Industrial Relations Commission of New South Wales CITATION: BlueScope Steel (AIS) Pty Limited v. Australian Workers Union [2007] NSWIRComm 1045 APPLICANT BlueScope Steel (AIS) Pty Limited PARTIES: RESPONDENT Australian Workers Union FILE NUMBER(S): IRC 3577 of 2006 CORAM: Connor C CATCHWORDS: industrial dispute - steelworks - tundish repair area - slabmaking department - referral agreement - restructuring of operations - reduction in manning - trial - matter settled by conciliation LEGISLATION CITED: Industrial Relations Act 1996 Australian Workers Union v. BlueScope Steel (AIS) Pty Limited (2006) 157 IR 93 CASES CITED: Re Cram; ex parte New South Wales Colliery Proprietors Association Limited (1987) 61 ALJR 401 Soaking Pits Dispute Case (1955) AR 663 HEARING DATES: 17/07/2007 EXTEMPORE JUDGMENT DATE : 17 July 2007 APPLICANT Bree Thomas BlueScope Steel (AIS) Pty Limited LEGAL REPRESENTATIVES: RESPONDENT Andrew Gorman Australian Workers Union DECISION: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: CONNOR C Tuesday, 17 July, 2007 Matter No IRC 3577 of 2007 BlueScope Steel (AIS) Pty Limited and the Australian Workers Union Dispute notification under S.130 of the Industrial Relations Act, 1996 re restructuring of the tundish repair area in the slabmaking department Referral of an industrial dispute under S.146A of the Industrial Relations Act, 1996 by BlueScope Steel (AIS) Pty Limited and the Australian Workers Union DECISION [2007] NSWIRComm 1045 Preliminary 1 BlueScope Steel (AIS) Pty Limited has lodged a notification of an industrial dispute with the Australian Workers Union. A protocol has been established for BlueScope Steel operations in Port Kembla by virtue of which individual industrial disputes are referred to the Commission in accordance with S.146A, viz: "A party to a dispute to which this section applies may apply to the Commission for the exercise by the Commission of such functions with respect to the resolution of the dispute as may be specified in the referral agreement." 2 A referral agreement for this particular dispute has been signed for and on behalf of the AWU and BlueScope Steel and annexed to the notification by BlueScope Steel for the following matter to be the subject of both conciliation or, if necessary, arbitration: "The dispute concerns the restructure of the tundish repair area within the slabmaking department. The company seeks that the in-principle agreement, as documented, be implemented as a trial at a date to be advised." The essential issue in dispute is the reduction in manning levels that is incorporated in the restructuring of the tundish repair area. Agreement between the parties has now confined that argument to a narrow argument between the parties. 3 The matter was initially allocated to Macdonald C and it was the subject of proceedings before him on Tuesday, 5 December, 2006, Friday, 23 February, 2007, Thursday, 15 March, 2007, Thursday, 29 March, 2007, Thursday, 19 April, 2007 and Thursday, 26 April, 2007 (in the Commission's premises at 90 Crown Street, Wollongong) and on Monday, 30 April, 2007 (by way of teleconference). Conciliation had failed to settle the matter. Macdonald C has lodged a certificate of attempted conciliation under S.135, lodged it in the prescribed manner and programmed the matter for arbitration. However, the AWU has made an application under S.173 that the arbitration of the matter take place before another member of the Commission and the matter was subsequently re-allocated to me. I set it down for mentions on Tuesday, 8 May, 2007 and Monday, 14 May, 2007 (in Wollongong) and programmed the matter for the hearing, amending the directions made by Macdonald C in that respect at the request of the parties. 4 I had scheduled the matter for a further mention for programming purposes on Tuesday, 7 August, 2007 but I received from a request from BlueScope Steel on Wednesday, 11 July, 2007 for the proceedings to be reconvened. Agreement had been reached concerning the matter and the parties wished to formalise that agreement in these proceedings before me and discontinue them under Rule138. I set the matter down for that purpose on Tuesday, 17 July, 2007 (also in Wollongong). In the proceedings Ms Thomas represented BlueScope Steel and Mr Gorman represented the AWU. Background 5 Operators in the tundish repair area are presently covered by the terms of the BlueScope Steel (AIS) Pty Limited - Port Kembla Steelworks Employees Award, which by virtue of a 2006 amendment to the Act has been converted into a preserved State agreement [PSA]. Clause 36, Procedure for Resolving Claims, Issues and Disputes, of the BlueScope Steel Award contains a comprehensive dispute settling procedure [DSP] for the orderly resolution of all industrial disputes at the Port Kembla steelworks. In particular, where changes of a significant nature are being introduced a consultation process is set up and the status quo is preserved, without any industrial action taking place. 6 Trial arrangements for the proposed change are also contemplated [Clause 36.4.3(p)], viz: "For workplace change (including the number or composition of employees engaged on any task), the consultation process may provide for the change to be introduced on a trial basis by agreement. There should be discussion between the parties as to how the trial arrangements should be implemented. An appropriate monitoring system will be established to ensure that the proposed changes are safe, efficient, legal and fair. The period of the trial will be determined in advance, with a return to the status quo in the event that it is shown that the trial fails the safe, efficient, legal and fair test." In accordance with Clause 36.4.3(o): "The status quo may be altered by recommendation or direction of the Commission in proceedings pursuant to S.130 of the Act, or as the outcome of arbitration by the Commission." 7 The trial of the new restructuring arrangements for the tundish repair area has been conducted and was to conclude on Monday, 30 April, 2007. BlueScope Steel remained satisfied with the outcome of the trial and sought to make the arrangements permanent but the AWU had opposed it and wished to return to the status quo, ie the arrangements which prevailed prior to trial. Hence the matter was to proceed to arbitration. But in a statement issued by Macdonald C on Monday, 30 April, 2007, among other things, he preserved the trial period in accordance with Clause 36.4.3(o) without prejudice to the parties pending the outcome of the arbitration of the matter. 8 The general principles relating to manning disputes have frequently been confirmed in the Commission. Essentially, caution should be exercised in what is tantamount to a substantial interference with the autonomy of management to decide how the business shall be effectively conducted [Re Cram; ex parte New South Wales Colliery Proprietors Association Limited (1987) 61 ALJR 401]. In the Soaking Pits Dispute Case (1955) AR 663 Richards J of the former Commission summarised the position as follows (at p.665): "… Prima facie , the company has the right to manage its business in its own way and is entitled to exercise its own discretion in the manning of its plant. In order to obtain an order against the company in relation to the manning decided upon by it on a case of this kind, the union carries the onus of establishing that the work which the employee is called upon to perform on his shift is more than a fair shift's work under the conditions in which the work is performed…" 9 But in its ex tempore decision in Australian Workers Union v. BlueScope Steel (AIS) Pty Limited (2006) 157 IR 93 the Full Bench of the Commission (Wright J - President, Walton J - Vice President and McLeay C) emphasised the need (at pp.96 and 97), when managing a change in steelwork operations, to rely on the actual terms of the relevant provisions of the BlueScope Steel Award which was designed to regulate such matters in considerable detail and not the established principles governing manning disputes at large. The Full Bench regarded it (at p.4) to have been an error of law and principle for such matters to be determined: "...in accordance with what is described as a 'fundamental principle'. That principle was stated as the right of an employer to manage its operations as it deemed appropriate, provided the consequences of exercising such a right did not place an unjust or unreasonable burden on employees..." In other words, for present purposes the test for manning disputes where there has been a change in the operations of BlueScope Steel is dependent not on general principles but on the "safe, efficient, legal and fair test" in Clause 36. 10 The AWU wrote a memorandum to the Registrar on Thursday, 3 May, 2005 seeking an urgent re-listing of the matter. That letter was referred to me. I set it down for a mention on Tuesday, 8 May, 2007 (in Wollongong). There remained a dispute between the BlueScope Steel and the AWU on the "safe, efficient, legal and fair test" in Clause 36.4.3(p). BlueScope Steel argued that the words "safe", "efficient", "legal" and "fair", had to be read cumulatively - as the linking word "and" suggested - and, consequently, it would be necessary for the AWU to satisfy the Commission (and the burden of proof does rest with it) that the change being contemplated was neither, unsafe, inefficient, illegal and unfair. The AWU contends that it would be required only to establish that the changes applied, ie that the changes were unsafe, inefficient, illegal or unfair. 11 Where a problem arises involves a question of an interpretation of the provisions of the BlueScope Steel Award, the following arrangements are made [Clause 36.4.3(q)]: "Where an issue associated with a change concerns the interpretation or application of an existing provision of the award, the status quo shall prevail until the matter is agreed or is the subject of interpretation by the Commission. No industrial action shall occur in relation to such a dispute." That issue therefore came before me for determination. 12 In its argument, BlueScope Steel relied on the decision of the Full Bench in Australian Workers Union v. BlueScope Steel (AIS) Pty Limited. The Full Bench (at p.98) spoke of: "...the relevant questions...in the present matter, namely, whether the change met the test of efficiency, legality and fairness..." And described the task faced by a member of the Commission in considering a change of that nature as making: "...findings concerning 'fairness' and not apply the more restrictive notions arising from the earlier jurisprudence of the Commission as to manning disputes....(and) also..to resolve the union's case as to 'efficiency' in accordance with the award clause (and if a case had been mounted, as such, whether changes proposed were lawful.) Our decision should not be taken as suggesting that onus of making out a case for the retention of the status quo or resisting changes...falls on the company. Such an approach would constitute error. The onus in such cases falls on the union to make out a case that the changes proposed by management should not be made or should be offset by some compensation or other adjustment in conditions of employment..." 13 But to my mind that does not mean that the AWU in this case must establish that a change that is being contemplated meets each and every one of the requirements of "safety", "efficiency", "legality" and "fairness". In my view, it would be absurd to suggest, for instance, that a change that is illegal but nevertheless efficient should still be permitted to occur: or permit a change that alone is unsafe to the employees. Each of the tests - safety, efficiency, legality and fairness - should be considered but any one of the tests may alone prove to be fatal to a proposed change. The Full Bench is not suggesting in Australian Workers Union v. BlueScope Steel (AIS) Pty Limited to read the "safe, efficient, legal and fair test" as being cumulative: it is only emphasising the need to consider manning disputes in the context of Clause 36 rather than to otherwise rely on general principles relating to manning disputes. Conclusion 14 In any event, as I indicated earlier in this decision, BlueScope Steel and the AWU have reached an agreement under which the trial in place in the tundish repair area, subject to such modifications as have been agreed between the parties, will become the operating standard on the following conditions: * tundish repair area operators will be given first opportunity to apply for vacant positions within the casting operations department: in the event of urgent operational needs BlueScope Steel reserves the right to employ people from other areas; *all tundish repair area operators currently employed under fixed term contracts will be offered permanent full time positions: this will be effective pending ratification of this document; and * BlueScope Steel is committed to the on-going success of the new work arrangements: while not being able to make any long term commitments, BlueScope Steel has not plans in the foreseeable future to undertake outsourcing in this area. 15 On that basis, in accordance with Rule 138, I grant leave for the discontinuance of the matter, commending the parties on the constructive manner in which they have resolved this matter. P J CONNOR Commissioner 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.