Industrial Relations Commission of New South Wales CITATION: Macquarie Generation v Labor Council of New South Wales [2005] NSWIRComm 327 Macquarie Generation PARTIES: Labor Council of New South Wales Construction, Forestry, Mining and Energy Union (NSW Branch) FILE NUMBER(S): IRC 4251 of 2002; IRC 3097 of 2004 CORAM: Harrison DP Notification under s 130 of a dispute re award negotiations and failure to comply with clauses of award, skills development program - structural efficiency principle - salary levels for power workers and tradespersons - classification flexibility - alleged failure to consult - failure to obtain agreement - failure to undertake salary review for additional skills - recommendations sought. CATCHWORDS: Held - award not breached - additional skills acquired and work across classifications consistent with skills development program and general wage increases pursuant to structural efficiency principle - recommendations sought refused - scope for parties to confer on salary levels - recommendation that employer proposal of one salary point increase available on demonstration of superior performance be acccepted. LEGISLATION CITED: Industrial Relations Act 1996 Goodlet v Electricity Commission of New South Wales (CIM 96/0269) Zoological Parks Board of New South Wales and The Australian Workers' Union, New South Wales (2004) 135 IR 56 Construction, Forestry, Mining and Energy Union (NSW Branch) and Delta Electricity [2003] NSWIRComm 135 Eraring Energy and Construction, Forestry, Mining and Energy Union (NSW Branch) [2005] NSWIRComm 13 Australian Workers' Union v Pasminco Australia Limited & Ors [2003] NSWIRComm 365 CASES CITED: 1991 State Wage Case (1991) 36 IR 362 1992 State Wage Case (1992) 41 IR 239 1993 State Wage Case (1994) 52 IR 157 1994 State Wage Case (1994) 57 IR 1 2004 State Wage Case (2004) 132 IR 190 HEARING DATES: 05/02/2005 DATE OF JUDGMENT: 10/06/2005 APPLICANT Counsel Mr J Phillips LEGAL REPRESENTATIVES: RESPONDENT Mr M Thistlethwaite Labor Council of NSW JUDGMENT: - 1 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: HARRISON DP Thursday, 6 October 2005 Matter No IRC 4251 of 2002 Notification under s 130 by Macquarie Generation of a dispute with Labor Council of New South Wales and others re award negotiations Matter No IRC 3097 of 2004 Notification Under Section 130 By Construction, Forestry, Mining and Energy Union (NSW Branch) of a dispute with Macquarie Generation re failure to comply with clauses of award DECISION [2005] NSWIRComm 327 1 These proceedings arise from difficult and complex negotiations between the parties in the making of the Macquarie Generation (State) Award 2002 339 IG 13 ("the 2002 Award"). Those negotiations were settled on the basis of a 10 point plan advanced by the Commission, ultimately modified and adopted by the parties in resolution of the 2002 Award and attendant industrial action. 2 The 10 point plan identified matters which had become stumbling blocks in the relationship between the parties and set them upon a course of resolution of those matters during the life of the 2002 Award. 3 Item 7 of the 10 point plan identified classification flexibility as an unresolved issue. The Labor Council of New South Wales ("the Labor Council") and affiliated unions had sought to renegotiate the tradespersons and power worker skills development programme in a manner which recognised additional skills acquired by power workers and trades persons in higher salary points. 4 There has been substantial but unsuccessful discussion and negotiation between the parties during the life of the 2002 Award. The failure of these attempts to resolve the issues has resulted in the present proceedings. 5 The case brought by the Labor Council asserts that Macquarie Generation has breached cl 3.8 of the 2002 Award, which states: Working up to skill level 3.8 Employees must: (a) Work up to their skill level, competence and training within the categories listed below; and (b) Work in accordance with the classification descriptions, salary points and Skills Development Programmes negotiated under Award Restructuring. Administrative Officer Engineering Officer Professional Officer Operator Power Worker Tradesperson (c) Classification flexibility - Following agreement through consultation with classifications affected and/or relevant unions where required, work can be performed across the classifications referred to in subclause 3.8(b) above. Those jobs which change as a result of classification flexibility will have the new position evaluated within one week of a signed Position Description becoming available. In the interim, for the three classification groups not covered by the current job evaluation system, additional skill levels can result in additional remuneration. Both parties agree that this clause will not be used to impede the development of flexible work practices. 6 It is appropriate to note that the three classification groups not covered by the current job evaluation system are Operator, Power Worker, and Tradesperson. There has been substantial restructure and salary point agreements in the Operator classification. 7 The remedy sought by the Labor Council and affiliated unions is a recommendation from the Commission, tendered in draft form by Mr Thistlethwaite (exhibit 1). DRAFT RECOMMENDATION The Commission recommends that: (a) Macquarie Generation adhere to the agreed terms of the Electricity Commission of New South Wales Trades Skills Development Program and the Electricity Commission of New South Wales Production Non- Trades Reclassification and Skills Development program. Specifically Macquarie Generation shall not direct or encourage employees in relevant classifications to perform work of other classifications (other than in the terms agreed stated in the above Skills Development Programs). (b) Macquarie Generation adheres to the terms of clause 3.8 (c) of the Macquarie Generation Employees (State) Award. Specifically Macquarie Generation shall not direct or encourage employees in relevant classifications to perform work of other classifications (other than in the terms agreed stated in the above Skills Development Programs), without the agreement of the employees affected and/or their relevant unions. (c) Macquarie Generation and the unions party to this dispute negotiate new skills development programs and classification descriptors for tradespersons and power workers that appropriately reflect the greater range of training and skills possessed by the current workforce in these classifications. 8 Mr Thistlethwaite, appearing on behalf of the Labor Council, brought evidence from Mr Allen Drew, President of the Energy Division of the Construction, Forestry, Mining and Energy Union (NSW Branch); Mr Peter Swann, a tradesman; and Mr Glen Cousin, a power worker, both Macquarie Generation employees. 9 Mr Phillips of Counsel, appearing on behalf of Macquarie Generation, brought evidence from Mr Ken Petersen, Employee Relations Manager, Macquarie Generation; and Mr Kevin Wykes employed by Macquarie Generation as Resources Engineer at Liddell Power Station ("Liddell"). 10 In order to obtain the recommendation sought the Labor Council needs to establish that: 1. Macquarie Generation have an obligation to adhere to the agreed terms of the Electricity Commission of New South Wales ("Elcom") Trades Skills Development Programme and Production Non-Trades Reclassification and Skills Development Programme ("the SDP's). 2. That Macquarie Generation have failed to comply with that obligation by directing and encouraging employees to work across classifications contrary to the SDP's. 3. Macquarie Generation has failed to obtain agreement through consultation with classifications affected and/or relevant unions for work across classifications. 4. Tradespersons and Power Workers have acquired a range of training and skills which justify a new skills development program and classification descriptions. 11 Macquarie Generation deny any breach of their award obligations and oppose the assertions of conduct relied upon by the Labor Council to support the recommendations sought. The Skills Development Agreement - Award History 12 The evidence of Mr Drew (Ex 3) describes in part the process of negotiation and arbitration before this Commission in Matter No 993 of 1990 (Mills DP) referred to generally as the "1991 Award restructuring" which led the parties to agreement upon the Elcom Power Production Non-Trades Reclassification and Skills Development Programme (Attach. B to Ex 3). The head note of this document states: Agreement incorporating determination in the judgment of Deputy President Mills dated 13 December 1991, in Matter No 993/90 and consideration of a meeting of the Specific Functions Committee held on 3rd August 1992. 13 This agreement became part of the Electricity Commission of New South Wales (State) Award 269 IG 896 ("the Elcom Award") by operation of clause 30 of that Award. 14 On restructure of Elcom to Pacific Power an enterprise agreement titled "Pacific Power Employees Enterprise Agreement 1994" was approved by the Commission. Subsequent disaggregation of the electricity generation industry resulted in the formation of Macquarie Generation, which led to the making of the Macquarie Generation Employees (State) Award 1996 300 IG 821 ("the 1996 Award") which replaced the Pacific Power Enterprise Agreement and the Elcom Award but for cl 30 of that Award, and registered agreements. 15 The 1996 Award was replaced by the Macquarie Generation Employees (State) Award 1997 306 IG 1179; and subsequently the Macquarie Generation Employees (State) Award 1999 317 IG 904 ("the 1999 Award"). 16 All of the awards were made by consent of the parties following negotiations, at times requiring some assistance from the Commission in conciliation and mediation. 17 The 1999 Award was subject to review pursuant to s 19 of the Industrial Relations Act 1996 ("the Act"). Those proceedings were heard by a Full Bench of the Commission (Walton J, VP, Harrison DP and Patterson C) in Matters No IRC 3973 of 1999 and 3091 of 2001. The 1999 Award was varied by consent of the parties on 2 July 2001 (33 IG 238) by replacing cl 2.2, Intent, Scope and Duration, with the following: 2.2 This Award replaces the Macquarie Generation Employees (State) Award 1997 and the Electricity Commission of New South Wales Award and registered agreements. This Award has attached to it Appendix A which Appendix exists until the 1st December 2001. Appendix A will be examined for its relevance to Macquarie Generation by a joint sub-committee for negotiation, agreement, conciliation and/or arbitration, if necessary, before the Industrial Relations Commission of New South Wales by the 1st December 2001. 18 Appendix A is the former cl 30 of the Elcom Award which, among other things, identified the SDP's as part of the award. 19 I note that there is no record of any discussion or reference to the Commission in accordance with cl 2.2. of the reviewed award. In these circumstances the Appendix to the award incorporating the SDP's ceased to exist on 1 December 2001. The Appendix was not included in the Macquarie Generation Employees (State) Award 2002 339 IG 13 ("the 2002 Award"). The SDP's continue to define the classifications for the purpose of cl 3.8 of the 2002 Award and is the only document to do so. 20 Subsequent to the s 19 review proceedings the 1999 Award, as varied in the review process, was subject to renegotiation resulting in the 2002 Award. 21 In cross examination (TR p 54 2/5/05) Mr Petersen accepts that trades and non-trades skills development programs are binding on Macquarie Generation. Mr Petersen strenuously resisted suggestions from Mr Thistlethwaite that the SDP's were outdated and denied that any discussion or proposal to improve on them evidenced an intention to replace them, but, properly understood, was a willingness to build upon the agreement that remained binding. 22 This was confirmed by the evidence of Mr Wykes, the Resources Engineer at Liddell, who confirmed (TR p 65 2/5/05) that the SDP's are the documents used in relation to the development of trades and non-trades staff through their skills matrix. 23 There is no dispute between the parties that the SDP's are those applicable and used at Macquarie Generation. Review of the Skills Development Programmes 24 The evidence is that a Macquarie Generation Maintenance Development Committee was established, holding its first meeting in October 2002. The work of the committee resulted in management and unions developing different SDP's, each allowing for advancement to salary point (SP) 18 for tradespersons (compared to SP 17 in the existing SDP), and to SP 15 for power workers (compared to SP 14 in the existing SDP). The difference between the parties is that the management proposal provides for advancement to the final salary point (18 trades, 15 power workers) on performance assessment, whilst under the unions' proposal advancement is on acquisition of skills by undertaking additional training. 25 The two proposals were put to a mass meeting of employees on 26 March 2003 which rejected the management proposal and endorsed the unions' scheme. No agreement has been reached. The unions informed Macquarie Generation of a refusal to work across classifications, resulting in the notification of a dispute pursuant to s 130 of the Act by Macquarie Generation in other proceedings, not further referred to by the parties in this matter. Terms of the Skills Development Programmes 26 The Power Worker SDP sets out a career path for power workers in four levels, identified as: 1. Power Worker Production - SP 9 2. Power Worker General - SP 11 3. Power Worker Intermediate - SP 12 4. Power Worker Advanced - SP 14 27 It is useful to restate the relevant features of the SDP here (emphasis added): OBJECTIVE To create a working environment where workers are able to develop both occupationally and personally, and to plan and enjoy satisfying careers irrespective of age or past experience, thus assisting the competitive requirements of the industry, and complying with the Structural Efficiency Principles of the 1989 State Wage Case. CAREER PATHS The programme will create career paths free of any artificial barriers to workers being able to undertake higher and further education, trade certificates, advanced certificates, diploma or degree. Several career paths will be available to workers, the main streams being: 1. Non-trades career paths at Power Stations and other EC locations. 2. Adult apprenticeship into trade or technical fields 3. Operator 4. Administrative/Clerical/Supervision ACCREDITATION Where possible, training will be TAFE recognised or accredited to ensure industry-wide acceptability and portability. … … SKILLS TYPES AND TRAINING Each employee in consultation with his/her employer will choose a career path on obtaining appointment to the grade of PWG. This will require the employee to select a skills package in an appropriate stream and to an appropriate level (PWI or PWA). Progress to higher levels within the career path will depend on satisfactory completion of relevant skill training, and will not be impeded. However, in the event of potential overloading in skill areas, the employer may limit training availability, and retains the right to limit appointments, above the grade of PWI. Notwithstanding this, however, once an employee is approved to commence training above his/her current pay point, there will be no impediment to his/her continued training until the next highest pay point is attained on successful completion of his/her agreed skills package or half package . A Power Worker Intermediate who is approved and satisfactorily trains and achieves a further half package must be provided with the opportunity to train and complete the training for the further half package of skills after a further period of twelve months' service from the date of achieving the first half package of skills beyond Power Worker Intermediate, subject to satisfactory service Employees who choose a career path and who subsequently decide to change, may do so subject to the same control as above. This includes those employees who initially choose a package which is aimed at PWI and should subsequently decide to aim for progression to PWA or a different career stream. SKILL PACKAGES Skill packages are groups of skills which a non-trades person may attain in a given career stream, the acquisition of which will qualify him/her for appointment to a higher grade. For the purpose of defining rules for formation of packages, skills are divided into four types: - Core Skills - General Skills - Career Skills - Service Skills A proposed listing of skills in these types is included in Appendix 1. The content of training modules will be revised and further new modules may be added to suit changing needs of the job and particular station needs. Rules for Skill Package Formation: PW1: 2 core skills, plus 4 general skills. Service skills may be substituted for general skills on a one for one basis, and career skills may substitute for care skills on a one for one basis. PWA: 3 extra core skills, plus 3 extra general skills. Progression from PW1 to PWA shall be in two stages. The first stage shall involve the attainment of 2 extra core skills and one extra general skill. The second stage shall involve the attainment of one extra core skill and two extra general skills. See under 'Skill Types and Training' for progression rules from PWI to PWA. One service skill substitutes for one general skill. One career skill substitutes for one core skill, or two general skills. Skills in a given package should derive from the table of suitable and optional skills for career streams nominated in Appendix 2. Actual skill packages are to be determined at individual sites within the framework of the above rules. PAYMENT FOR SKILLS Payment is for skills acquired rather than skills used. Skills acquired will be those recognised as meeting the needs of the Electricity Commission of New South Wales. Increments of pay will be available by progression to the next pay point on completion of training and demonstration of competence in a defined number of skills. MULTISKILLING During training employees will carry out or undertake tasks associated with the training, together with skills acquired. The range of skills required to be used from time to time include all skills acquired and recognised/ accredited under the programme. ENTRY POINT Entry point for all new starters will depend on skills held, training or education achievements and be to an appropriate specific level in the structure. Induction training will be compulsory for all new starters. DISPUTES SETTLEMENTS Disputes arising out of the above procedure shall be dealt with using normal industrial relations principles. STRUCTURE AND PROGRESSION Power Workers employed as at 8th February, 1991 who have transferred to the new salary scale according to their previous grade, will progress subject to approval, by completion of the packages (or half packages) of skills required for promotion except that where there is a deficiency of skills at their transfer point compared to a new employee who progresses in accordance with the rules for skill package formation, this deficiency is only required to be made up to a maximum of 2 core skills. 28 The Tradesperson SDP identifies three multi-skills trades classifications as: 1. Tradesperson - SP 13/14 2. Tradesperson Special - SP 15 3. Tradesperson Advanced - SP 16/17 29 Relevant features of the Tradespersons SDP are (emphasis added): 1. INTRODUCTION The aim of the programme will be to provide skills training to improve productivity and provide training that will lead to improved career opportunities for all trade staff. 2. CLASSIFICATIONS INVOLVED Over 30 trade classifications presently exist in the Commission. These classifications will be consolidated into three new multi-skilled trade classifications grouped into the three trade streams of Electrical, Mechanical and Metal Fabrication. Training modules will be available to give other trade staff similar career path opportunities. 3. PROPOSED NEW STRUCTURE AND CAREER PATH 3.1 The programme aims to provide staff with a high level of skills so they are able to complete the maximum range of tasks. The skills required by the multi-skilled tradesperson to achieve this will broadly be: - technical and general trade skills - organisational skills - supervising skills 3.2 The three multi-skilled trades classifications are: Tradesperson (Tp) Sal Pt 13/14 Tradesperson Special Class (Tp.SC) Sal Pt 15 Tradesperson Advanced Class (Tp.AC) Sal Pt 16/17 3.3 Trade classifications will be common across all Groups of the Commission therefore an employee can move from one Group to another within the Commission via an agreed process, It should be noted that some new modules specific to that Group may need to be undertaken prior to appointment (and may not be considered part of the SDP). However applicants may be appointed on the grounds that they have the capacity based on past performance to complete those necessary modules and a firm commitment is given by the applicant to complete the training in a reasonable time. 3.4 Employees who opt for no further training beyond their current level of training will continue to be paid at their initial transfer salary point and remain in their present Classification. 3.5 Subject to an employee being able to demonstrate successful completion of agreed training for progression and demonstrate the Skills and Abilities required an employee will be reclassified up to salary point 15. Positions at Tp.AC will be advertised and filled through normal appointment procedures. 3.6 An employee successfully completing the agreed training between classifications will be paid at the intermediate salary point. Training completed Sal. Pt 13 Apprenticeship and Induction Sal. Pt 14 120 hrs Sal. Pt 15 240 hrs Sal. Pt 16 360 hrs Sal. Pt 17 500 hrs (On transfer to the new Single Salary Structure existing Tradespersons will be credited with Training equal to those required from promotion to that salary point. This rate of pay and training points recognises the 'experience training' already gained by existing trades staff. It is not an assessment of the training points that would be allocated to the in-house training already undertaken. Existing staff, provided they have accreditation of the necessary training before the end of 1992 can progress up to and including salary point 17, provided that these staff demonstrate a commitment to the SDP and awareness of their present job requirements. A general review of this provision will be undertaken at the end of 1991 and if necessary a further review on an individual basis at the end of 1992. Training will include an additional compulsory module (approximately 40 hours) which related to Tp.AC classification.) 3.7 Employees will provide all their skills on the job from the time of accreditation, thus undertaking as much of a task as Possible. Should an employee, having undertaken an SDP fail to be reclassified, they may if they choose withdraw provision of those skills gained to move from their existing salary point to the next salary point. 3.8 Any dispute related to the assessment of an employees' training and development shall be referred to an agreed arbitration process. 3.9 Job evaluation will be available to allow appropriate relativities between different categories of workers within the award. … … Training Requirements Higher grade career path training, including operating, engineering, supervision, administration will be available for promotional opportunities for this group. Training will be made available to enhance existing skills/knowledge and experience and any prerequisites for promotion to the next EO classification (The generic Job Description for EO's in Salary Band 4 will apply or operating or administrative positions). 30 The SDP specifies the essential requirements, duties and training requirements for each of the three levels of Tradesperson, Tradesperson Special Class and Tradesperson Advanced Class. Common to the description of duties for each level is the following requirement: "Perform work which, while primarily involving the skills of the employees trade, may include work of other trades and non-trades staff which is incidental or peripheral to the primary task and facilitates the completion of the whole task." 31 The duties requirement for Tradesperson Advanced Class also states: "In order to gain experience, the Tp.AC may work, at their appointed grade, in the career path areas which are included in their Trades SDP. The Tp.AC will perform either a broader range of duties than a Tp.SC or exercise greater technical specialisation. The Tp.AC will work with technical guidance but will require less direct supervision and thus accept a greater level of responsibility for completion of tasks, eg organising, planning and loading a small workgroup. A Tp.AC may be required to assist in the provision of training, in conjunction with supervisors and trainers." 32 At the time of its introduction participation in the SDP was voluntary for individual workers who could choose to remain in their appointed position and not undertake skills acquisition training and not access the associated wage increases from moving up the salary point scale. 33 The extent of and type of work regarded as incidental and peripheral is subject to dispute between the parties. 34 Mr Drew's evidence is that a schedule of upskills, cross skills and subsidiary skills was developed at Liddell in 1992 subsequent to the establishment of the SDP (Attach. A to Ex 4). Mr Drew's evidence is that Attach. A, dated 7 February 1992, represents the agreement reached between Elcom and the unions regarding the range of skills a tradesperson can perform in non-trade areas as incidental and peripheral to their primary task. 35 Mr Drew notes that the subsidiary skills include elevated platform work, scaffolding, dogman and insulation handling; it does not include rigging and truck driving duties as currently undertaken by tradespersons within Macquarie Generation. 36 Mr Drew's evidence is that the Liddell document provided for the inclusion of additional skills, however, he has not been approached since the document was published in 1992 to consider or negotiate an alteration or addition to it. 37 Mr Wykes' evidence is that each power station developed a schedule of skills of the type referred to by Mr Drew for Liddell (Attach. A to Ex 4) which identified preferred non-trades skills which could, in accordance with the SDP, be performed by tradespersons, putting that the schedules were not meant to be exhaustive. 38 The Labor Council relied upon the evidence of Mr Glen Cousin, employed by Macquarie Generation as a Power Worker Advanced Level SP 14 at Liddell. Mr Cousin has worked at Liddell from 11 January 1986, commencing on that date as a cleaner with Elcom. 39 Mr Cousin elected to enter the SDP and undertook the appropriate training, acquired and used additional skills, and consequently moved from SP 12 to SP 13 and then 14. Mr Cousin deposed that subsequent to attainment of SP 14 he has acquired additional skills which equip him to undertake certain work usually performed by a tradesperson, 40 The evidence of Mr Cousin is that he performs some work across classifications putting that he regularly performs fitter's work, including conveyor roller changes, tyre changes on ash pumps and minor maintenance work on gibault joints. 41 Mr Cousin deposed that he is a member of the Maintenance Development Committee, putting that he has never been consulted concerning the cross classification duties nor is he aware of any consultation with the CFMEU or agreement by unions that Power Workers should, or could, undertake work of a tradesperson. 42 In reply to Mr Wykes Mr Cousin deposed that he often performed work without the presence of a tradesperson, for example, during outages he undertakes repairs and changes to tracking frames and changes of rollers on mine conveyors without the presence of a fitter. Examples of other work given are gland seal adjustments on the ash and dust pumps and work associated with sheer pins on the ash crusher. 43 Mr Cousin accepted that in making his choice to participate in the SDP he had been consulted, he did not accept a proposition from Mr Phillips that this consultation included working across classifications, putting that it was limited to work within the skills matrix. 44 Mr Cousin deposed that the work he did went beyond the five core and seven general skills, refuting Mr Phillips' suggestion that, as Power Worker Advanced, he is required to work beyond the minimum requirements of the position without additional remuneration. 45 Mr Cousin acknowledged that he could pursue career advancement in the Operator or Tradesperson stream, deposing that he had made an unsuccessful application for an Operator's position and was disinclined to pursue the Tradesperson stream as taking on an adult apprenticeship involved a period of payment at less than junior apprenticeship wages. 46 Mr Cousin put that he continued to be willing to use his skills but would like to see the pay scales varied. 47 The Labor Council also brought evidence from Mr Peter Swann, employed as a Tradesperson Fitter and Machinist and Electrical Tradesperson at Liddell. Mr Swann commenced employment with Elcom in January 1981 as an apprentice fitter and machinist, completing his trade course in 1984. In 1996 he commenced an electrical trades course of three years at TAFE, completing all of the requirements for a Certificate in Electrical Trade which he received in December 1998 and has, since that time, worked in his current position. Mr Swann has been paid at SP 17 since 1992. 48 Mr Swann deposed that he is completely multi skilled across the mechanical and electrical trades and can undertake almost any maintenance work at the power station. Mr Swann's evidence is that he also performs work traditionally done by a power worker, including rigging and crane observer work, driving the overhead crane, use of pendant cranes, cleaning of work areas, pressure cleaning jobs and parts before work can commence, and protective painting on completion. Mr Swann deposed that he also carries out truck driving and holds a licence to drive heavy rigid trucks. 49 Mr Swann deposed that all tradespersons in his crew undertake traditional power worker duties and that the power workers that he works with often perform tradespersons' duties. Mr Swann deposed that many tradespersons occasionally perform operating duties. 50 Mr Swann's evidence is that he has never been consulted about the range of duties he should perform. Mr Swann deposed that he undertakes duties within the wide range of his abilities as directed by his foreman. Mr Swann deposed that on occasion he has declined on the basis that he is not being paid adequately for the task, usually resulting in the foreman "leaving him alone for the day" but repeating the request at a later time. Mr Swann deposed that as a member of a work team he feels obliged to perform the work and always ends up doing the task eventually. 51 In cross examination Mr Swann put that he preferred to be the best tradesperson rather than pursue an Operator, Engineering or Technical career path. 52 In cross examination Mr Swann acknowledged that participation in the SDP was optional and that he had made a positive choice to participate, which he understood would result in working flexibly across classifications and an increase in remuneration by payment at a higher salary point level. 53 Macquarie Generation brought evidence from Mr Kevin Wykes, currently employed by Macquarie Generation as the Resources Engineer at Liddell. Mr Wykes has been employed in the Power Generation industry from 1 March 1977, then by Elcom and subsequently successor organisations, becoming part of Macquarie Generation from its inception and taking up his present position in July 2001. 54 Mr Wykes was the Liddell management representative on the Maintenance Development Committee, which he deposed met on many occasions after October 2002, including inquiries and inspection of other workplaces. 55 Mr Wykes was called to give evidence in response to that of Messrs Cousin and Swann and takes issue with their evidence that the SDP does not require them to work beyond the minimum requirements. 56 Mr Wykes' evidence that the multi-skilling provision of the SDP and cl 3.8 of the Award have been understood and applied by Macquarie Generation to require a Power Worker Advanced and Advanced Tradesperson to utilise all of their skills. 57 Mr Wykes deposed that Macquarie Generation assisted with and contributed to the training necessary to obtain skills for advancement sought by employees who volunteered to obtain additional skills. 58 Mr Wykes deposed that Mr Swann requested and volunteered to obtain some of the skills he currently holds and was assisted to obtain these skills without reservation as part of his continued career development. 59 Mr Wykes was unaware whether the training manuals and skills matrix schedules were agreed with the relevant unions, putting that they have been applied for many years with full knowledge of all parties. SUBMISSIONS 60 The Labor Council put that the SDP's do not allow progression beyond SP 17, achieved by 500 hours or equivalent of training for tradesperson; and SP 14, achieved by obtaining five core and seven general skills for power workers. The Labor Council submits that tradespersons and power workers have acquired skills beyond the upper limits of the SDP's and have not been afforded reclassification or additional remuneration. 61 The Labor Council submits that Macquarie Generation have breached cl 3.8(c) of the award by requiring employees to work across classifications without the requisite consultation and agreement and are further in breach of cl 3.8(c) by failing to reclassify jobs which change as a result of classification flexibility. In particular, the Labor Council relies on that part of cl 3(c) of the award which states: "In the interim, for the three classification groups not covered by the current job evaluation system, additional skills can result in additional remuneration." 62 The Labor Council submits that cl 3.7 of the Trades SDP supports the requirement for consultation and agreement as it allows an employee to withdraw provision of skills if not reclassified. 63 Macquarie Generation submits that the terms of the SDP provide the necessary agreement of the employee/s and union, working in accordance with it for work across classifications. 64 The submissions of Mr Phillips emphasise that the SDP's arose out of proceedings dealing with the 1989 State Wage Case 30 IR 107 in which the Structural Efficiency Principle was adopted. The Structural Efficiency Principle is found at 30 IR 117 in the following terms: STRUCTURAL EFFICIENCY Structural efficiency adjustments allowable under the State Wage case decision of 4 October 1989 will be justified in accordance with this principle if the Commission is satisfied that the parties to an award have co-operated positively in a fundamental review of that award and are implementing measures to improve the efficiency of the industry and provide workers with access to more varied, fulfilling and better paid jobs. The measures to be considered should include but not be limited to: establishing skill-related career paths which provide an incentive for workers to continue to participate in skill formation; eliminating impediments to multi-skilling and broadening the range of tasks which a worker may be required to perform; creating appropriate relativities between different categories of workers within the award and at enterprise level; ensuring that working patterns and arrangements enhance flexibility and the efficiency of the industry; including properly fixed minimum rates for classifications in awards, related appropriately to one another, with any amounts in excess of these properly fixed minimum rates being expressed as supplementary payments; updating and/or rationalising the list of respondents to awards; addressing any cases where award provisions discriminate against sections of the work-force. Structural efficiency exercises should incorporate all past work value considerations. 65 Mr Phillips further submits that the Non-Trades SDP was subject to a decision of his Honour, Deputy President Mills in Matter 993 of 1990 where his Honour refers to the Structural Efficiency Principle having two important measures, being: · "establishing skill-related career paths which provide an incentive for workers to continue to participate in skill formation; · eliminating impediments to multi-skilling and broadening the range of tasks which a worker may be required to perform" 66 Macquarie Generation refute the argument that the SDP does not provide progression for tradespersons and power workers beyond SP 17 and 14 respectively. Macquarie Generation submits that a salary review and increase is not automatic for tradespersons with greater than 500 hours training or a power worker with more than five core skills and seven general skills who work across classifications. Macquarie Generation submits that cl 3.8 of the award allows for additional remuneration, however, this can only come about where a specific claim is made by or on behalf of an individual and the merit of the claim assessed. 67 Macquarie Generation submits that a performance increment is available for individuals who are assessed as achieving superior performance, putting that a number of applications have been made and the one salary point increment paid. 68 Macquarie Generation submits that the Labor Council argument is not supported by item 3.7 of the Trades SDP, putting that the ability to withdraw skills is only available in the training and development process leading up to SP 17. Macquarie Generation put that, once appointed to SP 17, an employee cannot withdraw availability of skills acquired. 69 Macquarie Generation submits that the Labor Council and unions have not identified any employee who seeks to withdraw any skills. 70 Macquarie Generation puts that the judgment of the Chief Industrial Magistrate in Goodlet v Electricity Commission of New South Wales (CIM 96/0269 30 May 1996) supports the conclusion that the Power Workers SDP does not preclude a power worker from possessing more than five core skills and seven general skills. 71 Mr Goodlet was a Power Worker Advanced, employed by Pacific Power at the Vales Point "A" demolition site at SP 14 pursuant to the Pacific Power Employees Enterprise Agreement 1994. The CIM (Miller) described the issue of the matter before at p 4 of his judgment in the following terms: "As indicated earlier the issue between the parties is really the construction of Clause 3.16 as the FEDFA members say as employees they are only required to provide and work to their recognised skills whereas Pacific Power argue that the requirement of five core and seven general skills is only a threshold or minimum requirement to Power Worker Advanced with no limit as to the skills to be obtained by a PWA." 72 The issue before the CIM was a claim for recovery of wages by the Federated Engine Drivers' and Firemen's Association (FEDFA) (a predecessor to the CFMEU) on behalf of Mr Goodlet for time he was "stood down" for refusal of duty in accordance with the no work no pay principle when he refused to operate a crane in observance of an industrial ban that employees would not work outside the SDP. 73 The CIM noted at page 5 of his judgment that: "He [Mr Goodlet] has used the crane before but in a time of flexibility and goodwill with his employer. He [Mr Goodlet] said when the flexibility in workers' over award payment ceased he said it was only fair that an employee should refuse to do extra skills not paid for". 74 In finding against the FEDFA and in favour of Pacific Power the CIM held: "In the context of the Enterprise Agreement and the restructuring agreement a career structure was established for the workers involved. That structure particularly recognised training and the attainment of skills. It encourages Pacific Power's employees to attain further skills. There is nothing in Clause 3.16 that limits the work of an employee to the level of his "recognised" core and general skills. If this was the case then it could be argued that Mr Goodlet as one of his core skills is "certificated gardener" and as he is not required to use that skill on a demolition site upon which he was working at the relevant time therefore he is unable to work up to the skill level, competence and training for the tasks that he was required to perform. Simply, under the agreement, the possession of the 5 core skills and 7 general skills is the qualification required to attain Power Worker Advanced status. It is an essential requirement to attain to meet the level but does not mean that the woker having met that level is precluded from attaining other skills, broadening his experience and training and using those skills, training and experience in the performance of his work. It does not set the limit of the work that such an employee can be directed to perform. Neither s151 of the Act or the Enterprise Agreement has the effect of placing upon the employer the obligation to accept a willingness on the part of the employee to perform some of the duties but not others. It is not for the employee to make a choice of what he will do and not do. In my view, the complainant is not entitled to the salary claimed." 75 The Labor Council submits that the decision by the CIM in Goodlet is distinguished from this matter, putting that Mr Goodlet was accredited and had performed the tasks in issue previously; whilst this matter concerns power workers possessing skills and performing work outside the Power Worker classification and SDP, in particular, the work of a tradesperson. The performance of trades work was not subject to consideration in Goodlet and accordingly unhelpful in the present proceedings. 76 The Labor Council submits that Macquarie Generation had required tradespersons to undertake duties beyond the agreed incidental and peripheral tasks as detailed in attachment A to exhibit 4, Mr Drew's second statement of evidence. The Labor Council relies upon the evidence of Mr Swann that he undertook rigging and truck driving duties, which are not found in the schedule of additional duties detailed by Mr Drew, which it is put is the classification of the subsidiary skills that could be performed by tradespersons and represents the extent and limit of agreement between the parties for the purpose of consultation and agreement required by cl 3.8(c) of the award. 77 The Labor Council refutes the argument that acceptance of the SDP and working to it constitutes agreement for the purposes of cl 3.8(c), which the Labor council submits was inserted in the award on 11 December 1997 and is not found in preceding awards. Clause 3.8(c) states: (c) Classification flexibility - Following agreement through consultation with classifications affected and/or relevant unions where required, work can be performed across the classifications referred to in subclause 3.8(b) above. Those jobs which change as a result of classification flexibility will have the new position evaluated within one week of a signed Position Description becoming available. In the interim, for the three classification groups not covered by the current job evaluation system, additional skill levels can result in additional remuneration. Both parties agree that this clause will not be used to impede the development of flexible work practices. 78 The Labor Council submits that this implies future consultation and agreement in respect to classification flexibility and work beyond the then established SDP's. 79 The Labor Council submits that the introduction of cl 3.8(c) into the award in 1997 related to further job redesign to allow further breakdown of traditional demarcation barriers between trades and non-trades classifications beyond the extent of the 1991 award restructure and SDP's. 80 The Labor Council relies upon the evidence of Mr Drew that such further agreements pursuant to cl 3.8(c) have been negotiated between Macquarie Generation and the unions for mobile plant operators at Liddell, shift power workers at both Liddell and Bayswater, and operators at Bayswater. 81 The Labor Council submits that the primary task of the Maintenance Development Committee was to reach an agreement on classification flexibility beyond the terms contained in the SDP's and that its failure to do so results in no agreement pursuant to cl 3.8(c). 82 The Labor Council submits that in the absence of an agreement pursuant to cl 3.8(c) a requirement by Macquarie Generation for tradespersons and power workers to work across classifications is a breach of the award. 83 The Labor Council contends that the recommendations sought would settle a long running dispute between the parties by clearly defining the terms under which tradespersons and power workers may work. 84 The Labor Council puts that the recommendations will encourage the parties to reach further agreement related to classification flexibility and promote the original intent of the SDP's and cl 3.8 of the award. 85 Macquarie Generation puts that there is no case to answer in relation to any suggestion that it has breached the award. Macquarie Generation confirms that it is at all times ready to meet with the Labor Council and unions to discuss the development of a new SDP. 86 Macquarie Generation argues that in considering whether an award has been breached it is necessary to interpret the award correctly, applying the established principles of interpretation. Macquarie Generation refer to Zoological Parks Board of New South Wales and The Australian Workers' Union, New South Wales (2004) 135 IR 56; Construction, Forestry, Mining and Energy Union (NSW Branch) and Delta Electricity [2003] NSWIRComm 135; Eraring Energy and Construction, Forestry, Mining and Energy Union (NSW Branch) [2005] NSWIRComm 13; and Australian Workers' Union v Pasminco Australia Limited & Ors [2003] NSWIRComm 365. 87 Macquarie Generation relies on the passage at para 36 of Pasminco wherein the Full Bench states: "The relevant principles to be applied when interpreting industrial instruments are well settled. See for example Kingmill Australia Pty Limited t/as Thrifty Car Rental v Federated Clerks' Union of Australia, NSW Branch (2001) 106 IR 217 and Construction Forestry Mining & Energy Union (NSW) v Delta Electricity [2003] NSWIRComm 135 at [44] – [46]. In essence, the primary consideration is the actual words used and the context in which they appear. The context of the words may extend beyond those in the immediate proximity to the document as a whole and also to other documents in which there is an association. The importance of the language or text of the instrument in its construction is referred to in the recent High Court decision in Australian Communication Exchange Limited v Deputy Commissioner of Taxation [2003] HCA 55 at [8] per Gleeson CJ (in dissent), [38] per McHugh, Gummow, Callinan, Heydon JJ, [59] per Kirby J (in dissent) and [115] per Hayne J (in dissent)." CONSIDERATION 88 The evidence does not support a finding that Macquarie Generation is in breach of cl 3.8 of the award. The primary obligations found in cl 3.8 are upon employees, not the employer. 89 It is inescapable that the SDP's were founded on the Structural Efficiency Principle first enunciated in the 1989 State Wage Case. The Structural Efficiency Principle continued to be an important component of subsequent State Wage Case decisions: · The 1991 State Wage Case (1991) 36 IR 362 at 427-428 says: STRUCTURAL EFFICIENCY Consistent with the ongoing implementation of the structural efficiency principle determined in the State Wage Case decision of 4 October 1989, any party to a minimum rates award or a paid rates award seeking the increases in wages or salaries allowable under the State Wage Case decision of 29 May 1991 is required to satisfy the Commission: (a) that the parties to the award have examined or are examining both award and non­-award matters to test whether work classifications and basic work patterns and arrangements are appropriate - the examination to include specific consideration of: (i) the contract of employment including the employment of casual, part­-time, temporary, fixed term and seasonal employees, (ii) the arrangement of working hours, (iii) scope and incidence of the award; (b) that the parties to the award have a genuine commitment to the insertion of facilitative provisions in relevant clauses of the award and have taken or are taking action to do so; (c) that the award requires enterprises to establish a consultative mechanism and procedures appropriate to their size, structure and needs for consultation and negotiation on matters affecting their efficiency and productivity; (d) that the award, in order to ensure increased efficiency and productivity at the enterprise level, while not limiting the rights of either an employer or union to arbitration, provides a process whereby consideration can be given to changes in award provisions; any agreement reached under this process would have to be formally ratified by the Commission and any disputed areas should be subject to conciliation and/or arbitration; (e) that there is a provision in the award to the effect that an employer may direct an employee to carry out such duties as are within the limits of the employee's skill, competence and training; (f) that the parties to the award have implemented, substantially, the structural efficiency principle determined in the 4 October 1989 State Wage Case decision and have applied or are applying consequential award reforms to the workplace. · The 1992 State Wage Case (1992) 41 IR 239, when the Structural Efficiency Principle was the foundation of award wage movement, at 316-317: 1. Structural efficiency adjustment (a) There will be allowable under these principles an increase to a maximum of 2.5 per cent in both minimum rates and paid rates awards, with a minimum increase in award rates of $10 per week for adult employees under awards other than awards which have been varied in pursuance of the Minimum Rates Adjustment provisions, accessible, on application, from 29 May 1991 but the actual date of operation will be the date on which that award is varied in, accordance with the 29 May 1991 State Wage Case decision. (b) The increase shall apply to award rates including supplementary payments. (c) The Commission, after hearing the parties to an award and being satisfied that a proper case has been made, may recommend that overaward payments be increased by the same percentage adjustment. (d) No award will be made or varied to give effect to the State Wage Case decision of 29 May 1991 unless and until the second structural efficiency adjustment allowable under the 4 October 1989 State Wage Case decision has been given effect to by the making or variation of an award. · The 1993 State Wage Case (1994) 52 IR 157 at 202: Preamble These principles have been developed with the aim of providing, for their period of operation, a framework under which all concerned - employers, workers, and their unions, governments and tribunals - can co-operate to ensure that measures to meet the competitive requirements of enterprises and industry are positively examined and implemented in the interests of management, workers and, ultimately, Australian and New South Wales society. The Structural Efficiency Principle is set out at 206-207 in the following terms: Structural Efficiency Consistent with the October 1989, the May 1991 and the March 1992 State Wage Case decisions, the structural efficiency principle provides a framework through which it is intended that the parties to an award cooperate positively in a fundamental review of that award with a view to implementing measures to improve the efficiency of industry and provide employees with access to more varied, fulfilling and better paid jobs. The measures should include but not be limited to: establishing skill-related career paths which provide an incentive for workers to continue to participate in skill formation; eliminating impediments to multi-skilling and broadening the range of tasks which a worker may be required to perform; creating appropriate relativities between different categories of workers within the award and at enterprise level; ensuring that working patterns and arrangements enhance flexibility and the efficiency of the industry; including properly fixed minimum rates for classifications in awards, related appropriately to one another, With any amounts in excess of these properly fixed minimum rates being expressed as supplementary payments; updating and/or rationalising the list of interested parties to awards; addressing any cases where award provisions discriminate against sections of the workforce; examining both award and non-award matters to test whether work classifications and basic work patterns and arrangements are appropriate - the examination to include specific consideration of: (i) the contract of employment including the employment of casual, part­time, temporary, fixed term and seasonal employees, (ii) the arrangement of working hours, (iii) the scope and incidence of the award; inserting facilitative provisions in relevant clauses of the award; establishing a consultative mechanism and procedures appropriate to their size, structure and needs for consultation and negotiation on matters affecting their efficiency and productivity; providing in an award a provision to the effect that an employer may direct an employee to carry out such duties as are within the limits of the employee's skill, competence and training. Structural efficiency exercises should incorporate all past work value considerations. · In the 1994 State Wage Case Decision (1994) 57 IR 1 the Structural Efficiency considerations were incorporated in the Preamble at 39 in the following terms: Preamble These principles have been developed with the aim of providing for their period of operation, a framework under which all concerned - employers, workers and their unions, governments and tribunals - can co-operate to ensure that measures to meet the competitive requirements of enterprises and industry are positively examined and implemented in the interests of management, workers and, ultimately, Australian and New South Wales society. In exercising its powers, and obligations under the Industrial Relations Act 1991 (the Act), the Commission will continue to apply structural efficiency considerations including minimum rates adjustment provisions consistent with the State Wage Case - August 1988 (No 2) (1989) 27 IR 360; State Wage Case - October 1989 (unreported); State Wage Case - May 1991 (1991) 36 IR 362; State Wage Case - March 1992 (1992) 41 IR 239; State Wage Case - December 1993 (1993) 52 IR 157 decisions and the March 1990 Minimum Rates Adjustment (1990) 35 IR 183 decision. 90 It is not necessary to set out each subsequent State Wage Case which continued to hold the Structural Efficiency considerations as a matter of central importance. 91 The preamble to the 2004 State Wage Case (2004) 132 IR 190 states at 210: 1. Preamble These principles have been developed with the aim of providing for their period of operation, a framework under which all concerned - employers, workers and their unions, governments and tribunals - can co-operate to ensure that measures to meet the competitive requirements of enterprises and industry are positively examined and implemented in the interests of management, workers and, ultimately, Australian and New South Wales society. In exercising its powers and obligations under the Industrial Relations Act 1996 ("the Act"), the Commission will continue to apply structural efficiency considerations including minimum rates adjustment provisions. 92 The history of awards (and agreement) applicable to Macquarie Generation and its predecessors is one of consent with approval by the Commission in accordance with the Wage Fixation Principles. 93 The SDP's have continued to apply and operate throughout the period of award (and agreement) regulation described earlier. The SDP's are, and continue to be, integral in determining rates of pay and career progression for power workers and tradespersons and as such are an integral aspect of award (and agreement) regulation. 94 Structural Efficiency considerations have remained relevant to the making of awards throughout the years to the 2002 Award, and accordingly application of the SDP's must be considered against the requirements of the Structural Efficiency Principle, and the satisfaction of those requirements on award (and agreement) negotiations over time. 95 It is inescapable that the purpose of the SDP's is to provide opportunity for employees to obtain additional skills and to follow a career path resulting in additional remuneration, without regard to traditional demarcation barriers. 96 The evidence from Messrs Swann and Cousin leads to the conclusion that there has been little, if any, dispute about the work to be performed and the amount of training undertaken. Both gentleman have, on their evidence, embraced skills acquisition, training and flexible work practices with a commendable enthusiasm. The issue is the rate of pay for the work done and the skills acquired and a dissatisfaction with the limit of SP 17 for tradespersons and SP 14 for power workers. 97 Associated with this dispute is an issue over the form of qualification criteria for an additional salary point. The evidence is that the consultative efforts of the parties failed on this point, with the unions refusing to agree to a performance payment. 98 I am not asked to resolve this issue in these proceedings, but to make a recommendation that the parties further confer. 99 Given the expressed willingness of Macquarie Generation to confer, such a recommendation is unnecessary. 100 I note that acquisition of an additional salary point on demonstration of superior performance is not an unusual or novel means of progression in this industry, and I recommend that power workers and tradespersons pursue this path to additional remuneration. 101 There is no evidence to suggest that the parties have applied the salary review provision of cl 3.8 which provides that additional skills levels can result in additional remuneration. Such an omission is not a breach of the award, the provision is facilitative only and does not define the extent of additional skills necessary to obtain additional remuneration. In the absence of agreement the parties are, in my view, obliged to comply with the Wage Fixation Principles, the most prominent in these circumstances being the Work Value Principle. 102 It is appropriate that the parties confer in respect to the application and criteria of the facilitative provision of cl 3.8, however, due regard must be paid to the fact that the career path from non-trades and tradesperson is to other classifications; a choice not to pursue an available career path will limit salary progression to the equitable limits of remuneration for tradespersons and power workers within the structure of appropriate relativities. 103 I further note that opportunities to acquire additional skills and to work flexibly across classifications are consistent with Structural Efficiency considerations and allow an individual to explore an available career path and make a decision to pursue it or not. 104 Attention to these provisions may take the parties forward toward a resolution of the core dispute. 105 I find that Macquarie Generation is not in breach of the award. 106 I decline to make the recommendation sought by the Labor Council. 107 The parties are encouraged to confer in light of the findings and observations herein. 108 I so determine. oo0oo 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.