Industrial Relations Commission of New South Wales CITATION : Electrical Trades Union of Australia, New South Wales Branch and others v BHP Steel (AIS) Pty Limited [2001] NSWIRComm 70 APPLICANT: Electrical Trades Union of Australia, New South Wales Branch Australian Workers' Union, New South Wales Branch PARTIES : Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union, New South Wales Branch RESPONDENT: BHP Steel (AIS) Pty Ltd FILE NUMBER: IRC1598 of 2001 and IRC5840 of 2000 CORAM: Walton J Vice-President CATCHWORDS : Industrial Dispute - Review of maintenance at Port Kembla Steelworks - Contracting out of employees engaged in maintenance - Conciliation unsuccessful in resolving substantive issues - Conciliation resulted in agreement as to mechanism to resolve dispute - Certificate of attempted conciliation issued - Preliminary question - Prior agreements of parties - Steel Industry Agreement - Nature of the proceeding as not constituting a private arbitration - Parties agreed to be bound by decision - Arbitration of question - Resumption of conciliation - Agreement reached as to arrangements for review of maintenance - Public interest - Industrial merit - Unnecessary to finally resolve preliminary question - Arrangements interim in nature - Consideration of interim orders - Interim orders made - Directions given LEGISLATION CITED : Industrial Relations Act 1996 s130 s136 HEARING DATES: 12/07/2000; 12/12/2000; 02/05/2001; 02/07/2001; 02/16/2001; 03/05/2001; 03/06/2001; 03/13/2001; 03/30/2001; 03/31/2001; 04/01/2001; 04/02/2001; 04/03/2001 DATE OF JUDGMENT: 04/06/2001 APPLICANT: Mr A Gillespie Australian Workers Union, New South Wales Mr W Tomlins Electrical Trades Union of Australia, New South Wales Branch LEGAL REPRESENTATIVES: Mr W Phillips Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union, New South Wales Branch RESPONDENT: Mssrs A Morris and K Brotherson Blake Dawson Waldron JUDGMENT: MATTER NO. IRC 5840 of 2000 NOTIFICATION UNDER SECTION 130 BY ELECTRICAL TRADES UNION OF AUSTRALIA, NEW SOUTH WALES BRANCH AND OTHERS OF A DISPUTE WITH BHP RE CONTRACTING OUT OF MAINTENANCE STAFF. MATTER NO. IRC1598 OF 2001 NOTIFICATION UNDER SECTION 130 BY BHP STEEL (AIS) PTY LTD OF A DISPUTE WITH THE AUSTRALIAN WORKERS' UNION, NEW SOUTH WALES AND OTHERS RE STRIKES AND BANS. 1 By notification of an industrial dispute filed pursuant to s130(1) of the Industrial Relations Act 1996 ("the Act"), the Electrical Trades Union of Australia, New South Wales Branch ("the ETU"), the Australian Workers' Union, New South Wales ("the AWU") and the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union, New South Wales Branch ("the AMWU") ("the unions") notified the existence of an industrial dispute with BHP Steel (AIS) Pty Ltd ("the company") as to the "contracting out of maintenance staff" at the Port Kembla Steelworks. The unions also raised an issue as to the failure of "management" to abide by "[a] Statement of shared commitment document, as agreed to by the union(s) and BHP management". 2 On 28 February 2001 the company notified the existence of an industrial dispute pursuant to s130 of the Act and requested a concurrent listing with the dispute proceedings initiated by the unions. It was identified in that notification of industrial dispute that there was an ongoing campaign of industrial action by employees of the company engaged at the Port Kembla Steelworks in connection with "the review of maintenance by the company". The company also identified that the industrial action had caused significant disruption and interference to the companies operations and to the companies relationship with its customers. 3 For convenience, I shall refer to the industrial disputes before the Commission, so described, as "the matter". 4 In the result, the Commission undertook conciliation proceedings in the course of which the Commission issued statements and recommendations on 16 February and 5 March 2001. Those conciliation proceedings were ultimately unsuccessful in fully resolving the industrial dispute between the parties as to the contracting out of maintenance at the Port Kembla Steelworks. A certificate of attempted conciliation was issued. The Commission subsequently made orders in the proceedings. 5 The conciliation proceedings were, however, successful in identifying and developing a mechanism by which the parties would resolve their differences. The parties reached an agreement that the Commission would determine an issue in the proceedings as a preliminary matter. The resolution of that matter, it was envisaged, would have the potential to resolve the entirety of the issues in dispute. Preliminary Question 6 The preliminary issue was identified by the parties in the form of a question. That question was in the following terms: Whether the Company's maintenance review process for investigation and analysis through to ultimate letting of any contracts with alliance partners conflicts with existing obligations and undertakings (eg the Statement of Shared Commitment and the Steel Industry Agreement). Statement of Shared Commitment 7 The Statement of Shared Commitment ("the Statement") referred to in the question is in the following terms: BHP Steel - Flat Products - Manufacturing Vision Statement of Shared Commitment Background: Over the last ten years, the consultative approach taken between the leadership of both BHP's Flat Products business and the Steel Unions has delivered significant improvements to our business performance. This co operative and consultative approach to industrial relations has resulted in changed management and work practices which, in turn, has lead to the Port Kembla Steelworks now being recognised overall as one of the most cost efficient and high quality iron and steel producers in the world. There are many ongoing challenges facing our business. The globalisation of the Steel industry and the subsequent increased competition and pressure on prices, requires this co operative relationship to continue if the Flat Products business is to deliver the necessary returns to its shareholders and attract the required capital investment to sustain its future. BHP Flat Products - Manufacturing Vision The Manufacturing Vision is an evolving strategy which has as its main objective: "Port Kembla Steelworks will be a world class manufacturing business delivering superior business results and shareholder value" We share the view that this objective must be achieved in order to sustain a future for all employees. Maintenance Our plant reliability, cost levels and maintenance down time are not at world's best standards. In support of the main objective, a review of the provision of Flat Products maintenance is necessary to achieve a stepped change in our maintenance performance. The intent of the review is to determine what is necessary to ensure the delivery of cost efficient maintenance that in turn lifts operational equipment performance to world's best standards. It is acknowledged that this review is a sensitive issue and that no final decisions have yet been taken as to how this will be achieved. However, we are committed to taking steps towards achieving world class maintenance performance before the end of this calendar year and will pursue this in a co-operative manner. Shared Commitments and Undertakings The following shared commitments and undertakings are given with regard to the review of Maintenance across the Flat Products business: 1. We will in good faith consider all options and possibilities, both within the business and external to it, that positively contribute to the delivery of cost efficient maintenance that in turn lifts operational equipment performance to world's best standards. 2. We will only pursue maintenance outsourcing options where they clearly demonstrate a more efficient and effective method in the provision of those services than we can ourselves. 3. We will participate in good faith in the review process and will seek to progressively implement outcomes by 31 December 2000. 4. We will develop processes and systems to support employees as we move through the review and later in implementing the outcomes. 5. We will involve all affected employees in the change process. 6. We will develop a forum to resolve issues of contention and concern. 7. We will carry out a comprehensive review of maintenance with no final outcome determined until all of the above commitments and undertakings have been followed. 8. We will meet to determine a timetable and process to complete the review. 8 The Statement made provision for the signature of the parties. However, it was ultimately not signed by any party. Nevertheless, all parties concurred that the Statement constituted an agreement binding upon the company and the unions. Steel Industry Agreement 9 The parties produced an agreed bundle of documents which were tendered by Mr A Morris, solicitor, who appeared with Mr K Brotherson, solicitor, for the company. 10 The bundle of agreed documents contained a series of documents relating to what is described in the question as the "Steel Industry Agreement". Those documents included: (a) The Steel Industry Development Agreement Handbook. (b) The BHP Steel, Slab and Plate Products Division (Port Kembla Steelworks), Steel Industry Agreement 1992. (c) BHP Steel, Flat Products Division (Illawarra) Steel Industry Agreement 1996 - 1998. (d) Steel Industry Settlement, 1999. (e) Port Kembla Steelworks, Steel Industry Agreement 1998 - 2001. 11 The last of these documents constituted the Steel Industry Agreement for the purposes of the question and shall be referred to as "the Agreement" in this decision. The Agreement refers to, and incorporates, some of the terms of earlier agreements. It operates until 30 September 2001. The Agreement is in the following terms (excluding annexures to the Agreement): Port Kembla Steelworks Steel Industry Agreement 1998 - 2001 1. Purpose for this Agreement This agreement reflects a commitment by the Company, employees and Steel Industry Unions to secure a future for the Port Kembla Steelworks. 2. Our future 2.1 We all want to see a strong, profitable and secure flat products business in Port Kembla for at least the next 70 years. 2.2 As we achieve this we will: a) provide secure employment for ourselves and provide employment opportunities for our children; b) continue to be a major contributor to the Illawarra and Australian economy; c) provide a solid foundation for the manufacturing industry in Australia. 3. Challenges we must meet 3.1 Steel businesses around the world are experiencing low and falling prices. Intense competition from other steel companies and alternative materials in a global economy means only the most efficient will survive. The changes to our markets are not temporary - the tougher business environment is here to stay. And everyday our local community is less forgiving for how we impact on peoples' lives. 3.2 To stay in business for the long term we all must be involved in developing and achieving business plan goals. The following captures our challenges, key actions and outcomes: Challenges Individual Responsibilities Organisation Responsibilities Goals 1. Care for yourself · Improve safety, health and environment Zero injuries Price Reduction · Develop new markets Zero environmental incidents Reduced costs Increasing costs · Cut costs 2. Care for others Returns to justify reinvestment · Increase output Improved productivity More imports · Allow people to work to full potential 3. Care for the Community Support business · Work with the community 3.3 If we are to achieve all these things we must, more than ever before, work together to make our business viable. We recognise that: a) success will only come through the initiative and teamwork of everyone; b) we all must care for ourselves, others and the business c) we must be prepared to challenge tradition where it is at odds with the needs of the business; d) we all need to do whatever is safe, logical and legal to get the job done in the most efficient way possible; and, e) find ways to make changes faster so that we can better respond when things get tough. 4. Principles to guide our business All leaders are obligated to lead in a way that ensures the long term security of all those who rely on our business. To do so requires that: 4.1 We live by our agreed values of safety, honesty and excellence. We demonstrate them consistently in our normal working lives. 4.2 We are committed to the prevention of all unsafe acts and the elimination of all hazards in the workplace. 4.3 We are accountable for our own performance and growth and understand that we will only have employment if we have a sustainable business. 4.4 We establish and adhere to performance standards for everything we do. 4.5 We are committed to the prevention of every type of loss. 4.6 We build our success on good relationships, teamwork and technical competency. 4.7 We recognise and reward people for their skills, flexibility, commitment and excellence in improving our business performance. 4.8 We respect the differences that naturally exist within our workforce and seek a workplace where people have a sense of belonging and can contribute to their full potential. 5. Developing employment conditions which support teamwork and continuous improvement 5.1 We aim to create an environment where everyone can contribute to the best of their ability to make our business successful. 5.2 During the life of this agreement, we will undertake a fundamental review of our remuneration and conditions of employment to ensure that they support teamwork and continued improvement of business performance. The review will include consideration of such things as:- a) a common method by which relative job worth can be measured and a rate of pay established; b) wage/salary systems which encourage people to work together, focus on getting the job done in the most efficient way possible and provide income stability; c) payment systems which better reflect the capacity of the business to pay and allow everyone to share in the success of the business; d) shift systems and hours of work which better meet the needs of the industry whilst balancing lifestyle and OH&S considerations; e) common leave entitlements and other conditions of employment. 5.4 A plant-wide framework for these new employment conditions will be developed with involvement of management, unions and all employees. The agreed new conditions will be introduced progressively through departmental and workgroup redesigns. 5.5 The above conditions are aimed to support work systems based on teamwork. These can only be developed from within workgroups and departments. To this end, comprehensive work redesigns are to be encouraged rather than making piecemeal changes. The timing of individual redesigns needs to be driven by the specific needs of departments to complement their cultural change agendas. 5.6 A steering committee involving various senior managers and union officials will be established to develop a framework for the above changes and to encourage and monitor the redesign process. 6. Our behaviour whilst at work 6.1 If the business is to be successful and to ensure that we care for ourselves, each other and the environment, there are certain standards of conduct and performance to which we must all work. And we accept that when these standards are breached employees are held accountable for their actions. 6.2 Over the years, these standards have become less clear than they were many years ago. 6.3 During 1999, a code of conduct will be developed to clarify those standards of behaviour and performance we expect of each other in the workplace. It will contain agreed processes for how individuals will be treated if they don't meet expectations. It will also provide a common mechanism by which all employees can resolve issues and grievances. 6.4. To build on this code of conduct, workgroups will be encouraged to develop their own expectations of each other and to agree how they will work together to lift the performance standard of the team. While this may be done where there is a recognised need, it will normally be a key component of any redesign process and the establishment of team systems. 7. Maintenance direction 7.1 We recognise maintenance people as essential partners in all aspects of the business, focussing on reliability and failure reduction of the plant. We want to build a highly skilled and motivated maintenance workforce that is valued as a part of the team. 7.2 During the life of the agreement, discussions will continue to further clarify the direction for maintenance within the Steelworks to achieve best practice plant reliability and reduced maintenance costs. This will include a review of the appropriateness of maintaining the current plant-wide graded trades structures. In undertaking such a review, we recognise that much of our current training is inefficient or not tailored to specific needs of departments and that we must also be prepared to challenge how maintenance work is organised to take advantage of people's higher skill levels. 8. Respecting diversity 8.1 We are a large workforce, with people from many different backgrounds, of different ages, differing abilities and different ways of relating. We are also a predominantly male culture, which is not always welcoming of women. 8.2 We recognise that for everyone to perform to the best of their ability and enjoy their work, we need to develop more understanding and respect for the natural differences that exist between us. This requires many of us to shake off old prejudices and find fairer ways to relate to others. 8.3 During the life of this agreement, steps will be taken to identify and address those things which limit or discourage people from feeling and being part of this organisation. 9. Returning injured employees to meaningful work 9.1 Until recently, we have not been very good at rehabilitating injured employees or those with serious health problems. As a result, we have many people who are either not able to fulfil the key requirements of their job or who have been moved into "made up" roles. In doing so, we have not done the right thing by individuals, their workmates or the business. 9.2 There are a small number of injured people who do not actively and genuinely participate in rehabilitation with a view to resuming their normal position. 9.3 Agreement to improved rehabilitation arrangements is reflected in the Divisional Procedure Rehabilitation of Work Related Injury Employees (DIV-SHR-08-01 ) . This procedure is reflected in the Rehabilitation Policy contained in Attachment 1 9.4 Whilst the above rehabilitation procedure has been designed to apply to recent and future injuries, we recognise that many of its underlying principles have application to employees with longer standing restrictions. There will be focused case management to address the circumstances of these employees with the primary aim being to return them to productive authorised positions. 10. Security for people affected by workplace changes 10.1 Security of employment is important for improving working relationships, trust and cooperating with change. We do not want an environment where everyone is working in fear of losing their employment. We want an environment where people focus on doing their jobs safely and well, implementing improvement actions, adapting swiftly to change and caring for the business. Real employment security will only be achieved by successful business performance. Working together in implementing change and improvement, will maximise the security for everyone. 10.2 While workplace change, new technologies, changes in operations will be ongoing and may lead to employees being made surplus, every opportunity will be taken to effect changes through voluntary means and natural attrition. 10.3 Employment security is provided for the period of this agreement subject to the provisions of this section and the implementation of actions and undertakings outlined in this agreement. Where employees are made surplus, the relevant union/s will be advised and the following principles will apply: a) where suitable positions are available: An employee can reject two positions that become available. The next suitable position must be accepted by the employee. Employees will remain in their current Department whilst awaiting a new position. b) where only one suitable position is available: There will be situations where individuals are only offered one suitable position, because of the employee's particular skills and abilities. In these cases, the employee will transfer to where their skills and abilities can be used. c) where no suitable positions are available: Each employee will be managed on a case by case basis. Employees will be required to participate in a career transition, retraining, job search or outplacement programme sponsored by the Company to maximise opportunities for alternative employment recognising that employees cannot be maintained as surplus indefinitely. A flow diagram outlining this procedure is provided in Attachment 2. 10.4 The extension of employment security under the above arrangements requires that displaced employees take responsibility for their future and genuinely seek new positions and opportunities. 10.5 Any difficulties or issues arising out of the procedure described in 10.4, will be discussed with the involvement of the relevant Steel Union(s) where appropriate. 10.6 Major closures or significant unexpected events will be treated as special cases and will be discussed separately in advance of the event. 10.7 Changes to work arrangements can result in people having to move to different shift systems which provide lower ordinary time earnings. When this happens, we want people to have "fair warning" so that they have time to adjust their financial situation to suit. To provide for this, the Extended Notice of Shift Changes outlined in Attachment 3 will apply. These arrangements do not apply to roster changes which are driven by normal market fluctuations. 11. Continuing commitments from previous agreements Previous Steel Industry Agreements contained various understandings which will continue to apply but are not repeated in detail in this agreement. However, we want to build on them as follows: 11.1 Safety - continue our efforts towards achieving an injury free workplace. 11.2 Consultation - improving everyone's understanding of our business performance and encouraging them to be involved in improvement. 11.3 Employee development - making our training systems more efficient and making sure our training meets changing business needs. 11.4 Use of contractors - continuing to use contractors where there is a sensible business case to do so. 11.5 Relationships and trust - promoting a caring organisation and enhancing the level of trust between all groups of employees. Coverage and duration of this agreement This agreement applies to employees of BHP Steel (AIS) Pty Ltd (trading as BHP Integrated Steel) who are employed at the Port Kembla Steelworks. It will operate until 30 September 2001. This agreement will be reviewed at least annually to ensure that it is meeting the needs of the business and employees. Any variation to this agreement arising from such a review will be agreed between the parties. 12 It should be noted that the Steel Industry Agreements emerged following the Steel Industry Plan. That Plan commenced on 1 January 1984 and operated for five years. It was superseded by the National Steel Industry Development Programme Agreement, a national framework agreement. Local Steel Industry Agreements arose in consequence of that framework agreement. The Agreement represents the current form of those arrangements which apply to employees engaged at the Port Kembla Steelworks. Nature of the Proceedings 13 The Commission issued a statement on 19 March 2001, clarifying the nature of the proceedings (having regard to the agreement reached between the parties) and the procedures which it proposed to be applied in the hearing of the preliminary matter. 14 As to the nature of the proceedings, the Commission stated: The Commission has determined to hear this matter in the manner proposed by the parties. In doing so, however, the Commission does not propose to undertake such proceedings under the pseudonym or label "private arbitration", which expression the parties utilised to describe the agreed procedure. In my view, the procedure which is proposed by the parties is an appropriate means of resolving an extremely difficult and complex dispute. However, the arbitration of the question raised by the parties will be an arbitration conducted by the Commission in the exercise of its powers and functions under the Act. In that sense, the Commission would not act in any private function but will resolve the question raised by the parties in the manner proposed by them in accordance with the powers conferred upon, and the requirements imposed upon, the Commission under the Act. The determination made by the Commission will be binding upon the parties, although it is not intended that the determination will have wider ramifications for any future contracting out by the company or within the steel industry. 15 As to the procedure to be adopted, the Commission stated: The parties have fashioned a procedure by which this question would be addressed as follows: a) The question will be determined by arbitration. b) The proceedings will be in the nature of an inquiry with neither party bearing the onus of establishing any proposition raised by the question although the union parties will put their case first in the proceedings. It is envisaged that the Commission may require the parties to attend to certain matters in relation to the question, irrespective of the manner in which the parties may present their respective cases. c) The parties will be bound by the terms of any decision made by the Commission in answer to the question. There shall be no appeal from the decision of the Commission as to the question. d) There were a range of other procedural matters agreed between the parties which are unnecessary to repeat in this Statement. e) The Commission will apply its usual general principles in relation to the issue raised by the parties. f) The parties seek that the Commission determine a particular question arising in relation to the present industrial dispute as to the contracting out of maintenance (and earlier agreements in relation to that matter). They do not intend that any decision will be relevant to, or act as a precedent in relation to, any other contracting out of work at the Port Kembla steelworks or, for that matter, the letting of contracts generally in the steel industry. 16 At a directions hearing on 21 March 2001, the parties were invited to make submissions as to the nature of the proceedings as discussed in the statement and the proposed directions. The parties raised no issue with the statement and procedures proposed therein. The matter was programmed for hearing and directions were made accordingly. Initial Course of the Proceedings 17 On 21 March 2001, the Commission made directions in the following terms: 1. The company shall file and serve a document describing each stage of the maintenance review process, referred to in the question for determination, including any steps taken or intended to be taken by it as part of that process, on or before 4pm on Friday 23 March 2001. 2. The unions shall file and serve a document which indicates those aspects of the procedure described in 1 above which conflict with the existing obligations and undertakings referred to in the question for determination, including any steps which they contend should have been taken by the company in accordance with such existing obligations and undertakings but which have been omitted, on or before 4pm on Wednesday 28 March 2001. This document should also contain a brief outline of the particular aspects of any such existing obligation and understanding which are offended in each case where a conflict with such obligation and undertaking is identified. 18 In compliance with those directions the company filed on 23 March 2001 a document described as an "Outline of Stages and Steps in the Maintenance Review Process". 19 That document, which became exhibit A in the proceedings is set out, in full, below: Pre Statement of Shared Commitment 1. In November 1999 maintenance management proposed to the then President of the Port Kembla Steelworks (the "Steelworks") that BHP should investigate the outsourcing of the "doing part of maintenance" at the Steelworks. The type of work envisaged by this description was planned maintenance shutdowns and other routinely required tasks. This work has subsequently been referred to as "non-strategic" maintenance. 2. In April 2000 the Divisional Leadership Team ("DLT") of the Steelworks endorsed the further investigation of outsourcing non-strategic maintenance. 3. In April 2000 there was a meeting of plant managers to consider the pursuit of world class manufacturing performance. The concept of establishing manufacturing teams was accepted and the meeting developed ideas about the proper structure for "support teams", including maintenance. The consensus was that support teams may not need to be "owned" by BHP. 4. Following the April 2000 meeting of plant managers, working parties were established in the Ironmaking Red and continued in the Coal and Coke areas of the Steelworks. The purpose of these working parties was to prepare proposals for a transition towards the establishment of manufacturing teams and review of non-strategic maintenance. The working parties involved both staff and wages employees. Slabmaking maintenance repair had also earlier established a working committee to look at maintenance improvements. 5. In early July 2000 steel unions objected to the BHP investigation of the possible outsourcing of part of maintenance. 6. Senior BHP officers and steel union officials met on 14 and 24 July 2000 to discuss the maintenance issue. BHP confirmed it was looking for a cooperative and collaborative approach with unions and employees to the review of maintenance. 7. At the meeting on 24 July 2000 BHP and the unions discussed the development of a document setting out certain commitments and undertakings in relation to the review of maintenance. The Statement of Shared Commitment 8. On 24 July 2000 BHP provided by facsimile to each of the steel unions a document to reflect the discussions earlier that day. That document was titled "BHP Steel – Flat Products – Manufacturing Vision – Statement of Shared Commitment" (the "SSC"). 9. The SSC identified the concept of the "manufacturing vision" and the need to improve the performance of maintenance at the Steelworks. The SSC sets out 8 points as representing the "shared commitments and undertakings" of BHP and the steel unions in relation to the review of maintenance. 10. On 27 July 2000 Mr Graham Roberts (AWU) informed BHP that acceptance of the SSC was conditional upon BHP accepting the involvement of 5 full time delegates (3 AMWU, 1 AWU and 1 ETU). 11. Meetings of senior BHP officers and officials of the steel unions to discuss the maintenance review, its need for a methodology and the involvement of the 5 full time delegates were held on 2, 3 and 21 August 2000. 12. BHP wrote to the steel unions on 22 August 2000 confirming the need to improve maintenance performance, its commitment to the SSC, the existing operation of a number of working parties and the engagement of Booz Allen Hamilton ("BAH") to provide a methodology to assist in the maintenance review. The letter also confirmed that BHP saw that all affected employees should be involved in the maintenance review process. The letter accepted the involvement of 5 full time delegates up to 8 September 2000 and proposed that they attend a 5 day workshop to be facilitated by BAH. The Batemans Bay Workshop 13. The workshop at Batemans Bay was jointly facilitated by BAH and conducted from 4-8 September 2000. The workshop was titled the Strategic Maintenance Workshop. 14. The workshop involved 29 participants from the maintenance area, both staff and wages, including the 5 full time delegates. There were 6 facilitators involved, 3 of whom were from BAH. 15. Officials of the steel unions had an open invitation to attend the workshop, and Mr Wayne Phillips of the AMWU attended the closing session of the workshop on 8 September 2000. 16. The workshop considered the BAH decision making model and developed a definition of strategic maintenance and a list of criteria which could be used to apply that definition. It was agreed by those at the workshop that the BAH model and the definition and criteria which had been developed should be used by the working parties operating or to be established at the Steelworks as part of the maintenance review. 17. On 12 September 2000 a presentation was made by four representatives (2 staff and 2 wages employees) of those who attended Batemans Bay on the outcomes of the workshop. The presentation was prepared principally for plant managers, however, Steelworks management generally and officials of the steel unions were also invited. 18. In the weeks following 12 September 2001 this presentation was provided to approximately 95% of BHP's maintenance employees. The Working Party Process 19. Following the Batemans Bay workshop 8 working parties were established (or their operation confirmed) in various areas of the Steelworks to progress the maintenance review, utilising the methodology arising from the Batemans Bay workshop. 20. The 8 working parties operated in the areas of: (a) Coal and Coke; (b) Ironmaking; (c) Slabmaking; (d) Energy Services; (e) Hot Rolling Mills; (f) Tin Mill; (g) Transport and Site Services; and (h) Cryogenic Plant. 21. Each working party was comprised of up to 20 employees, both staff and wages. The 5 full time delegates were able to participate in any of these working parties as they desired. 22. Each working party attended a full week residential workshop similar to that which was conducted at Batemans Bay between 4-8 September 2000. The purpose of these workshops was to explore leadership principles for workshop members, build relationships between working party members, and to understand the BAH model and the methodology proposed for each working party arising out of the Batemans Bay workshop. 23. Certain members of each working party were able to devote their full time attention to the working party process and afforded by BHP such resources as they requested. 24. The working parties also had continuous opportunity to communicate with the workforce. This included newsletters from the working parties reporting on their activities and opportunities for working party members to meet with employees to discuss issues or obtain opinions on particular matters. Opportunities for improvements in behaviour and maintenance activities were identified. 25. Officials of the steel unions had an open invitation to, as required, participate in the working party process. Working Party Reports and DLT Considerations 26. In late December 2000 and January 2001 each of the working parties presented their reports to a management group. 27. The working party reports were considered by the DLT and on 16 January 2001 BHP issued a document to all employees acknowledging the progress of the maintenance review to date, including the reports of the working parties, and indicating how the DLT saw the review progressing from that point. The document indicated: (a) that the implementation of manufacturing teams would be pursued; (b) that potential "alliance partners" would be sought who could provide non-strategic maintenance work; (c) that a project manager would be appointed for analysis and implementation of the search for potential "alliance partners"; (d) certain areas of maintenance work were identified as non-strategic; and (e) a commitment by BHP to work with affected employees. "Alliance Partnership" Assessment 28. A project team was appointed to analyse the potential establishment of alliance partnerships. 29. On 22 January 2001 BHP invited 13 companies with experience in the provision of maintenance services to attend a briefing by BHP on the possible outsourcing. 30. On 31 January 2001 BHP conducted a briefing of the 13 companies referred to. The presentation provided background on BHP and the operations of the Steelworks. BHP also identified certain assessment factors which would need to be addressed if any of the companies wished to express an interest in the work which may be available. Those factors included: the contractors capability and experience in relation to workplace safety, the environment, maintenance capability, industrial relations and human resources (including training and experience and proposals for taking on any BHP employees), quality, technical and financial capability and any relevant steel industry experience. 31. In the week beginning 19 February 2001, 9 companies made presentations to BHP outlining their capabilities and the areas of maintenance within BHP in which they may be interested. 32. The presentations were attended by a group from the Project Team who ranked each of the companies against the assessment factors referred to above. 33. The assessments referred to were collated and appropriate weightings allocated based on the Kepner Tregoe process. 34. Members of the Project Team have also visited a number of the companies who have made expressions of interest and, in some cases, visited clients of those companies. Further Steps 35. The next step for the Project Team is to develop appropriate terms for any request for proposals ( " RFPs") to be issued to (preferred) maintenance contractors. 36. The RFPs will set out the scope of work (ie what has been determined to be non-strategic maintenance work) and other information such as the current cost to BHP of that maintenance work. The RFPs will also request the views of potential alliance partners about taking on some of BHP's current maintenance workforce and the terms upon which they propose that may be done. 37. BHP has engaged a consultancy firm, MAXX Implementations ("MI") to consider the possible relationship between BHP and any future alliance partners to determine what behavioural and structural changes might be necessary to maximise the effectiveness of any alliance. This study will look at existing behaviours within departments of the Steelworks, including communication flows, interactions of each department with existing contractors and internal service groups and the structure of those departments. It is expected that MI will provide some preliminary recommendations to BHP in the week beginning 26 March 2001. 38. The Project Team has also given consideration to what criteria should be utilised in evaluating any proposals which are submitted by potential alliance partners. To facilitate this process the Project Team has participated in a workshop conducted by Mr Wayne Gill from the BHP Corporate Alliances area in Melbourne. 39. When proposals are received they will be subjected to rigorous evaluation by BHP. This evaluation will include a thorough assessment of the potential benefits and advantages, and disadvantages, of accepting a proposal compared with those of prevailing maintenance arrangements. Proposals will be tested to see whether they demonstrate a more efficient and effective method of providing the relevant services than BHP's prevailing arrangements. This assessment will take into account the progress made by internal maintenance people at that time, resulting from the working parties findings and recommendations. 40. BHP intends to provide employees and the Steel unions with an opportunity for consultation and discussion in connection with the process of evaluation of proposals. It is envisaged that such consultation and discussion would include the following elements: (a) BHP will provide a description and explanation of the maintenance work which may be awarded to any Alliance Partner(s). (b) Appropriate relevant information will be shared with employees and the Steel Unions if requested, including information about BHP's evaluation of any proposals being considered (subject to proper protection of commercially sensitive or confidential information). (c) The opportunity will be provided for employees and the Unions to raise issues and present views which they consider should be taken into consideration in the evaluation of such proposals. (d) Where appropriate, BHP will review its position and hold further consultations and discussions. (Note: The parties would have the opportunity to seek the involvement of the Commission to assist in resolving issues that may arise) 41. BHP management will decide what maintenance work it intends to award to an Alliance Partner(s) taking into account all relevant considerations – including those arising from the consultations with employees and Steel unions, the commitments contained in the SSC and its existing industrial obligations. Further Notes 42. Throughout the period during which these processes are under way, employees are encouraged to continue to make changes that impact positively on plant and equipment reliability, maintenance down time and cost. Whilst the primary focus of BHP's energies and resources will be on the implementation of the "Manufacturing Teams" concept in operating departments and improvements in strategic maintenance work, it is important that improvement continues in all aspects of maintenance. The working parties have acknowledged that there are a number of improvement initiatives that employees could implement immediately. 43. Each department has developed processes to capture and address employee issues and concerns. (It is recognised that some areas of enquiry and concerns, eg employment benefits and conditions available from an Alliance Partner(s), will be unable to be concluded prior to the finalising of contracts with an Alliance Partner(s).) Each department has developed processes to ensure the involvement of and consultation with employees and unions. Generally, issues should be resolved at a departmental level. However, where this is unable to be achieved or the issue has site wide implications, the matter is to be referred to the relevant Vice President and unions for resolution. 44. A "People Plan", designed to ensure displaced employees are managed consistently and fairly, will be developed, in consultation with employees and unions. There are currently agreements and understandings about the treatment of and benefits available to employees whose jobs are affected by change. 20 On 30 March 2001, the unions tendered a document relating to the second direction issued by the Commission on 21 March 2001. That document is set out in full below: UNION RESPONSE There are points in the Companies pre statement of Shared Commitment document that the Unions disagree with. The Company has not maintained its commitment to either the integrity or intent of the current Steel Industry Agreement. In particular the areas of consultation, maintenance direction and employment security, have been ignored. The Statement of Shared Commitment has not been followed. · Point 1. All options and possibilities have not been explored for internal cost. · Point 2: The Company have not participated in good faith as pre determined decisions on outsourcing have already been made. · Point 3: No forum has been developed to resolve issues of contention as set out in point 6. · Point 4: No comprehensive review of internal maintenance has been undertaken and outcomes have already been decided and relayed to employees. How Should it Have Been Done It should have been done in accordance with point 7.2 of the Steel Industry Agreement. Quote: "During the life of the agreement, discussions will continue to further clarify the direction for maintenance within the Steelworks to achieve best practice plant reliability and reduced maintenance costs. This will include a review of the appropriateness of maintaining the current plant-wide graded trades structures. In undertaking such as review, we recognise that much of our current training is inefficient or not tailored to specific needs of departments and that we must also be prepared to challenge how maintenance work is organised to take advantage of people's higher skill levels". Discussions should have taken place through to the consultation process set out in the Consultation for Improvement Implementation document Tab 2, Point 4. Quote: Definition of Consultation "In providing for improved consultation, the Steel Industry Development Agreement records that consultation for improvement is a voluntary process through which employees will be encouraged to share in problem solving and decision making within their area of competence. It provides for union and employee input before Management decides on action affecting its employees." · The process of restructuring must involve unions and their members at all stages. See also clause 11 of the current Steel Industry Agreement. All steps in the Statement of Shared Commitment should have been followed in accordance with the clause listed above. 21 The unions subsequently produced a further document which responded directly to exhibit A. That document was in the following terms: Statement of Shared Commitment UNIONS' RESPONSE 1. This information was never given to the Unions'. The question is, who subsequently dubbed the work as "non-union strategic" and what relevance non-strategic or strategic for that matter has to the Agreed Process, i.e. Statement of Shared Commitment. 2. In April 2000, the Unions' did not know there was such as thing as a DLT 3. No indication was given by the Company to the Unions that this was taking place. 4. Most of the information we received on the formation of the Working Parties was second hand and related to mainly refining how the maintenance was done, and whether work packages revolving around annualized salaries were more appropriate. 5. Agreed 6. These meetings followed requests from the Union, after delegates meetings calling for industrial action 7. Agreed 8. Agreed 9. Agreed 10. Agreed 11. Agreed 12. Agreed 13. Agreed 14. Agreed 15. Agreed 16. Agreed. Full framework was not developed. 17. Agreed 18. We disagree on numbers. Areas such as Hot Strip Mill and Plate Mill had little or no presentation. 19. Disagree. The methodology discussed at Batemans Bay was purely the Booz Allen model and ignored the Statement of Shared Commitment. 20. Agree 21. Agree 22. Agree this happened but we don't accept that it was appropriate to just address the Booz Allen model without an understanding of a commitment to the 8 point plan agreed between the parties or an introduction on how to carry out a study on internal maintenance. 23. Disagree. Often resources were denied to Working Party participants. 24. Disagree. Time was limited and opportunities for improvements as indicated were no identified. There was no action plan put in place. 25. Agreed 26. Disagree. The reports given were only interim as no workgroup had completed a full review of internal maintenance. 27. Agree, but this document breached the process outlined in the Statement of Shared Commitment and plant managers briefed their employees in relation to the document, and indicated dates that their work would be outsourced in some departments. This indicated work identified as non-strategic. Non-strategic is not mentioned in the 8 point plan. 28. This was done without consultation or input from the Unions or employees. This is in direct conflict with commitments in the Steel Industry Agreement. 29. We have no knowledge of this and it conflicts with the Steel Industry Agreement and the Shared Commitment. 30. We have no knowledge of this and it conflicts with the Steel Industry Agreement and the Shared Commitment. 31. We have no knowledge of this and it conflicts with the Steel Industry Agreement and the Shared Commitment. 32. We have no knowledge of this and it conflicts with the Steel Industry Agreement and the Shared Commitment. 33. We have no knowledge of this and it conflicts with the Steel Industry Agreement and the Shared Commitment. 34. We have no knowledge of this and it conflicts with the Steel Industry Agreement and the Shared Commitment. 35. Should not happen until consultation has taken place and 8 point plan has been followed. This breaches the Steel Industry Agreement. 36. Should not happen until consultation has taken place and 8 point plan has been followed. This breaches the Steel Industry Agreement. 37. This breaches the Steel Industry Agreement re Maintenance Direction. A Consultant should be engaged to look at what structual and behavioural changes might be necessary to maximise the effectiveness of internal labour. 38. We have no knowledge of this and it conflicts with the Steel Industry Agreement and the Shared Commitment. 39. The 8 point process should be rigorously applied prior to this being given any consideration. External proposals should be assessed by BHP employees. Current Working Party findings and recommendations are incomplete. 40. Disagree to this clause as it involves consultation after the decision has been made. This breaches the Steel Industry Agreement and the 8 point plan. 41. We could agree with this clause except we believe it contradicts the clauses preceding it. 42. We reject this clause as it contravenes the Statement of Shared Commitment (1). It also contravenes the Steel Industry Agreement, Maintenance Direction clauses 7(1) and (2). The Working Parties did not complete their review of internal maintenance and improvement initiatives. 43. We need to complete the consultation process prior to any consideration of this clause. This clause breaches the Steel Industry Agreement, Security for People Affected by Workplace Change. 44. This already exists in the Steel Industry Agreement. 22 The positions of the parties, as expressed in exhibits A, B and C, represented the joinder of issues at the outset of the proceedings. Course of Proceeding Altered 23 At the commencement of the hearing of the question on 30 March 2001, the unions called Mr Graham Roberts, now an Industrial Officer of the AWU (Port Kembla Branch) and formerly the Secretary of that Branch, to give evidence. Mr Roberts gave evidence in a frank and forthright fashion as to the nature of the union's concerns arising from the company's review of maintenance. His evidence served to elucidate with much greater clarity the true nature of the issues arising in relation to the question. 24 Following the completion of Mr Robert's evidence on 31 March, the Commission required the parties to prepare a document setting out the particular issues requiring adjudication in relation to the question. The parties were directed to confer in relation to the preparation of that document. 25 Upon the commencement of proceedings on 1 April 2001, Mr Morris presented a draft arrangement for the resolution of the question and thereby hinted at the prospects of a resumption of conciliation. After some conferences with Mr W Tomlins, who appeared for the ETU, Mr A Gillespie, who appeared for the AWU, and Mr W Phillips, who appeared for the AMWU, the parties jointly applied for the arbitration be adjourned and the matter to be referred into conciliation. That application was granted and the conciliation commenced on 1 April 2001. 26 On 1 April 2001, the Commission issued a statement in relation to the procedures which would be adopted for conciliation. In that statement the Commission stated: In a commendable step, [the company] outlined through its solicitors, Blake Dawson Waldron, a draft arrangement for the resolution of the question. Whilst the proposal gives rise to a number of questions, it does, in my view, offer a real potential for an early resolution of the issues raised by the question for determination in these proceedings by conciliation or arbitration. A draft arrangement for consideration by the parties has been included in this Statement. In the conference this morning, the parties had agreed that the Commission may express a preliminary view as to the issues that may arise for consideration from the company's draft proposal. In the alternative, however, and without prejudice to the parties, the Commission has amended the terms of the draft arrangement in certain respects so that the draft arrangement comes forward for consideration by both parties. It does not represent the views of the Commission as to the terms of the arrangement, but simply anticipates a range of issues that will require the attention of the parties. In the circumstances, I direct the parties to confer in the following manner with a view to examining whether this initiative may wholly or partially resolve the question: (a) The first stage of this conciliation process will be for both parties to consider their position in relation to the proposed arrangement and thereby indicate whether they accept that conciliation should proceed upon the basis of that draft arrangement and the procedures identified in this Statement . This is without prejudice to their ultimate positions and with a view to indicating that the draft arrangement offers a possible basis for settlement. The outcome of these deliberations should be reported to the Commission before moving to the second stage. (b) The second stage of the process shall be for the parties to identify any issues arising as to the draft arrangements. At the completion of this stage, the parties shall be required to acknowledge to the Commission that the list of issues so identified are the entirety of the issues raised with respect to the proposed arrangement. The Commission will identify at this stage any issues which it considers should be attended to. (c) Subject to these steps being completed, the parties will then negotiate as to the draft arrangements, refining the words of those draft arrangements, if required, and, in particular, deal with the issues. The parties will amend the draft arrangements document so as to reflect the resolution of any issues and reduce the list of issues accordingly. The parties will report this outcome to the Commission. (d) Next, the Commission will conciliate upon the remaining issues. (e) Finally, any issue not resolved by conciliation shall be subjected to arbitral proceedings; which proceedings would be conducted on the same basis as the proceedings presently before the Commission to determine the question. 27 I do not set out the draft arrangements referred to in that statement in this decision as the draft arrangements there referred to were the subject of amendment during the course of the conciliation process. 28 On 2 April 2001, the Commission issued a further statement. In that statement it was noted that the steps required by paragraphs 5(a) and (b) of the statement of 1 April 2001, had been completed. Further, it was noted that a schedule of issues had been produced by the parties. In relation to the step required by paragraph 5(c), the Commission issued, in the further statement, an amended version of the draft arrangements for the resolution of the question. That amended version identified the remaining issues between the parties at that time and required the parties to confer in order to review the amended version of the draft arrangements and those issues. 29 In consequence of those conferences, the parties reported to the Commission late on 2 April 2001, that they had agreed to the amended draft arrangements for the resolution of the question, save for two issues which required resolution by the Commission in accordance with the procedures identified in paragraphs 5(d) and (e) of the Statement of the Commission issued on 1 April 2001. 30 The agreed terms of the arrangements for the resolution of the question at the close of proceedings on 2 April were as follows: Objective and Purpose 1. In August 2000 BHP and steel unions reached agreement with regard to a Review of Maintenance across the Flat Products Business. That agreement is contained in a Statement of Shared Commitment. The Statement of Shared Commitment defines the objectives of the Review of Maintenance including the achievement of a stepped change in maintenance performance that positively contributes to the delivery of cost efficient maintenance which in turn lifts operational equipment performance to worlds best standard. There remains a real urgency to implement improvements in maintenance cost, reliability and down time. The parties committed to 8 principles for the Review of Maintenance. The arrangements set out below are designed to: (a) help achieve the objectives of the review of maintenance; (b) ensure that the principles in the Statement of Shared Commitment are fulfilled; and (c) ensure that the provisions of the Steel Industry Agreement are fulfilled. Alliance Partnerships 2. BHP will continue with its current investigation of the potential establishment of Alliance Partnerships. The nature and process of that investigation is outlined in paragraphs 28 - 39 of exhibit A of these proceedings. One of the steps necessary to enable the process to be carried out is providing access to short listed potential Alliance Partners to enable such organisations to fully appreciate the work for which they are submitting a proposal to BHP. These processes are presently expected to be completed within approximately 3 months. Internal Maintenance Review 3. There should occur a further evaluation and review of internal maintenance arrangements with a view to having those arrangements tested at an appropriate time against the engagement of contractors. To this end: (a) The working parties shall be recommissioned and reconstituted with a view to answering a single question, namely, what steps are available to be taken in relation to the performance of maintenance by BHP employees which would make those arrangements most competitive in relation to the use of contractors. The working party shall not be required to evaluate the use of contractors or make any comparison between the use of contractors and internal maintenance. Upon answering the question, the working parties shall be disbanded. The original working parties will be reconstituted, with some variations where the company had previously selected employee representatives. Replacement employee representatives are to be elected from the shop floor. Further, participation by working party representatives shall be on a voluntary basis. (b) A joint consultative forum (the JC forum) will be established. The main purpose of the JC forum is to facilitate the efficient and effective completion of the work of the working parties. The forum shall be the initial means to resolve any difficulties associated with the activities of the working parties. The JC forum will comprise a management and employee representative from each working party, a nominated representative of each union (ETU, AWU and AMWU) and two nominees of the DLT. The JC forum will meet initially on 6 April 2001 at 8am, and weekly thereafter, or as determined by the forum. The forum may be assembled at short notice to deal with urgent matters. The JC forum will provide communication to all employees about the review. (Note: the individual working parties will communicate with employees in the areas to which the working party relates). Where issues arise in the JC forum which are not able to be resolved by agreement, they shall be quickly referred to the Commission for resolution. Overall Review and Evaluation 4. When BHP receives proposals from potential Alliance Partners it will be in a position to determine whether to adopt any Alliance partnerships taking into account the performance of maintenance using the arrangements then prevailing including any outcomes from the steps in paragraph 3 above. 5. If the unions wish to challenge evaluations undertaken by BHP in accordance with paragraph 4 above, they should notify BHP; in which case consultation shall proceed in accordance with paragraph 40 of exhibit A in the proceedings. Job Security 6. Any employee who becomes surplus as a direct result of these arrangements shall be covered by the provisions contained in clause 10 of the current Steel Industry Agreement. Reporting and Dispute Resolution 7. There will be no industrial action taken in relation to the review of maintenance and the various matters provided for in this document. 8. Any issues or disputes between the parties that arise in the implementation of these arrangements shall be referred to the Commission for resolution by conciliation, and if necessary arbitration in accordance with the procedures identified for resolving the question. The parties will report to the Commission on progress at times to be determined by the Commission. 31 In the result, there remained two issues for resolution in relation to the question. These issues were as follows: 1. Whether there should be a time limitation fixed upon the internal maintenance review and the overall review and evaluation. 2. Whether there should be a moratorium on offering voluntary redundancies to employees who may be potentially affected by the review of maintenance. 32 Upon confirmation of the terms of the draft arrangements and the remaining issues by the parties, the Commission adjourned into further conciliation proceedings on 3 April 2001 in accordance with paragraph 5(e) of the Commission's statement of 1 April 2001. The Commission chaired conferences as to those matters. 33 The parties subsequently reported to the Commission that they had reached agreement as to the remaining two issues. 34 As to the first issue, the parties agreed to amend the arrangements by inserting the following words in paragraph 4: "The target date of this evaluation by BHP is the week beginning 2 July 2001 although the date will be kept under active review by the Commission in its scheduled report backs". 35 As to the second issue, the parties agreed to amend the arrangements by inserting a new heading "Voluntary Redundancy Program" after paragraph 6, under which the following entry would appear: The voluntary redundancy program will remain in place. However, the parties will issue a joint communication to maintenance employees about these arrangements and confirming that those employees should be mindful of the review process provided for in these arrangements in considering any application for voluntary redundancy. The voluntary redundancy program will be the subject of consideration in the scheduled report backs to the Commission. 36 The parties also amended paragraph 3(b) so as to make the initial meeting of the joint consultative forum to be 12 April and to remove reference to a time of day for such meetings. The Arrangements 37 In the result, the parties have reached agreement as to a set of arrangements in resolution of the question ("the arrangements"). 38 The agreement is in the following terms: Objective and Purpose 1. In August 2000 BHP and steel unions reached agreement with regard to a Review of Maintenance across the Flat Products Business. That agreement is contained in a Statement of Shared Commitment. The Statement of Shared Commitment defines the objectives of the Review of Maintenance including the achievement of a stepped change in maintenance performance that positively contributes to the delivery of cost efficient maintenance which in turn lifts operational equipment performance to worlds best standard. There remains a real urgency to implement improvements in maintenance cost, reliability and down time. The parties committed to 8 principles for the Review of Maintenance. The arrangements set out below are designed to: (a) help achieve the objectives of the review of maintenance; (b) ensure that the principles in the Statement of Shared Commitment are fulfilled; and (c) ensure that the provisions of the Steel Industry Agreement are fulfilled. Alliance Partnerships 2. BHP will continue with its current investigation of the potential establishment of Alliance Partnerships. The nature and process of that investigation is outlined in paragraphs 28 - 39 of exhibit A of these proceedings. One of the steps necessary to enable the process to be carried out is providing access to short listed potential Alliance Partners to enable such organisations to fully appreciate the work for which they are submitting a proposal to BHP. These processes are presently expected to be completed within approximately 3 months. Internal Maintenance Review 3. There should occur a further evaluation and review of internal maintenance arrangements with a view to having those arrangements tested at an appropriate time against the engagement of contractors. To this end: (a) The working parties shall be recommissioned and reconstituted with a view to answering a single question, namely, what steps are available to be taken in relation to the performance of maintenance by BHP employees which would make those arrangements most competitive in relation to the use of contractors. The working party shall not be required to evaluate the use of contractors or make any comparison between the use of contractors and internal maintenance. Upon answering the question, the working parties shall be disbanded. The original working parties will be reconstituted, with some variations where the company had previously selected employee representatives. Replacement employee representatives are to be elected from the shop floor. Further, participation by working party representatives shall be on a voluntary basis. (b) A joint consultative forum (the JC forum) will be established. The main purpose of the JC forum is to facilitate the efficient and effective completion of the work of the working parties. The forum shall be the initial means to resolve any difficulties associated with the activities of the working parties. The JC forum will comprise a management and employee representative from each working party, a nominated representative of each union (ETU, AWU and AMWU) and two nominees of the DLT. The JC forum will meet initially on 12 April 2001, and weekly thereafter, or as determined by the forum. The forum may be assembled at short notice to deal with urgent matters. The JC forum will provide communication to all employees about the review. (Note: the individual working parties will communicate with employees in the areas to which the working party relates). Where issues arise in the JC forum which are not able to be resolved by agreement, they shall be quickly referred to the Commission for resolution. Overall Review and Evaluation 4. When BHP receives proposals from potential Alliance Partners it will be in a position to determine whether to adopt any Alliance partnerships taking into account the performance of maintenance using the arrangements then prevailing including any outcomes from the steps in paragraph 3 above. The target date of this evaluation by BHP is the week beginning 2 July 2001 although the date will be kept under active review by the Commission in its scheduled report backs. 5. If the unions wish to challenge evaluations undertaken by BHP in accordance with paragraph 4 above, they should notify BHP; in which case consultation shall proceed in accordance with paragraph 40 of exhibit A in the proceedings. Voluntary Redundancy Program 6. The voluntary redundancy program will remain in place. However, the parties will issue a joint communication to maintenance employees about these arrangements and confirming that those employees should be mindful of the review process provided for in these arrangements in considering any application for voluntary redundancy. The voluntary redundancy program will be the subject of consideration in the scheduled report backs to the Commission. Job Security 7. Any employee who becomes surplus as a direct result of these arrangements shall be covered by the provisions contained in clause 10 of the current Steel Industry Agreement. Reporting and Dispute Resolution 8. There will be no industrial action taken in relation to the review of maintenance and the various matters provided for in this document. 9. Any issues or disputes between the parties that arise in the implementation of these arrangements shall be referred to the Commission for resolution by conciliation, and if necessary arbitration in accordance with the procedures identified for resolving the question. The parties will report to the Commission on progress at times to be determined by the Commission. Resolution of the Question 39 The arrangements obviate the requirement for the Commission to determine the question. The issues raised by the question have been resolved by the arrangements. Thus, the preliminary matter arising for determination in the proceedings has been resolved by this process, although a question remains as to whether the Commission should make orders. 40 In consequence, the review of maintenance at the Port Kembla Steelworks shall now occur in conformity with the arrangements. Those arrangements are a testament to the good sense and maturity (as industrial citizens) of the parties. They are to be commended for their achievement in reaching this agreement which, in my view, is in the public interest. Interim Arrangements 41 Despite this, however, the arrangements do not constitute a resolution of the entirety of the issues giving rise to this industrial dispute between the parties. The ultimate determination as to whether any aspect of maintenance at the Port Kembla Steelworks will be let to contract may be the subject of further processes described in the arrangements. After a final evaluation, the agreed process of consultation between the parties may, by their very nature result in agreement (in part or in whole). It may also necessitate further arbitration as to the review of maintenance in accordance with the procedures stipulated in the arrangements. 42 It should be noted in this respect that the arrangements prevail over the terms of the Statement and the Agreement during the period of operation of the arrangements. However, the Statement and the Agreement will be relevant and apply to any process of consultation arising under the "Overall Review and Evaluation" and "Reporting and Dispute Resolution" sections of the arrangements. 43 Further, the Commission notes that the arrangements are not intended to act as a precedent for any review of operations or any other aspect of the contracting out of work (whether at the Steelworks or otherwise). Orders 44 Thus, the arrangements constitute an interim resolution of the industrial dispute. The question is whether the Commission should make any order with respect to those arrangements and, further, whether the Commission in doing so should make a further dispute orders after the expiry of the dispute orders made by it on 14 March 2001. 45 In ordinary circumstances, the resolution of the industrial dispute on an interim basis, in the manner described in this decision, would not call for the making of orders by the Commission. The arrangements derive from a process of conciliation in which the parties have participated in good faith. The parties have commendably made substantial compromises as to their respective positions. Their agreement arises in circumstances where the parties have bound themselves to accept the decision of the Commission in relation to the question. 46 However, there are two matters which I consider, on balance, warrant a contrary approach. Firstly, the parties have bound themselves to accept a decision of the Commission. Yet, strictly speaking, the Commission makes no determination of the question in this matter. The parties have reached an agreement, albeit in a conciliation process undertaken by the Commission. 47 Secondly, the substantial industrial action occasioned by this industrial dispute, in part, arose in spite of the best endeavours of the principals of the parties responsible for bringing about the highly desirable outcome reflected in those arrangements. In so describing this outcome, the Commission not only has in mind the interests of the parties, but the public interest including that specifically of the people of the Illawarra region. 48 Given the importance of these arrangements and, given this background, it is appropriate, in my view, to that the Commission make orders pursuant to s136(1)(d) of the Act. 49 The question arises as to the form of the orders. The arrangements reflect the terms of settlement in this matter. In order to convert those arrangements into an order some adjustments to the terms of the arrangements will be required. However, the Commission wishes to emphasise that the orders it shall make are based upon and designed to give effect to the arrangements. 50 A related consideration is whether the orders made on 14 March 2001 should be extended. 51 In my view, the making of the proposed interim orders (and indeed, the agreement reached between the parties) renders the order made on 14 March 2001 otiose. The orders restraining industrial action will be overtaken by the proposed interim orders. In any event, if industrial action were to occur in relation to the Hot Strip Mill (a principal component of the Orders of 14 March) then this matter could be relisted as a matter of urgency to deal with such matters. That aspect of the orders of 14 March which is in the nature of suppression orders is now also redundant, given the new procedures in the arrangements which designate how internal maintenance will be evaluated, and how alliance partners will be considered. Both of these issues were previously the source of much tension between the parties. Furthermore, I note that the parties have agreed to put in place elaborate procedures to communicate the terms of this decision and the arrangements. This process should be encouraged as a means of positively enhancing the initiatives found within the arrangements. 52 The Commission makes interim orders pursuant to s136(1)(d) of the Act as follows: 1. This order shall apply to the Australian Workers' Union, New South Wales ("the AWU"), the Electrical Trades Union of Australia, New South Wales Branch ("the ETU"), and the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union, New South Wales Branch (referred to collectively as "the unions") and the members of those unions employed by BHP Steel (AIS) Pty Ltd ("the Company") at the Port Kembla Steelworks and the Company. 2. BHP will continue with its current investigation of the potential establishment of Alliance Partnerships. The nature and process of that investigation is outlined in paragraphs 28 - 39 of exhibit A of these proceedings. One of the steps necessary to enable the process to be carried out is providing access to short listed potential Alliance Partners to enable such organisations to fully appreciate the work for which they are submitting a proposal to BHP. These processes are presently expected to be completed within approximately 3 months. 3. There shall occur a further evaluation and review of internal maintenance arrangements with a view to having those arrangements tested at an appropriate time against the engagement of contractors. To this end: a) The working parties shall be recommissioned and reconstituted with a view to answering a single question, namely, what steps are available to be taken in relation to the performance of maintenance by BHP employees which would make those arrangements most competitive in relation to the use of contractors. The working party shall not be required to evaluate the use of contractors or make any comparison between the use of contractors and internal maintenance. Upon answering the question, the working parties shall be disbanded. The original working parties will be reconstituted, with some variations where the company had previously selected employee representatives. Replacement employee representatives are to be elected from the shop floor. Further, participation by working party representatives shall be on a voluntary basis. b) A joint consultative forum (the JC forum) shall be established by the company and the unions. The main purpose of the JC forum is to facilitate the efficient and effective completion of the work of the working parties. The forum shall be the initial means to resolve any difficulties associated with the activities of the working parties. The JC forum shall comprise a management and employee representative from each working party, a nominated representative of each union (ETU, AWU and AMWU) and two nominees of the DLT. c) The JC forum shall meet initially on 12 April 2001 and weekly thereafter, or as determined by the forum. The forum may be assembled at short notice to deal with urgent matters. The JC forum shall provide communication to all employees about the review. (Note: the individual working parties will communicate with employees in the areas to which the working party relates). d) Where issues arise in the JC forum which are not able to be resolved by agreement, they shall be quickly referred to the Commission for resolution. 4. When BHP receives proposals from potential Alliance Partners it will be in a position to determine whether to adopt any Alliance partnerships taking into account the performance of maintenance using the arrangements then prevailing including any outcomes from the steps in paragraph 3 above. The target date of this evaluation by BHP is the week beginning 2 July 2001 although the date will be kept under active review by the Commission in its scheduled report backs. 5. If the unions wish to challenge evaluations undertaken by BHP in accordance with paragraph 4 above, they should notify BHP; in which case consultation shall proceed in accordance with paragraph 40 of exhibit A in the proceedings. 6. The voluntary redundancy program will remain in place. However, the parties shall issue a joint communication to maintenance employees about these arrangements which specifies that those employees should be mindful of the review process provided for in these arrangements in considering any application for voluntary redundancy. The voluntary redundancy program shall be the subject of consideration in the scheduled report backs to the Commission. 7. Any employee who becomes surplus as a direct result of these arrangements shall be covered by the provisions contained in clause 10 of the current Steel Industry Agreement. 8. There shall be no industrial action taken in relation to the review of maintenance and the various matters provided for in this document. 9. Any issues or disputes between the parties that arise in the implementation of these arrangements shall be referred to the Commission for resolution by conciliation, and if necessary arbitration in accordance with the procedures identified for resolving the question. 10. These orders shall operate on and from 9 April 2001 and shall remain in force until 6 July 2001 or until further order of the Commission. 53 These orders are based upon the arrangements. They are, therefore, intended to give effect to the objects and purposes of their arrangements. Directions 54 The matter will be listed for report back at 10.00am, Monday, 30 April; 10.00am, Tuesday, 29 May and 9.30am, Monday, 25 June. All sittings shall be in Sydney. 55 At each report back the parties shall be required to report on the progress of the review process generally. Particular attention shall be given at each such report back to the target date for evaluation and review (see interim orders 4 and 5) and the status of any voluntary redundancies at the Steelworks (see interim order 6). DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.