West Australian Newspapers Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers' Union (AMWU)-Western Australian Branch
[2012] FWA 2795
•10 APRIL 2012
[2012] FWA 2795 |
|
DECISION |
Fair Work Act 2009
s.739—Dispute resolution
West Australian Newspapers Ltd
v
Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers’ Union (AMWU)-Western Australian Branch
(C2011/1035)
COMMISSIONER WILLIAMS | PERTH, 10 APRIL 2012 |
s.739—Application to deal with a dispute.
[1] This is an application to deal with a dispute pursuant to section 739 of the Fair Work Act 2009 (the Act).
[2] The Applicant is West Australian Newspapers Limited (WAN) and the Respondent is the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers’ Union (AMWU).
[3] Section 739 empowers Fair Work Australia to deal with a dispute as permitted by the terms of the applicable enterprise agreement. The enterprise agreement in this instance is the West Australian Newspapers Production Employees Enterprise Bargaining Agreement 2010 [AE883079] (the Agreement).
[4] The relevant provisions of the Agreement are as follows:
“33. INTRODUCTION OF CHANGE PROCEDURE
The Production Division needs to use the most efficient and effective way to meet production requirements. In the event that it is necessary to introduce significant change the following Introduction of Change Procedure will apply.
Step 1. The Manager will advise their Employees in writing:
a) What the change is
b) Why it is necessary to introduce the change
c) Which Employees will be affected by the change
d) What effect these changes may have on the Employees
e) What steps have been taken to reduce/minimise these effects
Step 2. The Manager will give the Employees 5 working days to discuss and consider the proposed change.
Employees will provide feedback to the Manager clearly identifying any issues with the proposed change and providing suggested solutions to the issues.
Solutions or alternatives raised by Employees must meet the business objectives of the change in an efficient and effective way.
Step 3. The Manager will review the feedback from Employees to determine whether the solutions or alternatives provide an efficient and effective way to meet business requirements.
The Manager will also consider any issues raised and make any possible changes to the proposed change to address these issues while also ensuring business requirements are met in an efficient and effective way.
The Manager will respond to Employees within 5 working days.
Step 4. Where ongoing discussions are required, Employees and managers are required to respond to one another within 5 working days of receipt of new information.
Where a complex issue is being discussed, it is expected that the manager and Employees will agree to meet on a more frequent basis.
Step 5. If it is apparent that the manager and Employees are unlikely to reach agreement, the appropriate representative of senior management must be involved as soon as possible to facilitate agreement.
Step 6. In the event that the Manager and the Employees are unable to reach agreement on these changes within a maximum of 20 working days, the Dispute Settlement Procedure may be followed to resolve the matter. The Dispute Settlement Procedure must be commenced within 7 days of expiry of the 20 day period, otherwise the change will be taken to have been agreed to.
Where the issue escalates to the Dispute Settlement Procedure, the Dispute Settlement Procedure will commence at Step 3.
It is anticipated, however, that the Manager and Employees will endeavour to reach agreement on these changes.
Step 7. Until the matter is resolved in accordance with the Dispute Settlement Procedure contained in this Agreement, all work shall continue normally as was prior to the proposed changes.
Where little or no notice has been provided to the business for short term changes that are outside the businesses control, the Manager must, in Step 1, provide Employees with the date the change is required to take effect. Employees will have the opportunity to provide feedback on the most suitable way to implement the change; however, the timeframes must be shortened so that the change takes effect by the required date.
In these instances, it is agreed that these changes must occur and the change process will not escalate to the DSP on the proviso that the change is only short term to address a situation outside the businesses control.
34. DISPUTE SETTLEMENT PROCEDURE
Any question, dispute or difficulty arising out of this Agreement will be settled in accordance with the following Dispute Settlement Procedure:
1. In the first instance, and as soon as practicable, the Employee will raise the concern with their supervisor and attempt to resolve the matter as quickly as possible.
2. At each step of the procedure, the Employee can request to have a representative of their choice present.
3. If the concern is not resolved by the supervisor, or if it is inappropriate to refer the concern to the supervisor, the concern will be referred to the Department Manager.
4. If the above procedure is followed and the concern remains unresolved the matter will be referred to Human Resources for further assistance and resolution.
5. If the concern is not settled, and all reasonable endeavours have been made to resolve the matter, the Employee, the Employee’s nominated representative or the Employer may refer the matter to Fair Work Australia for conciliation.
6. The parties are committed to resolving all matters of concern by conciliation.
7. The matter may then proceed to arbitration at the request of either party, once the parties have exhausted all attempts to conciliate an agreed outcome.
8. During the time of the dispute, from the time when the matter first arises until the time of its resolution, normal work shall continue as was prior to the dispute, unless the performance of normal work would place at risk the health and safety of the employees concerned. No party shall suffer any prejudice as to the resolution of the matter by reason only that normal work continues as required by this process.”
[5] Conciliation under the Dispute Settlement Procedure occurred on 22 December 2011 and 7 February 2012. Conciliation however was unsuccessful and subsequently WAN requested that the matter proceed to arbitration.
[6] Inspection of the relevant areas of WAN’s operations at Osborne Park was conducted on Thursday, 22 March 2012.
[7] The dispute concerns changes to rosters and manning levels sought to be introduced by WAN. The AMWU’s members employed by WAN oppose both of these changes.
[8] I am satisfied that Fair Work Australia does have jurisdiction to arbitrate this dispute.
The proposed changes
[9] In September 2011 WAN presented to its employees and members of the AMWU a proposal for changes in the press room relating to rosters and manning levels.
[10] The proposal involved changes to the press room roster to ensure from WAN’s perspective that there were adequate staffing levels to deliver on the regular production requirements during ordinary hours wherever possible without this planned work also having to be completed on overtime. The manning levels in the basement of the press room were to be changed for both single and multiple press runs. Printers and basement staff would be reallocated away from the basement to other areas of the press room such as press equipment maintenance.
[11] It was always WAN’s position that there would be no job losses from these changes.
[12] The most significant practical effect upon employees of these changes was a reduced opportunity to work overtime with the consequential reduction in gross earnings for those employees who historically had chosen to work a significant amount of overtime.
[13] WAN had explained to its employees that the changes were necessary because of the difficult business conditions which began following the global financial crisis but which have continued. This reduced level of business means there is an increased need to seek improvements in productivity and efficiency that will provide consequential reductions in costs.
[14] The proposed roster changes, after some negotiations, were agreed upon however subsequently the AMWU retracted its support for these changes. The AMWU has at all stages opposed the change to the manning levels.
WAN’s submissions
[15] WAN submits and that the Agreement includes the following provisions that are relevant to this dispute.
[16] Firstly Clause 5–Relationship to Awards and Other Industrial Agreements of the Agreement provides that any changes to current arrangements will be addressed through the process prescribed in Clause 33–Introduction of Change Procedure.
[17] Secondly Clause 6–Aim of this Agreement of the Agreement says that the aim of this Agreement is too consolidated the shared benefits that have been gained from previous enterprise agreements and “implement changes to improve existing efficiencies within Production.”
[18] Shifts and rosters are to be determined in accordance with Clause 12–Hours of Work, and the roster changes are within the scope of this clause.
[19] Clause 33–Introduction of Change Procedure of the Agreement expressly says that the production division needs to use the most efficient and effective way to meet production requirements.
[20] Finally Clause 5–Relationship to Awards and Other Industrial Agreements of the Agreement says that the terms of the Agreement are to be read in conjunction with the terms of the Printing (Newspapers) Award 1979 [AN160258] (as was at 01.01.2010) (the Award), with the Agreement prevailing to the extent of any inconsistency.
[21] WAN submit that the Agreement and the Award are both silent on manning levels which therefore remain within the prerogative of WAN to set and to change as need be.
[22] It is submitted that existing manning levels and rosters are ‘current arrangements’ for the purposes of Clause 5–Relationship to Awards and Other Industrial Agreements of the Agreement. Consequently any proposed change must be addressed through the introduction of change process set out in Clause 33 which is what WAN has followed since September last year.
[23] In terms of arbitration it is submitted that Fair Work Australia should not interfere with the right of WAN to manage its own business unless the employer is seeking something which is unjust or unreasonable. 1
[24] In addition in the absence of any term of the Agreement that prevents WAN from making changes to shift arrangements, WAN has a managerial prerogative to alter both the pattern and structure of shifts and the particular shift worked by an employee. 2
[25] Relevantly the Tribunal should consider whether the proposed change is reasonable, which depends on the individual circumstances of the case. 3
[26] Criteria for reasonableness include whether:
a. a reasonable person in the position of the employer, could have made the decision in question; 4
b. the exercise of managerial prerogative is contrary to an industrial instrument; 5
c. the proposed change affects the health and safety of employees; 6and
d. the process for introducing the change has been fair. 7
Reasonableness
[27] WAN submits that the reasons for the proposed change relate to improving the cost effectiveness of the business and reducing overtime on planned production runs.
[28] The proposed change is not contrary to the terms of either the Agreement or the Award.
[29] The proposed change will not adversely affect the health and safety of employees indeed no new risks to health and safety have been identified through the introduction of change consultation process. The current safe operating systems are adequate to meet the proposed change.
[30] The process for introducing the change has been fair and in accordance with the provisions of the Agreement. There has been a lengthy process which has provided a significant number of opportunities for employees to provide feedback and to propose alternatives to the proposed change.
[31] There is no evidence in this case that payment for overtime is part of the employees’ remuneration, other than an additional benefit. The impact of the reduced opportunity to work overtime will be variable. For some employees there will be little or no reduction in their gross earnings. For a small number of other employees it is estimated the upper range of this would be approximately $20,000 per annum.
[32] The argument of the AMWU regarding what they say is this major reduction in income has not been supported by any evidence of their own. This is the only basis on which the AMWU at hearing has opposed these roster changes on manning levels. The AMWU has always had the opportunity to put evidence to the Tribunal about the impact on its members but has deliberately chosen not to call any evidence at all which seriously brings into doubt whether there is a sound factual basis for their submission.
[33] WAN submits that overtime is simply not part of the employees’ remuneration. There is no guarantee of overtime. This is demonstrated by the fact that there are some employees who work little or no overtime whilst others work a significant amount. Clearly it is an individual employee’s choice as to how much overtime they make themselves available to work. The employees who will be affected have had over six months notice of the proposed changes which is a lengthy period within which to adjust their affairs if that is necessary.
[34] WAN seeks orders that:
1. The Applicant has managerial prerogative to make reasonable changes to current working arrangements, subject to compliance with the Agreement.
2. The proposed changes to roster arrangements and manning levels are reasonable and comply with the Agreement.
AMWU submissions
[35] The AMWU acknowledge that Fair Work Australia should not interfere with the right of WAN to manage its own business unless the employer is seeking something which is unjust or unreasonable.
[36] However the AMWU submit that it is appropriate, and in this instance necessary, for the Tribunal to interfere with WAN’s managerial prerogative to the extent necessary to prevent an unjust or unreasonable outcome from being visited upon the employees.
[37] Here the proposed changes WAN seek to introduce reveal that the primary reason for the proposed change and the consequence of the proposed change on WAN’s employees would be a reduction in the remuneration package of those employees by approximately $20,000 per annum.
[38] This consequence of the proposed change makes the exercise of managerial prerogative in this instance unjust and unreasonable.
[39] Section 386 of the Act recognises that a significant reduction in remuneration or duties is so unjust and unreasonable as to amount to dismissal in certain circumstances. The AMWU submit that the reduction in remuneration that would arise from the change WAN is seeking to implement would be significant enough to amount to a repudiation of the contract of employment by the Applicant. 8
[40] While the changes proposed by WAN do not reduce the relevant hourly rates of AMWU members, the combined effect of the changes to the whole remuneration package is significant enough to amount to a repudiation of the contract of employment. 9
[41] In the alternative the AMWU submit that should the reduction in remuneration fall short of a repudiation of the contract of employment, such a reduction in remuneration would be sufficiently unjust and unreasonable so as to justify the Tribunal interfering with the exercise of managerial prerogative in this instance.
[42] The AMWU is seeking orders that:
1. Notwithstanding the right of the Applicant to exercise managerial prerogative to make changes to working arrangements that comply with the Agreement, that the specific changes sought in the present circumstance are unjust and unreasonable having regard to the significant reduction in the whole remuneration package of the relevant employees.
2. That the Tribunal interfere with the managerial prerogative of the Applicant only to the extent necessary to prevent the Applicant from making the proposed change in a way that would significantly reduce the whole remuneration package of the relevant employees.
Consideration
[43] The matter to be determined in this instance is whether the proposed changes are unjust or unreasonable.
The evidence
[44] The Applicant called four witnesses from WAN who gave evidence in this matter, Mr Terry Clarke the Production Director, Mr Mark Meacham the Industrial Relations Manager, Mr Barclay Fairweather the Manager for Health and Safety and finally Mr Liam Roche the General Manager–Group Operations and Information Technology.
[45] The AMWU did not call any evidence in support of its case.
[46] It is not necessary to review the evidence in detail with respect to the changes proposed to the roster and the changes proposed to manning, nor to traverse the history of the consultation process. These issues are largely not in dispute.
[47] What is in dispute is whether the proposed changes are reasonable given these will lead to a reduction in the amount of overtime employees can work and therefore their potential earnings.
[48] Having reviewed the evidence I find that the changes will have a variable effect in terms of any reduction on the gross earnings of affected employees. Currently approximately 60% of the affected employees do work overtime regularly on a Friday. Separately some employees working on night shifts may work overtime on Thursday. In addition currently some employees, as regularly as every four weeks, do work an additional Monday shift which is paid as overtime. The evidence does not allow any conclusion to be made however as to what proportion of the affected employees work all, some, or none of these overtime opportunities when they arise.
[49] I accept that the changes WAN propose means that these particular opportunities to work overtime above will no longer be regularly available.
[50] Further the evidence is that there are additional opportunities for employees to work overtime for a range of other reasons which are not planned or predictable.
[51] The evidence is that some individual employees have chosen to regularly work overtime whenever it is available whereas other employees have chosen to work little or no overtime.
[52] I accept the evidence of WAN that the employees’ reduction in annual gross earnings will range from zero for some, up to approximately $20,000 for others, with many employees experiencing a reduction somewhere in between these figures.
[53] Whilst there is some evidence that there may be an ‘outlier’ employee whose earnings are well above most others there is no evidence as to how much of their earnings are made up from the overtime which will no longer be regularly available under the proposed changes.
[54] The evidence is that employees who work only ordinary hours have gross earnings of approximately $73,000 per annum. However employees are unlikely to be paid only this amount because even under the proposed changes there will continue to be other overtime available caused by a range of events which cannot be predicted. 10
[55] The evidence is that employees gross earning includes payments for ordinary hours and overtime and various other payments, including loadings e.g. annual leave loading of 20% (Clause 24–Annual Leave subclause 8) and allowances for a range of other reasons.
[56] A number of documents were provided to the Tribunal that sought to demonstrate the annual earnings of one employee, Mr Small. I am satisfied that the documents demonstrate that for the financial year ending June 2009 Mr Small's gross earnings were $111,316. For the financial year ending in June 2010 Mr Small’s gross earnings were $112,610. Finally for the financial year ending June 2011 Mr Small’s gross earnings were $116,137.
[57] No evidence was given as to the breakdown of these gross payments. The only information provided in this regard is that contained in Exhibit R4 a single payslip of Mr Small with a pay end date of 2 July 2011. The details on this pay slip of the before tax earnings show that the total was made up of earnings for normal hours, O/T, shift allowance and a relief margin.
[58] Mr Small was present during the proceedings but was not called to give evidence.
[59] There is no direct evidence from the AMWU as to how much the gross earnings in Mr Small’s case will be affected by the proposed changes. The only evidence on this question is that from Mr Roche who says he accepts there will be a reduction in payments to Mr Small which in his case might be around the $20,000 per annum mark but that he will still probably work some overtime and receive additional payments for annual leave loading plus fill in margins and any other applicable allowances. 11
[60] The evidence of WAN’s witnesses as to the reasons for proposing the change are uncontested. The evidence of Mr Roche is that since the global financial crisis in 2008 he has been flagging the need for change with the Union’s on site delegates and there were discussions about manning levels and roster changes on a number of occasions including during the past two enterprise agreement negotiations. No agreement on these matters however has been reached.
[61] The Applicant’s business has been affected both by the need for ongoing structural change in traditional print media as a result of the increasing adoption of the Internet and other electronic media offerings and the impact of the global downturn since 2008.
[62] The newspaper continues to trade at significantly reduced volumes compared to those prior to 2008.
[63] In terms of the demand, printing the Weekend Real Estate lift out was in the past often 128 pages but is now commonly approximately 70. Previously the Weekend Motoring and Professional Employment section was regularly 96 pages but is currently around 40 pages. Similarly the Weekend West produced for Saturday publication was regularly 192 pages in the past but it is now around 168 pages.
[64] This reduced number of pages to be printed reflects lower advertising revenue which in the half year financial results were 7% less than the previous corresponding period when adjusted for comparative trading weeks.
[65] The evidence is that the business’s revenue from advertising and its circulation has continued to decline since 2008 whilst at the same time the staffing costs have continued to increase.
[66] In August 2011 Mr Roche discussed with his management team the deteriorating trading figures and rising staffing costs. At that time, week nine of the financial year, overtime costs were nearly $500,000 being 20% higher than the previous year. As at the date of hearing the overtime costs remain nearly $90,000 higher than the previous year despite measures taken in August 2011 to reduce overtime costs by ceasing a regular Saturday maintenance shift which had been paid at overtime rates and reallocating labour in the publishing department. This was implemented through the Agreement and introduced in September 2011. These changes have today saved the Applicant approximately $50,000. However there is a need to continue to pursue improved productivity and efficiency.
[67] The evidence is that the production staff have had nearly 6 months to consider and be aware of the impact of the proposed changes on them personally.
Conclusion
[68] With respect to the question of whether the proposed changes are reasonable it is clear from the evidence that there will be a range of impacts on employees dependent upon to what extent in the past they have personally chosen to work overtime when it was available. The employees who will be most affected will be those employees who elected to work a large amount of overtime in the past. Employees who worked little or no overtime will experience limited detrimental consequences from these changes.
[69] It is clear from the evidence that there was no requirement placed on employees that they regularly work overtime. When, and the amount of overtime employees worked was a personal choice.
[70] The only expectation employees could have as to the future availability of overtime was based on the fact that the rostering arrangements presented regular opportunities for overtime to be worked for those who wished to do so.
[71] It is not correct then to say that here there has been a significant reduction in the employees’ remuneration by WAN. At most there has been a significant reduction in the opportunities for employees to work voluntary overtime. There has been no demotion of employees nor change to their duties. I reject the AMWU’s submission that the changes would about to a repudiation of the employees’ contract by WAN.
[72] The evidence is that there has been discussions with employees and union representatives over a very long period of time, spanning a number of years past, about possible changes to the rosters.
[73] The terms of the Agreement itself clearly envisage that changes to current arrangements can be made subject to these being processed through the Introduction of Change Procedure. This is what has occurred in this case.
[74] The evidence is that there are some, but probably only a small number, of employees who will experience a significant reduction in their gross earnings because historically they have chosen to regularly work a lot of overtime. It is understandable that these employees who have enjoyed the additional income earned from working large amounts of overtime in the past would want to continue to have the opportunity to do so for the future. It is not reasonable however for those employees to demand or expect that the existing rosters and manning levels always remain in place and that WAN should be stopped from improving the productivity and efficiency of its business and reducing its operating costs.
[75] In the circumstances of this case considering the business imperatives and the detail of the proposed changes there is no doubt that a reasonable person in the position of the employer could have made the decision in question.
[76] The evidence and a consideration of both the terms of the Award and the Agreement demonstrate that the decision to implement the proposed changes is not contrary to the Agreement or the Award.
[77] With respect to the health and safety of employees, whilst the AMWU have some reservations about this these were not vigorously pursued and no evidence was brought by the Union in support of its concerns. I am satisfied that the evidence before me clearly demonstrates that the proposed changes will not adversely affect the health and safety of employees.
[78] With respect to the process for introducing the change the evidence discloses that there have been consultations with the employees who would be affected and their union representatives both on site and their state-based organisers over a lengthy period of time. A number of the concerns of employees have been addressed by WAN. Clause 33–Introduction of Change Procedure of the Agreement expressly says that the production division needs to use the most efficient and effective way to meet production requirements. The consultation obligations imposed on WAN by the terms of this clause do not mean that the employees or the AMWU have any right to prevent proposed changes being implemented. WAN has properly complied with its obligations under the Agreement and consequently the process for introducing these changes has been fair.
[79] I find that the proposed changes to rosters and manning levels proposed by WAN in this case are reasonable in all of the circumstances. The changes proposed are not unjust. I determine the dispute in favour of WAN and endorse its right to vary the rosters and manning levels in the way it proposes.
[80] With respect to the orders the Applicant seeks I do not agree that it is appropriate to issue the first order which is broad and non-specific. I will however issue an order in the terms sought by the Applicant to the effect that the proposed changes to roster arrangements and manning levels are reasonable and comply with the Agreement.
[81] An order to that effect will issue in conjunction with this decision.
COMMISSIONER
Appearances:
K. Reid, Solicitor for the Applicant.
J. Wilson on behalf of the Respondent.
Hearing details:
2012.
Perth:
March 28.
1 Construction, Forestry, Mining and Energy Union v HWE Mining Pty Ltd [2011] FWA 8288 at [11].
2 Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (AMWU) v Silcar Pty Ltd
[2011] FWAFB 2555 at [13].
3 CFMEU v HWE Mining (Supra) at [11].
4 Ibid.,at [12].
5 Ibid.,at [29].
6 Australian Federated Union of Locomotive Enginemen v State Rail Authority of NSW (1984) 295 CAR 188.
7 Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (AMWU) v Rheem Australia Pty Ltd
[2011] FWA 7602.
8 Blair v Chubb Security Australia Pty Ltd [2003] PR936527 at [40].
9 Ibid.,at [50].
10 Transcript PN90-92.
11 Ibid., PN542.
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