.
I beg to differ but you might know more about it than I do?---Also when I use the term, "engineering knowledge", I'm talking about process knowledge. So example - how heat exchanges work, how to calculate the efficiencies, how to calculate terminal temperature differences, how to interpret that data and that sort of thing. Again, some of the - there is no intent here to disparage the current operators. It's our intent to use the knowledge and experience they have and some of them are very good operators and they may well have picked up this knowledge over time. But not all of them will understand those things or know how to do them.
So who currently performs that work?---That's done by day shift engineers and to some degree trades, but typically day shift engineers would do the tuning parameters and the efficiency analysis.
They're not going to do this work anymore so what work are they going to do?---That's not quite correct: they are going to continue to do this work. One of the justifications for introducing this role rather than just reducing the numbers is that we want to do this work in real time. We believe there are energy efficiency gains by doing this, not just on day shift but to put more resources at this tuning, at the optimization, to achieve the goal of better energy efficiency for the whole site.
Yes, I understand that. I understand the logic behind changing the efficiency gains would be associated with that. I'm just wondering, though, what is the - I'm just struggling to see how this change is of such a magnitude that you require some level of engineering training. You're telling me the people, the technicians - sorry, the operators - have picked up this skill or competency along the way and I think your earlier evidence was that there is probably a dozen of the existing 26 technicians that could currently do the role?---I believe that there is probably more than a dozen that would be capable of doing that role with further training. We don't intend to put anybody - just drop anybody in this role. We believe there are things they need to learn and understand to do that. But yes, we do believe that we are adding a degree of responsibility and accountability in this new role that is not required just to keep the plant operating. So we've justified the introduction of a new role on the basis that they can bring these real-time energy efficiencies to the table.
Sure, I understand all of that. I understand all of that and it's not too dissimilar to what occurs in the Energy Australia control room in Bathurst Street currently, in the city, where you've got system controllers who are looking at the loads associated with transformers and the like and the heat issues associated with those transformers and dare I say it, when another sprinkler needs to go on to a transformer to try and cool it down. Sometimes Energy Australia denies - or Ausgrid, as it now is. But in those circumstances, all of those employees are basically electricians, some of which have post-trade qualifications, whether it be engineering certificate or the diploma and they're more than competent to do the work because they've picked it up, the skills and competencies, based on their experience of a life in the trade. They're still covered by the enterprise agreement?---Yes, Commissioner. I guess that there is no intent in option D that we are going to require degree qualified people to fill these roles. That's an absolute requirement. The term, "engineering-based knowledge of process and control systems", was simply meant to indicate the type of knowledge that we are looking for. We believe that - - -
I understand that. Okay, that's fine. I understand that. I'm not sure other people would. You know, it would appear that - reading the submissions and the evidence - particularly from Mr Newbold, when you started talking about engineering work and engineering qualifications and tertiary qualifications, people didn't regard that as being a cert III trade certificate. I, for one, am happy to have suggested that. I've now got three tertiary qualifications, which is (indistinct) said to me before. But I'm not sure that the wider population, including the AWU, understood that was your interpretation. So we've got a situation where people are at cross-purposes here. You're talking about the need or the benefit of tertiary qualifications and the need moving forward for people to have an engineering knowledge. The union is suggesting that means people need university qualifications. You're coming back and saying, "No, you need - you might need a cert III. You might be able to RPL or recognition of prior learning work on the job." But all you need is this capacity to undertake these engineering-like parts in addition to PLCs or in relation to doing some complex mathematics in relation to heat exchanges and the like. So the argument - what's written down on paper doesn't identify what you've said in your evidence?---In my evidence I talked about tertiary qualifications or significant experience - that was an attempt to say that we understood the value of experience and that from an RPL or equivalent sort of thing that we weren't going to exclude people simply on the basis that they didn't have a particular tertiary qualification.
I understand that but you're the first person - and I've been a licensed electrician since 1985 - you're the first person that I've ever heard call electrical trade certificate a tertiary qualification. I've been around industry for all that time so - - -?---I'm happy to have that on the record, that I'm not talking just about a degree qualification.
Unfortunately moving forward, Mr Hodges, I wouldn't have thought that people are going to want to read transcript to identify whether or not they have the necessary qualifications to undertake the role. Assuming you're going to be successful in your application, there is nothing in any of the documentation, which is in existence, from what I understand, which indicates that the tertiary qualification you're talking about is a cert III. I don't know whether that's deliberate or not but that's the state of play as we sit here today. So how do you overcome that?---Commissioner, we're not even suggesting that they must have a cert III.” 16
(my emphasis)
[88] In relation to the December 2020 document, Mr Neilson put to Mr Hodges that there had been significant additional duties and responsibilities added to the role. Their exchange is as follows:
MR NEILSON: That's okay. Mr Hodges, we were just talking about IH05, which you circulated in December 2020 and the changes that you made to the role. Looking at the update to the role, it looks as thought here has been a significant addition of duties and responsibilities over and above that which were circulated in October 2020. That's correct, isn't it?---No.
So when you talk about, for example, the requirement that the role sit above - sorry, that the - I've lost my place here - that the role is the shift leader?---Yes.
That you say is not a substantial addition to the role that was circulated in October?---Correct.
So if we did a comparison between the roles that were circulated in July and the role that was circulated in October, we would find in there the requirement for the operator to be a shift process - a shift leader for their shift?---Sorry, did you say July?
Sorry, yes - July, October. If we looked at those job descriptions that were circulated, we'll find in there the requirement for the process controller to be a shift leader?---Yes. I'm a bit confused. The July to October one was changed. That was changed during consultation.
Yes, and what I'm talking about - so for example, if you compared the IH05 to IH04, the imposition of the process controller being a shift leader is a substantial change between the two documents, isn't it?---No, I don't believe so.
You don't believe - would you accept it's a change between the two documents?---I'd accept that it was a further explanation of some of the words in paragraph 1 and the words, "take the lead on non-routine problem-solving as the prime technical expert on shift."
If consultation was complete in October 2020 and the proposal, in your mind, was going to be implemented in October 2020, as notified by you, why would you have to go to such detail in December 2020, then?---I was asked to by the AWU.
Was that because they were still saying that they didn't understand what it was this process was designed or supposed to be doing - this role is supposed to be doing?---I'm not sure why they asked for it but in a meeting that we were asked to have as part of conciliation, they asked for further detail on that role description.
You don't attach to your evidence any updated notification consistent with clause 36(6)(g) about the updated role description, do you?---No.
That is because you didn't prepare another letter in relation to that, did you?---No.
You haven't circulated or - you may have but you haven't attached it to your evidence, a circular updating the employees who were going to be affected by the change what the updated role description looks like now, have you?---No.
An employee that received the notification required under 36(6)(g) in October 2020 potentially or certainly as a result of your lack of action has no idea about the update in December 2020?---I'm not sure. The update in December 2020 was a result of the proceedings around conciliation so we had stopped all progress on implementation in November and then were asked to provide this updated letter to the union. I can't comment on what they did with it. But we haven't proceeded with anything since then in terms of the restructure.
Yes, but you haven't notified the employees of the updated option B. I think we've established that, haven't we?---Correct - we have notified the union.” 17
[89] Following the Hearing on 15 March 2021, I requested my Associate send correspondence on 16 March 2021 to the parties requesting that they respond to the following:
“Do Process Controllers in the energy distribution section currently supervise work?”
[90] In response, the Respondent referred to the ordinary meaning of the work supervise as provided by the Macquarie Online Dictionary; “to oversee (a process, work, workers, etc.) during execution or performance; superintend; have the oversight and direction of”. The Respondent submitted that within the Energy Services Department, the current Process Controllers, Energy Centre Controllers, oversee the electrical generation process and are fully accountable for the process under their control. It is the Respondent’s submission that in light of this explanation, the answer to my question is ‘yes’.
[91] The Respondent submitted that if ‘supervise’ in the above question was in relation to whether Process Controllers supervise other employees on the shift in the sense that the employees report to Process Controllers, then the answer is ‘no’. The Respondent submitted that currently, Plant Operators are supervised by a Team Leader and Team Leaders are accountable for decisions made on shift. Under the new structure, the Respondent submitted that Plant Operators (who will be renamed Plant Technicians) will be supervised by Team Leaders (who will be renamed Plant Owners). The Respondent submitted that Process Controllers currently report to Mr Hodges, Energy Services Operations Manager, and under the new structure, they will report to Senior Process Engineers.
[92] The Applicant submitted that the answer was ‘no’.
[93] The matter was listed for further Hearing on 30 April 2021 in order for additional questions to be put to Mr Hodges.
[94] Mr Hodges was first requested to clarify an inconsistency identified in relation to the Respondent’s response as outlined in paragraph [89-90] above and Mr Hodge’s evidence provided in the Hearing on15 March 2021. During the Hearing, Mr Hodges confirmed that in the New Structure, Process Controllers will have an element of supervision over the plant technicians on nightshifts. 18
[95] I asked Mr Hodges whether there were consultation obligations, between the parties, which apply to staff employees. Mr Hodges said that the Respondent had a “Management of Change Process for technical changes, such as this, which will result in people changes, to discuss, to consult”. 19 I asked Mr Hodges whether there was a level of agreement required, to which Mr Hodges stated “there’s not a formal level of agreement that’s required, no”.20
[96] The matter was again listed for Hearing on 11 May 2021 for the purposes of additional cross-examination and re-examination. During the Hearing, I asked Mr Hodges what happens when the plant technician takes their meal break. Our exchange is as follows:
“…The plant continues to run. The plant technician is not required to make the plant run. The plant runs automatically. He can just walk over to the crib room and have his break. The plant attendant function, he still carries that responsibility that is true and so if there is an emergency or something he will get a call on the radio to say hey, there's an emergency and as plant attendant, as you know boiler attendant, he may have some function which is to shut down the boiler. However, that is all automated but - is that answering - I'm not sure if I'm answering the question correctly but in terms of taking a break both in the current situation the attendant remains the attendant for the shift normally currently.
Right, so what happens when the attendant takes a break currently?---He remains the attendant but if there is the same situation, he will have a break. He may sit - they often sit in front of the screens and have their meal but they're entitled to go elsewhere into somewhere else and have a break, but if there is something going on he'll be notified and he may have to come back.
So who will notify him - is that the process controller's job on night shift to notify him to come back?---Yes, if he's doing some outside duties or he's having a break or he's performing some other function that is not inside the control room, correct. On both night shift and day shift.
Right. Okay, but the two attendants on day shift, so the boiler attendant and the turbine attendant, do they tend to take their - stagger their breaks so there's one in the control room at any one time?---Currently, Commissioner, sorry is that a question about - - -
Yes, yes, currently?---Yes. Not necessarily. They can. There are four operators. Any one of them could be in the control room. We typically ask that there be always two people in the control room at any one time.
So if it's typical to ask them for two to be in the control room at any one time currently, what's going to be the process moving forward on night shift?---We would have the same, any two people to be in the control room at any one time.
But isn't there a demark?---No, anyone - like currently anyone can be - respond to an alarm or - I mean there are various different alarms so some alarms - the energy centre controller might get some alarms, might be got by the auxiliary driver. Some alarms might not need to be responded to straight away if I'm understanding the question. But the notification of the alarm is something that anyone can do and is required to do.” 21
(my emphasis)
[97] Under cross-examination, Mr Neilson put to Mr Hodges that the Australian Standards, as they concern boiler operations, require that no aspects of an operators’ duty will impede their supervision checking of the boiler start up, shut down and period testing. Mr Neilson further put to Mr Hodges that that the duties of the operator shall be that they are all time within sight and hearing distance of the boiler’s alarm systems and can response to the alarms. Mr Hodges agreed with Mr Neilson. 22
[98] Mr Neilson asked Mr Hodges what happens when the plant technician takes a break. Mr Hodges said that the Process Controller will respond to an alarm and contact the technician if an alarm goes off. 23
[99] I then asked Mr Hodges whether the Process Control will have a high risk license. Our exchange is as follows:
“THE COMMISSIONER: It's all right, Mr Hodges, I think you've answered that question a couple of times. Mr Neilson, Mr Hodges has indicated that the process controller will respond to an alarm and contact the technician if an alarm goes off. Now I'm assuming that means that the technician will have to take his radio or walkie talkie to the toilet with him. Creates other issues I suppose but that is obviously what is going to transpire there. The question which flows though, Mr Hodges, is will the process controllers also have this high risk licence?---We are not making that a requirement for all of them.
Isn't it a requirement though on the basis of what Mr Neilson's put you through today. There are issues here in relation to Australian standards that the plant needs to be under the supervision and monitoring of a high risk licensee at all times and from what you're saying that isn't going to happen. When the technician takes their breaks or whatever the reason, there's not going to be a high risk licensed person in the control room 24/7?---That's correct. That's correct. I don't believe that the standards asks us to have someone in the control room at all times but it asks us to carry - it asks the high risk work licensed attendant to carry out the tasks and monitoring as described by the owner's procedures. And that may be that they have to go outside or do some other test, and that's currently the case. There's nothing in the standard that says they have to sit in the control room just in case.” 24
Consideration
[100] I have taken into account all of the submissions and evidence that have been provided by the parties.
Determination
[101] I agree with the Respondent that the issue of whether the proposed restructuring of the Energy Services Department was a significant change does not need to be determined on the basis that the SELF test still needs to be satisfied in order for the proposed restructuring to be implemented.
[102] Therefore, the role of the Commission in this dispute is to determine whether the proposed restructuring put forward by the Respondent satisfies the SELF test. I now turn to consider and determine each individual element.
Safety
[103] I am satisfied that the transferal of the majority of the work to be performed on the plant from night shift to day shift will eradicate the majority of safety issues which currently exist when the operators are required to work on the plant in the night. Whilst I do not consider that working currently on the plant of an evening creates any major safety issues, the safety issues which may exist, such as, poor lighting, fatigue, lack of technical support and isolation all disappear as a result of this proposal.
[104] I am satisfied that the proposed manning of the control room has sufficient built-in capacity and resources to allow for the monitoring of the alarms in the control room to ensure the safe operation of the plant. I am satisfied that Mr Hodges is aware of the issue surrounding the high-risk license. The Commission is not the regulator. The Respondent must answer to another authority if they breach the Australian Standards, knowingly or otherwise, in this regard.
[105] I am satisfied that the proposal is safe.
Efficient
[106] The implementation of the proposal will see the reduction of 14 operator positions and the creation of 9 process controller roles. It is proposed that the process controller roles will be paid at a salary some $5, 000 p.a. above the highest rate in the Agreement.
[107] The Respondent also claims that the automation proposal will significantly improve the operational efficiency of the plant by minimising the need for employees to manually operate the plant, increased energy efficiency by improved energy conversion and generation and by using water in a more efficient and cost-effective manner. All of these measures will improve the cost efficiency of the Department.
[108] I am satisfied that the proposal satisfies the efficiency test.
Legal
[109] I am satisfied that the Respondent has identified the consequences for any employee who does not have either a Process Controller role or Plant Technician role after the restructure has been implemented. Mr Hodges advised that those employees that will work within the Department and be managed in accordance with the provisions of the Enterprise Agreement.
“What do you mean by that? You'll just keep them working and wait until they decide to retire or leave or what - - -?---Correct - so I guess it's a bit of a hypothetical question but if - as I've stated, we have quite a few employees who have indicated their retirement plans. I'm not holding them to that or otherwise. But there will be significant work that we could keep them within the energy services department until such time. If all the - if none of the existing operators wanted to apply or chose not to apply for any of the controller roles, and there were a number even above that which didn't seem on the reasonable horizon - and I guess we can discuss what that means at some point - that we could manage through that attrition process and we would deal with them with EA processes. I believe that relates to us offering them to apply for other roles within BlueScope.”
[110] A Full Bench of the Commission in BlueScope Steel (AIS) Pty Ltd v AWU and Ors, stated:
“[15] The criterion of legality has, in relation to industrial instruments preceding the Agreement which applied to Bluescope and contained a provision equivalent to the current clause 35.2, been applied on the basis that a change will be “legal” if it is not illegal - that is, if it is not positively prohibited by any enforceable legal requirement. That approach is consistent with the ordinary meaning of “legal” and is one that we propose to adopt...” 25
[111] Whilst the Applicant may have some concerns in relation to the Australian Standards associated with the monitoring of the boilers by a licensed person, I am confident that Mr Hodges would not knowingly or deliberately contravene these obligations.
[112] As stated in paragraph [104] above, a breach of the Australian Standards is a matter for the safety regulator not the Commission.
[113] I do not regard the issues raised by the Applicant in relation to the consultation process to identify any form of illegality. It is not in debate that the Respondent made modifications to the role, function and competency requirements of the Process Controller position during the negotiations. This fluidity identifies that the process working, not that it was illegal.
[114] I am satisfied that the proposal is not “illegal”, therefore it is legal.
Fair
[115] An assessment of the fairness of any proposal is quite obviously a subjective assessment and a discretionary decision.
[116] I am not convinced that the proposal is fair. Whilst there were lengthy discussions in relation to the proposal, the fact that the Respondent changed the position description on two occasions during the process, meant that the Applicant did not know the case it had to answer. Whilst I accept the argument that there was no need for the Respondent to issue a new “letter 1” after it had released the third position description for the Process Controller, it was required to have meaningful discussions about the modified role. This did not occur. As a result, the Applicant was denied the opportunity to consult properly in relation to the more detailed position description issued in December 2020.
[117] It is also unfair, in my view, for the Respondent to introduce the need for tertiary qualifications into the role. The level of this unfairness is exacerbated by Mr Hodges ignorance in relation to his understanding of a tertiary qualification. A trade certificate, to use the old terminology, is not a tertiary qualification. For Mr Hodges to believe that a trade certificate is a tertiary qualification undermines the whole academic process of including this qualification in the position description. Mr Hodges did not commit to remove this provision from the proposal. As such, in the future, no tradesman will ever be able to progress to the Process Controller role without a University degree.
[118] Having previously been involved in discussions in relation to the Electrotechnology Training Package, I sincerely doubt that a qualified electrical technician could not perform the necessary mathematical calculations. From my experience, complex mathematical calculations have formed part of the electrical apprenticeship for more than 40 years.
[119] I am sympathetic to the views of Mr Newbold, who stated:
“6. As to paragraph 31 of the Hodges Statement, he cites the greater technical knowledge which will be required for Plant Operators. The first thing to note is that, in my view, and based on my experiences and feedback from the consultation discussions, the requirement for the holder to have engineering or science knowledge is likely overstated. It is not a mandatory requirement in the new role as is made clear by Mr Hodges stating that experience equivalent would be accepted for the new roles and his prediction at paragraph 32 about some employees having transferrable skills. However, if equivalent experience is accepted and the existing employees are qualified for the role then it highlights that the position is not so different from the existing positions albeit renamed. However, if the positions do require the engineering and science skills as mandatory skills, then it is likely that none of the existing cohort of employees will meet the criteria which will mean that at least 10 employees will become displaced.” 26
[120] Whilst it is likely that Mr Hodges will appoint existing Plant Operators into the Process Technician roles based on their job knowledge and competency, that career path for future Plant Technicians will definitely disappear, simply because they will not receive the same level of experience and training compared to the current arrangement. Such an outcome could be considered unfair to the existing and future employees in the Department.
[121] I also find that it is unfair and unnecessary for the Process Controller role to be a staff position. Mr Newbold highlighted the position of Operators in the Hot Strip Mill where Operators are paid at level 16.5 and receive an allowance based on a plus or plus plus criteria 27.
[122] I also note that an Operator 3 28 in the Hot Strip Mill is required to:
Role Statement | 5. Ensure consistent slab temperature of both furnaces |
Task List | • Responsible for the attainment of consistent slab heating performance for both Furnace 1 and Furnace 2 using the process operator consoles to monitor and control: Individual Zone Temperatures including response and performance. Slab Performance Operator or computer control input and performance. Take appropriate action via available control systems to correct any known deviations that affect heating performance and slab integrity. |
Role Statement | 7. Liaise with external departments to ensure correct operation of furnaces. |
Task List | • Liaise and co-operate with other departments employing a collaborative approach to ensure correct operation of the furnace, including but not limited to: • Energy Centre • Production control centre • Slab yard • Power control officer |
Role Statement | 8. Problem Solving |
Task List | • Analyse adaptation trends. • Update Event using "5 Why" methodology - objective is to get root cause |
Role Statement | 10. Carry out duties as per Gas Regulations including: • GSL 2 Accreditation • Standby Person for Gas Safety and Confined Space Regulations |
Task List | • Accredited in the role of Gas Safety Level 2 Person supervising the safe shutdown, isolation, de-isolation, and safe light up of Furnace 1 and Furnace 2. • Carry out the role of Standby Person for Gas Safety and Confined Space Regulations including the daily span checks of all 3 in 1 Gas Monitors. • Conduct pressure testing of coke ovens gas pipe work for Furnace 1 and Furnace 2 to determine performance of individual zones or burners. Perform ongoing monitoring of COG flows to ensure maximum fuel output and efficiency. |
Role Statement | 14. Be involved in projects and trials as required including small group activities (required at all levels). |
Task List | • Participate with mill trials and project rolling. • Participate in small group improvement activities. |
Role Statement | 15. Prepare shift reports and input information into event system (required at all levels) |
Task List | • Complete shift reports, major problem reports, inspection reports, and quality control reports via the HSM Event System including submitting follow-ups to appropriate personnel to resolve issues that affect the performance of the Walking Beam Furnaces and Roughing Mill area. Identify root cause wherever possible. |
[123] In comparison, the Process Controller will be required to utilize a similar range of skills and competencies. Mr Hodges indicated that the Respondent is willing to train appointed employees in any competency that they currently do not possess. Adopting the obiter in Fonterra Brands 29 I am satisfied that the duties of the Process Controller are an extension of the duties and functions of the current Operators in the Department. Further, the duties are similar to that of an Operator 3 plus plus in the HSM, which is a classification covered by the Agreement.
[124] A Full Bench of the Commission in BlueScope Steel (AIS) Pty Ltd v AWU and Ors 30, determined that the classifications in the Agreement do not have any settled definitions. Therefore, the Respondent has the capacity to be very flexible in relation to the rates of pay and allowances that it provides to any role which is covered by the Agreement. To suggest that the Process Controller role must be a staff role based on the limited scope of the Agreement is at odds with the unchallenged evidence of Mr Newbold in relation to what happens at the HSM. I find that it was unfair for the Respondent to not utilize the provisions of the Agreement in determining a rate of pay for the Process Controller.
[125] I am satisfied that the restructuring proposal is unfair.
Conclusion
[126] I am satisfied and find, for the reasons stated above, that the Process Controller proposal sought by the Respondent is safe, efficient, legal but unfair.
[127] I also note that this decision supports the “Objects” of the Fair Work Act by maintaining these employees under the Agreement:
“Section 3 Object of this Act
(f) achieving productivity and fairness through an emphasis on enterprise-level collective bargaining underpinned by simple good faith bargaining obligations and clear rules governing industrial action”
[128] I also note that this decision will increase the cost benefits of the proposal for the Respondent. The employees are clearly prepared to perform the duties of the proposed role, but they want to maintain the protections and benefits associated with their collective agreement and not receive the higher remuneration of the staff position. In this regard, the Respondent achieves the benefits of the automation process, without the total cost of the proposal.
[129] The objection of the Applicant to the proposed restructure of the Energy Services Department is upheld.
[130] I so Order.
COMMISSIONER
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1 Email correspondence from Chambers to the parties dated 5 March 2021.
2 [2019] FWCA 3947, at [2].
3 Applicant’s written submissions dated 11 February 2021, at [7].
4 Fonterra Brands (Australia) Pty Ltd v AMWU[2015] FWCFB 3912, at [16].
5 Applicant’s written submissions dated 11 February 2021, at [37].
6 Applicant’s written submissions dated 11 February 2021, at [39].
7 Applicant’s written submissions dated 11 February 2021, at [42].
8 Respondent’s written submissions dated 4 March 2021, at [1.7].
9 Respondent’s written submissions dated 4 March 2021, at [3.2].
10 Australian Workers’ Union v BlueScope Steel (AIS) Pty Ltd[2016] FWC 3848 at [58].
11 Respondent’s written submissions dated 4 March 2021, at [3.32].
12 Respondent’s written submissions dated 4 March 2021, at [3.36].
13 Statement of Ian Hodges dated 3 March 2021, at [13].
14 Statement of Ian Hodges dated 3 March 2021, at [20].
15 Transcript of Proceedings, 15 March 2021, PN 415-430.
16 Transcript of Proceedings, 15 March, PN 438-451.
17 Transcript of proceedings, PN459-473.
18 Transcript of Proceedings, 30 April 2021, PN 31.
19 Ibid, PN40.
20 Ibid, PN41.
21 Transcript of Proceedings, 11 May 2021, pm58-64.
22 Transcript of Proceedings, 11 May 2021, PN 67-69.
23 Ibid, PN69-96.
24 Ibid, PN97-98.
25 BlueScope Steel (AIS) Pty Ltd v AWU and Ors[2015] FWCFB 5615 at [15].
26 Statement of Christopher Newbold dated 10 March 2021, at [6].
27 Statement of Christopher Newbold dated 10 March 2021, attachment CN-R–1 page 359.
28 Statement of Christopher Newbold dated 10 March 2021, attachment CN-R–1 page 364.
29 Fonterra Brands (Australia) Pty Ltd v AMWU[2015] FWCFB 3912.
30 BlueScope Steel (AIS) Pty Ltd v AWU and Ors[2015] FWCFB 5615.
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