C2002/3182, Transcript of Proceedings [2002] AIRCTrans 2533 (8 July 2002)

AUSCRIPT PTY LTD
ABN 76 082 664 220

Level 4, 60-70 Elizabeth St SYDNEY NSW 2000
DX1344 Sydney Tel:[phone] Fax:[phone]

TRANSCRIPT OF PROCEEDINGS

AUSTRALIAN INDUSTRIAL

RELATIONS COMMISSION

COMMISSIONER HARRISON

C2002/3182

BELL SCAFFOLDING (NSW)
PTY LIMITED

and

CONSTRUCTION, FORESTRY, MINING
AND ENERGY UNION

Notification pursuant to Section 99 of the
Act of a dispute re selection criteria for
redundancy

SYDNEY

2.06 PM, FRIDAY, 21 JUNE 2002

Adjourned sine die

PN1

THE COMMISSIONER: Can I have the appearances please?

PN2

MR D. MURRAY: If the Commission pleases, I am from the Master Builders Association. I appear for the notifier. I have with me MR A. MOURITZ, Managing Director of that company.

PN3

MR T. PAPA: If the Commission pleases, I am from the CFMEU and I appear with MR D. JONES and MR R. GILLMEIER.

PN4

THE COMMISSIONER: Mr Murray?

PN5

MR MURRAY: Commissioner, the background to this dispute is set out in the notice in form R4 that I sent through to you. Do you have that in front of you?

PN6

THE COMMISSIONER: I do.

PN7

MR MURRAY: Would you like me to go through those points?

PN8

THE COMMISSIONER: No, I've read that. You might tell me what the current position is.

PN9

MR MURRAY: The current position is that the industrial action continued until about mid morning today. I am informed that the employees have since gone back to work. However there still subsists a question about the selection criteria for redundancy which hasn't been resolved and if nothing else we would aim to have that resolved today. The situation is essentially as follows. The company Bell Scaffolding has a certified agreement made under the Workplace Relations Act named the Bell Scaffolding (Sydney) Pty Limited CFMEU Enterprise Agreement 2000-2003. I have some copies and for information I might hand them up if you wish.

PN10

THE COMMISSIONER: Thank you.

PN11

MR MURRAY: Commissioner, this copy that I've handed up came off the Sirius Internet Website and unfortunately the print has come out without the clause numbers in the margins. I've therefore tabbed the relevant clauses. The first of those is clause 13(b), the first tabbed clause in that document and it sets out the agreed position with respect to terminations and that is that the parties agree that in the spirit of this agreement terminations will be consistent with the objectives and goals of the company and the work force. Termination of employment and this is the relevant part:

PN12

Termination of employment shall be decided on but not limited to issues such as skills and ability, diligence and anticipated skills and labour requirements.

PN13

Now, as is set out in the notice of dispute it became necessary over recent weeks for there to be some determinations, some retrenchments of employees due to a downturn in work and contracts not being one that the company had bid for. What the company did then was to select employees and the way that it did so was on the basis essentially of those criteria. It selected from the employees first of all by taking out of the selection the leading hands and then from the remaining pool of employees selecting on the basis of length of service. Therefore applying first of all the skills ability future labour requirements criterion, the leading hands being those that had demonstrated the greatest skills abilities etcetera and therefore been promoted and then the established practice of the company of looking at service to the company and terminating those with the shortest service.

PN14

When the employees given their notice or shortly thereafter a dispute erupted and the dispute essentially is this. The employees claim that the proper criterion ought to be length of service alone independent of the distinction between leading hands and others. Now, we would say that the leading hand criterion is a proper one available to the company and the company has a broad discretion under the terms of the enterprise agreement to look at things other than length of service and has done. But nonetheless the employees including the remaining employees who had not been retrenched took industrial action and that industrial action continued for over 48 hours at considerable cost to the company and with the effect also of putting at grave risk other contracts which the company has and perhaps even had it continued leading to a situation where further retrenchments might have been necessary.

PN15

It's therefore important that this question be resolved, Commissioner, and I have tabbed clause 14. It's the second tabbed item in the certified agreement. This relates to the dispute resolution procedure for disputes between the company and its employees. It's in a fairly standard form, the important part of it being that - at the bottom of the page there - while the procedure is being followed normal work must continue. So not only do we have a dispute about the selection criteria for retrenchment but in the view of the company a clear breach of the dispute resolution procedure; that the employees took industrial action and not protected industrial action, unlawful industrial action rather than following the agreed disputes procedure which involves discussion and should that discussion not be fruitful bringing the matter before this Commission. So that's where we are at the moment. Now, the employees as I have said have gone back but the issues have not gone away and that's why we're here this afternoon to resolve those issues, if the Commission pleases.

PN16

THE COMMISSIONER: Thank you. Of the 11 redundancies - what's the total work force?

PN17

MR MURRAY: There are 18 left. There were 29; 11 went.

PN18

THE COMMISSIONER: How many leading hands are there?

PN19

MR MURRAY: Fourteen.

PN20

MR PAPA: If I may, Commissioner, with due respect to my learned comrade here he indicated that as far as the selection criterion is concerned it is an issue, a very relevant issue taken into account that this particular matter has now been discussed now for quite some time. It is not as if it has just happened in the last 48 hours. Three weeks ago there was based on the then selection criterion which everyone agreed to and that was the period of service, based on the period of service of each of the employees, implemented on an across the board basis three weeks there was six people that went under that criteria based on the length of service. Last week there was seven went last week under the same criteria which everyone agreed to including the company and that was based on the principle of seniority.

PN21

THE COMMISSIONER: Could you just summarise that again, Mr Papa?

PN22

MR PAPA: Going to the last page from George Moses which has got a bit of scribble and that on it down they were terminated three weeks ago and the ones above George Moses were last week and as you can see they've been working off the bottom off this list and as you can see the days of commencement, the start date of the employees commencement of employment with the company they've started from the bottom and worked their way up. Now, I find it extremely bizarre that you have a situation where out of the number of employees in total there's 14 leading hands. What appears to have been occurring is that the company has been elevating people into a leading hand position and it's been indicated earlier that they've selected these leading hands based on skills and what have you; the skills are the same, all scaffolders. They're all identical in the skills classification. They've elevated people into the leading hand position, 14 of them in fact out of a total work force of 19 or 16 at the moment.

PN23

MR MURRAY: There was 16 workers; 14 leadings hands. Now there's 4 workers and 14 leading hands.

PN24

MR PAPA: Yes, so you have a situation where the company has deliberately picked out people that they wanted to hang onto despite the fact that there was an agreement to work on a seniority process based off this list and elevated those people to leading hand and saying on the one hand that these people are leading hands in a more management role as opposed to a scaffolders or labourers role and therefore they want to to get rid of the others. That's contrary to the principle that was agreed to on previous occasions, determinations to take place where necessary. We are not saying for one minute that we object to terminations taking place, if there's a situation where the company has got a valid argument about its continued operation in terms of liquidity to continue in the business. We understand that but it's based on some equity and fairness.

PN25

Now, for them to select 14 people and automatically make them leading hands and then start to cull the rest of them, we don't believe that's fair or just and as I say it's contrary to the spirit of agreement that was reached previously to have as situation where it would be based on seniority which we accept We have no argument with that. Moreso, the leading hands on two occasions have agreed with the rest of the employees on a unanimous situation that they would accept seniority, the list as it was, and if their number came they would go as well and they've accepted that.

PN26

Now, since this dispute has occurred we've sought to sit down and discuss the matter with the company and try and resolve the issue amicably but but they've been stonewalling, they didn't want to accept us or the view that we were pushing which was accepted by everyone including the company on previous occasions where the redundancies occurred on the same principle under the current circumstances so I find it extremely difficult to accept the employers' argument and extremely bizarre that 14 out of 16 employees are leading hands. It's just crazy.

PN27

THE COMMISSIONER: I take it the 14 were also involved in the 48 hour stoppage.

PN28

MR PAPA: They were indeed.

PN29

THE COMMISSIONER: That's very unusual. Mr Murray.

PN30

MR MURRAY: Yes, just a few things. I am instructed that first of all none of these leading hands were promoted recently. This company has had some downsizing take place over a fairly extended period of time and a few months ago there were, as I understand it, something like 50 employees. Be that as it may, none of them were recently promoted. This is not an artificial scheme and it is a matter of - a word that has been forgotten here - the prerogative of the management to select who it wishes to keep.

PN31

It does have the right under its agreement with the union and the employees to select on a number of criteria not limited to skills, abilities, etcetera.

PN32

Now, looking at it from the outside you have employees whose skills and abilities have been recognised by promotion and then you have employees who are not. The document that was handed up to you too by Mr Papa, the two page document, list of employees by start date, I have been given another copy of that just now which shows the termination dates and it's not disputed that those on the second page were terminated over recent weeks but none of those is a leading hand.

PN33

When we move up the length of service to the first page we then reach leading hands and this is the round that we now are talking about, where the company had retrenched those on the second page, now is compelled to carry out further retrenchments and now the distinction becomes important, the distinction between the leading hands because, of course, before it operated by default. All of those that went were not leading hands but also had the shortest length of service so perhaps this operated by default.

PN34

However, the principle has never been agreed, as I am instructed by the company that the length of service be the sole criterion and, in fact, that is quite inconsistent with the certified agreement that would override any such private agreement between the parties anyway. The parties have set their hands to an agreement certified by this Commission which binds them as a matter of law which sets out the criteria to be taken into account; not an exhaustive listed but it does quite clearly say that the company may take into account those other matters besides length of service.

PN35

It would have been a different situation had the certified agreement been silent, it would have been a different situation had the certified agreement said, last on first off, but it doesn't. What it does say is that the company shall decide on but not limited to issues such as skills, ability, diligence and anticipated skills and labour requirements. It then therefore puts it into the company's prerogative how it looks at each of its employees in terms of which of them has the skills, abilities, etcetera, which of them best matches its future labour requirements and the way that the company has looked at that is that should work pick up the employees it wish to have are those that have the track record, the demonstrated ability not only to do the scaffolding work but to act as leading hands.

PN36

I might also say that if the employees who have been terminated, I would agree if there is a mechanism for that to be resolved without industrial action, it seems very unusual I must say in fact unique in my experience for employees to take industrial action in support of a proposition that they should have been terminated instead of others that were terminated but be that as it may those that were terminated may pursue their rights under the Workplace Relations Act by way of an application for relief from alleged unfair dismissal without there being illegal industrial action, without there being action in breach of the settled certified agreement, the dispute resolution procedures of that agreement and in an attempt to override the agreed criteria for termination of employment.

PN37

That is really where we are Commissioner we really are at the stage where employees have taken industrial action which simply ignores what they and the union have committed themselves to by way of a certified agreement that binds them. It is within its nominal term, it binds them. It binds all the parties here.

PN38

THE COMMISSIONER: Are there any severance payments involved in the process?

PN39

MR MURRAY: I do not have specific instructions, there are severance payment provided of course in the certified agreement by notice ACERT payments and so forth. I am instructed that they have not been made either.

PN40

THE COMMISSIONER: Has the company considered the scale of its criteria calling for volunteers?

PN41

MR MURRAY: The company had not but nor has it had anyone come forward and volunteer and in fact when Mr Papa said that the leading hands were willing to or have agreed that they would accept seniority the instructions that I received were that none of them has come forward to say that. If there are volunteers that would like to take the place of their fellows well the company of course would look at that. I am told that one has in fact accepted that situation and left of his own accord.

PN42

THE COMMISSIONER: A leading hand?

PN43

MR MURRAY: Yes.

PN44

THE COMMISSIONER: Mr Papa?

PN45

MR PAPA: There are a number of issues that need to be clarified, in terms of the number of people left that were going and the procedure that company was supposed to get involved in terms of notification never occurred. There was no notification, there was a consultative committee, if you turn to page 5 of the enterprise agreement that was handed up to you by Mr Murray, you will see under the heading "Consultative Committee" and part of the Consultative Committee's involvement which - and the Consultative Committee is made up of an equal number of management positions and also employee representatives.

PN46

Part of Consultative Committee's responsibility is also job security along with productivity, OH&S, removal of restrictive work practices, etcetera. The Consultative Committee was not consulted. The company did not involve the Consultative Committee to work out what appropriate methods or measures should be put into place (a) in terms of proper notification of employees and to work out a suitable criteria about how it was going to operate other than last year, there was an agreed position between the parties about this period of service.

PN47

As you can see from the top person down it indicates there the person's start date and you can also see they have started from the bottom of the list. Within a four week period, well, just over a three week period all those people on the back of the page have gone.

PN48

THE COMMISSIONER: That is also coincidentally consistent with what the company says that they prefer to keep their leading hands.

PN49

MR PAPA: You can have a look at the circumstances that develop where people have been automatically promoted over a period of time to leading hands and then I argue the skills of the leading hands are not dissimilar to the skills of the other employees. Now in terms of management prerogative no one would argue that other than to say as long as it is done a fair and just basis there would be support for the downsize of a numbers based on the economic circumstances of the company.

PN50

The Consulting Committee wasn't consulted, people were given a couple of minutes notice of the fact that they were no longer needed. I don't believe that - that's just not fair. We have tried to discuss this matter with the company, try and work on a suitable solution. The leading hands agree with the rest of the employees there should be the list. That that is the list that should be worked off which includes them as well. They've accepted that. They were also out on the 48-hour stoppage in protest of the actions of the company, despite the management prerogative.

PN51

THE COMMISSIONER: I think in the circumstances it might be best if we adjourn to the private conference if there is no objection.

OFF THE RECORD [2.26pm]

RESUMES [4.25pm]

PN52

THE COMMISSIONER: The Commission has met with the parties in private conference. During those discussions there has been an examination of the elements of an employee appraisal system between the parties. Mr Murray from the Master Builders has undertaken to further develop those elements and to present a proposal to the delegates and the Consultative Committee by Tuesday of next week. Following that the Consultative Committee and the union will respond to the company.

PN53

It is my recommendation that while this process is being undertaken that the 11 employees who were entrenched on the 18th of this month should form part of the appraisal or the assessment in the context of the company's requirements and the overall numbers of the workforce. In other words assuming that there is an agreed appraisal system adopted by the company and the union its first application should apply not only to those currently employed but to those who were also retrenched on 18 June. That is without prejudice to the outcome.

PN54

It is also my recommendation and I take on board the commitment and the comments of Mr Papa in these proceedings - in private conference at least - that the employees return to work today on the basis that they wanted to protect future job security. I don't believe it is necessary to say if that is there motivation but it would be my recommendation also that whilst this process is under way that normal work continue to allow a report-back hearing to be held at 1.00pm next Friday, 28 June, here in Sydney.

PN55

Unless the parties want to put anything further on the record I will adjourn until 1.00pm next Friday, 28th. Thank you.

ADJOURNED ACCORDINGLY [4.30pm]