Industrial Relations Commission of New South Wales CITATION : Murray Irrigation Enterprise Agreement 2001 [2003] NSWIRComm 24 APPLICANT: PARTIES : Murray Irrigation Limited RESPONDENT: Seven employees FILE NUMBER: 6562 of 2002 CORAM: Sams DP Stand down of employees - s126 of the Act - irrigation work in country New South Wales - severe drought - alternative to redundancy - consultation with employees - agreement reached for four day week - orders sought. CATCHWORDS : Held, application granted - unprecedented drought conditions - orders appropriate in the public interest - consent of employees and union relevant - orders made. LEGISLATION CITED : Industrial Relations Act 1996 CASES CITED : Murray Irrigation Enterprise Agreement 2001. HEARING DATES: 11/22/2002 DATE OF JUDGMENT: 11/22/2002 APPLICANT: Ms S McKinnon (agent) IR Australia LEGAL REPRESENTATIVES: RESPONDENT: No appearance JUDGMENT: - 7 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM : SAMS, DP 12 February 2002 Matter No. IRC02/6562 MURRAY IRRIGATION ENTERPRISE AGREEMENT 2001 Application by Murray Irrigation Limited for stand down orders pursuant to section 126 of the Industrial Relations Act 1996. REASONS FOR DECISION [2003] NSWIRComm 24 1 This application, pursuant to s126 of the Industrial Relations Act 1996 ("the Act") arises as a direct consequence of the very serious drought being experienced throughout New South Wales and much of Australia. Murray Irrigation Limited ("the applicant") is an irrigation operator. For some months it has been experiencing severe difficulties in providing full time work for its employees due to chronic and unprecedented shortages of water - its lowest levels in over a century. 2 Section 126 of the Act is expressed as follows: 126(1) The Commission may, on the application of an employer or an industrial organisation of employers, order the stand down of employees of that employer or of members of that organisation if there is no useful work for the employees because of: (a) industrial action, or (b) breakdown of machinery, or (c) any other act or omission, for which the employer or employers are not responsible. 126(2) The Commission is to give high priority to the hearing and determination of any such applicant. 126(3) An employee who is stood down by the Commission is not entitled to any remuneration (including allowances) while stood down. However, this subsection does not apply to any allowance that the Commission considers should be paid despite the stand-down order. 126(4) The period during which an employee is stood down is to be regarded as a period of employment with the employer for all other purposes, including the accrual of leave and the calculation of superannuation and other entitlements. 126(5) A stand-down order does not apply to an employee which is an apprentice or trainee with the meaning of the Industrial and Commercial Training Act 1989. 3 At a hearing of the matter on 22 November 2002, the Commission was asked to make the following stand down order: 1. Murray Immigration Limited may stand down employees with or without pay for any day the employee cannot be usefully employed because of drought, as defined herein. 2. When the Company proposes to exercise the right conferred by this clause, it shall first consult with the employee(s) in accordance with clause 10.9.2 of the Murray Irrigation Enterprise Agreement 2001. 3. Any employee who is stood down under this clause shall be treated for all purposes (other than payment of wages) as having not broken continuity of service notwithstanding such standing down. 4. Any employee who is stood down under this clause shall be at liberty to take other employment during the period of stand down provided the position does not in any way conflict with the interests of Murray Irrigation Limited. 5. Any employee whom the Company proposes to stand down under this clause shall be entitled to elect to take any annual or long service leave to which the employee is entitled in lieu of loss of income for the period of stand down or part thereof. 6. With the prior consent and written agreement of the Company, if an employee has exhausted available leave and long service leave accruals, the employee may elect to take annual leave in advance provided that any leave taken in advance shall be deducted from the employee's future leave credits as they accrue. 7. In the event the employee ceases to work for the employer before the leave has been repaid payment may be deducted by the employer from future eligible termination payments upon resignation, retirement, redundancy or dismissal. 8. "Drought" means conditions where the allowance announced by Murray Irrigation up to November 1 is lower than 30%. 4 The employees, some of whom are members of the Australian Workers Union, are covered by the Murray Irrigation Enterprise Agreement 2001. The agreement makes provision for the redundancy of employees. However, the applicant, through its agent, Ms S McKinnon submitted that redundancy was an absolute last resort and alternatives to redundancy had been carefully considered. As a consequence, the stand down application was made after consultation with the employees through the Workplace Consultative Committee. The application has the support of the Australian Workers' Union; although the Union does not wish to give its formal consent to the application. 5 Three affidavits were filed in support of the application. Ms Warren Elsbury, Deputy General Manager of Murray Irrigation Ltd referred to the seriousness of the applicant's position and an agreement reached with the employees to close on one day a week and for longer periods over Christmas and Easter. 6 Ms Karen Axton and Mr Glen Hayes, employees of the applicant and members of the Workplace Consultative Committee, attested to the meetings held with employees and confirmed that an agreement had been made. 7 While it will be seen that the proposed order is expressed in general terms, the Commission was informed that the actual agreement with the employees is for work to be performed and paid for, according to a four day week, with no work on Fridays. 8 Ms McKinnon submitted that it could not be predicted when the drought will break and consequently the order is proposed to continue until at least the winter of 2003. A review of the prevailing circumstances will take place in April and June 2003. 9 Ms McKinnon put that, while the current agreement makes no provision for stand downs, the next round of enterprise agreement negotiations, in early 2003, will likely result in such a provision being included in the new agreement. 10 At the conclusion of the hearing, the Commission issued the following decision: Having heard the submissions of Ms McKinnon , and reviewing the documentation that has been filed, the Commission is satisfied that there is a serious need for the orders sought, and it would be in the public interest to do so. There has been consultation with the employees and the union concerned, such that the proposed orders proceed by consent. The orders will be made according to the Schedule attached to the application, and shall remain in force until 31 July 2003, or unless otherwise ordered by the Commission. Liberty to apply is available to the parties to the enterprise agreement and the award in respect to a review of the orders that have been made. The Commission also notes that the parties are to enter into discussions about the extent to which stand down provisions should be inserted in either the enterprise agreement or the parent award. The order will take effect from today's date and the Commission will in due course publish a decision reflecting the orders that have been made. 11 The said order is attached to this decision. Peter Sams Deputy President INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM : SAMS, DP 12 February 2002 Matter No. IRC02/6562 MURRAY IRRIGATION ENTERPRISE AGREEMENT 2001 Application by Murray Irrigation Limited for stand down orders pursuant to section 126 of the Industrial Relations Act 1996. ORDER Pursuant to s126 of the Industrial Relations Act 1996, the Commission makes the following order: 1. Murray Irrigation Limited may stand down employees with or without pay for any day the employee cannot be usefully employed because of drought, as defined herein. 2. When the Company proposes to exercise the right conferred by this clause, it shall consult with the employee(s) in accordance with clause 10.9.2 of the Murray Irrigation Limited Enterprise Agreement 2001. 3. Any employee who is stood down under this clause shall be treated for all purposes (other then payment of wages) as having not broken continuity of service notwithstanding such standing down. 4. Any employee who is stood down under this clause shall be at liberty to take other employment during the period of stand down provided the position does not in any way conflict with the interests of Murray Irrigation Limited. 5. Any employee who the Company proposes to stand down under this clause shall be entitled to elect to take any annual or long service leave to which the employee is entitled in lieu of loss of income for the period of stand down or part thereof. 6. With the prior consent and written agreement of the Company, if an employee has exhausted available leave and Long Service leave accruals, the employee may elect to take leave in advance provided that any leave in advance shall be deducted from the employee's future leave credits as they accrue. 7. In the event the employee ceases to work for the employer before the leave has been repaid, payment may be deducted by the employer from future eligible termination payments upon resignation, retirement, redundancy or dismissal. 8. "Drought" means conditions where the allocation announced by Murray Irrigation up to November 1 is lower than 30%. 9. This order shall take effect from the 22 November 2002 and remain in force until 31 July 2003, or unless otherwise ordered by the Commission. Peter Sams Deputy President 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.