C2006/2825, Transcript of Proceedings [2006] AIRCTrans 1158 (20 October 2006)

TRANSCRIPT OF PROCEEDINGS

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Workplace Relations Act 1996 15873-1

COMMISSIONER HINGLEY

C2006/2825

THE AUSTRALIAN WORKERS’ UNION
AND
SMORGON STEEL (SERVICES) PTY LTD T/A SMORGON STEEL MANUFACTURING
s.170LW pre-reform Act - Appl’n for settlement of dispute (certified agreement)
(C2006/2825)

MELBOURNE

10.09AM, THURSDAY, 05 OCTOBER 2006

Continued from 31/7/2006

Reserved for Decision

PN1

MS S HODGERS: I appear on behalf of the applicant with MR P SPEAR and MR P WILSON.

PN2

MR C O'GRADY: I seek leave to appear as counsel on behalf of Smorgon Steel.

PN3

THE COMMISSIONER: Is there any objection to counsel appearing?

PN4

MS HODGERS: No, Commissioner.

PN5

THE COMMISSIONER: Leave is granted, Mr O'Grady.

EXHIBIT #AWU1 OUTLINE OF SUBMISSIONS OF
MS HODGERS

PN6

MS HODGERS: Commissioner, the Commission has before it today an application to have a dispute resolution process conducted pursuant to pre-reform section 170LW of the Workplace Relations Act. The union outlined in the dispute notice that was filed in the Commission and on the company that the dispute relates to the application of the Smorgon Steel Mill Certified Agreement 2005. The union and the company are parties to and are bound by that agreement.

PN7

The dispute specifically relates to clause 11 of the agreement. Clause 11 relates to the facilitation of change. The union says that the company is not properly applying clause 11 because it failed to adequately consult with employees and the union in relation to a change to human resource allocation. The company has challenged the Commission's jurisdiction to determine the dispute and has requested that we deal only with the issue of jurisdiction today.

PN8

The question currently before the Commission is therefore whether or not the Commission has the power to hear and determine the dispute notified by the union. We say the Commission does have the power to hear and determine this dispute because the transitional provisions of the Workplace Relations Act provide for the continued operation of section 170LW of the pre-reform Act in relation to pre-reform certified agreements. This agreement is a pre-reform certified agreement within the meaning of the Act.

PN9

Section 170LW empowers the Commission to settle disputes over the application of an agreement if the agreement empowers the Commission to do so. We say that the dispute procedure at clause 10 of the agreement empowers the Commission to settle this dispute. In accordance with section 170LW, the dispute is about the application of the agreement. Specifically it relates to the proper application of the facilitation of change procedure outlined at clause 11.

PN10

Clause 11 provides that proposals for improvement in technology, the work processes and human resource allocation may include any matter relating to change generated by either the company or the union or any matter of concern held by either part in relation to practices requiring change. The parties agree that the mechanism for dealing with any proposals for change shall comprehend a proactive consultative approach before implementation can occur.

PN11

The dispute has arisen because the company decided that it would not backfill the position of the site delegate when the site delegate is on leave. The dispute relates to the application of clause 11 because the company's decision relates to a change to human resource allocation. Properly applied the clause requires the company to consult with its employees and the union before a change of this nature is implemented.

PN12

The company submits that the Commission does not have the power to settle the dispute because the dispute is not properly described as a dispute over the application of the agreement. In its outline of submissions the company refers to established case law that provides that if a dispute properly characterised is about what should be an agreement rather than what is in an agreement, it is not a dispute over the application of the agreement.

PN13

It says that what is sought by the union through this application is to impose a new and discrete obligation upon the company, namely that where the site delegate is on extended leave, it fills his position through the appointment of a dedicated shift delegate and then arrange for the duties of the shift delegate to be performed by a contractor engaged by the company.

PN14

Commissioner, granted, that would be a desirable outcome for the union but the company is speculating and anticipating. We have certainly not sought that outcome in this application. What is being sought is that the company properly applies clause 11 and that it consults with the union before it implements a change of this nature.

PN15

Consultation may result in the best outcome for the union and its employees and arguably for the company as well but it would cause the parties to sit down together and discuss the issues. The company may relay its concerns to the union and the union may be sympathetic of these concerns and may even offer a number of solutions that are suitable to both parties. We don't know what the result would be because there has been no consultation to date but we say that the clause requires it and that it should therefore occur.

PN16

The respondent also submits that the Commission does not have the power to determine the dispute because the dispute doesn't actually fall within the scope of clause 11. It makes this argument on the grounds that a change regarding the backfilling of the site delegate is not properly characterised as a dispute about human resource allocation. It says that reference to human resource allocation in clause 11 was intended to be a reference to far reaching change of a type similar to the change which might flow from improvements in technology and changes to work processes and a phrase directed to a general roster change or a change of that type.

PN17

We say no, that was not the intended meaning of the phrase "human resource allocation" within clause 11. The phrase was not intended to be limited to issues regarding rostering and if it was, it most likely would have said so, but it doesn't say proposals for improvement in technology, work processes and rostering. We submit that the reference to human resource allocation was very much intended to refer to matters of the kind currently before the Commission. Furthermore, we submit that the phrase "human resource allocation" on its face does refer to the matters of the kind currently before the Commission.

PN18

The company says that to construe the phrase "human resource allocation" in a way that would encompass change of this type would mean that virtually any determination made by the company as to the tasks to be performed by its employees would fall within the ambit of this clause. For example, the union could refer a dispute to the Commission about the application of clause 11 where an employee has been assigned a task he does not like.

PN19

We do not say that the company's refusal to replace the site delegate when he is on leave is a matter concerning human resource allocation because it affects the site delegate or that it affects the person who misses out on filling his shoes when he is on leave, quite the contrary. It is a matter concerning human resource allocation because it affects every employee on the floor.

PN20

The company's ridiculous example only serves to demonstrate that it does not realise or appreciate the important and we say integral role an employee representative plays in the workplace. Perhaps the company does not appreciate or realise the important contact an employee representative for all employees, employees who may not be comfortable talking to management about a problem or concern or employees who do not have access to management.

PN21

The site delegate position is a full time position because it is an important role and up until now the position has always been backfilled because both the union and the company recognise its importance. The site delegate is a critical contact point for all employees and should be a critical contact point for management also. We know that the site delegate liaises with management at least once every day to report or discuss issues of concern.

PN22

To say that this change would not have a far reaching impact, or to say that this does not concern human resource allocation is to fail to recognise the impact the change will have on a vast number of employees and the contribution the site delegate makes to the management of employee-employer relations.

PN23

The company also submits that because clause 30 in the agreement deals with recognition of union representatives that clause 11 should not be applied in a way that brings it into conflict with clause 30. Clause 11 is a general provision, the focus of which is facilitation of change and the process that should be followed where the company or the union proposes change. We reiterate that we only seek that the clause be properly applied and not that any obligation be imposed on the company. We therefore fail to see how clause 11 could be applied in a way that brings it into conflict with clause 30.

PN24

The respondent also claims that not only does the application seek to impose a new and discrete obligation on the company, but that the nature of the obligation is one which could not be enforced as part of the agreement because they would be defined as objectionable provisions pursuant to section 810 of the Act. We do not seek to include a new obligation on the company and we certainly do not ask that the Commission circumvent sections 810 and 811 of the Act. Again we reiterate, the application relates to the proper application of clause 11. We certainly do not ask that the Commission circumvent any other provisions of the Act or that a new obligation be imposed upon the company.

PN25

Thank you, Commissioner.

PN26

THE COMMISSIONER: Thank you. Mr O'Grady.

PN27

MR O'GRADY: Commissioner, the position of the company as outlined in the submissions that we have filed.

PN28

THE COMMISSIONER: I should mark that, Mr O'Grady.

EXHIBIT #S1 SUBMISSIONS OF MR O'GRADY

PN29

MR O'GRADY: Is that the application by the AWU, whilst described as a dispute over the application of clause 11, has to be viewed in context and the context of that application is apparent from both the dispute notification itself but perhaps more particularly and more precisely in the outline of submissions that have been filed by the AWU and the witness statement that has been filed by
Mr Eagles.

PN30

It is apparent from those documents that the underlying dispute is a dispute over the practice of backfilling the position of site delegate when the site delegate is on leave and that the union has, we would submit, bravely sought to drag that dispute under the rubric of human resource allocation in an endeavour to provide the Commission with jurisdiction to determine the dispute under section 170LW of the Act as it was.

PN31

Can I say that the company agrees with the submissions of Ms Hodgers as to the transitional provisions and the like and there's no dispute about those matters. In my respectful submission the task before the Commission in determining the jurisdictional dispute is one of characterisation and the Commission has to ask "Well, what is the nub of the issue between the parties?" It is clear from the AWU's own material in my respectful, that the nub of the issue is this practice that has been in existence for some years. We don't accept all that Mr Eagles says about it but we're not taking issue with the fact that there's been a practice for some years of backfilling this position of site delegate.

PN32

If you accept that as being the correct characterisation of the dispute, then we would submit that it's clear beyond argument that this is not a matter that can be properly determined pursuant to 170LW of the previous Act because when one has regard to the terms of the certified agreement, it is clear that they do not make provision for that type of arrangement or anything like it. Indeed, as we've pointed out in the written submissions that we've filed, clause 30 of the certified agreement is a strong contra indicator, if I can put it in those terms, Commissioner, that that sort of practice should exist because, as we've said in the outline that we've filed, if you look at clause 30 it clearly suggests that both site delegates and shift delegates, and they're dealt with without differentiation in the clause, will, when they are not discharging their representative functions, return to their workstation and perform work.

PN33

That is a clause, we would say, is inconsistent with the notion of there being a dedicated site delegate. That's not a fight that we have to determine today, but it flows, to use a legal term., a fortiori that it's clearly inconsistent with any notion that when the dedicated site delegate goes on leave, there will be this practice of backfilling the position.

PN34

As to the submission about the language in clause 11 itself, in my respectful submission, if one reads clause 11B of the agreement it is clear that human resource allocation is a phrase used in conjunction with a number of other like notions and those notions are proposals for improvement in technology, work processes. Those, we would submit, are if you like big picture items. They are proposals which are going to have a wide impact over the site and they are not proposals which would be concerning the rostering or allocation of a particular individual employee.

PN35

Ms Hodgers, as I understand her submission says, well the company doesn't appreciate the value of having a site delegate and the role that that site delegate plays with respect to the mass of employees. In my submission, assuming for the sake of the submissions that Ms Hodgers is right, that the site delegate performs a valuable service in respect of the mass of employees, that service and his impact on those employees is not an impact that could be described as human resource allocation.

PN36

THE COMMISSIONER: Is it your submission that if - putting aside the particular case we're talking about, if an individual were made redundant, that clause wouldn't have anything to do?

PN37

MR O'GRADY: If an individual were made redundant, it would be arguable, Commissioner. I wouldn't put it as highly as saying that the clause would not apply to an individual being made redundant. I would put it as highly as saying that if an individual's roster was changed, it wouldn't have anything to do. As I understand what Ms Hodgers says she accepts that and indeed, suggests that that is a - our example was a ridiculous example because it couldn't sensibly be said to fall within the clause.

PN38

There is, of course, a specific provision in the agreement, clause 41, that does deal with redundancy and makes provisions with redundancy and then you would get tied up, I suspect, Commissioner, with the question of well, where you've got a general provision and you've got a specific provision, should you be able to access the general provision with a view to altering the obligations that are found within the specific provision. For the reasons that we've put in the written submission, we say that as a matter of construction or a matter of approach, that's not correct and that where the parties have specifically outlined what the processes are to be, then recourse can't be had to the general provisions to circumvent those limitations.

PN39

In my submission, the phrase "human resource allocation" is not one that is well adapted to describe the type of change that Mr Eagles speaks of in his witness statement or the AWU have described in their outline, particularly when one reads it along with the phrases that sit alongside it, namely "proposals for improvements in technology" and "work processes". In my submission, if that be right, then this is not a matter that can properly come before the Commission because the contrary construction, in my respectful submission, is that virtually anything that represents the status quo is a matter that is covered and impacts upon human resource allocation read in its broad sense, is a matter that the parties can bring before the Commission under section 170LW to have determined by the Commission.

PN40

The effect of that, in my respectful submission, would be to enshrine the status quo in respect of almost all matters unless and until the Commission determines the dispute under clause 11. In my submission, that's not what clause 11 is really directed to. It's directed to broader changes, changes of the type that would impact upon the employees as a whole through the type of change that is used in clause 11B, namely a change in technology, a change in work processes, a change in human resource allocation.

PN41

Whilst this does have an impact upon Mr Wilson, one employee, and to an extent he's a human resource and to an extent there is a change in the way in which he's been allocated, although I query whether that is actually quite correct when one recalls that there is no proposal before the Commission to do away with
Mr Wilson's position as a dedicated site delegate, really what we're talking about is changing the situation that would pertain when Mr Wilson goes on leave where a shift delegate might be seconded to fill his position and then be replaced for the period of Mr Wilson's leave.

PN42

In my submission, if you have regard to the language of clause 11 on its sensible construction, it should not be seen as extending to a dispute of this type. A dispute properly characterised is a dispute about the arrangements that should be in place when the site delegate goes on leave. That's not a matter that's covered by the agreement and for those reasons there is no jurisdiction in the Commission to determine the dispute. If the Commission pleases.

PN43

THE COMMISSIONER: Mr O'Grady, you seem in your submissions to concede there's a dispute, although you say there's no power under section 170LW. Is it your submission there's power elsewhere under the Act to deal with the dispute?

PN44

MR O'GRADY: No. In my respectful submission, what is being sought through this application is to impose an obligation upon the company that it currently doesn't have in respect of the arrangements in place with respect to the replacement of the site delegate when he goes on leave. As the authorities that we've referred to in the submission make clear, a dispute over what should be in the agreement - and it may be an argument for another day, Commissioner, that given the fact that the agreement does refer to site delegates in a number of roles, including giving of warnings and the like, that a provision should be in the agreement that makes arrangements for what happens when he goes on leave. In my submission the authorities make it very clear that a dispute about what should be in the agreement is not a dispute of the type contemplated by section 170LW.

PN45

THE COMMISSIONER: What do you say about the argument of custom and practice in the application of the agreement? What impact does it have?

PN46

MR O'GRADY: In my respectful submission, it doesn't have any impact, save and except to the extent to which it could be said that it reflects the objective intention of the parties when the agreement was certified but the authorities seem to be quite clear now, Commissioner, that in construing the agreement one applies an objective approach so it's not what the parties might have subjectively intended when they had the agreement certified, but rather what they are taken to have intended because of the words they used or what they said to each other at the time and must be seen to have accepted.

PN47

If there was a provision in the agreement that talked about the practice of what's happening, the site delegate going on leave, then it may well be in those circumstances that the practice that had occurred previously would be something that might be admissible and the Commission could have regard to, but there is no provision of that type in the agreement. The agreement, whilst it makes reference to the existence of a site delegate makes no provision for the creation of that position, save and except for clause 30; makes no provision for the remuneration or the income that a person will receive in those provisions or the leave arrangements that would apply.

PN48

What we say is that this application is an attempt, if you like, to turn a custom and practice, which is a contractual arrangement really between the company and Mr Wilson at its highest we would say, into an enforceable obligation under the certified agreement. That's not something that section 170LW is about.

PN49

THE COMMISSIONER: Does it follow from that your other argument that there's no work for the Commission to do in dispute resolution?

PN50

MR O'GRADY: Sorry, in respect to this particular dispute?

PN51

THE COMMISSIONER: Yes.

PN52

MR O'GRADY: Yes, it does, Commissioner, but in respect of this particular matter, if the union wishes to enshrine the practice that has existed to date with respect to the site delegate, that is a matter that it can pursue in enterprise bargaining subject of course to the very clear statutory limitations about what can be included in an agreement. The Commission will recall we've made some - without trying to go into it in too much detail, there are some concerns we would say that flow from a number of the provisions in the Act as amended as to the compatibility of this practice that the union relies upon and the current legislative scheme as to what can and can't be included in a certified agreement.

PN53

That's not, I suppose, a matter that has to be determined today. In my submission, for the Commission to have jurisdiction the union has to establish that there is a provision in the certified agreement that deals with the nub of the dispute, namely what happens when the site delegate goes on leave. In my submission, there is no such provision. Whether there's been a practice that's grown up over time with respect to that issue, in my submission, is not something that the Commission can determine under section 170LW because the authorities make it very clear that the Commission's jurisdiction under section 170LW is confined to disputes arising over the application of the agreement and therefore there must be something in the agreement for the Commission to latch onto, if you like, to found jurisdiction In my respectful submission, whilst there a degree of ingenuity, and I don't say this with any disrespect, there is a degree of ingenuity in attempting to latch onto the phrase "human resource allocation" to achieve that end.

PN54

In my submission, when one looks at clause 11B, what is being described there is not a dispute of this nature on any fair reading of it because if, as I've already put to the Commission, human resource allocation applies to this type of dispute, then it would really apply to any dispute about any practice that impacts upon the replacement of an employee when they're on leave, an individual employee when they're on leave. In my submission, that's inconsistent with the thrust of clause 11. If the Commission pleases.

PN55

THE COMMISSIONER: Thank you. Ms Hodgers.

PN56

MS HODGERS: Commissioner, I have nothing further to add, only to reiterate that again it's not sought any provision in the agreement in relation to the site delegate. We're not asking that clause 30 be amended so that it provides for replacement of the site delegate when he's on leave. We reiterate that we only seek that the company apply clause 11 and that where a change of this nature is proposed, that it follow that clause, to consult with the union and attempt to perhaps find a solution that's suitable to both parties. Whether or not that's the outcome is another thing and I think a great deal of the company's focus has been on the actual outcome or anticipated outcome of that consultation of what the union would be seeking when it's sitting across the table from the company and that's certainly not what this application is about. It's about the fact that consultation should occur and not what the outcome of that consultation would be. Thank you, Commissioner.

PN57

THE COMMISSIONER: I don't want to put you on the spot because I appreciate you're the advocate, not the negotiator in this matter, but do you accept that in the ultimate the company would have the right to make the decision regardless of the union's view in the ultimate, if it followed the process you're talking about of thorough consultation

PN58

MS HODGERS: If it followed that process - and I guess the clause also provides for a few other steps and does ultimately say that where the parties cannot reach agreement on a proposed change, that the matter could be referred to the Commission under clause 10, the dispute resolution procedure, and I won't comment on whether or not that would be appropriate in these circumstances, but I'm just reluctant to actually comment on the actual outcome, given that - - -

PN59

THE COMMISSIONER: That's okay. Arising from my question, first of all you're not faced with the circumstance, it's raised in an environment in which it's predicting something in the future and it's been raised now over a considerable period with the union, some months, and it has been the subject of conference before the Commission, I suspect it's been a matter and I understand it's been a matter of discussion between the company and the union, doesn't that fulfil the obligations for consultation?

PN60

MS HODGERS: I don't know what's actually been the subject of the discussions that have occurred, but I do know and have been instructed that the union does have a number of proposals that it would say would address the company's concerns and the union's.

PN61

THE COMMISSIONER: Yes, I'm aware of that and in fact my understanding is they've already discussed that with the company, haven't they? The union has put forward some alternative views.

PN62

MR WILSON: We have, yes, in the past and unfortunately we haven't had the ability to sit down and discuss it, call in and finish the sequence off. We're still partway through it when we were told basically that's what's going to happen and there's no discussion about it. We've sent a letter to them saying how we felt it should be covered and we did have other ideas, but we never got any feedback from that.

PN63

THE COMMISSIONER: I see.

PN64

MS HODGERS: I think what's probably happened is the company has made the decision and I guess the focus is on genuine consultation rather than - I mean, it's one thing to instruct the union that this is what's happening and to humour them by sitting at conciliation before the Commission discussing the matter. It's never been an open - they've never replied to our suggestions.

PN65

THE COMMISSIONER: No. I guess the point that I was raising - I don't know whether it's wise to raise it or not, but if the company reached a view, it's not obliged to change its view even by consultation necessarily. The union hasn't changed its view.

PN66

MS HODGERS: No.

PN67

THE COMMISSIONER: Is there anything further you want to put to me?

PN68

MS HODGERS: No, that's all, thank you.

PN69

THE COMMISSIONER: Thank you.

PN70

MR O'GRADY: Sorry, Commissioner, can I just for the record say that the company has a different view from that that was expressed on the other end of the bar table about the discussions that have taken place and this is reflected in - - -

PN71

THE COMMISSIONER: I may have disadvantaged Ms Hodgers because she's here as an advocate and she probably wasn't involved in negotiations.

PN72

MR O'GRADY: Yes, and I'm not being critical of her at all, I'm simply making the observation, sir, that that's an issue. We say we have had discussions, the union has had an opportunity to come up with a cost neutral solution and has been unable to do so.

PN73

Can I pick up on one of the questions you asked Ms Hodgers, which perhaps I didn't articulate as clearly as I should have, which is that if Ms Hodgers is saying, well, at the end of the day when you apply clause 11 in the way she says you should apply it, that the parties could refer the matter back to the Commission and the Commission could determine the issue as she describes it, then that in my submission makes good our jurisdictional objection because what she is in effect saying, sir, is that if the parties are still at loggerheads, it would be open - after the process described in clause 11 is gone through, it would be open for the union to come back here and say, "We want you, Commissioner, to determine this dispute and in so doing make an order that when Mr Wilson goes on leave there is a backfilling of positions."

PN74

That must, in my respectful submission, amount to an application to impose a fresh obligation upon my client. It can't be found and we say can't be reconciled with the current provisions in the certified agreement and it's for those reasons that we say that the Commission doesn't have jurisdiction. If the Commission pleases.

PN75

THE COMMISSIONER: Ms Hodgers.

PN76

MS HODGERS: I might just add that I actually thought that I fell well short of actually saying that that was what would occur. I didn't actually comment on whether or not the union would rightfully have the power to make the application and that the Commission would then have the jurisdiction to hear that dispute, if that was the actual outcome.

PN77

THE COMMISSIONER: Thank you. I'm not going to proceed further today. I'm going to reserve my decision and advise you of my decision in printed form. We'll adjourn.

<ADJOURNED INDEFINITELY [10.42AM]

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #AWU1 OUTLINE OF SUBMISSIONS OF
MS HODGERS PN5
EXHIBIT #S1 SUBMISSIONS OF MR O'GRADY PN28