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Fair Work Commission Transcripts |
TRANSCRIPT OF PROCEEDINGS
Commissioner Riordan
C2014/5994
s.739 - Application to deal with a dispute
The Australian Workers Union
and
Bluescope Steel
1556
s.739 - Application to deal with a dispute
The Australian Manufacturing Workers Union
and
Bluescope Steel
1528
s.739 - Application to deal with a dispute
The CEPU
and
Bluescope Steel
Wollongong
10.58AM, TUESDAY, 2 DECEMBER 2014
PN1
THE COMMISSIONER: Can we have the appearances, please.
PN2
MR T. HOWELL: Yes, Commissioner. Howell, H-o-w-e-l-l. I seek permission to appear on behalf of the applicant unions in these proceedings. In my respectful submission permission to be represented by a lawyer ought be granted as it will enable the matter to be dealt with more expeditiously.
PN3
THE COMMISSIONER: Thank you.
PN4
MR K. BROTHERSON: If the commission pleases, Brotherson, initial K. I seek permission to appear for Bluescope Steel AIS Pty Ltd. I have with me MR DAVIS from the company, and MR VIDO, for whom I also would seek permission to appear. I'd support what my friend has said about reasons why the commission should grant permission in this matter. I think there's, in addition to the efficiency issue, clearly issues of legal complexity which arise on some of the arguments which will arise during the course of the day.
PN5
THE COMMISSIONER: Thank you, Mr Brotherson. On the basis of the submissions and the occurrence of section 596 of the Act, permission to appear is granted to both parties.
PN6
MR HOWELL: Thank you, Commissioner. Commissioner - - -
PN7
HIS HONOUR: Before you start, Mr Howell, might I ask, there's a gentleman sitting outside. Is he related to this matter?
PN8
MR ..........: Mr Dave Fairly.
PN9
MR HOWELL: Dave Fairly, yes.
PN10
MR ..........: He's (indistinct)
PN11
MR HOWELL: Thanks, Commissioner.
PN12
THE COMMISSIONER: Sorry, Mr Howell.
PN13
MR HOWELL: Not at all. Thank you, Commissioner. Commissioner, thank you for the indulgence of the time this morning. The parties have been able to put the discussions to good use, not with a view to settling the proceedings unfortunately, but with a view to settling some procedural matters which will facilitate the running of the hearing today.
PN14
Can I start by articulating four points that are agreed between the parties? If I characterise these wrongly, I'm sure Mr Brotherson will correct me. The first is that the unions in these proceedings is not taking any point about the compliance or otherwise with the consultation provisions outlined in clause 35.2 of the relevant agreement. That's not a formal concession that it's been complied with, but we certainly will not be inviting the commission to make any findings that suggest there has been noncompliance.
PN15
Secondly, the commission will note that there is some dispute in the evidence in relation to the impact on the individuals involved of the proposed changes. Now, the parties have taken the view that in the interests of efficiency it's really unnecessary to cross-examine the individual witnesses in relation to that evidence, and no point will be taken in the submissions by either side about the absence of that cross-examination. The evidence describes the impact, or perceived impact, of the relevant proposed change, and the parties will make submissions on that basis.
PN16
There are two additional matters. The first is a concession that I understand my friend's client is prepared to make, which will avoid the need to cross-examine the witnesses, that the eight-hour shift length that currently applies generally in the plate mill, and I have to acknowledge that there are aspects - sorry, withdraw that - there are areas within the plate mill which have 12-hour shift structures that have been introduced over time by agreement. Nonetheless the eight-hour shift arrangement which applies generally at the plate mill has been in place for over 20 years.
PN17
The second element is that the demographic of the workers in the plate mill - sorry, withdraw that. The workers within the plate mill to whom the changes will apply have varying lengths of service, some very extended lengths of service, and my client is prepared to make a concession that the majority of the workers within the plate mill would have periods of service in excess of 10 years.
PN18
Now, Commissioner, I understand my friend has some answers to the two questions which the commission proposed to us in some discussions before the commencements of today. I should perhaps leave him to answer those questions, but as I apprehend what the answers will be, I don't think there will be any material dispute about what will be said, and so they can be taken as agreed facts.
PN19
THE COMMISSIONER: Thank you. Mr Brotherson?
PN20
MR BROTHERSON: Thank you, Commissioner. If I can first confirm the company's agreement with the four propositions that have just been put to you, that is an agreed way forward for this matter. Secondly, you asked me a number of questions that you wished to be addressed on and it was agreed that you would accept, and my friend wouldn't challenge, that I would answer those questions from the bar table rather than calling evidence. I did actually record that there were three questions, but I'll deal with them in this order.
PN21
Firstly, Commissioner, you asked a question as to why the company was proposing that it's 12-hour roster arrangement would work on a Tuesday to Friday, as opposed to a Monday to Thursday. I am instructed that there are two principal reasons for the Tuesday to Friday arrangement. The first of those reasons relates to scheduling issues, and the company's practice is that it closes off orders which it will attend to in production the following week on Thursday afternoon of the previous week and arrangements are finalised on the Friday.
PN22
The company's view is that if - and I should say that the plate mill deals with slab which it converts into plate. That slab comes from the slab yard at the steelworks. I'm told that the slab yard receives what are called parent slabs, and the slab yard cuts them into what are called child slabs, which is simple, which then goes into the plate mill for rolling purposes.
PN23
The advantage that the company sees in a Tuesday to Friday operation from a scheduling perspective is that if it completes its scheduling on a Monday to commence production on the Tuesday, then it is able to see the child slabs which have been produced on the previous Friday, Saturday and Sunday, the slab yard operating on all those three days, and that in turn provides some potential opportunities for improved quality, as well as more efficient operation because it can see the slabs, the child slabs, which will be used through the process. If the operation is to start on the Monday, then the orders would need to be finalised on the Friday where it's effectively only able to look at the child slabs that are available on that day. So it actually obtains a further retrospective view of what's available for processing, which in turn, I'm told, has quality issues.
PN24
The second reason for the Tuesday to Friday relates to the reheat furnace in the rolling area, and under current arrangements the company idles the furnace over the weekend, doesn't actually turn it off. Under the proposed arrangements the company would turn off the furnace so it will be totally shut down, which in turn generates less gas consumption and a saving associated with that. It also means there will be no need for people to be in attendance at the plate mill when the furnace is shut down.
PN25
The benefit of the company in then a Tuesday commencement date, it will take approximately 24 hours to restart the reheat furnace. If it gets people in to do that on a Monday day shift, that provides the required 24 hours for a Tuesday day shift commencement of the 12-hour roster arrangement. Apparently if an issue is to arise with the furnace, it is most likely to arise at the start-up phase, and so if the furnace is started up on a Monday, then the people who are involved in that activity have access to the full suite of the company's technical officers and other support staff that might assist, and that would include both staff technical officers and a broader suite of maintenance employees.
PN26
If the 12-hour shift for the production operators was to start on a Monday, the company would need to get people in to restart the furnace on a Sunday, which obviously has an associated additional cost of penalty rates, aside from the absence of those technical and maintenance support staff that I mentioned. That, on my instructions, is the explanation for the reason for a Tuesday to Friday operation of the 12-hour roster arrangement.
PN27
The second question that I understand I was asked to address you on, Commissioner, was given the proposal to work on a Tuesday to Friday, what is the impact on public holidays, and you identified that obviously there are certain public holidays which invariably fall on a Monday, and others that often are substituted for a Monday where they arise on the weekend. The company's position on that, and it has been during the course of discussions communicated to employees, is that the company would apply the arrangements of the enterprise agreement. The arrangements in the enterprise agreement are that as a Monday to Friday worker, even being a shift worker, if a day is not a day he would otherwise be rostered to work and there's a public holiday, no payment applies.
PN28
The third question that I believe you asked me to address you on was that in other parts of the steelworks employees on 12-hour shift systems may work either or be in receipt of either annualised or aggregate salaries. My friend has asked me to confirm on the record what they represent and if I can explain them in this way, I'm sure the Commissioner - I'm not telling you anything that you don't otherwise know - an annualised salary, of course, builds up all of the components of an employee's remuneration factoring in base rates, shift allowances, weekend penalties, public holidays, and a component for overtime and usually no additional remuneration is received by that employee other than in certain defined circumstances that perhaps aren't addressed by the in-built overtime component.
PN29
An aggregate salary, in comparison, usually contains the base components for an employee's ordinary hours of work, base rate, shift allowance, but makes no allowance or in-built provision for overtime, that would be an additional payment where somebody works in excess of the ordinary hours of work. The case of the plate mill moving to 12-hour shifts, the employees there currently receive a base rate of pay and a shift allowance and receive overtime when they work hours in addition to their set shift or their weekly ordinary hours.
PN30
I'm not sure if the Commissioner has a copy of the enterprise agreement available at this stage. If I can take the Commissioner to table 8 of the agreement which is titled Other Rates and Allowances, and if I can take you to item 23 - I'm having trouble reading that at the moment - item 23, which you will see relates to clause 15 and clause 15.1.1 shift work allowances for shift workers, and shift workers whilst working rotating shift work. The plate mill workers currently under their eight-hour arrangement are rotating shift workers. They will continue to be rotating shift workers under the proposed 12-hour arrangement because one week they work days, the next week nights.
PN31
Their shift allowance, as set out in the agreement as at 23 October 2012 was 86.64. That amount has increased as a result of the last wage movement. I don't have access to that immediate figure, but the important piece, Commissioner, is that the relevant shift allowance due to these workers will not change as a result of them being either on 12 hours or eight hours. So their base rate and shift earnings are unaffected by this change.
PN32
I'm instructed by the company that if the employees wish to discuss some levelling of their earnings or some arrangement by which their earnings were level, because you recall every sixth week there's to be two rostered days off, that that could be addressed, but in terms of whether it be a more traditional annualised arrangement or aggregate arrangement, the essential point at the moment is there will be no change to their earnings, simply a change to their hours of work.
PN33
THE COMMISSIONER: The idea of annualised salary though, Mr Brotherson, would allow the company to factor in the overtime which is generated from the four-day three-night shift pattern without the additional RDO, if that was seen to be of benefit to both parties.
PN34
MR BROTHERSON: That may be, Commissioner. I don't think that's been something that's been discussed.
PN35
THE COMMISSIONER: No.
PN36
MR BROTHERSON: I mean, obviously the employees have to average 38 hours, which the arrangement, as has been acknowledged, the rostered days off addresses over a period of six weeks, but at the moment the company proceeds on the basis there will be no change to earnings and where overtime does need to be worked, if it does, then that would be paid in the usual way.
PN37
THE COMMISSIONER: Thank you.
PN38
MR BROTHERSON: I'm not sure - perhaps we obviously having made an agreement on the witness's need to tender the statements, it's probably best that my friend goes first on that.
PN39
THE COMMISSIONER: Yes.
PN40
MR BROTHERSON: I think we've indicated we have one issue to address with one of the statements we've covered.
PN41
MR HOWELL: Commissioner, I'll tender that in one moment. If I just might have a quick word with my friend.
PN42
MR BROTHERSON: If I can also just add, Commissioner, in respect to annualised and aggregate salaries, across the steelworks and the Springhill site where 12-hour shifts are worked, there are varying arrangements for annualised salary or aggregate salaries or, indeed, arrangements as I've just outlined. There is no standard procedure, it has depended on the circumstances of the particular work area. If only it was so easy (indistinct)
PN43
THE COMMISSIONER: Thank you.
PN44
MR HOWELL: Thank you, Commissioner. In terms of the answers to those questions, I am not instructed to make a formal admission that they are admitted facts but certainly I will not be leading any evidence to challenge them.
PN45
THE COMMISSIONER: Thank you.
PN46
MR HOWELL: To deal with the mechanics of the litigation today or the proceedings today, I don't see there being any utility in making an opening statement given that the matter is essentially going to proceed straight into submissions, so if the commission is content with that I'll simply read - or tender, I should say, the two statements that have been filed by the union. The first is a witness of Mr Tim Kangas extending across some five pages. So I tender that statement.
PN47
THE COMMISSIONER: Any response?
PN48
MR BROTHERSON: I take the point that our position is as confirmed in the propositions that have already been outlined to the commission.
THE COMMISSIONER: Thank you. I shall mark the statement of Tim Kangas as exhibit A1.
EXHIBIT #A1 WITNESS STATEMENT OF TIM KANGAS
PN50
MR HOWELL: Thank you, Commissioner. The second statement is a witness statement of Mr Paul Bessant. That's seven pages and dated 27 October 2014. I tender that statement.
PN51
THE COMMISSIONER: The same issues, Mr Brotherson.
PN52
MR BROTHERSON: The same position, yes.
THE COMMISSIONER: I'll mark Mr Bessant's witness statement as exhibit A2.
EXHIBIT #A2 WITNESS STATEMENT OF PAUL BESSANT
PN54
MR HOWELL: Thank you, Commissioner. That's the union's evidence.
PN55
THE COMMISSIONER: Thank you. Mr Brotherson.
PN56
MR HOWELL: Sorry, to clarify, I do have a folder of industrial instruments. It's the history of the relevant agreement which I can hand up. Would the commission prefer to have that marked as an exhibit or simply receive it for the purposes of the commission?
PN57
THE COMMISSIONER: Hand it up and I'll mark it. Can I just take you though - I notice there were a couple of areas in most of the statements from the parties - in Mr Bessant's statement, paragraph 21, unless I'm reading it incorrectly, it's a four-day three-night roster, is it not?
PN58
MR HOWELL: Yes, Commissioner.
PN59
THE COMMISSIONER: The same applies to the company statements as well, there's a couple of minor issues. In relation to the statement of Mr Kangas, at paragraph 38(b) the rationale is in line with what Mr Brotherson just told me, but I think that should read, "If the public holiday falls on a Monday," rather than Thursday or Friday.
PN60
MR HOWELL: On the proposal that's current, yes.
PN61
THE COMMISSIONER: Thank you. So do you want to hand up your bundle?
PN62
MR HOWELL: Yes, Commissioner. I'll deal with this in submissions. I don't intend to take the commission through that bundle in great detail. I'll refer you to some relevant clauses. I understand my friend is likely to do the same and has a bundle. There is some cross-over in the two but it's not complete. I think between the two folders you will have the complete history.
PN63
THE COMMISSIONER: About the third occasion, I think, Mr Howell.
PN64
MR HOWELL: Yes. That would not be surprising. But unless the commission requires anything further of me at this point, that's the applicant's - - -
THE COMMISSIONER: I will mark that bundle as exhibit A3.
EXHIBIT #A3 AWU BUNDLE OF DOCUMENTS
PN66
MR HOWELL: Thank you, Commissioner.
PN67
THE COMMISSIONER: Thank you, Mr Howell. Mr Brotherson.
PN68
MR BROTHERSON: Commissioner, the company has filed three witness statements. There is a witness statement of Mr Sam Gerovalasis which, if I could just make two amendments. In paragraph 32 in the third line after the word "driven", the word "by" should be included, and in paragraph 36 in the fifth line before the words "side piled", the word "be" should be inserted. With those amendments, Commissioner, I'd seek to tender that statement.
PN69
MR HOWELL: No object.
PN70
THE COMMISSIONER: At paragraph 11, Mr Brotherson, are those times accurate in relation to the night shift at 7.20 pm?
PN71
MR BROTHERSON: The night shift currently does finish - or does currently commence - - -
PN72
THE COMMISSIONER: It commences at 11.20 pm I would have thought.
PN73
MR BROTHERSON: Yes. I think that's correct, that needs to be corrected, Commissioner.
PN74
MR..........: The processing area is 20 past the hour (indistinct)
PN75
THE COMMISSIONER: So that is 11.20 pm.
PN76
MR BROTHERSON: 11.20 for night shift in the processing area, the rolling area apparently would be on the hour.
PN77
THE COMMISSIONER: Yes, just 7.20 just wanted - - -
PN78
MR BROTHERSON: No, that's out of sequence. I think there obviously might be some intricate details, but I think we can take that as a broad summary of (indistinct)
PN79
THE COMMISSIONER: I think there was just confusion about whether it was eight hour or 12-hour shifts at that point.
PN80
MR BROTHERSON: Yes.
THE COMMISSIONER: Okay. I'll mark that exhibit as exhibit B1.
EXHIBIT #B1 WITNESS STATEMENT OF SAM GEROVALASIS
PN82
MR BROTHERSON: There is also a statement of Mr David Fairly which I would seek to tender.
PN83
MR HOWELL: No object.
THE COMMISSIONER: I'll mark that exhibit B2.
EXHIBIT #B2 WITNESS STATEMENT OF DAVID FAIRLY
PN85
MR BROTHERSON: And the third statement on behalf of the company is a statement of Mr David Otsyula which I would seek to amend in two ways, and perhaps if I deal with the simple one first, and that is at paragraph 65 in the third line the reference should be to "paragraph 44", not paragraph 444. The second amendment is at paragraph 34 where we would seek to insert at the end of the third line after the sentence ending "throughout", an additional sentence which would read as follows, "A copy of the presentation made on 5 June will be provided at the hearing," and I can provide that now.
PN86
The sentence that currently begins, " A copy of the company's presentation from the meeting on 5 June," if that could be amended as follows, "A copy of the company's presentation", if we delete the words "from the meeting on 5 June", and insert the words, "Made at a later meeting of 29 August," and then continuing as typed, "2014 titled Plate Mill Business Market Change 2014 is annexed and marked DO3." It does raise perhaps the question of what status is afforded the additional presentation.
PN87
THE COMMISSIONER: I think it would be appropriate to mark it as DO6, would it not?
PN88
MR BROTHERSON: That would be one option, Commissioner. I am content with that.
THE COMMISSIONER: Yes, I'll mark the presentation from June as DO6.
EXHIBIT #DO6 PRESENTATION FROM JUNE
PN90
THE COMMISSIONER: And make the relevant notation at paragraph 34, so, "A copy of presentation of 5 June will be provided at the hearing," in brackets "DO6".
PN91
MR HOWELL: Thank you. And there's no object to the statement in question.
PN92
MR BROTHERSON: Commissioner, that is the company's evidence.
PN93
THE COMMISSIONER: No bundle?
PN94
MR BROTHERSON: Yes. In terms of folders that we speak to in submissions, we have two folders that we'll refer to, one is a folder of our authorities and the second is a folder of industrial instruments and legislation which contains some of the same documents as Mr Howell has just produced but mops up the difference. So if I can provide those two folders now.
THE COMMISSIONER: I will mark the respondent's authorities as exhibit B4 and the industrial instruments legislation as exhibit B5.
EXHIBIT #B4 RESPONDENT'S AUTHORITIES
EXHIBIT #B5 INDUSTRIAL INSTRUMENTS LEGISLATION
PN96
THE COMMISSIONER: Thank you, Mr Brotherson.
PN97
MR HOWELL: All right. It falls to me then. Thank you, Commissioner.
PN98
THE COMMISSIONER: Mr Howell.
PN99
MR HOWELL: Commissioner, these proceedings concern an application under section 739 of the Fair Work Act by the AWU and other unions to deal with a dispute pursuant to clause 35.1 of the BlueScope Steel Port Kembla Steelworks Agreement 2012. The scope of the arbitration today is as described in the commission's directions of 1 October 2012, restricted to the introduction of the two shift 12-hour roster operation.
PN100
There are two distinct issues that the commission is, in my respectful submission, required to consider in these proceedings. The first issue, which I think in some of the communications to date has been described as a threshold issue, is this, does the agreement permit BlueScope the authority to unilaterally impose ordinary hours of work for a particular work area, here the plate mill, that involve shift lengths in excess of eight hours? The union's simple contention is that on its proper construction clause 13 of the agreement, read in terms and having regard to relevant context, means what it says:
PN101
Ordinary working hours will not exceed eight hours during any consecutive 24 hours, or up to 12 hours during any consecutive hours where there is agreement between the company and the majority of employees concerned in the relevant work area.
PN102
Now, my friend hasn't made this concession, but I don't understand there to be any dispute that the plate mill is a relevant work area for the purposes of that clause. The agreement does not give Bluescope the authority to unilaterally impose ordinary hours shifts in excess of eight hours' duration and that specific prohibition is, in my respectful submission, not qualified by the application of the general provision in clause 35 in relation to disputes and the introduction of significant change.
PN103
As I understand the company's contention, it is said that the agreement when properly construed does permit Bluescope to unilaterally impose a change involving the introduction of ordinary hour shifts in excess of eight here in the plate mill because it is said to be a significant change as defined in the agreement, and clause 35, in particular clause 35.2, provides a mechanism for the introduction of such change, including by way of arbitration. The union's retort is quite simply that makes the specific commitment given in clause 13.1.1 of the agreement meaningless and on its proper construction clause 13.1.1 was intended to have a separate and distinct operation when it comes to the implementation of change.
PN104
If the commission does not accept the union's contention on what I've characterised as the threshold issue, a second issue arises. That is whether the commission is satisfied that the introduction of the 12-hour shift proposal in the plate mill is safe, efficient, legal and fair, consistent with clause 35.2.1(c), I think it is, of the agreement, and the union's contention in that respect is it is neither legal, nor is it fair.
PN105
There is a subsidiary issue if the commission comes to consider the application of the general disputes clause about who bears the onus of demonstrating that a change is safe, efficient, legal and fair. The union's position is that the party propounding the change bears the issue. That issue has been canvassed in the written submissions. I think it's adequately dealt with in writing, and subject to anything which might fall in reply, I don't intend to trouble the commission with anything orally about that today.
PN106
I should note at the outset though that the company, quite correctly in my respectful submission, does accept, and this is at paragraph 44 of its written submissions, that if the commission accepted the union's construction of the agreement, in particular proper construction of clause 13.1.1, then, as their submission records it, that is the end of the matter. That is of course correct. Section 739 subsection (3) of the Fair Work Act limits the commission's power in the context of a private arbitration to the power given to it by the agreement, and section 739 subsection (5) provides that the commission "must not make a decision that is inconsistent with this Act, or a Fair Work instrument that applies to the parties," and of course that would include the agreement itself.
PN107
On the threshold point, if on its proper construction the general provision about introduction of change in clause 35.2 does not apply to a change involving the introduction of ordinary hour shift lengths in excess of eight hours, then the general dispute resolution clause in clause 35.1 does not empower the commission to make a decision about whether the company's proposal is safe, efficient, legal and fair. It is a separate and distinct mechanism for the introduction of change and internally it provides the answer in the event that there is a dispute, as I'll come to explain in due course. Any determination on that question would transgress the power given to the commission by the agreement and be contrary to section 739 subsection (3).
PN108
If the commission concluded that the general provision about the introduction of change does apply to this issue and the dispute and grievance provision is engaged, then the question is whether the general provision in relation to the introduction of change on its proper construction permits the commission to effectively ignore the specific limit imposed on ordinary hours shift lengths by clause 13.1.1 of the agreement. If the commission accepts the union's contention that clause 13.1.1 contains a prohibition on the imposition of ordinary hours shifts in excess of eight hours in the absence of majority agreement for the relevant work area, even if the dispute and grievance provision, clause 35.2, does apply, that would still be the end of the matter.
PN109
To determine the matter in any other way would be to determine the dispute in a manner inconsistent with a Fair Work instrument, namely the agreement, and be inconsistent with the limits of the power imposed on the commission by section 739 subsection (5) of the Act, and in terms of the agreement itself having regard to the test in clause 35.2.1(c) it would not be legal. The third limb to the union's agreement is that it would not be fair, and that really is a merit question which falls to be determined in the event that the other two matters fall away.
PN110
Now, as will be self-evident, the principal issue in the union's case is the proper construction of the enterprise agreement. That in turn engages the principles for construction of an agreement of this kind. No doubt the commission is well familiar with them, but there does seem to be a minor dispute between the parties in that connection, so I should address them at least briefly.
PN111
Now, the principles have been helpfully and comprehensively summarised in a very recent full bench decision which was published just a couple of days ago on 27 November. I was going to hand the commission a whole range of authorities, but fortunately the full bench has done a very good job of summarising them all into a series of paragraphs, and so I'll simply hand the commission that one, if it's a convenient course. It's the Australasian Meat Industry Employees Union v Golden Cockerel Pty Ltd [2014] FWCFB 7447.
PN112
Now, Commissioner, this case arose from a dispute under an enterprise agreement. You will see that in paragraph 1, and it related to a dispute about a unilateral change to the starting time of two workers, a Mr Menz and a Mr Shaw. You will see that in paragraph 3 of the decision. In terms of the question of merit and how the proceedings was ultimately received, the full bench appeared to accept that the language of the agreement at issue in this case precluded the unilateral change to the start time in relation to ordinary hours, but did not prevent the employer from requiring the two employees to work reasonable overtime, including by directing them to start their shifts at a particular time on overtime rates. The commission will see that from paragraphs 59 to 63. I don't need to take you to that because that's really the application of the relevant principles in the agreement at play here.
PN113
But in the course of coming to that conclusion the full bench outlined in a very helpful summary the relevant principles, so can I take the commission to paragraph 19? Much of this will be, I suspect, very well understood territory, but I ought briefly take the commission to it. Firstly the full bench reiterates and re-embraces the well-known passage from the judgment of his Honour French J as his Honour then was in City of Wanneroo v Australian Municipal Administrative, Clerical and Services Union where his Honour emphasised:
PN114
The construction of an award, like that of a statute, begins with a consideration of the ordinary meaning of its words. As with the task of statutory construction, regard must be paid to the context and purpose of the provision or expression being construed. Context may appear from the text of the instrument taken as a whole, its arrangement and the place in it of the provision under construction. It is not confined to the words of the relevant Act or instrument surrounding the expression to be construed. It may extend to the entire document or other documents with which there is an association.
PN115
If I end the quote there and ask the commission to turn to paragraph 20 of the relevant decision, again the full bench is reiterating the oft quoted observations of his Honour Madgwick J in Kucks v CSR Ltd, emphasising that no narrow or pedantic approach ought be taken, but emphasising, as I would emphasise respectfully here:
PN116
The task remains one of interpreting a document produced by another or others. A court is not free -
PN117
here the commission of course -
PN118
is not free to give effect to some -
PN119
I think that should be "anteriorly", not "interiorly" -
PN120
derived notion of what would be fair or just, regardless of what has been written into the award. Deciding what an existing award means is a process quite different from deciding, as an arbitral body does, what might fairly be put into an award.
PN121
I emphasise those points at the outset because in my friend's written submissions, I think from memory at paragraph 28, there's a suggestion that one of the relevant principles to construction is the commission should try and give construction to the instrument that is fair and reasonable as between the parties. With respect, that is not the approach. The question is what does the agreement provide? What was it intended that the agreement provide? The arbitral process of determining what's fair and reasonable is different to the process of construction.
PN122
Now, Commissioner, at paragraphs 23 to 30 the full bench discusses the proper use of extrinsic materials in the process of interpreting enterprise agreements. I don't need to take the commission to that specifically, but simply note it for the present purposes. The conclusion is ultimately expressed in paragraph 30 in a manner which I would have thought was uncontroversial, but apparently not. Required the full bench to deal with it at some length.
PN123
The full bench then at paragraphs 31 to 41 considers the application of the Acts Interpretation Act to the process of construction of an enterprise agreement, and again in a manner I would have thought was not controversial reinforces the observations made by the full Federal Court in Toyota Motor Corporation Australia Ltd v Marmara in which the court essential said, "Well, this is not an instrument which is made under a statutory authority. It's made by agreement between relevant parties and as such it's not an agreement which attracts the operation of the Acts Interpretation Act." Again I don't need to take the commission to those in particular.
PN124
But then at paragraph 41 the full bench has the helpful summary that I earlier described. The first six points really deal with the question of extrinsic material and the application of the Acts Interpretation Act. I don't need to trouble the commission with those in particular. The relevant paragraphs in the summary that I think are of particular assistance to the commission in these proceedings is paragraph 7 emphasising that the disputed construction will turn on the language of the agreement understood having regard to its context and purpose, the context as described in paragraph 8, and ultimately, as the full bench says at paragraph 10:
PN125
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.
PN126
The full bench there emphasising what was otherwise contained in the extract of his Honour's judgment, Madgwick J, in the matter of Kucks which I've already taken the commission to. So the central question in these proceedings is what does this agreement provide? Now, if I can then turn to the unions' threshold point, the principal clause relied upon by the unions in these proceedings is of course clause 13 which is entitled Ordinary Hours of Work, and in particular clause 13.1.1, and I'll come to that clause shortly but, as is always the case, the usual principles of construction require one to look at the award in general, the relevant context as it is often said.
PN127
So if I can ask the commission to open the agreement. It can be found in no doubt several places. In tab 1 of the exhibit A3 the commission will find a bundle. If the commission has a copy otherwise conveniently available to it, then I'm sure that will suffice. The starting point is clause 5, which is the no extra claims provision:
PN128
Parties to the agreement will not make any further claims prior to the nominal expiry. The agreement does not prevent the implementation of change or raising of reasonable issues where provided for by the terms or processes of this agreement.
PN129
Now, the proper construction of a clause such as that has been recently addressed by the full Federal Court in the Toyota Motor Corporation v Marmara decision, or judgment. I don't need to take the commission through that at any length. I would note that yesterday there was another full bench decision of the commission which reiterated the proper approach to the construction of a clause such as the no extra claims clause here. In light of the Full Court's decision I don't need to take the commission to it. It's a relatively short passage. I simply note their decision is DL Employment Pty Ltd v Australian Manufacturing Workers Union [2014] FWCFB 7946. The relevant passage is to be found at paragraph 51. It's referring to a no extra claims provision which in terms is set out at paragraph 4 of the decision, and it simply says this:
PN130
That provision is to be read as having the same effect as the no extra claims provision considered by the Federal Court, Bromberg J, in Marmara v Toyota Motor Corporation Australia Ltd, and on appeal by the Federal Court Full Court, Jessup, Tracey and Perram, JJ, in Toyota Motor Corporation Australia Ltd v Marmara, namely prohibiting a proposal made by a party to the agreement to materially change the terms and conditions of employment set out in the agreement other than in a manner already provided for by the agreement, but not to the extent of excluding the capacity of the parties to seek a variation of the agreement under sections 207 and 208 of the Act.
PN131
So the no extra claims provision is intended to set the parameters of what one may do within the context of an agreement, and to prohibit claims being made to the extent that they would otherwise be outside of what is contemplated within the agreement itself. If one then goes to clause 13 of the agreement, which is the centrally relevant clause in the unions' respectful submission, and I should say in light of what the respondent says in paragraphs 67 and 68 of their written submissions, I don't understand there to be any dispute about the application and proper construction of the no extra claims provision, so I'll say little more about it.
PN132
Turning then to clause 13, hours of duty, and looking to its function and purpose in the context of this agreement, the function of clause 13 in the context of the agreement is to provide the scheme of ordinary hours of work, and it does so in the traditional way. It does so firstly by reference to the total number of hours per week, and then by reference to the parameters within which those ordinary hours are to be worked.
PN133
So one first looks to paragraph 13.1.1 setting the overall ordinary hours of work, "Full-time employees, ordinary working hours will be an average of 38 hours per week over the full cycle of the relevant work roster." Everything else in the clause then deals with the parameters within which those 38 hours can be worked, and a critically relevant provision is what immediately then follows:
PN134
Ordinary working hours will not exceed eight hours during any consecutive 24 hours, or up to 12 hours during any consecutive 24 hours where there is agreement between the company and the majority of employees concerned in the relevant work area.
PN135
Of course then you've got clause 13.2 and clause 13.2 which provide some additional parameters relating to day workers and shift workers, "day workers" being defined in clause 4.4 of the agreement, and "shift workers" being defined in clause 4.7 of the agreement. I don't need to trouble the commission with the definition of a day worker, but it's useful to note that a shift worker is defined as "employees working on a two or three shift system, or a one shift system whose ordinary hours includes weekend shifts".
PN136
The point being in both the definition of "shift worker" and in clause 15 which deals with shift allowances, one will see within the agreement itself there are already parameters about what a shift worker is, and indeed in clauses 19 and 20 one will see the capacity to alter some of those parameters, for example from a day worker to a shift worker, or a shift worker to a day worker. So the language - again approaching the matter from the perspective of the ordinary principles construction, the ordinary meaning of the words used in clause 13.1, in particular clause 13.1.1, are absolutely plain. In fact it's difficult to conceive of a more clearly worded provision.
PN137
Clause 13.1 has this effect: it establish the maximum ordinary hours of work within any consecutive 24 hours, and it does so by providing that in the absence of something more, ordinary hours shall not exceed eight hours in any 24-hour period. It provides the mechanism for the flexibility. That is to say, it provides the mechanism by which the company can seek to alter the maximum ordinary hours of work in any consecutive 24-hour period up to a maximum of 12 hours in any consecutive 24 hours within the relevant work area.
PN138
But, thirdly, it creates a clear and specific condition or limitation on the working of shifts of more than eight ordinary hours. That is, the limitation is there needs to be agreement between the company and the majority of employees concerned in the relevant work area. That's clearly intended to be a limitation on the capacity of the company to impose a unilateral change. It's very clearly worded, and the condition is either satisfied, or it is not.
PN139
For the purpose of the unions' threshold argument, what is most important about this clause is that internally it provides both the mechanism for change and the outcome in the event that there is a dispute arising from the company's efforts to introduce that change. In other words, in the event the company wants to change the ordinary hours of work arrangement so that shifts extend beyond eight hours, they require the agreement of the majority of the workforce. If they can't get that agreement, the dispute is resolved by the clause itself. In the absence of that agreement the ordinary hours maximum shift length is eight hours.
PN140
Clause 13.1.1 would prevent the change from proceeding, or to put it another way, as I say, the dispute is already resolved. Ordinary working hours will not exceed eight hours during any consecutive 24 hours. So in terms it provides the mechanism for change, the precondition to the making of the change, and a default position in the absence of that precondition being met. That precondition, the agreement of the majority of the relevant work area, is not qualified or limited by reference to how or when that agreement might be given or withheld, and it's not qualified by considerations akin to those outlined in the general change provision in clause 35.2.1. In other words, it's not qualified by concepts such as their refusal or their agreement being safe, efficient, legal or fair.
PN141
Now, I'll come to the specific provision in clause 35 in one moment, but again looking at relevant context can I ask the commission to go to clause 33? Now, the commission will immediately note that this is a provision specifically directed towards the concept of change and commitments in relation to change, in particular what is relevant here is clause 33.2. Subject to relevant provisions which deal with specific changes about shift structures or shift workers:
PN142
For the purpose of meeting the needs of the industry, the company may require an employee to transfer from one shift system to another shift system prescribed by this agreement at the applicable rate. Unless reasonable cause exists, the employee will work in accordance with this requirement.
PN143
Now, that provision is important for two reasons. Firstly, it contemplates a change about shift structures. Not individual shifts for individuals, but the shift structure that's applied in the relevant roster. The agreement otherwise provides the parameters around what those shift structures will be. It's outlined in the definition of "shift worker" itself, and it's otherwise outlined in clause 15. What's also important about that provision is that it does not have a qualification akin to that to be found in clause 13.1.1.
PN144
There's no requirement for a majority agreement to shift from shift structure X to shift structure Y. The company can impose this change. It can be a significant change. What they can't do in this provision, and there is nothing to this effect in the clause, what they can't do in this provision is unilaterally change the length of the shifts contemplated within that shift structure. That's otherwise dealt with in the ordinary hours of work provision, in particular clause 13.1.1.
PN145
Again we then come to the question of the general disputes provision and how these provisions ought interact with one another. So can I ask the commission then to go to clause 35? Now, clause 35, something the commission will no doubt have looked at on more than one occasion and so I'll endeavour not to labour it. But clause 35 has four real parts to it. The first is the general principles concerning - sorry, withdraw that. The first is the dispute resolution procedure in clause 35.1.
PN146
Secondly is the introduction of change provision in clause 35.2, and this really has three elements to it. The first is the general principles. That's in 35.2.1. The next is the general description of the processes for the introduction of change. That's in 35.2.2, and specifically in relation to changes that are defined as being changes that are significant in nature, 35.2.3. If I can ask the commission to go to 35.2.2, in particular 35.2.2(b). This is where one finds the delineation between changes that are not significant and changes that are significant. I should say (b) and (c), (c) containing the definition of what a significant change is.
PN147
So (b) firstly, "Changes which are not significant in nature shall be introduced in accordance with the principles set out in subclause 35.2.1" - and these are the critically important words - "and the provisions of the agreement." Changes not significant in nature must be consistent with the provisions of the agreement. We then come to matters about - sorry, withdraw that. We then come to the significant change definition. (c) says what it says.
PN148
But then we come to (d), a provision which is not referred to at all in my friend's written submissions, "Where a change is otherwise provided for in this agreement, it will not be regarded as a significant change in nature for the purposes of this clause." Now, (d) is quite clearly intended to be a carve-out from what might otherwise fit within the concept of significant change. That's its obvious and evident purpose, in which case it's to be dealt with in accordance with clause 35.2.2(b), in which case, consistent with what one might expect, given that it carves out things which are otherwise dealt with within this agreement, it must be dealt with within the terms of the provisions of the agreement. That's what 35.2.2(b) requires for matters that are not otherwise significant changes.
PN149
Turning then to the matters that are significant changes, 35.2.3, the agreement outlines really three things about the process for the introduction of change which is significant or for resolving issues and disputes. The first is it provides for consultation. That's dealt with in (c) through to (g). You then have notification of the relevant decision. That's dealt with in - sorry. I should say you then have the bringing to the end of the relevant consultation phase. That's dealt with in (h) and (i), noting that the final decision of the company post the consultation must be notified in writing.
PN150
Then you have what happens at the end of the consultation phase dealt with in paragraphs (j) and (k). If there is agreement, change will be implemented immediately. That's paragraph (j). Where there is disagreement to a change, a party to the consultation provision must give written notice that it disputes the implementation of the change and must follow the procedure for resolving disputes as per clause 35.1.7. Importantly, "Where a matter is referred to Fair Work" - should be the Fair Work - "Commission as part of the disputes procedure, implementation of the change will be subject to the outcome of such proceedings, so it's subject to the outcome of the relevant arbitration during which time the status quo will remain.
PN151
Now, the construction of that clause has meaning in both the threshold point that the union raises and also in the proper construction and the application of it, the commission does accept that that provision applies to this change. The threshold proposition though is that clause 35 does not apply to changes that are contemplated and dealt with outside clause 35.2 and within the agreement. How does that arise? The starting point is this, it goes without saying that the mechanism for the implementation of change in clause 35 stands in stark contrast and is materially different to the specific mechanism for the introduction of change in relation to ordinary shift lengths that extend beyond eight hours. That's dealt with in clause 13.1.1.
PN152
The mechanism for the introduction of changing clause 13.1.1 is specific in its subject matter and it's specific in its terms. There is a direct inconsistency between the express and specific limitation on when a change may be implemented in relation to ordinary hour shift lengths outlined in clause 13.1.1 and the general implementation of change provision outlined in clause 35.2 and for this purpose it doesn't matter whether you accept that this is a significant change or not. Ultimately the instrument contemplates arbitration of the outcome of such a dispute. That process is materially different to the process for the introduction of change contemplated by clause 13.1.1 in terms.
PN153
The point is simply this, if the company can pursue an increase in shift length beyond eight hours in any 24 hours by way of the introduction of change provision the requirement that there be an agreement of the majority of the workforce to which the relevant change is to apply is rendered absolutely meaningless. That commitment, that limitation, that specific limitation that applies in the specific area of operation of the agreement would be rendered meaningless and it's that inconsistency which gives - it attracts the operation of the well-known and yet somewhat difficult to say principle generalia specialibus non derogant.
PN154
It's a principle of interpretation. The seminal authority of Goodwin v Phillips is extracted in the written submissions filed on behalf of the union, in particular, at paragraph 20, and what the author of the written submissions has done is set out a small extract from one of the relevant cases out of the New South Wales Supreme Court which extracts the principle. The principle itself does not have any particular magic to it. The relevant Latin expression is translated for us in the extract, "General things or words do not derogate special things or words," and the application of the principle is otherwise described there in the similar authority of Goodwin v Phillips with a general provision which applied in its entirety would neutralise a special provision dealing with the same subject matter. A special provision must be read as a proviso to the general provision and the general provision insofar as it is inconsistent with a special provision, must be deemed not to apply.
PN155
In my respectful submission, clause 35.2 is a general provision relation to the introduction of change, that if applied would neutralise the specific provision dealing with the introduction of change in clause 13.1.1. Applying the relevant principle of construction, clause 13.1.1 must be read as a proviso to the general change provision in 35.2 and 35.2 must be deemed not to apply the changes that involve the imposition of an ordinary hours shift length in excess of eight hours.
PN156
Now, my friend says in the written submissions, "Well, that effectively renders 35.2.2 at nought, and insofar as the definition of specific change, a significant change includes references to the hours of work of employees in (v)," that's 35.2.2(c)(v). That indicates an intention to capture the issue that's dealt with by clause 13.1.1. With respect, there are two answers to that. Firstly, in relation to the suggestion that clause 35.2 would be rendered nugatory, that is, with respect, (a) a nonsense, 35.2 would still have general application in relation to, for example, the introduction of different shift structures. They must simply be within the parameters of the ordinary hour shift length otherwise provided for in clause 13, in particular, the limitation contemplated by 13.1.1, and the concept of ordinary hours of work is a very limited sub-species of the issue described in (v), the hours of work of employees.
PN157
Disputes about the hours of work of employees - I'm sure the Commissioner's experience of this would lead me to not need to really elaborate on that in any material way - but 13.1.1 deals with a specific species of issue relating to the hours of work. It's the ordinary hours of work and the shift length, more particularly the shift length that can be worked as ordinary hours of work. General disputes about the hours of work of employees could extend to a very broad sweep of potential issues, it is not confined in the same way that 13.1.1 is, indeed, the fact that 13.1.1 contains a very specific provision would suggest a carve out from the general concept dealt with in 35.2.2(c)(v).
PN158
THE COMMISSIONER: What about (i)?
PN159
MR HOWELL: (i):
PN160
The composition, operation or size of the workforce in (indistinct) operation of the company.
PN161
The first thing I should say is at the moment the proposal that this arbitration is limited to is the implementation of the two-shift 12-hour roster. That might well have knock-on consequences for the size of the workforce, but the issue that this arbitration is limited to in accordance with the commission's directions is the capacity to implement the relevant 12-hour roster.
PN162
THE COMMISSIONER: But isn't that to do with the operation of the department? The evidence - - -
PN163
MR HOWELL: "The operation or size of the workforce - - -"
PN164
THE COMMISSIONER: The witness statement of Mr Otsyula goes in some detail to the amount of production which is required and the excess amount of production that is work that is generated or produced from the five by three roster system compared to the 12-hour shift system of four days and three nights, isn't that the operation - go to the operation of the department?
PN165
MR HOWELL: The proposal would otherwise generally deal with the issue of the hours at work as well. I accept that. But that is why - that is the general proposition. This general disputes provision is capable of applying to the subject matter of this dispute. It is capable of application in that context, but it is only capable of application in that context because it is a general disputes provision which operates in the way that it does. The point of the doctrine, the point of the principle of interpretation is if you have something that is in general terms or that applies generally that is capable of application to a very specific set of circumstances and has the effect of rendering specific limitations at nought, then you read the general as subject to the particular proviso, that is, you read the general subject to the specific and the specific stands alone.
PN166
THE COMMISSIONER: What do you say is my capacity in relation to perhaps issuing an order under section 35.2.3(l) in relation to a trial? You can take that on notice if you like, perhaps after lunch address me on that point.
PN167
MR HOWELL: May it please. I can deal with it now, Commissioner. The short answer is - and there are two answers. The first thing is if the commission accepts the threshold point that we raise, clause 35.2 has no application to this particular issue. If the commission does not accept that, then there's a question of construction that arises, how does 35.2 apply to these circumstances. In my respectful submission, this is not a significant change, what is proposed, the subject matter of this arbitration is not a significant change within the definition of significant change in the agreement because (d) - I'll come to elaborate on this in a minute - (d) excises from the concept of significant change a change that's otherwise provided for in the agreement itself.
PN168
What you're drawing my attention to, Commissioner, is a provision which deals with the process for the introduction of significant change and, in my respectful submission, it simply doesn't apply, there would be no capacity to make an order in that respect. To the extent that this agreement - and this is against the case that I mount on the threshold point, but if the commission construed clause 35.2 as having application to the subject matter of this dispute, it applies under 35.2.2(b), that is to say, it's a change which is otherwise provided for in the agreement and so it's not a significant change, in which case the commission's hands are tied by the terms of the agreement itself and again a trial would not be something which the commission would be empowered to order in the context of the arbitration.
PN169
THE COMMISSIONER: Thank you.
PN170
MR HOWELL: It's something of an esoteric point - well, actually I withdraw that. It's an issue, this generalia specialibus doctrine is not one which is often canvassed at least in terms in the context of the interpretation of industrial instruments, albeit one sees the application of the principle embedded in the approach one often sees to the interpretation of industrial instruments, but it's not normal and I would like to take the commission as briefly as I can through a couple of decisions in which the principle has been relevantly applied, including a decision of Connor C which applied to the very terms of clause 13.1.1 albeit in a different agreement that applies to BlueScope.
PN171
The first of the authorities that I want to take the commission to is a decision of the full bench from January of this year. It's Leading Age Services Australia New South Wales - ACT 2014 FWCFB 129, a decision of his Honour Hatcher VP, Sams DP and Roberts C. Now, Commissioner, the proceedings concerned an application to appeal a decision of Gooley DP that was made in conclusion of one of the two yearly transitional reviews of a modern award, in particular, the Aged Care Award 2010.
PN172
Commissioner, you will see that background described in paragraphs 1 to 3. The review proceedings before Gooley DP in essence, as many of them did, became arguments about variation. Gooley DP refused three of the variations which were sought by the employer interests, and the employer interests sought permission to appeal those refusals.
PN173
Variation 1 is the only aspect of the decision that I need to take the commission to. What it deal with was what was said to be an uncertainty and an inconsistency between provisions in the relevant award that contemplated the ordinary hours of work of part-time workers and provisions that related for changes of rostered hours and particular start and finish times. You will see the relevant provisions extracted on pages 2 and 3 of the agreement and you will see a short statement of the issue itself in paragraph 7.
PN174
To briefly walk the commission through how the issue arose, you will see paragraph 4, clause 10.3 dealt with part-time employees. 14.3(b) required, as of course all modern awards do, that there be an agreement in writing prior to a part-time employee commencing about a range of matters including the number of hours to be worked each week, the days of the week and starting and finishing times each day. Subclause (c) contemplated any agreed variation be in writing and the question arose was whether or not agreement was required to a variation in start and finish times given clause 22.6 of the award which is extracted in paragraph 6. In particular 22.6(c) purported to give an employer the unilateral right to change start and finish times on a roster.
PN175
So the employer's case was there was this interpretational difficulty that arose between a general right given to changed start and finish times in the roster and the specific requirement in relation to part-time employees that there be an agreed variation if that matter was to be dealt with. The full bench came to deal with what they described as the interpretational contest at page of 66 18 and 19 of the decision, which I might ask the Commissioner to turn to. It's on pages 7 and 8 of the print that I've handed up. At paragraph 18 the full bench said this:
PN176
Insofar as there is an interpretational contest as to how clauses 10.3(c) and 22.6(c) interrelate with each other, we consider it appropriate to express our views on the subject. Our conclusion is that the effect of clause 10.3(c) is to require any changes to the agreement entered into before the commencement of employment pursuant to clause 10.3(b), including any changes to the number of hours worked each week, the days of the week the employee will work and the starting and finishing times to be by further written agreement, and that clause 22.6(c) does not permit the employer to make unilateral changes in respect of any of these matters for part-time employees by use of its right to change the rosters. The reasons for our conclusion are as follows.
PN177
Over to paragraph 19:
PN178
Clause 10.3 contains a scheme of provisions specific to the subject matter of part-time employment.
PN179
Applying the relevant doctrine:
PN180
The specific provisions of clause 10.3 should be read as prevailing over other more general provisions of the award in the case of inconsistency unless the context dictates otherwise.
PN181
Now, of course the full bench then goes on at some length to consider the relevant context of the particular clause, in particular 10.3. They are, of course, specific to that particular agreement so I don't need to trouble the commission with that. It ultimately comes to the conclusion or the application of the doctrine at paragraph 27. It says this:
PN182
The appellants’ submissions concerning the effect of clause 22.6(c) and its relationship with clause 10.3(c) suffer from two major flaws.
PN183
It's the first of these, (c) is the relevant doctrine being applied:
PN184
The first is that it leads to a result whereby the requirement for reasonably predictable hours of work in clause 10.3(a) is left without any substance. Under the appellants’ approach, an employer, notwithstanding the agreement reached prior to the commencement of employment concerning among other things the days upon which work is to be performed and the starting and finishing times of work on each day, could unilaterally vary that agreement via a roster change at any time after employment commenced, and vary it as frequently thereafter as suited the employer, provided the required notice was given. This would not constitute predicability in employment in any reasonable sense.
PN185
Can I ask the commission whilst it has this decision open to also note paragraph 29 where the full bench itself notes the conclusion reached in that case was consistent with an earlier full bench in the matter of Transport Workers’ Union of Australia v Qantas Airways Ltd. So far as that case is concerned, I'm content to rely upon the extract which is outlined in the full bench's judgment at paragraph 29. You will see in paragraphs 12 and 13 there is a statement - sorry, I should say in paragraph 29 of the Leading Age Services Australia decision there is an extract of paragraphs 12 and 13 of the decision of the full bench in TWU v Qantas Airways matter.
PN186
There's a statement of the issue in paragraph 13, in particular, noting in about the middle of the paragraph there's a direct conflict between the provisions where the circumstances in clause 18.5.8 are present if the employer refuses to agree to a roster change and the application of the relevant principle, albeit it's not said in terms, comes to be seen in paragraph 14 of the extract:
PN187
In our view the provisions conflict in a significant way. The conflict should be resolved by according greater weight to the provisions which deal specifically with changes in part-time hours. To do otherwise would render those provisions almost meaningless. A more general clause should be interpreted in such a way as to continue its operation to changes in rosters for individual full-time employees. The rosters of part-time employees may only be changed in accordance with 18.5.8.
PN188
A classic application of the generalia specialibus non derogant doctrine, albeit it's not said so in terms, and that sort of reasoning is often seen in the proper construction of an enterprise agreement, specific prevailing over the general. Now, I held out the promise of a case which dealt with that specific principle in the context of one of the agreements with which this agreement is associated - I shouldn't say one agreement, one of the predecessor awards with which this agreement has some association.
PN189
Can I provide the commission - it's referred to in the written submissions, the author of the written submissions describes it as a case which is not specifically relevant. With respect, it's a particularly relevant decision to the issues that arise in these proceedings and I'll endeavour to show it. I should note for the record the decision I have just handed up is BlueScope Steel Ltd v Australian Workers Union 2008 NSWIRComm 1054, a decision of Connor C dated 9 July 2008 in which I note my friend represented the company.
PN190
THE COMMISSIONER: He's been doing it a while, from memory.
PN191
MR HOWELL: Pardon, Commissioner.
PN192
THE COMMISSIONER: He's been doing it for a while.
PN193
MR HOWELL: He's been doing it for a while, quite. Now, the case involved the proper interpretation of clause 13.1.1 of the BlueScope Steel Ltd Springhill and CRM Employees Award. Now, the relevant clause is extracted at paragraph 1 of the decision and it is in terms identical to clause 13.1.1 in this agreement:
PN194
Ordinary hours of work will not exceed eight hours during any consecutive 24 hours, or up to 12 hours during any consecutive 24 hours -
PN195
and so on. Precisely the same language. The background to the dispute is dealt with in paragraphs - I think it's 12 to 43 with a level of detail that I do not need to trouble the commission with, suffice it to say that the matter involved a dispute between a particular group of workers within the painting and finishing division of the Springhill site, it was the number 3 paint line. It's referred to in the decision - the painting and finishing decision is referred to in the decision as the PFD. Now, they had undertaken a trial arrangement of a 12-hour roster and had for a number of years. You will see that in paragraph 15 of the decision, sir, if the Commissioner is looking for a reference.
PN196
For reasons that I need not trouble the commission with, the workers in the number 3 paint line withdrew their agreement to work shifts beyond eight ordinary hours and the question for the state commission which came up pursuant to a referral agreement, 146A of the state Act as it then was, the referral agreement is set out in paragraph 2 and it's quite clearly an issue about interpretation. The issue is the proper interpretation of clause 13.1.1.
PN197
Now, the submissions of the parties that are summarised at paragraphs 44 to 53 of the decision - and I won't take the commission through all of them, but can I ask the commission to go to paragraph 47. This is the submission then being advanced by my learned friend on behalf of the company, identical, one thinks, to the submission which is being advanced in these proceedings, or at least for all intents and purposes it's identical.
PN198
Can I then ask the commission to note the submissions for the union then made by Mr Taylor of counsel, now senior counsel, in particular at paragraph 49, again advancing a contention which is for all intents and purposes the same as that that's advanced here, albeit the factual context is slightly different. In this proceedings it was whether or not an agreement earlier given could be withdrawn, proper construction of the clause of course gave rise to the question of whether or not agreement was essential in the first instance and, if so, could it be withdrawn.
PN199
Now, the Commissioner's conclusions start at paragraph 58. Firstly you will see a discussion of relevant principle about the interpretation of state awards. I don't need to take the commission through that, although I would note that at paragraph 60 again the company relied upon the decision of the High Court in Amcor, similar to what's relied upon here, and ultimately the Connor C comes to construe the clause at paragraph 64 through to 68. Can I start by noting in paragraph 64 the qualification to the construction principle (indistinct) earlier extract where the Commissioner emphasised this:
PN200
I should still not adopt an interpretation of any industrial instrument in a manner which would offend the actual wording of the instrument and the task before me in this hearing (indistinct) it's simply a question of interpretation.
PN201
There's a discussion about relevant principle which is consistent with the authority which I took the commission to earlier today as outlined in paragraph 65, and then the Commissioner comes at paragraph 66 to say this:
PN202
In this case I am satisfied the plain meaning of clause 13.1.1 would permit the revocation by employees of any agreement to work 12-hour shifts at any time, subject only to the proper notice of any obligations which flow from (indistinct) procedure.
PN203
He refers to a full bench authority of this place, the predecessor of this place, the Australian Industrial Relations Commission and Australian Licensed Aircraft Engineers Association v Qantas Airways Ltd, and then says this:
PN204
The special provisions in clause 13.1.1 were written into the BlueScope Steel Award in contemplation of the more general provisions of clause 36 and to that extent they must be read as a qualification of the obligations to which Mr Brotherson has referred to in his submissions.
PN205
Of course the matters which Mr Brotherson referred to in his submissions were the matters that I took the commission to a moment ago, namely, the general disputes clause. I'd additionally note what was said by the Commissioner in paragraph 68:
PN206
Ultimately as I see the position my task and the task of any full bench of Industrial Relations Commission are virtually identical, it's just a question of the interpretation of clause 13.1.1 alone. I have no licence in interpreting clause 13.1.1 to depart from what appears to be the unambiguous wording of the provision to be what it so clearly states. It is, as Mr Taylor submitted, all employees covered at BlueScope work eight-hour shifts and they only depart from that standard agreement with employees concerned and that agreement may be used in (indistinct) employees BlueScope Steel at any time.
PN207
Of course, the union was ultimately unsuccessful in those proceedings because the number 3 paint line was found to be not a relevant work area for the purposes of clause 13.1.1, but the construction given to clause 13.1.1 and the interaction between 13.1.1 and the general introduction of change provision was precisely dealt with and dealt with in exactly the way that I invite the commission to determine the matter in these proceedings.
PN208
13.1.1 was drafted in contemplation of the general disputes provision. It's a specific and limited capacity to make change, and if the general provision relation to the implementation of change could be applied it would be rendered at nought, there would be no requirement in a practical sense for the company to secure the majority of the relevant workforce, the majority agreement of the relevant workforce.
PN209
For completeness, I should briefly note the full bench decision which Connor C referred to. It's Australian Licensed Aircraft Engineers Association v Qantas Airways Ltd (2007) 166 IR 388. Now, unfortunately I don't have the copies that I had made with me, so the passages are relatively short, so if the commission is content.
PN210
THE COMMISSIONER: We can make copies at the appropriate point in time.
PN211
MR HOWELL: May it please. In short, it was a dispute akin to the dispute before Connor C about whether agreement to work shifts in excess of eight hours could be withdrawn in the context of the clause which was in not identical terms, but similar terms to the clause at play here, that is to say anything beyond eight hours required an agreement of the majority of the relevant work area, and Watson VP at first instance had concluded that both Qantas and the ALAEA could unilaterally withdrawn an earlier agreement to work shifts beyond the eight hours, ordinary hours shifts beyond the eight hours.
PN212
Qantas didn't like it and ultimately took it to the full bench, and the full bench confirmed Watson VP's construction of the relevant agreement. When the commission comes to see it, the headnote adequately sets out the relevant background and the relevant aspect of the decision can be found in paragraphs 11 to 14. Qantas's argument was that the agreement could not be withheld and could not be withdrawn unreasonably. They wanted to read into the requirement for agreement some implicit limitation. What the full bench said in that connection is this:
PN213
It can be seen that Qantas's submission depends upon the implication of a limitation on the association's right to agree pursuant to the relevant provision, clause 12.8.2. The effect would be that the association could not withhold its agreement on any shift length up to and including 12 hours if such shift length was demonstrably reasonably or efficient. In our view that would be a provision of a distinctly different character to the one the parties have agreed upon. Qantas could select the shift duration it wished up to a maximum of 12 hours, provided the duration could be demonstrated to be reasonable or efficient, and the agreement of the association would be rendered irrelevant.
PN214
Some additional commentary is then passed at paragraph 12, and at paragraph 13 the full bench then says this:
PN215
There is another reason to doubt that the framers of the clause intended that it should operate subject to any implication of the kind Qantas supports. The clause prescribes what is to occur if there is no agreement, namely the shifts are to be eight hours. On its face the clause provides two alternatives only. Shift lengths of more than eight hours but not exceeding 12 hours may be worked by agreement. In default of agreement eight hour shifts must be worked. If the framers of the clause had intended that in some circumstances shifts of more than eight hours might be worked without agreement, a clear indication of those circumstances might have been expected.
PN216
Now, in my respectful submission those observations apply equally here. If the limitation in clause 13.1.1 was intended to be able to be avoided by the application of a general disputes clause that includes an arbitration that in its outcome enables the commission on my friend's construction to entirely ignore that specific commitment, one would have expected something in the language of the instrument which made that plain, and in my respectful submission in the absence of something like that the language of this clause is plain. It provides a specific mechanism for the introduction of change about a specific issue. It is different in terms, that is to say its preconditions are different to what is otherwise contemplated by clause 35.2 in relation to proposals for change, and it's limited in the preconditions that are required.
PN217
But more than that, internally it provides the outcome. As the full bench said, internally it provides the outcome in the event that there is no agreement about the introduction of change. If the general application of change provision applied to this scenario, that limitation is rendered meaningless. Now, it is a classic illustration, in my respectful submission, of where the generalia specialibus doctrine has work to do. The general is read subject to, and as not applicable to, the specific. Commissioner, I note the time. We kicked off a little late, and we haven't had a break. Did the commission want me to continue until the luncheon adjournment?
PN218
THE COMMISSIONER: If you need - you might want a break to - - -
PN219
MR HOWELL: No, I'm content to continue on.
PN220
THE COMMISSIONER: Okay. More than happy.
PN221
MR HOWELL: Thank you. That's all I want to say about the threshold point, that is to say whether or not clause 35.2 applies to the issue dealt with in 13.1.1 at all. The alternative argument is that 35.2 does apply to the concept of change contemplating 13.1.1. The question then becomes well how does it apply? I have already dealt with that at some length when dealing with the threshold argument, if I describe it in that way. On its proper construction, if the commission is against me and says that this applies, that clause 35.2 applies, the agreement in terms provides in 35.2 - I should not try and remember.
PN222
As I've already taken the commission to, in 35.2.2(d), "Where a change is otherwise provided for in this agreement, it will not be regarded as significant in nature for the purposes of this clause." That invokes 35.2.2(b) which requires changes to be progressed. If they are not significant in nature, they are to be introduced in accordance with the principles set out in 35.2.1, and the provision of the agreement. It's quite clearly intended to be a more narrow mechanism for dealing with the implementation of change than the significant changes.
PN223
What's important about it is in terms it limits the capacity to implement changes which are not significant changes by the terms of the agreement. That's self-evidently, in my respectful submission, the purpose of the carve out in subclause 35.2.2(d). If the agreement provides for the mechanism of change, then that's how it's to be dealt with, and there's nothing in 35.2, in particular 35.2.2(b), that would empower the commission, in dealing with a matter by arbitration, a determination that effectively writes 13.1.1 out of existence. It would be inconsistent with the disputes power given to the commission dealing with the introduction of change in 35.2.2(b). It would be to provide a determination that is inconsistent with the provisions of the agreement. That's consistent with a construction of 35.2.1 which requires any proposed change to be legal.
PN224
I've already mentioned to the commission section 739 subsection (3) and subsection (5) - sorry, subsection (4). They are two express limitations on the power of the commission to deal with a matter by way of private arbitration. The power given to the commission is limited by the terms of the agreement itself, subsection (3), and any determination in any proceedings must not be inconsistent with a Fair Work instrument, in particular, in my respectful submission, the agreement.
PN225
The agreement here, 13.1.1, in terms very plain, emphatic, contains a limitation on the capacity to introduce a change of this kind, and on its proper construction there is nothing in clause 35.2 which lets the company ignore it or the commission ignore it. So even if the commission does not accept my threshold argument on the generalia specialibus non derogant doctrine, the proper construction of 35.2 leads to the same conclusion. It would not be legal for the commission to conclude that the company is empowered to implement a change in terms inconsistent with the agreement.
PN226
That finally then leads me to the question of merit, what might be described as merit. That is, again applying 35.2.1(c), whether the proposed change is safe, efficient, legal and fair, and as I indicated at the outset in that respect the unions' submission is that the implementation of this change would not be legal. For the reasons I have just articulated, it would be inconsistent with the terms of the agreement itself, and in my respectful submission it would not be fair. Now, of course fairness requires a balance of competing interests. I should remind the commission of something which is said in Mr Otsyula's evidence, and I apologise to him if I've said that wrong.
PN227
Mr Otsyula at paragraph 18 confirms that the change the company wants to make, that is to say - sorry, withdraw that. The desire of the company to make its operations more efficient has an alternative. It has an alternative that does not require the commission, or the company for that matter, to ignore the express commitment that it has given in clause 13.1.1 that shifts for ordinary hours will not exceed eight in the absence of agreement of the workforce in the relevant area. Let me make this plain. Mr Otsyula's evidence is that it would be less cost-effective and less efficient, but nonetheless Mr Otsyula's evidence is clear. The company's objectives could be met, albeit in a less efficient way.
PN228
The evidence of the unions' witnesses - sorry, Commissioner. Before coming here I should say as outlined at the beginning it's an agreed fact that the workers that will be the subject of this relevant change have very extended periods of service. The majority are in excess of 10 years. That means they were the workforce that voted to approve this agreement, and as recently as 2012 the company has expressly committed itself in clause 13.1.1 of the agreement to not introduce ordinary shift lengths that extend beyond eight hours in the absence of agreement of the majority of workers. That commitment has been in the agreement since 2012, but it's been in its predecessors for at least a decade, and I suspect much, much longer than that. As I say, the workforce as recently as 2012 voted and agreed with the company to continue that commitment in the application of the current agreement.
PN229
The evidence of the unions' witnesses confirms that the eight-hour shift arrangement will have a very significant effect, as one might expect, on people's lives. This eight-hour shift arrangement has been in place for many, many years. My friend's concession at the outset is, albeit there are specific pockets where 12 hours in the plate mill has been worked, the general application of ordinary shift lengths has been eight hours for more than 20 years.
PN230
Workers have built their lives around that rostering arrangement. They've built their families' lives around that rostering arrangement, no doubt secure in the knowledge that it could not be changed without the majority agreement of the workers in the relevant work area. The range of potential circumstances is self-evident. People's partners take up employment, rather than necessarily committing themselves to caring for children.
PN231
People commit themselves to child care arrangements. They commit to various community activities. They've built their lives around this commitment that they won't be required to work eight hours in the absence of majority agreement. Having whole days off, additional whole days off, doesn't assist if your commitment otherwise involve you working at times where you will now be required to be at work, so taking care of your kid after school, or engaging as a coach for the local soccer club or netball club, as one of the unions' witnesses describes. Additional days off doesn't help with those matters.
PN232
The requirement to secure the agreement of the majority of the workers in the relevant work area is a commitment which the company itself has made. If the commission accepts that the company should be bound by that commitment, it's not placing the company in some invidious position, as my friend describes it in the written submissions. It's holding the company to the agreement that it has made.
PN233
I'm reminded of something which was said in the ALAEA v Qantas decision. In those proceedings - and this is at paragraphs 17 and 18 of the relevant decision. In paragraph 17 the full bench extracts a passage from Watson VP's decision, and it dealt with whether or not the commission was empowered to impose an outcome in an private arbitration that was inconsistent with the language of an agreement, or whether it should be dealt with as a matter of discretion in any event, and what his Honour Watson VP had said was this:
PN234
Although the above decisions concern findings of jurisdictional error and the parties to this agreement have agreed that the commission determines disputes without resorting to jurisdictional objections, I nevertheless believe that ensuring that any determination is consistent with the terms of the agreement is an important consideration, if not as a matter of jurisdiction, then as a matter of discretion. In my view therefore the proper interpretation of the terms of the agreement in a case such as the present is likely to be a very important and perhaps determinative consideration in the matter.
PN235
The full bench at paragraph 18 says well this is dealing with a particular issue which was in dispute in those proceedings. Whether or not he dealt with it as a jurisdictional question or as a discretionary one, the full bench said that it was satisfied that he dealt with as a discretionary consideration, and then says this, "We add that the Vice President's concern to respect the terms of the parties' agreement in exercising his decision seems to us appropriate. So too here."
PN236
In my respectful submission again it's a balancing consideration. If the company can achieve, albeit in a less efficient way, its objective, it can do so by adhering to the commitment that it made in 13.1.1 of the agreement, most recently in 2012, but reinforcing a commitment that it's given to this workforce over many, many years, then a fair outcome requires them to engage that mechanism, that alternative mechanism, albeit that it be less efficient.
PN237
Finally in relation to the question of fairness - and again this is not something which I would suggest would cause the commission to determine the matter one way or another, but is nonetheless a relevant consideration to weigh with other considerations. The unions' evidence does describe some of the impacts on the individuals' earning capacity that arises from the implementation of this change if it were permitted to be implemented. That is to say, it would cause them to lose the opportunity - in a realistic sense it would lose the opportunity for them to secure additional remuneration in the nature of overtime, and it would again deny them the existing benefit they have of additional remuneration in relation to public holidays for which they would otherwise be rostered. Again one of the natural and logical consequences of the implementation of this proposed change is that they would be denied that benefit.
PN238
In short, balancing the relevant competing - I should also add to that that the company - sorry, withdraw that. I should also add to that that the unions' evidence describes in some significant detail concerns - sorry, withdraw that. The unions' witnesses describe to some extent their concerns about the additional fatigue that they will no doubt have to incur as a consequence of moving to this particular shift pattern. That is to say, four consecutive 12-hour shifts, and three consecutive night shifts. Again something being foisted upon them in the absence of agreement. If these people have lengths of service that are on average in excess of 10 years, inferences can be drawn about the age of the relevant workforce. It's likely to have a very material impact on them, and it's likely to have a very material impact on their capacity to provide care and support to their family.
PN239
I can put it no more highly than that. But nonetheless fairness requires a balancing of competing considerations. The company committed to this requirement that it secure majority agreement before it would implement ordinary hours of work in excess of eight hours. It doesn't have that. There is no evidence to suggest that they have the majority agreement. It's a commitment made as recently as 2012.
PN240
It can achieve what it wants to achieve albeit in a less efficient way in my respectful submission. All things considered, a fair outcome would be for them to be required to adhere to the commitment they made in the agreement. It would not be fair to foist upon these workers in the absence of agreement the 12-hour proposal which is contemplated and forms the basis of this dispute. Those are the unions' submissions, unless the commission has anything in particular from me.
PN241
THE COMMISSIONER: No. Thank you, Mr Howell. Can we go off record?
<OFF THE RECORD [12.50PM]
ON THE RECORD [1.38PM]
PN242
THE COMMISSIONER: Mr Brotherson.
PN243
MR BROTHERSON: Thank you, Commissioner. Commissioner, we filed an outline of submissions in this matter. I notice you didn’t mark the outline of submissions on behalf of the union but I refer to ours and I will rely on that during the course of the afternoon. I certainly don’t propose to go to every paragraph but obviously ask the Commission to take account of all that is contained within that outline. I also refer to the two folders which were provided earlier and which are now marked as D4 and D5 and I will be referring to those as I progress. The particular issue in this matter is a proposal by the company to introduce 12 hour shifts at the plate mill and if I can say at the outset it’s not a decision as my friend has characterised it as a unilateral decision. If it was a unilateral decision it would have already have occurred.
PN244
What the company has attempted to do is follow a process which is set out in the enterprise agreement for the introduction of change and to seek agreement as that process for the introduction of change provides for. Absent agreement we are now in these proceedings before the Commission which again is part of the process. Working through a process like that I just again reaffirm that we wouldn’t accept the characterisation of what the company seeks to do as a unilateral change. What the company does propose in terms of that 12 hour shift arrangement at the plate mill, just by way of recapping, is a two crew operation which would involve 12 hour shifts worked Tuesday to Thursday each week involving four day shifts and a three night shift arrangement.
PN245
There are of course exceptions to that that we shouldn’t overlook and that is that there will be a day shift despatch crew, those employees are effectively continuing on their existing arrangement. The company’s proposal on the particular 12 hour shift issue for the plate mill generates a number of legal issues for the Commission to consider and determine and we would characterise those I don’t think at all inconsistently with what Mr Howell has gone through earlier today but reading paragraph 22 and 24 of our outline we characterise them firstly as what I define as the change issue which I think is what he will say is his threshold and knockout issue and we accept that if you were against us on that point this matter is probably resolved quickly. But we say you shouldn’t do that and for reasons which we will elaborate on.
PN246
The second issue or legal issue the Commission needs to consider is what we define at paragraph 23 as the onus issue which my friend hasn’t spent too much time on and hopefully I don’t need to either but the unions do claim that the onus, if we get through the threshold issue of establishing that the change should proceed it’s now on the company to satisfy the Commission, we say that is not the case under the proper construction of the agreement, nor has it be the historic case. What we will say ultimately of course is irrespective of where the onus does lie the Commission should be satisfied that the change should proceed. Then the third issue that the Commission will need to deal with of course is that if we get through the threshold issue, subject to what you may find on the onus issue, that the company can then be released from the status quo on the basis that it satisfies the specified tests in the agreement of safe, efficient, legal and fair.
PN247
So I don’t think how we’ve characterised the issues to be determined in paragraphs 22 to 24 is at all different to what my friend has identified but perhaps it might be a convenient summary of those issues. The change issue and the onus issue as we’ve defined require the Commission to determine the proper construction of certain provisions of the enterprise agreement, and as I’ve said depending on what you find on the change issue that may quickly resolve the matter or alternatively it may determine how you would approach the matter in determining whether the 12 hour shift arrangements should proceed. On the issue of construction of an enterprise agreement the parties essentially rely on the same authorities, I think as my friend said the path that we approach the Commission should apply to that is well worn and I don’t propose to spend very much time on that and indeed we have recently done it in matters involving these parties in a sick leave matter which for the record is matter number C2014/2872.
PN248
But I would just recap on these points and that is that the approach to construction, there are a number of elements that are important, they are consistent with what my friend said. Context is an important consideration. History of the agreement and the origins of the provisions can also be regarded and where we do depart he took issue with paragraph 28 of our outline where we said, “The approach to construction should involve efforts to ensure construction provides sensible outcomes and ones if reasonably possible are fair to both parties.” I’m not quite sure why he took issue to that, but he did. We dispute that and we’ve set out there a reference or a view is expressed by Justice Kirby in the Amcor case. I don’t repeat that. It refers to the issue with a sensible industrial outcome should be strived for.
PN249
Relevantly in that Amcor case, and its quoted within the Connor decision of 2007 and my friend spent a little bit of time on the decision in BlueScope Steel Ltd v. Australian Workers Union [2008] NSW IR Com 1054. In paragraph 60 at the top of a page, just above paragraph 61, there is a reference to a view expressed by Justice Caliban halfway through the quotation there, “It is important to keep in mind therefore the desirability of construction if it is reasonably available that will operate fairly towards both parties.” I’m not sure as I said whether there’s huge contest between us or it is just a matter of the way it was worded but we say that what’s worded in our paragraph 28 is a valid proposition and should be something the Commission is mindful of in its approach to this matter. My friend took you to a recent decision of the full bench of the Commission in AMIEU v. Golden Cockerel Pty Ltd.
PN250
I think that reaffirms a good number of the authorities but if I could just take you to another decision which I think sets out similar ones and I think I may have taken you to this earlier matter involving sick leave that I referred to in tab 5 of the respondent’s authorities folder. It’s a decision of Vice President Lawler and Watson versus ACT Department of Disability and Housing and Community. As a decision it contains really a summary and citations of all the other cases which we refer to. So for efficiency rather than go through each of those cases they are all there within the folder. I refer the Commissioner to that and in particular I think the helpful summary begins at paragraph 7 at page 397 and continues through paragraph 8, then into 9. There is the well-worn citation decision of Mad wick J in Cuts v. CSR Ltd through paragraph 10, 11 and 12. Then if I can take you into paragraph 13 which I did want to take the Commissioner to which is the decision of Burchett J and Short v F.W. Hercus Pty Ltd and the second paragraph in that quote,
PN251
The context of an expression may thus be much more than the words that are its immediate neighbours. Context may extend to the entire document of which it is a part or to other documents with which there is an association. Context may also include in some cases ideas that gave rise to an expression in a document from which it has been taken. When the expression was transplanted it may have been brought with it some of the soil in which it once grew, retaining a special strength and colour in its new environment. There is no inherent necessity to read it as uprooted and stripped of every trace of its former significance standing bare in alien ground. (Indistinct) sometimes does stand as if below but that should not just be assumed in the case of an expression of a known source without looking at its creation and understanding its original meaning and seeing how it is now used very frequently perhaps most often the immediate context is the clearest guide, the court should not deny itself all other guidance in those cases where it can be seen that more is needed.
PN252
I don’t go on to quote his Honour’s reference to ancient English literature but I think the point is clear and I think perhaps just finally, Commissioner, that paragraph 15 his Honour the Vice President summarises what he had gleaned from the various authorities and I don’t think the more recent decision that my friend has produced today alters that in any substantive way or any way at all. What I would like to do following on from that reference to the decision in Short v. Hercus and more specifically addressing the change issue and the onus issue is to consider some of the history of the current agreement and it should not be contentious that change has been a central element of the steel industry and the arrangements between the parties since at least the introduction of the steel industry plan in 1984.
PN253
The more modern era, if I can call it that, of industrial arrangements between the parties arrives from the recommendation of his Honour Justice Walton of the Industrial Relations Commission of New South Wales on 13 May 2002 and at that time when his Honour was making that recommendation the core industrial instrument applicable at the Port Kembla Steelworks was the BHP Steel (AIS) Pty Ltd Port Kembla Steelworks Employees Award 2000. That award caused the recommendation of his Honour Justice Walton arose under the Industrial Relations Act 1996 of New South Wales which remained the relevant jurisdiction to the industrial relations between these parties until the WorkChoices regime in March 2006. The 2000 award is in the folder of industrial instruments and legislation which is B5 and it’s at tab 1. If I can just perhaps take the Commissioner to clause 3.2 application which confirms the application to employees of the employer in this matter other than the clerical staff and salaried staff.
PN254
If I could take you to 3.4, the effective date of the award that came into effect on the first pay period beginning on or after 12 July remains in force for a period of 12 months, the nominal term. If I can then take you to clause 13, you will see their clause 13 hours of duty, a clause which is in large measure what remains clause 13 of the current enterprise agreement including relevantly 13.1 that ordinary hours will be an average of 38 per week over the cycle for the relevant work roster and of course the clause which my friend places so much weight on 13.1.1, eight hours during any consecutive 24 hours or up to 12 hours during any consecutive 24 hours where there is agreement between the company and majority of employees concerned with the relevant work area or again an alternative method of working 38 hours. That provision has been in the industrial arrangements between the parties since at least the 2000 award. I can tell the Commission it was actually there before that but I don’t have copies of that with me here today.
PN255
If I can then take you to clause 36, the procedure for resolving claims, issues and disputes, the Commission will see that it’s what I think we would understand as an old style disputes settlement clause. It talks about dealing with departmental claims issues and disputes and then in its second part at 36.1.2 general claims, issues and disputes. The claims of course are claims raised by employees. There is no express provision as we now have in clause 35 of the current enterprise agreement to deal with the introduction of change. If I can take you back to the index or the arrangement clause, clause 2 at the front of the award, you will see that that is the case. There were a range of provisions but not an introduction of change clause, as for example now required as a mandatory provision of the Fair Work Act or as subsequently was required by the Workplace Relations Act once the WorkChoices regime came into being.
PN256
Importantly though it was the Industrial Relations Act New South Wales that prevailed over that award subject to the wage fixing principles, and there is an extract to that Act at tab 6 of that folder of industrial instruments. This is an extract of the Act as it stood in 2002 at the time his Honour made his recommendation. The extract includes provisions dealing with the making of awards and the resolution of industrial disputes. Those provisions didn’t change again up until 2006. But if I can take the Commission to the index contained there in the extract, I think in the top right hand corner that index continues up until what is identified as page 20, but then we get to page 23 which says, “Division 1 awards generally,” and at section 10, “The Commission may make an award in accordance with this Act setting fair and reasonable conditions of employment for employees.”
PN257
If I can then take the Commission to section 17 which is on page 26 of the 236. You will see that there is provisions there, variation or rescission of an award and sub-section 1, “The Commission may vary or rescind an award,” and sub-section 3 it sets out the circumstances where an award could be varied or rescinded and at, “a), at any time by mutual consent of the parties; b) to give effect to a decision of the full bench in the national and station wage decision,” and relevantly at c) “during the nominal term if the Commission considers it is not contrary to the public interest to do so and there is a substantial reason to do so,” and again at d) “after its nominal term if the Commission considers that it is not contrary to the public interest to do so.” Why do I take the Commission to some of that ancient history? Firstly it shows that clause 13 precedes what I have described as that modern era of industrial regulation, but it’s an era of regulation that continued up until 2006.
PN258
Secondly where my friend has tried to portray clause 13.1.1 as something sacrosanct and could never be touched, it could always be touched and if there was a dispute then the company that couldn’t be resolved, an application to vary the award could have been made subject to those tests in section 17. Of course, if you did have an industrial dispute and I should just include the reference to the extract, the State Commission had very broad powers as you would recall. At page 76 at 236 in the extract from the State Act the provisions dealing with resolutions of dispute. If I can just take you to section 136 arbitration of a dispute, one of the things which the Commission in arbitration was able to do at 1B was make or vary an award under part 1 of chapter 2. So whilst 13.1.1 provided at that time for agreement, it wasn’t sacrosanct, it was try and reach agreement but if you can’t there were avenues to progress the matter.
PN259
If we then go to the recommendation of his Honour Justice Walton which is in the respondent’s authorities folder at tab 6 and as I’ve described it I think this brings us to what I’ve described as the commencement of the modern era of industrial regulation between the parties. Between paragraphs 2 and 4 his Honour sets out the background to his recommendation, that there had been an expiry of the steel industry agreement that the Commissioner would be familiar with. There had been an increase in industrial activity and that it was important given the impact of this industry in this region and it was about to move into its own corporation spun out from its parent, that there be a resolution to the dispute. At paragraph 8 his Honour again dealing with the background says, “It is at this juncture that BHP Steel Ltd and BHP Steel (AIS) Pty Ltd,” who he defines as the companies, “have sought to establish fundamentally different industrial relations and employment conditions for the steelworks in Port Kembla. In addition to offering approved terms and conditions of employment the companies have sought fundamental changes with respect to conditions and security of employment, the introduction of change and the management of industrial disputation. The companies have contended that the changes are appropriate as a matter of merit and necessary in order to sustain the new corporation and meet the challenges of the market.”
PN260
Paragraph 11 his Honour confirms the process that he went through where the parties had agreed to submit themselves to accepting his recommendation. At paragraph 30 his Honour sets out some of the history of the steel industry plan and subsequent agreements and what they intended to do. I don’t agree with all of that. At paragraph 42 his Honour sets out his aim at that time, “It is essential that arrangements be put in place to maintain the viability of this important industry. However, it must also be said that in order for the industry to remain viable it will be necessary for management of the unions by their officers and members to once again establish common goals for the industry and implement these objectives for the benefit of the companies and their employees and in the public interest. These recommendations are intended to strike a balance between the economic interests of the companies and the basic and reasonable rights and interests of employees and their unions.”
PN261
At paragraph 49 his Honour sets out the start of his recommendations and the process which he sees to unfold from there and that process was that his Honour was going to set out his recommendations in respect to each of the claims of the parties coming into this process and that they were to then go away and prepare an industrial instrument in a form of their choosing, that they were to come back to him and he would deal with it if they couldn’t agree. If I could take the Commission then to paragraph 76 which is where his Honour deals with the introduction of change question. His Honour there says, “The parties did not define precisely the areas of change that were intended to be caught by the provision. They should further confer as to that matter. However, it is intended that this recommendation will concern the full panoply of the changes affecting the employees at the workplace (including proposals for outsourcing) where those changes are substantial in nature.” The instrument that was made – or perhaps if I can deal with that, his Honour often used words which sometimes I had to search (indistinct) but - - -
PN262
THE COMMISSIONER: Mr Howell might have had something to do with that.
PN263
MR HOWELL: I’m not saying.
PN264
MR BROTHERSON: Probably the higher learning curve I suspect. A panoply is defined by the Macquarie Dictionary as, “A complete suit of armour, a complete covering or array of something,” and I can provide a copy of that definition. What then the instrument that was made follows on from his Honour – actually if I can remain at paragraph 76 for a moment, his Honour then set out certain comments at paragraph 78 through to 79 about what he saw as the interaction of change and I would take you to item 7 there in paragraph 79. The proposed change, it’s at the foot of page 13 of 19, “The proposed change may be put into effect after the conclusion of the cooling off period subject to any decision by the Commission in proceedings pursuant to section 130 of the Act varying the duration of the cooling off period. A party to the consultation process may seek an extension or reduction of the cooling off period. In such proceedings the onus shall fall upon that party to establish a basis for varying the cooling off period.”
PN265
Paragraph 8, “The existing disputes settlement procedures shall apply to disputes concerning the management of change, except to the extent affected by this recommendation.” 9, “The existing disputes settlement procedures shall also apply to all industrial disputes which do not concern change.” His comment about provisions of existing agreements, “The status quo shall prevail until the matter is agreed or the subject of interpretation by the Commission.” So nothing was left untouched by his Honour in making this recommendation. The industrial instrument that was then made, Commissioner, was the BHP Steel Port Kembla Operations Enterprise Agreement 2002, a copy of that is at tab 2 of the folder of industrial instruments. If I can just foreshadow, I’ll take you to this and then I have a short cut way through the next decade after that.
PN266
This is the instrument that was made by the parties by consent and you will see it applied to both BHP companies, BHP Steel (AIS) Pty Ltd the respondent in these proceedings and BHP Steel Ltd. Clause 7 introduction of change including outsourcing, same title that now appears in clause 35.2 of the current enterprise agreement. You can see a quick – even a quick glance, Commissioner, that 7.1 is a formulation akin to what is in 35.2.1 of the current agreement. 7.2, the processes from the introduction of change, you will see the emergence of changes which are significant in nature and a definition of that at 7.2.3 which with one exception one of the items has dropped out is exactly what it is to this day and we would say it reflects that full panoply of changes that his Honour recommended in his recommendation.
PN267
Relevantly in terms of the principles to apply back in 7.1 we see the provisions that are still there to this day 7.1.1 on page 4, “The parties recognise and accept that change is an inevitable and increasingly necessary party of the steel industry.” 7.1.2, “Change must be ongoing to ensure that the companies remain viable and employee expectations concerns security of employment can be satisfied.” That enterprise agreement continued into 2004 and if you were to look at the folder that my friend provided A3, you see there at his tab 5 the enterprise agreements was replaced by an interim award of the state Commission in March 2004 followed then by a full award known as the 2004 award in August 2004 and then another award made in 2006 just prior to the commencement of the WorkChoices changes. What I would take you to, Commissioner, is this. The introduction of change clause has some adjustment made to it in the 2004 award when it was made, and it then remained unaltered at all until the 2012 enterprise agreement.
PN268
There has been some subtle change we say in 2012 which I will take you to shortly but for all intents and purposes apart from those adjustments the clear purpose of the clause is what Justice Walton recommended back in 2002, no other construction could possibly be taken from the history of the agreement and if I can take you to the changes that I refer to. At the front of the folder of industrial instrument and legislation and this is where I’m hoping to cut through a decade of agreements quickly. There is a table which sets out the introduction of change including outsourcing provision from the 2002 enterprise agreement to the 2006 award and then the 2012 enterprise agreement. All of those instruments are contained either within B5 and/or in A3. Commissioner, the way I’ve proposed to approach it I think the visual serves its purpose quite well. Clause 7.1 has remained largely unchanged until the present day. The tests remain the same, the acknowledgements of the parties remain the same.
PN269
There is some subtle wording change to 2006 over 2002 with cross-referencing and disagreements being deal with in accordance with agreed dispute procedures rather than directly to the Commission, but for all intends and purposes what is now 35.2.1 has remained unaltered since his Honour’s recommendation and the agreement made to reflect that. If we then turn to the next page of the table and we see there set out clause 35.2.2 the process for the introduction of change and again as process of change which is significant in nature and change which is not significant in nature has been in place since 2002 and his Honour’s recommendation. The only change in that clause across that period of time is that what was item C in 7.2.3, the availability of job opportunities for employees no longer appears in the 2012 agreement. If I can make the gratuitous comment I understand that the parties took the view that that was caught up with various other provisions such as composition of workforce, skills required and opportunities for promotions was not required. But that has gone and for whatever reason in 7.2.4 the word otherwise was inserted in 2006 and remains.
PN270
I will come back to some of that in a moment, but then we see the processes for introducing change which is significant in nature and there was a much shorter version in 2002, although we say relevantly if matters couldn’t be resolved the matters went to the Commission under firstly a cooling off period but of course there would also be a status quo during the cooling off period, so the cooling off period and the status quo were in large measure one and the same thing and you’ll recall his Honour talked about the party claim in the status quo or the onus. What has occurred in this sequence of course is that in the 2002 agreement at 7.3.2 the consultation started once a decision had been made. Subsequent agreements require consultation to commence, effectively once an idea has been developed to the stage of a task brief. I don’t think that’s material to these proceedings but acknowledge.
PN271
We then get what we say is to the more relevant parts of the clause and that is where there is agreement as to a change, a change is to be implemented immediately and you will see on the next page at 7.3.5 where agreement is to be reached as to a change to be implemented and that’s continued across the decade. At 7.3.6 where there is no agreement then we get to word it differently now but effectively a status quo applies and the matter gets referred to the Commission to determine. So since 2002 where you had a requirement for the introduction of change which is within the definition of significant in nature there has been provision for the Commission to deal with that dispute and of course that provision for it to deal with it by dispute includes arbitration spelled out in the early version but now at K as per clause 35.1.7 of the dispute resolution procedure which includes the power to arbitrate.
PN272
If I could just focus on that page for a moment where item K of the current agreement is identified, where there is disagreement as to the change to be implemented a party to the consultation process must give written notice to the other parties that it disputes the implementation of the change and must follow the procedure for resolving disputes as per clause 35.1.7 where a matter is referred to the Commissions as part of the disputes procedure implementation will be subject to the outcome of such proceedings during which time the status quo will remain. In K now there are two mandatory steps for a party opposing change. Firstly it must give the written notice to the other party and secondly it must follow the DSP as per clause 35.1.7, so there is now a positive requirement for a party disputing change to notify the Commission and that is different to the earlier versions where if you go back into J of the 2006 report where the consultation – actually it’s K again of the earlier version, for written notice in accordance with 36.4.3J to be effective it must be served on the other parties within five working days after the declaration that the consultative process is exhausted.
PN273
The written notice must set out the details of the particular objections to the change, and 2) where the steps have been or will within 24 hours be taken by the party to refer the matter to the Commission. The unions have taken a view that that was not a mandatory requirement to notify the Commission and on occasions would invoke the status quo and sit and do nothing. The clear intent with K was to prevent that and to take the position that if you want to oppose a change when it gets to this point you must do two things, you must give the required notice that you dispute it to the other party and you must notify the Commission which effectively then means if conciliation doesn’t resolve it here at first instance it will go to arbitration.
PN274
It’s perhaps a convenient time to deal with our outline of submissions again in this way, Commissioner. At paragraph 48 of our submissions we set out the decision of the full bench of the Commission in BlueScope Steel (AIS) Pty Ltd Port Kembla Steelworks Employees 2006 Award, a full bench of the Commission confirmed that the proper approaches that such changes need to be assessed by the specific requirements of the award, however the Commission also confirmed that relevantly, “Our decision should not be taken to suggest that the onus of making out a case for the retention of the status quo or resisting changes on grounds which rely on the principles in clause 36.4.1C falls on the company. Such an approach would constitute error. The onus in such cases falls upon the unions to make out a case that the changes proposed by management should not be made or should be offset by some compensation or other adjustment of conditions of employment. This approach gives full recognition to the requirements of 36.4.1B of the award which provides change must be ongoing to ensure that the company remain viable and employee expectation concerning security of employment can be satisfied.”
PN275
Now, relevantly the sub-section or sub-clause of the agreements that the Commission relies on there in coming to that view about change being ongoing is still in the enterprise agreement. When we look at K of the current agreement that we were looking at a moment ago, that’s 35.2.3K, then as I said there is now an additional step in this new agreement that’s been added in. You must take it to the Commission. We say that heightens the onus on the party challenging the change. It doesn’t reduce it, it heightens it and that approach to onus has been taken in every subsequent decision by either the state Commission whilst it retains jurisdiction or this Commission where it’s had to deal with this provision since the time that the full bench of the New South Wales Commission determined the question of onus. The other decisions where that approach has been adopted can be found at tabs 8 and 9 of the folder, I don’t take you specifically to those but they’re there and I’ll provide references shortly and also at tab 12 of the folder.
PN276
Commissioner, if I can perhaps just summarise what we say the table shows, and I don’t take you into each of those industrial instruments, we can if needs be but I think the table is a useful way to approach it. Firstly the principles for the introduction of change have been unaltered since the Walton recommendation. The approach or the processes as to whether change is significant or not significant are unchanged as are the definitions and the procedure for the introduction of significant change again in the critical parts for this matter we say are unchanged. That is if you can’t reach agreement the matter is determined by the Commission. Across the years consultation at one stage started when there was a decision, now it’s at the ideas stage. We have gone through a (indistinct) from informing people of the change through to a three letter process, now back to a two letter process. But they don’t change that fundamental element of the Commission being given the power to arbitrate.
PN277
If I can also perhaps by reference to the table, my friend took you at some length earlier in the day to clause 35.2.2D which is on the second page of the next of the 83 document that I’ve bene referring to where a change is otherwise provided for in this agreement. It will not be regarded as significant in nature for the purposes of this clause and he says that if it’s a clause of that type then clause B would apply. If I can perhaps begin with that, “If clause B applies we see changes which are not significant in nature shall be introduced in accordance with the principles set out in 35.2.1 and the provisions of the agreement. Disputes in relation to such changes, that is ones which are not significant in nature shall be dealt with in accordance with clause 35.1 procedure for resolving claims, issues and disputes.” If we look at that procedure for resolving claims, issues and disputes at clause 35.1 we see again ultimately 35.1.7, “If still unresolved the matter will be referred to the Fair Work Commission by either party for resolution which will include conciliation and if necessary arbitration.”
PN278
So whether it’s a change which is significant in nature or which is not significant in nature, the disputes procedure applies and the disputes procedure by all routes may bring us to arbitration. It is perhaps worth bearing in mind that as an enterprise agreement arising under the Fair Work Act and my friend took you to the fact that your charter arises under the Act, of course it does and that your dispute settling powers are limited by those powers given by the parties, we say that a mandatory provision of the Fair Work Act is that an enterprise agreements must contain a dispute resolution procedure and the Act at section 186.6 provides that, “That dispute resolution procedure provides a procedure that requires or allows the Commission or another person who is independent of the employers, employees or employee organisations covered by the agreement to settle disputes about any matters arising under the agreement and in relation to the national employment standards.”
PN279
So let’s not underestimate the extent of the wall that my friend is trying to build around 13.1.1. In light of the history including the definitions of change which is significant in nature or not significant in nature and what the requirements of the dispute resolution procedure is required to be under the Act, he is trying to say that agreement there cannot otherwise be touched and we say that is wrong and I’ll deal with that further shortly. If I can again come back to that second page of the A3 summary sheet and where my friend again has referred to 35.2.2D and for a change otherwise provided for in this agreement. We would say that clause really deals with things like the Commission would find in provisions such as clause 17 of the enterprise agreement which is shift workers whose ordinary working days include Sundays and public holidays as ordinary working days.
PN280
Sunday and public – sorry, 19, night work for day workers and day shift workers. Transfer of day workers from day work to shift work and transfer of shift workers. They are the sorts of changes which we say are contained by 35.2.2D and they are generally matters which apply to and would be implemented usually on an individual by individual basis. That is quite different – I’ll take you to that in a moment. But if we do look at what the significant change provisions deal with, if we go back to 35.2.2C, you will see that we are looking really at global issues and C, “A change is significant in nature for the purposes of this clause if the change will have substantial effects on and the composition operation and size of the workforce, the skills required of employees,” and in each case its employees. Its groups of people, substantial changes on groups of people.
PN281
The other sorts of matters he’s taken you to which will apply are we say of a different character and that clearly puts the notion of something such as the change for a whole mill from eight hours to 12 hours into that significant change realm. My friend took you to clause 33 of the enterprise agreement and said well, you’ve got clause 33 and that says if you want to move people from one shift system to another you can. Well, I’ll answer that in this way, again it’s a provision that deals with “may require any employee”, so again it’s not necessarily a global provision, it’s subject to other clauses including clauses that I’ve referred you to and I’ll ask a rhetorical question. One could just imagine what the claim would be and we’ll be hearing no doubt very quickly if the company attempted to rely on clause 33.2 to say to a group of people you’ve been working a certain shift pattern for 10 years and we’re going to change it in reliance on clause 33.2 by giving you seven days’ notice and its going to result in the reduction of 17 operators and might reduce your opportunities for overtime.
PN282
There is no doubt where we would be. We would be in dispute, demands that you need to issue letter one and you need to consult (indistinct) clause 35.2.2 of the enterprise agreements because this would be change which is significant in nature because it’s going to impact on the composition and size of the workforce, our hours of work, our shift patterns and the various other components that are listed as making up a significant change. Commissioner, if I can return now to the issues which we say need to be determined in this matter. As we’ve said there’s two legal issues, one of change issue and one the onus issue. If I could deal firstly with the onus issue as we have defined it at paragraph 23, as we have just gone through in the table under the 2006 award the onus for showing one of the proposed change was not safe, efficient, legal and fair, fell to the unions opposing the change. It was determined by a full bench of the Commission and as I’ve indicated followed subsequently by both the New South Wales Commission and this Commission on every subsequent occasion.
PN283
So what has changed under the 2012 agreement that allows the unions to now say the onus reverts to the company now, and they claim that the no extra claims provision of the agreement is what does that and as I’ve said that’s not the case and we say is plainly wrong. If I can take you to clause 5 of the agreements you will see it contains two sentences. The first one is a general statement about not making further claims prior to the nominal expiry date of the agreement, but the most critical part of the clause is the second sentence, “This does not however prevent the implementation of change or raising and progressing of issues where provided for by the terms or processes of the agreement.” We say that clause 35 of the enterprise agreement, the introduction claims provision 25.2 I should say, is clearly such a process as referred to in the second sentence of clause 5, and further that clause 35.2.3K which has now been amended from the 2012 agreements to place a further obligation on a party opposing change, that it must follow the dispute settlement procedure.
PN284
Not to say we might or we might not notify a dispute is further illustration that there was simply never an intention to change that long established onus as determined by the full bench of the state Commission and in fact what the change to 35.2.3K does is reinforce the historic position. It is very interesting, we say the unions have not brought any evidence to try and substantiate that was either raised as a claim in making the 2012 agreements or it was discussed and the simple fact is they can’t. What was changed is a further requirement on a party opposing change to do so (indistinct). The other interesting fact is that the agreement has been in place for heading towards 18 months and this so called impact of the no extra claims clause and the reversal of onus has only arisen in the most recent sequence of arbitrations over the last month or so. I say no more about that.
PN285
What I do think it’s appropriate to deal with at this stage and I’m not sure how material it is in this particular case, but the union’s submissions claim that this enterprise agreement abolishes the concept of managerial prerogative. We reject that outright, what this enterprise agreement has is a very particular test for the introduction of change which is different to the more established test that the Commission might apply in other matters as set in the XPT case. But all that’s applied is a special test rather than a general test. All other things are equal and to suggest managerial prerogative is dead simply cannot be accepted. Back to the no extra claims provision and its impact on onus. Our submission is that something which is provided for in the agreement is not a claim as contemplated by clause 5 and we say the caveat in the second sentence confirms that.
PN286
If we look at the Toyota case with both sides referred to and it’s in the folder of the respondent’s authorities at tab 11. If I can take you to paragraph 37 on page 16. The full bench didn’t necessarily agree with very much of what Justice Bromberg decided but they did agree with him on one thing which they set out at paragraph 37 and what they say is, “However as the primary judge considered to deal with the problem at this level of generality would be to ignore context which is of paramount importance in this area of law.” His Honour said and halfway through the quote, “Both the ordinary industrial meaning of the claim and the scheme of the agreements to which I have referred as consistent with the construction of further claims in clause 4 as encompassing a proposal made by the party to the agreements to materially change the terms and conditions of employment set out in the agreement other than in a manner already provided for by the agreement. Such a proposal is not merely a request or offer, it is also a further claim.”
PN287
Then the full bench for the reasons which follow we agree with this passage in his Honour’s conclusion. Well, the things that are provided for in clause 35.2 including change which is significant in nature, we return to the words of Justice Walton in 2002, it’s the full panoply of changes which might be contemplated and that’s the intent of the reasons why there is the extensive list of items in clause 35.2.2 and what constitutes change which is significant in nature and includes for these proceedings relevantly both hours of work and shift patterns. Relevantly and I’ll deal with the Commission upon it shortly, but relevantly that clause came in after clause 13.1.1, not before. The introduction of change clauses are in the sequence of agreements post-date the requirement for agreements in clause 13.1.1, so that provision to deal with the full panoply of changes which might occur comes later.
PN288
We say that therefore on the issue of onus, if I can conclude that onus, fully supports the company when one considers the history of the provisions, the wording of the provisions, and the context of the provisions and the authority dating back to the full bench of the New South Wales Commission in 2006. If I can deal then with the more critical issue, the change issue. As I’ve just indicated clause 13.1.1 of the agreement which requires an agreement of the majority of employees in the relevant work area to introduce shifts of 12 hours is a provision of long standing, that can’t be avoided or denied. It was as was shown relevantly in the 2000 award, but again at that time the company could have applied to vary either generally that provision or for a specific work area if it required. Commissioner Connor even acknowledges that in his decision dealing with the (indistinct) that my friend took you to earlier.
PN289
Further again, as it was with the onus issue we say with critical relevance to the Walton decision and again I’ll reinforce the intended clause 35.2 of what’s now clause 35.2 of the current agreement to apply to that full panoply of changes. We see the development of that in the 2002 agreement and continuing, and as I’ve taken you to in the comparative tables we still see those critical words of change is inevitable and increasingly necessary, it has to be ongoing to ensure viability. I have also confirmed that change which is significant in nature is change which will have substantial effects on a range of possible issues, including hours of work and shift patterns. If a change from eight hours to 12 hours for shift workers could not be contemplated as one having substantial effects then it’s hard to underhand what that clause really would deal with and I can’t think of something. That has to be contemplated by that clause because it’s hard to see what more critical aspect could apply.
PN290
It also and I think the Commissioner took my friend to this before lunch is particularly where such a proposal would also significantly impact on things like the composition of a workforce, skills and so forth as it does. All of which are contained within that application for change which is significant in nature. I’m just wondering whether the air conditioner has stopped, Commissioner.
PN291
THE COMMISSIONER: I was going to suggest it might be an appropriate time to have a quick break if we can.
PN292
MR BROTHERSON: Yes, it’s got very warm.
<SHORT ADJOURNMENT [2.47PM]
<RESUMED [2.53PM]
PN293
MR BROTHERSON: Commissioner, we were dealing with what I’ve defined as the change issue and I think I was saying that it’s hard to envisage how a change from eight hours to 12 hours could not constitute a change which is significant in nature as contained in the definition in the agreement. My friend of course tries to box clause 13.1.1 around and he says it’s a self-contained clause that provides both a mechanism for an agreement to be reached and an agreement if you don’t have it that’s the end of it. Well, it doesn’t provide a mechanism for anything. All it says is if you want to get 12 hour shifts you’ve got to have agreement. Well, that is perfectly reconcilable with clause 35.2 of the enterprise agreement. Firstly how does a discussion about it commence and it would commence by one party, typically the company providing information as to why it needs to do it and how it would propose to go about it.
PN294
You are in the consultation process because clause 13.1.1 doesn’t describe a mechanism for reaching agreement, it describes an agreements of the majority of employees. But if one looks at clause 35.2 which if I can deal with it this way, perhaps for convenience by way of the A3 extract, if we go to clause 35.2.3J of the current agreement, “Where agreements is reached as to change or a change the change may be implemented immediately and the parties are to promptly record the terms of the agreements in writing.” Presumably it’s exactly the same form of agreement as provided for in clause 13.1.1, the words “majority of employees” are not used by surely the unions aren’t trying to tell us in these proceedings that agreement here does not mean an agreements of the majority of their members affected by change, that would be absolute nonsense.
PN295
It is exactly the same form of agreement that is being reached and every indication has to be that this is the process that leads to agreement in clause 13.1.1 and if you haven’t got agreement then the mechanisms for resolving the disagreement are again as set out here and that’s entirely consistent with what was intended by the introduction of these provisions and encapsulating all change which might be considered in as provided for and of course specific types of change which are covered and they’re not general. They’re hours of work and shift patterns. How much more specific can you be than by defining those? We say the two clauses are quite reconcilable and that’s quite important for another aspect that I’ll take you to in a moment. The aim of the parties in clause 35.2.2 and 13.1.1 is agreement and it would be exactly the same form of agreement.
PN296
The unions attempt to rely on the generalia principle. It’s not a doctrine, it’s a principle and there’s actually quite a significant difference. Firstly it’s a principle which we say doesn’t apply in this case. It’s also a principle that is an aid to construction, it’s not a rigid thing that you put in a formula and it automatically jumps out and says yes, that’s right and relevantly only applies where the respective clauses are irreconcilable as a matter of ordinary interpretation. In our authorities if I can take you to that folder, Commissioner, there are three examples of this, if I can take you to tab 13 which is a high court decision of this principle and it’s the authority which is most commonly referred to in such cases, perhaps only to that (indistinct) matter that is also referred to. This involved an employee who had moved from Sydney County Council to Alcom. I think as far back as the 1940s and when he came to retire in 1982 he tried to claim some benefits that might be due to him under what had become a Sydney County Council agreement.
PN297
THE COMMISSIONER: Sounds fair.
PN298
MR BROTHERSON: It would have been very fair to him.
PN299
THE COMMISSIONER: Having worked at Sydney County Council and looking over the fence at Alcom and the benefits that they had, including the 35 hour week at the time, I can imagine why.
PN300
MR BROTHERSON: The critical provisions if I take you to page 2 which is numbered 653 on the extract, they set out there in numbered paragraphs the various provisions in the legislation which provided for the transfer, and at 3, “The servants shall have and enjoy the same rights and privileges of any with regard to annual, sick, preferred and extended leave as if he had continued to be a servant of the County Council and for the purpose of this sub-section service with the Commission shall be deemed to be service with the County Council.” The next relevant provision to the ultimate finding was 5 where the legislation provided, “Where the servant is one for whom the provisions of sub-section 4 do not apply, he shall be entitled to retain the rights and privileges, if any, in relation to payments on retirement or death to which he would have had been entitled if he had continued to be a servant of the County Council, and for the purposes of this section service with the Commission shall be deemed to be service with the County Council.”
PN301
Then at 7, “Where any condition of employment of the service is immediately before he becomes a servant of the Commission regulated by an award or industrial agreement, such conditions shall continue to be so regulated until an award regulating such condition binding the Commission is made by a competent tribunal or such condition is regulated by an industrial agreement to which the Commission is a party.” Firstly I would say it’s a much more mind boggling provision than we see comparison in clause 13.1.1 and clause 35.2. But relevantly the Commission or the high court I should say worked its way through this and on page 657 set out the sort of practical approach one needs to apply to these matters. When the section is read as a whole it becomes reasonably clear that the architect of section 60, “Intended that the transferred employee should continue to enjoy the relevant rights and privileges as if his service with the old employer remained on foot, subject to the qualification that those rights and privileges to the extent to which they were conditions of employment regulated by an award or industrial agreement would be regulated by an award or industrial agreement binding on Alcom, once such an award or industrial agreement came into existence. When read in this way the provisions give the transferred employee suitable protection in the interregnum between the date of his transfer to Alcom and the date when he obtains the benefit of an award or industrial instrument binding on Alcom.”
PN302
Relevantly at paragraph 40 or just below paragraph 40, “In the result agreeing as we do with the construction given to section 60(3)(5) and (7) by the court of appeal we have no need to consider so much of the appellant’s arguments was based on the maximum generalia special (indistinct), the maximum applies only where there are two inconsistent provisions which cannot be reconciled as a matter for ordinary interpretation.” As I’ve said, our position quite clearly is that there is a requirement for agreement in clause 13.1.1 is fundamentally reconcilable with clause 35.2. We say as well the change which is significant in nature that even if it’s not change which is significant in nature otherwise change which again brings us to the Commission’s role.
PN303
THE COMMISSIONER: Mr Brotherson, I think my copy may have been different to yours.
PN304
MR BROTHERSON: It shouldn’t be.
PN305
THE COMMISSIONER: Mine goes from page 105 (indistinct).
PN306
MR BROTHERSON: (Indistinct) this is the Electricity Commission of New South Wales, tab 13.
PN307
MR HOWELL: We start at 652.
PN308
THE COMMISSIONER: I’ve got page 105 to 111.
PN309
MR BROTHERSON: Could I perhaps just have a look at that Commissioner? Yes, I apologise, I can give you the correct reference.
PN310
MR HOWELL: You can take mine.
PN311
THE COMMISSIONER: Thank you.
PN312
MR BROTHERSON: I can repeat the references if you like, Commissioner.
PN313
THE COMMISSIONER: The one – I’ve been able to track some of them, the last one which I think you said was immediately before paragraph 40.
PN314
MR BROTHERSON: Yes, it’s just above where Justice Dean begins his dissenting judgement.
PN315
THE COMMISSIONER: Yes, all right. Mr Howell, you have marked this one, is that a submission, you don’t need it?
PN316
MR BROTHERSON: The next case in the bundle is again a matter of this Commission involving the CEPU and Australian Postal Corporation where the CEPU argue in relation to a provision of the Fair Work Act that the generalia principle should apply and Vice President Lawler at paragraph 11 – sorry, if I could take you to paragraph 7 it says, “Section 111(1)(b) of the Act confers a power on the Commission to take evidence on oath or affirmation in relation to proceedings before the Commissions an application under section 451 is undoubtedly proceeding before the Commission and prima facie section 111(1)(b) applies and authorises the Commission to receive evidence on such an application. At this point the counsel for the CEPU relied upon another principle of construction,” one which is in contention here.
PN317
His Honour then went on to note in paragraph 8, “The leading text on statutory interpretation is Pearce and Geddes, statutory interpretation in Australia presently in sixth edition, the learned authors consideration of the maxims make it clear that the rules or principles to which these maxims refer are properly described as aids to construction and should not be applied in some rigid, mechanical or automatic fashion.” Then over the page if I can refer you to paragraphs 11 and 12 and the principle wasn’t applied in that case. But again it reaffirms that the principle is an aid to construction, it is nothing more than that and it shouldn’t be placed any higher than needs be. At tab 15 is a copy of the Timberland case which I think is referred to in the union’s outline of submissions in this matter and if I can take you to that decision at paragraphs 23 to 24, relevantly my friend took you to paragraph 23 earlier today by reference to outline of submissions, but at paragraph 24 the supreme court reaffirmed the authority that I took you to in Purcell v. Electricity Commission of New South Wales, confirming that the maxim only applies where there are two inconsistent provisions which cannot be reconciled.
PN318
At that point it’s probably appropriate that I deal with Commissioner Connor and like all things decisions of the Commission are sometimes not always what they seem when one looks at them in hindsight. As my friend explained, Commissioner Connor was dealing with the dispute where employees of the (indistinct) in Spring Hill works had worked 12 hour shifts for some five plus years. They all of a sudden claimed that it had been a trial and the trial was over and they didn’t wish to continue with it. If I can take you to paragraph 25, 26 and 27 perhaps you will see there paragraph 26, the company was responding to the union position. The letter referred to the obligations flowing from BlueScope Steel Award clause 36.4.2.C where changes of a significant nature arose in the Steelworks Award the status quo should be preserved in that industrial action whilst the matter was subject to consultation, conciliation if necessary, arbitration. Then at paragraph 27 the AWU write back and say, no, we don’t accept that.
PN319
So we see there in this dispute really the genesis of the dispute we now have. If I can then take you – my friend took you to the Commissioner’s consideration of the matter and I think referred you to paragraphs 64 through to 68 I think were the paragraphs you were taken to. Ultimately of course the Commissioner decided that the relevant work area wasn’t the paint line, the effect of that was that it defeated the claim of the employees. He dealt with the other issue but he didn’t deal with it and nor did the parties ever follow him up perhaps as strongly as they should have and I will take you to that now. The matter ended because the relevant work area was defined as the paint line. I should just say my friend earlier today said he doesn’t think the company contest the (indistinct) is the relevant work area, well we haven’t taken the point in these proceedings but at some later point who knows what might be argued.
PN320
But if I can take you to paragraph 66 and my friend did – and I’m sure there was nothing in this but the Commissioner begins there by concluding, “In this case I am satisfied that the plain meaning in clause 13.1.1 would permit the revocation by employees of any agreement to work to 12 hour shifts at any time, subject only to the proper notice and any obligations which flow from the dispute settlement procedure.” He doesn’t reject the company’s argument, all he does is say 13.1.1 requires agreement and an agreement can be revoked. Of course 12 hour shift agreements are a little bit different than say a manning case or an outsourcing case where once you’ve done something it’s hard, but in this case he decides yes, agreement is there, if you don’t want agreement perhaps give notice, but he is not dispensing the obligations that flow from a dispute settlement procedure. Let’s not overlook where the introduction of change clauses prevail, they are contained within the dispute settlement procedure because they are dispute resolution procedures.
PN321
My friend took you to paragraph 68 and where the Commissioners says at the end of that paragraph that the agreement may be rescinded by the employees at any time. But the Commissioner couldn’t have it both ways. He’s firstly said they can rescind it but it’s going to be subject to two obligations, one is proper notice and secondly is obligations under the DSP. What he says at the end of 68 must be read as simply a summation of where he got to on that point. It doesn’t throw away the other obligations he’s first identified in paragraph 66. The Commissioner didn’t attend any further to that because he’s pretty quick to then get into the fact I’ve got a better way to deal with this, it’s all over in this way. Why was the matter never subject to appeal or anything like that, it didn’t need to be, the dispute was over. But we say on proper consideration the Commissioner was accepting at paragraph 66 before he gets to 68, obligations to give notice and under the DSP do apply.
PN322
Importantly the Commissioner in any event clearly fell into error in paragraph 66 which perhaps in different circumstances would have been taken up with him at the time, but longevity gives people the chance to take things up again at a later point, which I now have, and that is the point that I went to earlier. The Commissioner says that the special provisions of clause 13.1.1 were written into the BlueScope Steel Award in contemplation of a more general provision. Well, they weren’t, they were there. The more general provisions as he calls them, and one questions whether they were, were in fact superimposed over a longstanding clause dealing with change and there is no doubt that an agreement to introduce 12 hour shifts is change and has to have been caught by what Justice Walton intended when he made his recommendation in 2002.
PN323
So yet again Commissioner on this change issue we say the two provisions are reconcilable and we say you should accept what we say on the change issue that there is no impediment to you progressing to deal with this. Where a dispute arises, where agreement can’t be reached, the introduction of 12 hour shifts, the history, the context and that striving to find a sensible outcome as Justice Kirby described it will lead you to accept the construction that we propose on that change issue. If we then deal with what my friend escribed as the merit issue and I’m assuming that you are still with us that we can progress that far. Then if I can take you to paragraphs 79 and 80 of the company’s outline of submissions, the company’s submission is that it has a very sound business case as to why it needs to make this change which would satisfy and will satisfy whether you find that the onus rests with the unions or the company that it is safe, efficient, legal or fair and some of the reasoning, and this isn’t necessarily part of one of the tests although I think it does contribute to the test, as to why the company needs to implement 12 hour shifts is to properly provide for the required utilisation of the mill having regard to factors including customer demand, issues of plant integrity, flexibility to vary production as required, product quality and an efficient cost structure that should be matched to demand.
PN324
THE COMMISSIONER: How do you deal with C? How do you vary the production as required?
PN325
MR BROTHERSON: I think the company’s view is that if it has the four day, three night arrangement it gives us some ability to perhaps provide overtime by working at the further shift or at some point perhaps to rebuild the arrangement by adding more shifts in at some point. It’s certainly not envisaged and if one was to go to the evidence of Mr Gerovalasis in particular he describes a seemingly ever deteriorating market position, every time there is a forecast it seems to get worse. So to what extent that is likely in the next year or two on the estimates he states, it is hard to see. But if you are on a four day, three night arrangement it may be that there has to at some point be either overtime offered and/or perhaps rebuilding crews at some point. A prerequisite with the provisions of clause 35.2 of the agreements apply is that the company consult. My friend has identified during the day that no point is taken and no finding is sought from the Commission that the company hasn’t consulted.
PN326
We therefore would simply reply on the paragraphs 81 to 85 of our outline on that and add that we say that there can be no serious argument that the company has not complied with its obligations to consult and refer you to the evidence of Mr Gerovalasis and Mr Otsyula on that point. If I can then address you on the specific tests for the introduction of change to the agreement, safe, efficient, legal and fair. My understanding of the submissions which have been made today are that really the grounds on which the Commission would be invited to find in favour of the unions would be that the change is not legal and I think we have largely attended to that through what has been described as the threshold or change issue. The second is the ground of fairness. But if I can say something briefly about all four of the tests. On the issue of is the change safe I will ask the Commission to deal with or accept what we say at paragraphs 86 to 90 in our outline of submissions. We would refer you in the company’s evidence particularly to the statement of Mr Fairly and on that just to confirm that the company has extensive experience with 12 hour shift arrangements in other parts of its operations.
PN327
It has approaches as to how such issues are to be managed. Importantly the employee concerns which are identified, whilst they might be genuinely held by those people are largely speculative and contrary to the company’s own experience with those issues when it comes to safety and importantly the company has procedures in place to address any issues which will arise and I think the evidence also says would be further attended to at the time of implementation. Again we say there is no serious argument can be made being proposed changes did fail that test. If I can deal then with the test of is the change efficient which doesn’t appear to be a particular point of challenge by the unions, I think it is important to address it in this way. We would submit, Commissioner, that the evidence of the company is overwhelming that the current hours of work arrangement of the eight hour shift pattern of the plate mill is inefficient given the current state of customer orders and market demand and the evidence of Mr Gerovalasis and Mr Otsyula we would say is compelling on that.
PN328
The current work arrangements provide for 120 hours of available operator time each week. Current demand simply does not require that level, and as I’ve said a moment ago the forecasts seem to be ever deteriorating and for the next few years into 2017 contain no optimism that that will positively change and in particular details of that can be found at paragraph 17 through to 19 of Mr Gerovalasis’s evidence. Further, of course, the current circumstances where employees are being required to take leave or being asked to take leave or undertake training in other areas as a result of idyll shifts where there is simply no production to be had, is simply not a sustainable arrangement. The company arrangement for 12 hour shifts addresses what is now required for the plate mill. In the lines of the market some may be four hours and it deals with those critical aspects that are set out in both the evidence of Mr Gerovalasis and Mr Otsyula about the need for any shift pattern to be able to deal with issues of the reheat furnace integrity and the associated quality issues that arise over that.
PN329
We say the proposal is without question efficient and again there is a decision in the authorities of Commission Connor, so having one thing he didn’t get wrong, Commissioner, if I can take you to tab 12 of our respondent’s authorities. Paragraph 35 we cite in our submissions at paragraph 91 where he says, “The proof of this particular pudding will only be in its eating. It would be presumption for a member of the Commission to make any determination concerning the efficiency of any proposal advanced by BlueScope Steel management after the thorough analysis that Mr Cowper has conducted. The assessment of efficiency of any change to operations remains essentially the proper function of BlueScope Steel management alone and the Commission would ordinarily decline to intervene in a decision on any employer on manning levels, read that as change for his operation unless it is established that the proposal by the employer acts unfairly or unsafely.” Those are in the context of these provisions.
PN330
The Commissioner restates that to similar effect at paragraph 60 and we say that that historically has been the approach on the test of efficiency. The legal test I think it’s been acknowledged during the day turns very much on the findings that the Commission may make of what my friend calls the threshold issue and what I’ve defined as the change issue, and assuming that you find in the company’s favour on that point, Commissioner, we would otherwise rely on paragraphs 96 and 97 of our outline which is to the effect that there is no legal impediment to the change progressing. The final test that applies under the enterprise agreement is the test of is the change fair? We would rely again on paragraphs 98 to 106 of the outline, reaffirming that the test of fairness must take into account the positon of all the parties, and from the perspective of the company and my friend has spoken about the perspective of employees. So from the perspective of the company our strong submission is it is unfair for the company to be expected to continue to operate with current hours of work and shift patterns with surplus capacity and equally it would be not fair for it to have to adopt any other system that fails to dress those key requirements of aligning production with market demand and protecting the integrity of the furnace and other quality issues arising from that.
PN331
As to the issues raised by the unions on behalf of the employees, again we would say that the concerns about the working of 12 hour shifts are in general speculative and we would say over-stated as a group and should not be accepted as reasons why a 12 hour shift arrangement which operates very widely both in this company and elsewhere could not be accepted, and that is particularly in circumstances where we say the company satisfies any safety requirement. Yes, there may be a need for some employees to change their personal arrangements but in the scheme of things that is not sufficient to say this arrangement fails on that test of fairness. Any overtime that may be lost would be something that has never been guaranteed to employees and the current time is generally largely there to deal with issues of vacancies which haven’t been filled pending this decision as to whether there is to be a reduction in the workforce.
PN332
I think there is also in the evidence of Mr Bessant a suggestion that employees will work on skeleton crews. One issue perhaps by not actually calling the company witnesses, but the evidence as it stands is quite clear that the company is not reducing the number of positions on the two remaining crews, its simply there will be two crews, not three crews. But all of the positions that are currently filled will be filled. So it’s not going to be we’re moving to two crews and only half the number of people we used to have on each crew. It will be positions – set positions will be filled as they have been previously. We dealt with the issue of public holidays earlier. My friend says a detriment, well the employees will still be receiving their 38 hours each week on average. They will if the Monday is a public holiday not have to work that day. The difference of course is where they wouldn’t have had to work and be paid their eight hours, now they get the day but no money, but they still get the same money.
PN333
On the issue of fairness I think we also need to attend to the issue of there will be 17 positions which will become surplus as a result of a move to a two-crew 12 hour shift arrangement. The evidence is that there are already some vacancies which exist, and I think there’s seven vacancies and also there has been 16 expressions of interest for redundancy. So it may be that Mr Bessant and Mr Kangas have not applied for redundancy but if one does the sums there is a chance that nobody who doesn’t wish to leave would be forced to leave, the numbers may work out. If I can take you to Mr Otsyula’s statement at page 46 and this is the presentation made to employees on 29 August. There is a slide there that’s titled “looking after the people”. You will see it is identified that redundancy quotes have been distributed, supervisors have received some formal expressions of interest. 17 people – I think I might have said 16 a moment ago, I apologise – have expressed an interest in leaving the organisation.
PN334
Six people have already left, I understand and I have to say absent Mr Otsyula having called that evidence is not up to date I am instructed it’s now seven. There are seven vacancies and 17 people have expressed an interest. So there is a high likelihood that the reductions can be done in a seamless fashion, subject to obviously skill identification and the such like. When considering that issue, Commissioner, again the enterprise agreement contains provisions in clause 34 for managing surplus employees, they are being in the enterprise agreement of course agreed provisions in contemplation that the terms of the agreement including the introduction of change could see situations where people are declared surplus. So those provisions are there, we say that adds to the satisfaction of the test of fairness in these proceedings.
PN335
Commissioner, we say that for all of the reasons that we’ve gone through that the company should satisfy you on the legal arguments and if we made our way through those there should be no impediment to you finding that 12 hour shifts should be able to be implemented at the plate mill. They are the submissions, thank you.
PN336
THE COMMISSIONER: Before you sit down, Mr Brotherson, you might need to seek some instructions in relation to this. I’m just wondering are there any other employees at BlueScope who are working this type of 12 hour shift system where it is set to a fixed number of days per week rather than a seven by two rotating roster for example.
PN337
MR BROTHERSON: I might just reaffirm my instructions but I understand the short answer is no.
PN338
THE COMMISSIONER: So this is (indistinct). We might break for five minutes and Mr Howell can collect his thoughts.
PN339
MR HOWELL: Thank you, Commissioner.
<SHORT ADJOURNMENT [3.33PM]
<RESUMED [3.39PM]
PN340
THE COMMISSIONER: Mr Brotherson.
PN341
MR BROTHERSON: Commissioner, in answer to your questions before we broke, as I said there is no other part of the operation currently working exactly what is proposed by the company in this matter. There is a variety of 12 hour systems, I won’t deal with all those now. I was reminded, if I can just you’re your indulgence in this, I think you asked me a question about how the company might flexibly move from the four day, three night arrangement as required. I’d answered you I think for an upsizing situation. I was reminded there was another alternative considered which was a three day, three night system. The company could accommodate that where required or it’s needed. It would mean that there would be a slight adjustment to the rostered days off and I think an eight hour shift gets (indistinct) once every six weeks or so.
PN342
THE COMMISSIONER: Yes, thank you.
PN343
MR HOWELL: Thank you. Commissioner, I will endeavour to be brief. If I can deal with the question - - -
THE COMMISISONER: Before you start, I might mark on the basis of the extent that Mr Brotherson took me through his outline of submissions it might be appropriate that I mark those submissions.
EXHIBIT #B16 SUBMISSIONS OF MR BROTHERSON
MR HOWELL: Thank you, Commissioner, I do read and rely upon the submissions that were filed earlier in time by the union. They perhaps ought to be marked also.
EXHIBIT #A4 SUMISSIONS OF MR HOWELL
PN346
MR HOWELL: There should also be a supplementary outline of submissions which deal tilth the question of onus.
PN347
THE COMMISSIONER: Sorry?
PN348
MR HOWELL: There should be two submissions, Commissioner, one is the document headed, “Outline of submissions”, and the other is a short supplementary outline of submissions on the question of onus.
PN349
THE COMMISSIONER: No, there was no - - -
PN350
MR HOWELL: Well then I had better address the question of onus in a bit more comprehensive way. Then I will deal with the question of onus in reply and I will do that in one moment. The first thing I should say by way of reply deals with this question of fairness and it’s really to touch upon the matter which my friend just address, that is to say the nature of this proposed 12 hour rostering arrangement. My friend’s evidence describes the company’s experience of the 12 hour roster arrangements. So far as it gets it say what it says, but none of that can give the Commission any confidence that the system which is now proposed would be able to be managed quite the same way. Nowhere in the Steelworks does someone work consecutive 12 hour shifts over four days in the same way proposed in this arrangement.
PN351
At best its two days followed by two nights, not four days – as I understand it, not four consecutive days followed by three consecutive nights, that is to say subsequent arrangements. What is more is the nature – this is described in the evidence of the union’s witnesses – each of those arrangements, the 12 hour arrangements that apply elsewhere in the steelworks and I readily accept that there is limited evidence in this Commission, enable fatigue to be managed in ways which is unlikely to be able to be managed for those within the plate mill. So by way of illustration which I understand the Commission may have seen the inspection which unfortunately (indistinct) never benefited being there, but there is a (indistinct) in which one of the operators works within the plate mill there is an equivalent in the (instinct) mill, in the pulpit in the plate mill is occupied by one person, the (indistinct) mill is occupied by two workers and they can coordinate between themselves in a way which enables them to manage fatigue in a way which is simply (indistinct) to be possible in the same way in the plate mill if this operation can be implemented.
PN352
I raise that only to emphasise that what these workers have to say about their concerns in relation to fatigue arising from this particular arrangement and this unique arrangement in this particular department within the operations of BlueScope should not be simply dismissed out of hand. Of itself I cannot rely upon it to say that it would lead the Commission to the conclusion that this working arrangement would be unsafe, but it is part of the considerations which in my respectful submission ought be brought to bear in whether or not the proposal is fair and the submission otherwise, which I have earlier articulated, is fairness in this case as my friend quite rightly points out involves a balancing of competing considerations, key amongst them in my respectful submission is that one of the commitments made in this agreements is that ordinary hours rosters beyond eight hours would not be implemented in the absence of a majority agreements of workers who are to be covered by it. There are a range of other considerations which I have already articulated and I won’t repeat them but the questions of fatigue are a relevant consideration and the Commission needs to be mindful of the fact that this is a unique arrangement when giving some consideration in its ultimate deliberations.
PN353
Next I will deal with the question of onus. I had understood that there were some written submissions filed and it seems I am wrong in that connection so I am (indistinct) the issues (indistinct) in the way that it has. My friend deal with the question of onus by reference to the no extra claims provisions and the submission – characterised the submissions of the union in relation to the question of onus as being dependent exclusively upon the question of the no extra claims provision and the introduction of the no extra claims provision in its current form, that is to say a no extra claims provision which binds both parties rather than simply prohibiting the union from advancing relevant claims. The changes that were made in the 2012 agreement, as my friend has already outlined, were not limited to the introduction of the no extra claims provision. The changes that were introduced included, as my friend spent some little time addressing, clause 2 point – This relates to questions – sorry to the process associated with the implementation of significant change.
PN354
It includes 35.2.3K which for the first time requires any party to the consultation, not merely the union, any party to the consultation process to give rewritten notice that it disputes the implementation of the change, and this is perhaps more significant, requires the procedure in relation to the resolution of disputes to be followed, that is to say it must be referred to the Commission and the relevant test outlined in 35.2.1C then applies. So what you have in this scheme is a commitment that neither party will advance a new claim subject to the operation of the agreement, and I’ll come to that in due course, and a change provision dealing with significant change that contemplates both parties being required to refer the matter to the Commission in the event that at the conclusion of the consultation phase there is no agreement. Whoever is continuing to press for the introduction of the relevant changes is obliged to take the matter to the Commission.
PN355
Of course the company is the one which (indistinct) counting up these proposals for change but it’s not necessarily the case. The union might well have a proposal or a claim, albeit not an extra claim which ultimately would progress through the consultation provision and ultimately be required to be referred through arbitration. It binds both sides. The point that the union makes is that the changed operation of clause 35.2.3, in particular little “k”, when read with the no extra claims clause is that the positon that now prevails under the agreement is the party who is disputing the change must notify the Commission and in those circumstances on its proper construction, indeed the ordinary operation of the (indistinct) process is they are the ones who must prove that the change is safe, efficient, fair, legal. That is to say the person propounding the change is the one who must bear the onus and it might be the union in a case, it might be the company in another case but on its proper construction parties are bound to not pursue the extra claim.
PN356
If there is a significant change which is being advanced consistent with the agreements and there continues to be a dispute at the end of the consultation process someone has to give notice of dispute and the matter has to be taken to the Commission. The person propounding the change has to show that the status quo ought to be avoided. That’s the simple point when it comes to the question of onus and it’s why those earlier decisions are of limited assistance in my respectful submission. They dealt with that environment, that was determined in the environment where the no extra claims provision exclusively bound the union or unions and the disputes provision and the change provision did not have a mandatory requirement binding either party to refer the dispute to the Commission for final determination. The landscape has changed, the earlier authorities would no doubt (indistinct) in the context of the instrument that they were then interpreting, I leave aside Commissioners Ball’s decision which dealt with I think the agreements we are currently dealing with, but on its proper construction the change that was visited in the 2012 agreement that I’ve already outlined, the no extra climes provision and the disputes resolution provision dealing with the introduction of change alter the landscape that underpinned the reasoning and in my respectful submission the onus is now on those who propound the change, and whether it be the company (instinct) in this case it’s the company.
PN357
Can I then deal with the – by way of reply with the change issue and I want to – there are two aspects of this that I wish to address. The first is the relevant history of the instrument. My friend says that Commissioner Connor got it wrong when he said in paragraph 66 of the 2008 decision that I took you to earlier, the special provisions of clause 13.1.1 were written into the BlueScope award in contemplation of the more general provisions of clause 36. Now two things that I need to draw to the Commission’s attention about that. The first thing is this, it is no doubt right to say that in the 2000 award that my friend has taken you to, clause 13 of the 2000 award was in essentially the same terms as clause 13 in the current instrument. There was of course under the 2000 award a provision for dealing with issues. Clause 36 again my friend has already taken you to it, I won’t deal with that again. But the chronology that follows is this, proceedings before his Honour Justice Walton, recommendation made about amongst other things procedures involving the implementation of change.
PN358
There is an enterprise agreement in 2002, there is then the interim award in 2004 which essentially replicates the 2002 enterprise agreement. But then we come to the 2004 award, the substantive 2004 award. In 2002 enterprise agreement and in 2004 interim award there is, as my friend has already taken you through, the general change provision that Walton recommended. In 2004 when we come to make the substantive instrument that is to apply after this period of flux, if I can describe it in that way, clause 13.1.1 is reintroduced as it was in the 2000 instrument, granted, but it is reintroduced into an instrument together with this new scheme for change recommended by his Honour Justice Walton. With respect Connor was not wrong when he said the special provisions of clause 13.1.1 were written into the BlueScope award in contemplation of the more general provisions of clause 36. It’s quite right to say that.
PN359
If the parties had intended for there to be some other operation, that is to say some different interaction between clause 13.1.1 and clause 36, the general provision in relation to change, that’s where they could have dealt with it at that point in time but they didn’t, they embraced the earlier provision which included the commitment of the company to not introduce ordinary shift length beyond eight hours without the majority support of the workforce to be covered (indistinct). What is also telling about that, and I should say that is then repeated in 2006 award, in the 2009 extension of the state award on its transition into the new WorkChoices system and then again in 2012. Clause 13 remains the same throughout, clause 33 remains the same throughout, clause 35 gets renumbered and there are some minor differences my friend has already taken you through, starts out as clause 36, ultimately now it’s clause 35 but again substantially remains in the same terms.
PN360
What is telling is that in 2009 and in 2012 clause 13.1.1 remains the same, clause 35 remains substantially the same after the interpretation given to it by Commissioner Connor. If there was an issue about the construction given they have had more than ample opportunity to deal with it. In my respectful submission the fact that they haven’t reinforces the submission that I otherwise make. 13.1.1 On its proper construction provides the mechanism for the introduction of change in relation to ordinary shift lengths, ordinary hour shift lengths beyond eight hours and it provides the default position in the event that the company cannot secure that agreement. My friend says that the 2004 interim award, to use it as the illustration - - -
PN361
MR BROTHERSON: No, it was the enterprise agreements.
PN362
MR HOWELL: - - - but no doubt the enterprise agreement as well will be the same, the 2004 interim award simply lifted the enterprise agreements and put it into an interim ward pending the final resolution of those proceedings. My friend says that there was an underpinning award which continued to have the obligation in clause 13.1.1, that might well be right but that doesn’t take away that in 2004 when they made a wholly new instrument as a result of that period of flux, they reintroduced clause 13.1.1 in the terms that it continues to be in today.
PN363
MR BROTHERSON: It was always there.
PN364
MR HOWELL: Commissioner Connor gives an interpretation of it in 2008, it’s again in 2009, and it’s again in 2012. In my respectful submission the history, particularly when taken with a plain ordinary meaning of the words does not support the construction of clause 35 and the interaction between 13.1.1 and clause 35 that my friend wants to advance. But can I then – that really deals with the threshold point that is to say whether clause 13.1.1 and clause 35 were intended to interact at all. My friend, and I don’t think he did this deliberately, I think in his submissions suggested that the change point and it was – was the threshold point. I need to make this plain, the threshold point as I characterise it is whether or not 35.2 has any implication to the change contemplated by 13.1.1.
PN365
There is an additional change point which the Commission is required to deal with and that is the proper construction and application of clause 35.2 in the event that the Commission does not accept what I have to say about the generalia specialibus non derogant principle of interpretation and I (indistinct) accept it as a principle of interpretation, a maxim, an aid to interpretation (indistinct) doctrine to the extent that I lapsed into that language earlier that’s a result of a lack of sleep and I apologise, Commissioner. It is certainly an aid to construction and it is nothing more, but nonetheless it is an aid to construction which is intended to contemplate circumstances such as this. My friend is quite right to say, as I did in the outset, that it is based on the idea of inconsistency between two provisions, two provisions that cannot be reconciled. With the greatest respect on its proper construction 13.1.1 and 35.2 cannot be reconciled.
PN366
You cannot have a commitment recorded in express terms that says ordinary hours will be worked not in excess of eight hours in any consecutive 24, or by agreement with the majority of the workforce up to 12 hours and yet say that is consistent with a provision that enables you to go and get arbitration out of a third party. Whether it’s a unilateral change and again I understand what my friend says about that, whether it’s a unilateral change or not, the point is the mechanism to enable a movement from something beyond ordinary shift rates of eight hours are entirely inconsistent with one another, that is what gives rise to the inconsistency, in my respectful submission that’s what gives rise to the application of the relevant doctrine.
PN367
So putting that threshold issue aside for one moment and then dealing with the construction of the clause in the event that you don’t accept that threshold argument, what my friend has not done is take you to any provision in the enterprise agreements which would enable the Commission in its determination, let’s assume everything else my friend has said is right and we get to the point where we’re dealing with 35.2.3 significant change arbitration. My friend is yet to take you to anything which would empower the Commission to give a determination that is inconsistent with 13.1.1. That is to say there is nothing in this agreements which would empower the Commission to make a determination that an ordinary shift in excess of eight hours can be worked or should be worked in the absence of the majority agreements of the workers. That is a commitment in terms recorded in 13.1.1.
PN368
Section 739(5) of the Act provides that any determination in an arbitration empowered by a relevant disputes clause cannot result in a determination that is inconsistent with the terms of the Fair Work instrument. What my friend is inviting the Commission to do is rewrite the ordinary hours clause and the protections that operate around the ordinary hours clause in this agreements, that is the very thing that an enterprise agreement is not permitted to do and it’s the very thing my friends have committed not to do in clause 5 of the enterprise agreement.
PN369
THE COMMISSIONER: Wouldn’t it be possible though that that clause 13.1.1, could it be there to protect the majority of employees in a work group from the wishes of a minority. Let’s take for example, assume that employees are working a seven by three roster, eight hour shift in a particular department, there might be 30 employees working in that department. 10 of them decide, well, let’s go and see the company, we think we can get away with working a seven by two roster, 12 hour shifts, give us more flexible arrangements, some would argue better family time, some would argue worse family time, whatever it may be. 10 of them front up and convince the employer that’s what they want to do and the employer says yes. Doesn’t 13.1.1 guard against that arrangement where the minority don’t have the capacity to overcome the majority simply by having the employer support?
PN370
MR HOWELL: Yes, quite, but it’s not limited in that way. The clause is quite plainly in my respectful submission intended to provide a limitation on the capacity – I withdraw that. It’s to provide the parameters within which 38 ordinary hours can be worked. Those parameters are, other than the description of day workers and shift workers which we don’t need to be troubled with, as provided for in clause 13.1.1, ordinary working hours will not exceed eight hours during any consecutive 24 hours in the absence of the oral agreement. In which case even with a relevant agreement there is a parameter set, that is to say up to 12 hours. But that’s its function, that’s its purpose. Its purpose is to set conditions on the way in which ordinary hours can be dealt with. And it doesn’t matter whether it’s protecting against the minority who wants to go and curry favour with the boss or whether it’s just the boss deciding to unilaterally impose it.
PN371
The point is it provides for what the ordinary hours are and it provides for the parameters around which it might be worked, and there is nothing in the implementation of change provision which operates to empower the Commission to ignore those parameters when it is determining the outcome of an arbitration, whether it be way of a substantial change or whether it be by way of a non-substantial change. So whether it’s under 35.2.3B or 35.2.3K, all roads lead to Rome, the outcome is the same. The determination made by the Commission must be consistent with the agreement. To accept my friend’s construction is to accept a construction that says clause 35.2.3 enables the Commission in the context of a private arbitration to ignore any limitation contained within the agreement provided it otherwise fits within the parameters of significant change.
PN372
The logic that underpins the company’s argument here is that clause 35.2.3 permits us to advance proposals for significant change. Because the second sentence of a no extra claims provision says no extra claims but for ones which are consistent with the processes contemplated by this agreement we can pursue any change characterised as significant, regardless of what the language of the instrument itself says through the arbitral processes of the Commission because that’s what this process contemplates. If that clause had that effect it would be entirely inconsistent in my respectful submission with the limits that are imposed by the Act on the capacity to vary an enterprise agreement during its nominal term and it would be inconsistent with the first sentence of the no extra claims commitment, that is to say you won’t pursue an extra claim, extra claim contemplated in the way interpreted by the full federal court in Armora – in the DL case which I referred the commission to earlier.
PN373
Whatever one is empowered to do in the context of clause 35.2 and the provision of change, it does not empower the Commission to essentially rewrite express commitments made in the context of the agreement. The company couldn’t say by way of illustration, we’ve got this idea, we’re going to refashion the way we operate a particular department, let’s say the plate mill, we’re going to change the composition, we’re going to change the operation and size, we’re going to change the skills required, we’re going to change the shift pattern and we’re going to ignore the commitment about hose of work. We’re going to extend your shift patterns beyond those contemplated by clause 15 of the agreement. We’re going to introduce a four shift pattern consistent with what’s in the agreement now.
PN374
It is not a fiat, this provision is not a fiat to ignore and rewrite provisions of the agreement. To the extent it empowers the resolution of a dispute, the dispute resolution still must be consistent with the agreement. In the absence of it being consistent with the agreement it is not legal 35.2.1C and it extends beyond what the Commission is empowered to do under section 739(5) of the Act. In my respectful submission the language of 13.1.1 is clear and it is in fact – its purpose is self-evident, it is intended to operate as a limitation on the capacity of the company to require ordinary shift lengths in excess of eight hours in any consecutive 24 hours in the absence of the majority agreement of the workers covered (indistinct) and there is nothing in clause 35.2 which would empower the Commission to make a determination that ignores it. Those are the submissions, Commissioner.
PN375
THE COMMISSIONER: Thank you. Mr Brotherson, you seem keen to say something else.
PN376
MR BROTHERSON: I just wanted to seek an indulgence to deal with two issues if I may. Firstly I was asked a question which I answered as to whether the shift pattern proposed here was unique or not, the answer was yes with a variety of other matters. My friend took that a step perhaps too far for the answer that I had given where I think he said there is no other place (indistinct) for consecutive day shifts, there actually is that and that is a factual positon that can be clarified as required. The second issue I think I would like to address is the issue of where he said, and I think he has in part conceded it but I think it is worth clarifying that when the parties came to do the 2004 award they reintroduced 13.1.1. 13.1.1 had never lapsed. The enterprise agreement made in 2002, if you turn to the folder where that is contained in our material of industrial instruments, I think it’s at tab 2 of that folder, confirms that the enterprise agreement deals with only 13 provisions. In fact if you take title of arrangements and signatories out it’s even less.
PN377
It operated in conjunction with the 2000 award where 13.1.1 sat. So 13.1.1 was never reintroduced to for want of a better term excuse Commissioner Connor’s finding, it had always been there and indeed the front page of the enterprise agreement addresses that, that it applies to, “All employees engaged by BHP Steel Ltd and BHP Steel (AIS) Pty Ltd, the company’s Port Kembla’s operations and to whom the following awards or any award that succeed or replace such awards apply,” and it names both the 2000 Steelworks award and a 2001 Springhill award, so I just wanted to address that. We have an extract in the folder behind tab 2 of the enterprise agreement. I can if you require it provide a full copy of that which actually - - -
PN378
THE COMMISSIONER: No, that’s all right.
PN379
MR BROTHERSON: - - - clause 3 confirms that it applies in conjunction with those 2000 and 2001 awards respectively.
PN380
THE COMMISSIONER: That clause is in the material before me?
PN381
MR BROTHERSON: No, it’s not.
PN382
THE COMMISSIONER: Okay, I will accept (indistinct).
PN383
MR BROTHERSON: If it can be found alternatively the 2004 interim award was actually an award made to simply replicate the enterprise agreement to avoid, I think Mr Gillespie had issued notice to terminate the agreement if it caused mayhem and the state Commission decided they would make an award in the same terms as the emperies agreement. So you can actually glean the same points from clause 3 of the – actually it’s perhaps not quite as clear in clause 3, it’s worded slightly differently but it confirms it operates in conjunction with the 2000 award. So if I can just address that point.
PN384
MR HOWELL: Commissioner, by way of reply I should say I thought I had clarified that. None of what my friend has just said is disputed. The point is a rather more simple one. There is - - -
PN385
THE COMMISSIONER: I think I understand your point, particularly in relation to 2009 and the like which is made after Commissioner Connor’s decisions.
PN386
MR HOWELL: If it may please the Commission.
PN387
THE COMMISSIONER: All right. Thank you for your assistance today in getting through the matter. We may have struggled had we had to cross-examine witnesses, so I thank you for your assistance. I shall reserve my decision and understanding the time required in relation to the current production constraints and issues at the plate mill I will endeavour to hand down my decision as soon as possible.
<ADJOURNED INDEFINITELY [4.13PM]
LIST OF WITNESSES, EXHIBITS AND MFIs
EXHIBIT #A1 WITNESS STATEMENT OF TIM KANGAS PN49
EXHIBIT #A2 WITNESS STATEMENT OF PAUL BESSANT PN53
EXHIBIT #A3 AWU BUNDLE OF DOCUMENTS PN65
EXHIBIT #B1 WITNESS STATEMENT OF SAM GEROVALASIS PN81
EXHIBIT #B2 WITNESS STATEMENT OF DAVID FAIRLY PN84
EXHIBIT #DO6 PRESENTATION FROM JUNE PN89
EXHIBIT #B4 RESPONDENT'S AUTHORITIES PN95
EXHIBIT #B5 INDUSTRIAL INSTRUMENTS LEGISLATION PN95
EXHIBIT #B16 SUBMISSIONS OF MR BROTHERSON PN344
EXHIBIT #A4 SUMISSIONS OF MR HOWELL PN345
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URL: http://www.austlii.edu.au/au/other/FWCTrans/2015/43.html