The Australian Workers' Union v BlueScope Steel Limited T/A Lysaght

[2016] FWC 8877

[2016] FWC 8877

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739—Dispute resolution

The Australian Workers’ Union
v
BlueScope Steel Limited T/A Lysaght
(C2016/7005)

Manufacturing and associated industries
DEPUTY PRESIDENT GOOLEY	MELBOURNE, 9 DECEMBER 2016

Alleged dispute about any matters arising under the enterprise agreement and the NES;[s186(6)].

[1] The Australian Workers’ Union and Bluescope Lysaght are in dispute about warnings given to an employee of Bluescope. In addition, they are in dispute about Bluescope’s alcohol and drug testing procedure.

[2] The AWU sought the assistance of the Commission to resolve the dispute. Bluescope objected and said the Commission had no jurisdiction to deal with the dispute.

[3] At the hearing of the matter I granted permission to Bluescope to have legal representation as I considered that the matter involved some complexity and legal representation would enable the matter to be dealt with more efficiently. Further, the AWU did not oppose permission being granted.

[4] The Lysaght Lyndhurst Workplace Agreement 2014 provides at clause 7 for the resolution of disputes as follows:

“This is what we do when we haven’t been able to resolve our differences about the National Employment Standards and other employment related matters in the normal course of work. At any stage in the process the employee/s affected by the issue and the Company officer involved may have a person of their choosing who is conveniently available, attend the meeting to assist them in trying to resolve the issue in dispute.

I. Discussion of the issue between the employee or employees affected and the Team Leader involved. If the matter remains unresolved following discussion then;

II. Referral of the matter to the Operations Manager, who would meet with the employee or the employees affected. If the matter remains unresolved following the discussion then;

III. Referral of the matter to the State Manager Vic/Tas who would meet with the employee or the employees affected. In the case of disputes about discretionary benefits the Manager’s decision will be final. Otherwise, if the matter remains unresolved following discussion then;

IV. Where the issue remains unresolved then either party may refer; the issue or grievance to Fair Work Commission for conciliation and/or arbitration.

Relative to health and safety, we understand that these issues must be addressed according to the dispute resolution procedure provided for under the state OHS legislation. Differences between the employees and the Company in relation to disciplinary action taken by the Company as a result of underperformance at work will also be addressed using this procedure.

We recognise that normal work will continue while our differences are being resolved unless an employee has a reasonable concern about an imminent risk to his or her health and safety, in which case the employee will be allocated and perform alternative safe work. We agree to maintain the work practices that existed before the dispute whilst the parties are following the resolving our difference process.

We will resolve differences as quickly as possible, because it’s good for us and good for business.”

Evidence

[5] Mr Sanan Sharma, the HR business partner, gave evidence and was cross-examined. He was a member of the negotiating team for the Agreement. The AWU made a number of claims in relation to the Agreement including a claim in relation to the disciplinary procedure. The AWU sought an agreed procedure to investigate incidents that may lead to disciplinary action. Further they sought clarification of the status quo provisions in the dispute’s procedure. 1 Those demands were not agreed to. On 20 May 2015, Mr Liam O’Brien on behalf of the AWU sent an email to Bluescope including Mr Sharma. Relevantly that email sought the inclusion of the following in the Agreement:

“DP or similar provision in agreement that contains the following:

a. The opportunity to hear allegation of underperformance or misconduct and respond to them in a timely manner

b. To have all matters of underperformance or misconduct fully investigated

c. The right to be represented by a person of your choosing who is readily available to attend

d. The right to have the decision reviewed prior to implementation 2”

[6] That proposal was not agreed to, but Bluescope did agree to include in the Agreement the following words:

“Differences between the employees and the Company in relation to disciplinary action taken by the Company as a result of underperformance at work will also be addressed using this procedure.” 3

[7] Employees were informed of this change prior to voting to approve the Agreement.

Submissions of Bluescope

[8] Bluescope submitted that the matters in dispute is whether it was appropriate for Bluescope to:

1. issue a warning to its employee who failed to report a safety incident in accordance with his obligations under the BSL-HSE-S-12-01 HSE Incident Management Procedure (the reporting obligation);

2. issue a warning to its employee for refusing to comply with the requirement to undertake a test in breach of the BBC-OHS-04-01 Alcohol and Other Drugs Testing Procedure (the testing breach); and

3. Whether it’s requirement that the employee undertake random testing under the testing procedure is inconsistent with the procedure.

[9] Bluescope submitted that clause 7 of the Agreement did not provide for disputes in relation to misconduct to be dealt with under the dispute resolution procedure.

[10] Clause 7, it submitted, only required disputes in relation to underperformance to be addressed by the dispute resolution procedure. It submitted that the expression “other employment related matters in the normal course of work” does not extend to misconduct. Misconduct, it submitted, is outside the normal course of work. It submitted that the opening paragraph of clause 7 did not provide for the resolution of disputes about misconduct or performance. Had it done so, it would not have been necessary for the AWU to make a demand for a process to deal with disciplinary procedures in the bargaining for the new agreement. Further, the exclusion of the words “misconduct” from the new words added to the Agreement set out above in paragraph [6] makes it clear that the parties did not agree that disputes over misconduct could be dealt with under the dispute resolution procedure.

[11] Further, Bluescope argue that this is a dispute about safety and the resolution of such a dispute is dealt with under the dispute resolution procedure under state Occupational Health & Safety legislation.

[12] It says that this is a dispute about safety because the first warning letter arose out of the employee’s failure to report a safety incident in accordance with the procedure. It was that failure that led to the first disputed warning letter. The parties are in disagreement as to whether under the procedure an employee who merely observed a safety breach but did not report it was involved in a safety incident.

[13] Only if the employee was involved in a safety incident could he have been required on that occasion to undertake a drug and alcohol test. His view that he was not involved led him to refuse the test. That refusal led to the second disputed warning letter.

[14] As a result, that employee is required to undertake random breath testing. It was submitted that the resolution of this dispute would require the interpretation of safety policy. As such it is caught by the exclusion in the dispute resolution procedure for health and safety issues.

Submissions of the AWU

[15] The AWU, in its application, notified of a dispute over both the letters of warning and the alcohol and drug testing procedure. The AWU contend that its member did not witness a safety breach and therefore was under no obligation to report the incident. As such, he should not have been issued with a warning for failing to report the incident. Further, even if he had seen the incident, he was not involved in serious safety breach and should not have been required to undertake a drug and alcohol test and therefore he should not have been issued with the second warning. Further he should not be now subject to random fitness for work testing.

[16] The AWU submitted that the words “in the normal course of work” are not words of limitation. The AWU submitted that the Fair Work Act 2009 requires that an agreement contain a dispute resolution procedure which provides for an independent person or the FWC to settle disputes about any matters arising under the agreement and in relation to the National Employment Standards. 4

[17] It submitted that redundancy which is dealt with in the agreement does not occur “in the normal course of work”. If Bluescope’s contention were upheld, then disputes over the redundancy provisions in the agreement could not be resolved in accordance with the dispute resolution procedure. The AWU submitted that an interpretation, which was inconsistent with the Act, should not be favoured.

[18] It submitted that dispute resolution procedures in agreements should not be narrowly construed. 5

[19] The AWU submitted that the parties agreed to the inclusion of the additional words in the dispute resolution procedure to make it clear that performance issues could be dealt with under the dispute resolution procedure. The words were not put there to limit the scope of the dispute resolution procedure. The AWU submitted that had the parties intended to exclude disputes relating to misconduct they could have expressly excluded misconduct and they did not do so.

[20] It was submitted that the words in the opening paragraph had always applied to disputes over performance and misconduct. The AWU says this is clear from the plain and ordinary meaning of the words in the Agreement.

[21] To support this proposition the AWU relied on the evidence of Mr Sharma that such disputes had, under the predecessor agreement, been dealt with by the Commission and no objection had been taken. Mr Sharma accepted that disputes under the predecessor agreement, including disputes over misconduct, had been conciliated by the Commission and Bluescope had participated in the conciliations without objection. He said, on one occasion, where the matter was to proceed to arbitration, Bluescope had prepared submissions objecting to the Commission’s jurisdiction but the matter had not proceeded.

[22] The AWU submitted that this was not a dispute about occupational health and safety. It was a dispute about the disciplinary action taken by Bluescope and it was caught by the dispute resolution procedure. The AWU accepted that resolving this dispute may involve a consideration of the policy but that did not change the character of the dispute. The dispute is about the disciplinary action taken against their member.

Consideration

[23] It is not disputed that the Commission’s jurisdiction to deal with disputes is not at large. 6 The Commission is able to deal with a dispute if an enterprise agreement includes a term that provides a procedure for dealing with disputes. The scope of the Commission’s power is determined by the terms of the agreement.

[24] The principles relevant to the interpretation of agreements were summarised by a Full Bench 7 as follows:

[28] Those principles were recently summarised by a Full Bench in Cockerel  8 as follows:

“1. The AI (Acts Interpretation) Act 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.”

[25] I find that there is uncertainty about the meaning to be attached to the words “other employment related matters in the normal course of work.” The words “in the normal course of work” appear to be words of limitation otherwise their inclusion means nothing.

[26] I further find that the scope of the exclusion of issues relative to health and safety is also uncertain. It is not clear for example if disciplinary action for underperformance in relation to health and safety issues is included or excluded from resolution under the dispute resolution clause.

[27] I do not accept the submissions of the AWU that in interpreting the clause that I should have regard to Bluescope’s involvement in conciliation in relation to disputes about misconduct under predecessor agreements. Participation in conciliation is not evidence of the scope of the dispute resolution clause in a predecessor clause. While I accept that there may be circumstances in which conduct under predecessor agreements can be relied on to support a particular construction of an agreement, 9 mere participation in conciliation conferences conducted by the Commission to resolve disputes is not such conduct.

[28] I do not accept the submissions of the AWU that the inclusion of an express provision that permitted matters related to unsatisfactory performance to be dealt with by the dispute resolution procedure was a result of an abundance of caution. The evidence in relation to this matter is clear. These words were included in response to the AWU’s claim in relation to both unsatisfactory performance and misconduct. While its broader claim was rejected Bluescope accepted the AWU’s claim that there be a procedure to review a decision in relation to unsatisfactory performance but did not extend that right in relation to misconduct. If as the AWU contended the clause already applied to unsatisfactory work performance and misconduct the words were unnecessary.

[29] I am therefore satisfied therefore that the dispute resolution procedure in the agreement does not apply to disputes relating to misconduct.

[30] It is therefore not necessary for me to decide if the dispute is one that is caught by the exclusion in relation to issues of health and safety.

[31] I therefore uphold the jurisdictional objection raised by Bluescope and dismiss the AWU’s application.

DEPUTY PRESIDENT

Appearances:

P. Reilly for the Applicant.

H. Skene for the Respondent.

Hearing details:

2016.

Melbourne:

8 December.

<Price code C, AE414969  PR588412>

 1   Exhibit R1 at SS5

 2   Ibid at SS6

 3   Ibid at SS8

 4   S186(6)

 5   Construction, Forestry, Mining and Energy Union v Mt Arthur Coal Pty Ltd [2016] FWC 2959 at [7] and SDA v Big W Discount Department Stores [PR 924554] at [23]

 6 See ss.738 and 739 of the Fair Work Act 2009

 7   Construction, Forestry, Mining and Energy Union and another v Transfield Services (Australia) Pty Ltd [2015] FWCFB 1061 at [28]

 8   [2014] FWCFB 7447 at [41]

 9   Hospira Australia Pty Ltd v National Union of Workers[2010] FWA 1199

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