Industrial Relations Commission of New South Wales CITATION: Reckitt Benckiser (Household) Pty Ltd and Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union, New South Wales Branch and others [2006] NSWIRComm 41 NOTIFIER Reckitt Benckiser (Household) Pty Ltd PARTIES: RESPONDENTS Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union, New South Wales Branch Australian Workers' Union, New South Wales Branch Electrical Trades Union, New South Wales Branch FILE NUMBER(S): IRC4991 of 2005 CORAM: Sams DP Industrial dispute - maintenance employees on day shift - operational requirements to more evenly balance maintenance work across day and afternoon shifts - proposal to move employees to afternoon shift - long service of employees on day shift - provisions of the Award and Enterprise Agreement - volunteers sought - no volunteers - management prerogative - Company to direct day shift employees to afternoon shift - Unions maintain Company has no right to direct employees - dispute referred to conciliation - various rosters considered and rejected - conciliation unsuccessful - matter remitted to another member of the Commission - Company seeks discrete award to permit shift changes - interpretation of industrial instruments - no extra claim commitment - Special Case considerations - matter remitted to single member - principles of management prerogative . CATCHWORDS: Held, need for change in operational requirements not contested - evidence not seriously disputed - whether award necessary - management prerogative outweighed by other factors - unreasonable to expect long serving day shift employees to transfer to afternoon shift - personal inconvenience and family disruption obvious - award application refused - proposal barred by no extra claim commitment - unnecessary to consider Special Case matters - dispute proceedings determined. Industrial Relations Act 1996 AWARD: LEGISLATION CITED: Metal Engineering and Associated Industries (State) Award 325 IG 209 AGREEMENTS: Reckitt Benckiser Enterprise Agreement 2004-2005 Australian Federated Union of Locomotive Enginemen and State Rail Authority of New South Wales [1984] CAR 188 Australian Iron and Steel Pty Ltd v Federated Ironworkers' Association of Australia, New South Wales Division (unreported, Watson J, IRC 77/254, 10 November 1977) Australian Telecommunications Commission v Hart (1982) 43 ALR 165 BHP Steel AIS Pty Ltd v Federated Ironworkers' Association of Australia, New South Wales Division (unreported, Hungerford J, IRC 94/2208, 7 November 1994) BHP Steel (JLA) Pty Limited v Australian Workers' Union, NSW Branch [2003] NSWIRComm 189 Re Cram CASES CITED: ex parte New South Wales Colliery Proprietors' Association Ltd (1987) 163 CLR 117 Department of Water Resources v Australian Workers' Union, New South Wales Branch (1992) 43 IR 76 Dispute between the Federated Engine Drivers and Firemens' Association and BHP Company Limited (1950) AR 371 Iron & Steel Works Employees (Australian Iron & Steel Limited - Port Kembla) Award [1955] AR 663 John Lysaght (Australia) Ltd - Port Kembla - Slit Recoil Line Award [1994] NSWIRComm 18 Shell Company Australia Limited and Others v Transport Workers' Union of Australia (unreported, Sweeney C, 3303 of 1986, 13 January 1987) State Wage Case 2005 [2005] NSWIRComm 213 Steel Works Employees and Engine Drivers, &c (Australian Iron and Steel Ltd - Port Kembla) Awards [1956] AR 855 HEARING DATES: 13/12/2005 DATE OF JUDGMENT: 02/28/2006 NOTIFIER Mr R Goot, AM of Senior Counsel Lawyers Minter Ellison LEGAL REPRESENTATIVES: RESPONDENTS Mr A Neilson, Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union, New South Wales Branch and the Australian Workers' Union, New South Wales Branch Mr B Currey, Electrical Trades Union, New South Wales Branch JUDGMENT: - 15 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM : SAMS, DP 28 February, 2006 Matter IRC05/4991 Notification under s130 by Reckitt Benckiser (Household) Pty Ltd of a dispute with Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union, New South Wales Branch and others DECISION [2006] NSWIRComm 41 1 This decision arises from a notification of an industrial dispute pursuant to s130 of the Industrial Relations Act 1996 ('the Act'), lodged by Reckitt Benckiser (Household) Pty Limited ('the Company') on 23 September 2005. The notification named the following Unions as respondents to the dispute: Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union, New South Wales Branch ('the AMWU') Australian Workers' Union, New South Wales Branch ('the AWU') Electrical Trades Union, New South Wales Branch ('the ETU') (the AMWU, AWU and ETU shall be referred to collectively as 'the Unions'). There are two industrial instruments covering the Company's household factory at West Ryde: the Metal, Engineering and Associated Industries (State) Award 325 IG 209 ('the Award') and the Reckitt Benckiser Enterprise Agreement 2004-2005 (Matter IRC 05/5476) ('the Enterprise Agreement'). 2 The genesis of the industrial dispute lies in the Company's requirements, for operational reasons, to move four of its mechanical maintenance employees from day shift to afternoon shift. When it was unable to secure volunteers for the move, the Company stated that it would nominate the employees for the change, insisting it had a management right to direct employees to work afternoon shift. The Unions and the employees dispute such a right. 3 Notwithstanding the Company's belief that it has the right to direct employees to work afternoon shift, it then sought an award be made by the Commission confirming its right to do so after the giving of seven days' notice to the affected employees. I shall return to the form of the proposed award shortly. 4 The dispute was listed for conciliation on three occasions before Ritchie, C. It is pertinent to note that during these conferences Ritchie, C asked the Company to draft sample rosters which might accommodate the Company's need for better afternoon shift coverage and minimise the impact on the employees. Two such rosters were tendered in evidence. The first disclosed that if ten maintenance employees were rostered, each one would work an average of one week of afternoon shift in 2.6 weeks. Another proposal was for nine of the maintenance employees to be on the roster with two permanent afternoon shift employees. This resulted in each employee working an average one week of afternoon shift every 2.3 weeks. The Company said that the Unions and the employees had not responded to either of these proposals. 5 On 21 October 2005, the Commissioner issued a Certificate of Attempted Conciliation (s135) and issued directions for the arbitration of the dispute. The arbitration was re-allocated to me by his Honour the President on 1 December 2005 consequent upon the Commissioner's unavailability due to other urgent Commission business. 6 The arbitration was heard on 13 December with the following persons providing written and/or oral evidence: Richard Gordon Cover - Operations Manager Barry Allan Luskey - Mechanical Tradesperson Allan Henry Burgess - Maintenance Fitter Bruce Francis O'Keefe - Organiser, AMWU 7 At this point, it is relevant to note that during the opening submissions for the Unions, Mr Neilson argued that the proposed award could only be dealt with as a Special Case because it sought to alter the conditions of employment of employees outside Principle 2 of the State Wage Case 2005 [2005] NSWIRComm 213. 8 Accordingly, after the closure of submissions, I referred the matter to his Honour the President pursuant to s193 of the Act and Principle 11 of the State Wage Case 2005. On 20 December, his Honour determined: Having considered the reference to the President of the Commission by Deputy President Sams in this matter and his Honour's memorandum of 16 December 2005, I determine that these proceedings, including any Special Case aspect of them, are to be dealt with by his Honour. The Proposed Award 9 The Company sought an award be made in settlement of the dispute pursuant to s136(1)(b) of the Act. The proposed award is expressed in the following terms: Award 1. This Award will be called the 'Reckitt Benckiser Shift Change Award'. 2. This Award shall be binding on the employer, the maintenance employees from time to time employed by the employer and the unions. 3. Where the employer gives at least 7 days written notice to a maintenance employee who is working on day shift, requiring them to work on afternoon shift on a rotating shift roster, the maintenance employee must comply with that direction. 4. This Award prevails over any inconsistent provision of any other award. 5. In this Award: (a) employer means Reckitt Benckiser (Australia) Pty Limited; (b) maintenance employee means a maintenance employee who is employed by the employer in its household goods factory at its West Ryde site; (c) unions means the (i) Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union, New South Wales Branch; (ii) the Australian Workers' Union, New South Wales Branch; and (iii) the Electrical Trades Union of Australia, New South Wales Branch. 6. This Award will commence on the date it is made and will have a nominal term of 3 years. The affected employees 10 The following is a list of the affected employees and their years of service: Ian Bosen - Mechanical Team Leader (17 years service) Alan Burgess - Mechanical Tradesperson (33 years service) Bob Donaldson - Electrician (10 years service) Barry Luskey - Mechanical Tradesperson and AMWU delegate (29 years service) Les Morris - Mechanical Leading Hand (27 years service) Anton Savkovic - Mechanical Leading Hand (31 years service) Allan Nicol - Mechanical Tradesperson (17 years service) Kevin Smith - Mechanical Tradesperson (38 years service) Ernst Studenbock - Mechanical Tradesperson (27 years service) Relevant Award and Agreement Provisions 11 The following provisions of the Enterprise Agreement are relevant: Cl 32(n) Right to transfer employees The Company retains the right to transfer employees within their classification structures according to production requirements within the West Ryde site. Cl 36 No extra claims It is the term of this agreement that the Unions and the Company will not pursue any extra claims, award or over award, for the life for(sic) this Agreement including increase arising from award variations or decision of the Commission other than increases that are consistent with the terms of this Agreement. 12 The relevant provisions of the Award are: 6.1.4(a) Subject to the employer's right to fix the daily hours of work for day workers from time to time within the spread of hours referred to in 6.1.1(c) and the employee's right to fix the commencing and finishing time of shifts from time to time, the arrangement of ordinary working hours is to be by agreement between the employer and the majority of employees in the enterprise or part of the enterprise concerned. This does not preclude the employer reaching agreement with individual employees about how their working hours are to be arranged. 6.1.4(b) Matters upon which agreement may be reached include: i) how the hours are to (sic) averaged within a work cycle established in accordance with 6.1.2 and 6.1.3; ii) the duration of the work cycle for day workers provided that such duration shall not exceed three months; iii) rosters which specify the starting and finishing times of working hours; iv) a period of notice of a rostered day off which is less than four weeks; v) substitution of rostered days off; vi) accumulation of rostered days off; vii) arrangements which allow for flexibility in relation to the taking of rostered days off; viii) any arrangements of ordinary hours which exceed 8 hours in any day. and 2.2.3: Facilitation by majority or individual agreement - (a) Subject to paragraphs (b) and (c) of this subclause, the following facilitative provisions can be utilised upon agreement between the employer and the majority of employees in the workplace or a section or sections of it OR, the employer and an individual employee: 5.11.1(b) Payment of wages 6.1.1(b) Ordinary hours of Work for day Workers on Weekends 6.1.1 (c) Variation to Spread of Hours for Day Workers 6.1.3(a)&(b) Method of Arranging Ordinary Working Hours 6.2.1 Shift Definitions 6.3.1(b) Working in Excess of Five Hours without a Meal Break 7.7.1 (e) Substitution of Public Holidays The Evidence 13 At this juncture, I would observe that the contested evidence concerning the negotiations for the Enterprise Agreement and what Mr O'Keefe is alleged to have said about deferring the vote on the Enterprise Agreement, is not materially relevant to the issues to be determined in this matter. 14 Mr Richard Cover is the Operations Manager for the Company. Mr Cover described the present shift arrangements for production and mechanical maintenance employees at the West Ryde site. These shifts are day shift - 7.00am to 3.15pm and afternoon shift - 3.15pm to 11.00pm. The afternoon shift was introduced in 1990. One mechanical maintenance employee transferred from day shift to afternoon shift in 2001. 15 Mr Cover deposed to the reasons why the Company sought the change to balance day and afternoon maintenance shifts. These might be summarised as: 1) The Company's sourcing and manufacturing strategy, including international and local competitiveness and efficiencies. 2) Rationalisation of production at the household factory, including outsourcing and insourcing production and deleting products. 3) Balancing maintenance requirements arising from less inventory brought about by more frequent production line changeovers and smaller production run sizes. 4) The inefficient and cost ineffective unbalanced maintenance arrangements. 16 Mr Cover explained the extensive consultation which management had undertaken with the Unions and employees since March 2005. There had been presentations to employees with a call for volunteers, proposals for a rotating shift arrangement and an invitation to employees to explain their personal circumstances as to why they could not move to afternoon shift. All relevant employees indicated their unwillingness to change. In oral evidence, Mr Cover said that none of the employees had approached him to explain their personal circumstances. 17 Further meetings were held in September 2005 at which the following suggestions were made: (a) rotating mechanical maintenance employees on day and afternoon shifts; (b) creating a roster system whereby the current mechanical maintenance employees on day shift would rotate through the four positions required for afternoon shift; (c) implementing a job share scheme whereby two employees could elect to share the one position and reduce their working hours (for any reason, including in anticipation of retirement). This would mean that one less person would be required to transfer to afternoon shift, as the Company would proceed to employ an additional afternoon shift worker; or (d) allowing one day shift person to transfer to the one predominantly day shift position available in the aerosols factory, thereby reducing the number of mechanical maintenance employees required to move to afternoon shift from four to three. 18 Mr Cover believed that the Unions and employees were not willing to seriously consider any alternatives and offered none of their own. Mr Cover observed that on the employees' original applications for employment, they had all indicated a willingness to work shift work. 19 Mr Cover deposed that the need to make the necessary change was driven by a genuine need to sustain the viability of the manufacturing operations of the Company at the West Ryde site. Unless the changes required by the sourcing and manufacturing strategy (including the balance of the Production Line Changes and the Balanced Production Shift Change) take place: (a) the household factory would become increasingly uncompetitive; and (b) there was a real risk that the Company would reconsider, and may not go forward with, the planned capital investment in the household factory. That planned capital investment is for a sum of $5.5 million to be used to upgrade production facilities in the 2005/2006 calendar years. There was therefore a risk that the Company would continue to lose products to other cost effective producers in Australia or overseas. 20 In cross examination, Mr Cover could not say what effect the proposed change would have on the Company's current profit margin of around 63 per cent. However, this proposal was but one of the factors being considered to improve profitability. 21 Mr Cover conceded that he had not been involved in the negotiations for the recent Enterprise Agreement and could not give evidence about its specific terms. Nonetheless, Mr Cover was aware of each employee's long period of service on day shift. 22 Mr Cover was asked about the question and answer sessions with employees and the fact that he had not replied to the personal circumstances of two employees who provided evidence in the proceedings - Mr Luskey and Mr Burgess. 23 Mr Barry Luskey is an AMWU delegate and he commenced working day shift with the Company on 6 June 1977. 24 Mr Luskey deposed that during recent negotiations with the Company resulting in the Reckitt Benckiser Enterprise Agreement 2004-2005, the Company at no time raised the issue of transferring employees from day shift to afternoon shift. (Mr Cover disputed this evidence and said the issue was raised on a number of occasions and as early as October 2003). Mr Luskey believed that forcing employees on to afternoon shift was an extra claim in breach of the Agreement's No Extra Claims provision (cl 36). 25 Mr Luskey described the effect the change of shift would have on his personal and family life. Mr Luskey's wife works in the city and arrives home around 7.00pm. As she is a diabetic, Mr Luskey prepares the evening meal according to her daily requirements and at a set time. Mr Luskey's doctor confirmed this information. Mr Luskey said he rarely works overtime because of his carer's responsibilities. In cross examination, Mr Luskey agreed that he was not responsible for preparing his wife's breakfast and lunch. 26 Mr Luskey acknowledged that while he did indicate he was prepared to work shift work 28 years ago, this was obviously before the birth of his three children (who all still live at home) and the illness of his wife. 27 In cross examination, Mr Luskey conceded that he had participated in presentations by the Company in March 2005 in which the requirement for a change to shifts had been discussed. Mr Luskey believed that the Company's proposed rosters would still have an impact on his family situation. 28 Mr Allan Burgess has worked for the Company on day shift for 33 years. He believed that if he was forced to work afternoon shift, it would severely disrupt his family commitments and potentially compromise his wife's health. Mr Burgess' wife has had problems with her legs for some 15 years involving varicose veins, blood clotting and a leaky valve in one leg. She is required to wear medical grade stockings which he helps her to remove and replace. He is also required to massage his wife's legs because of the pain associated with her ailments and the removal of the stockings. 29 Mr Burgess also deposed that his wife is in the early stage of osteoporosis and he will need to provide more care for her in the future. He added that both his and his wife's families live in the UK and are unable to assist in her care. 30 Mr Burgess agreed he had indicated a willingness to work shiftwork thirty-three years ago. However, his personal and family commitments have obviously changed since then. Mr Bruce O'Keefe 31 Mr O'Keefe is the AMWU Organiser for the West Ryde site. His evidence traced the Union's involvement in the contested issue, the meetings of the affected members and meetings with management. He also attached to his affidavit letters from the employees in which they all express opposition to the change of shifts. 32 Mr O'Keefe said that the Company had informed the Union that it could forcibly transfer employees to the afternoon shift and that it was not prevented from doing so by the terms of the Enterprise Agreement. Mr O'Keefe disputed that this matter had ever been raised in the negotiations for the Enterprise Agreement. 33 Mr O'Keefe was concerned with the proposed change because: (a) there had been no discussion with the site delegates about the proposed changes before the Company's intention to change shifts was notified to all employees and after the decision had been made; (b) there had been no prior use of the site consultative committee; and (c) there had been no consideration given to the dramatic impact these changes could have upon long serving day shift employees. 34 Mr O'Keefe said the reference to flexibility in cl 32(m) of the Enterprise Agreement has been used to move people within various factories. It had never been used, nor was it contemplated to be used, for shiftwork. There was no industrial right available to the Company to force employees on to afternoon shift and the Award makes it clear that changes of shift can only occur by agreement with the employees concerned. 35 In oral evidence, Mr O'Keefe denied a conversation in September 2005 with Mr Cover in which it was claimed Mr O'Keefe said: I regret supporting the vote on the Enterprise Agreement at the mass meeting of employees as some employees raised the issue of shift transferral. I advised the employees to vote for the acceptance of the Enterprise Agreement as this would not affect them. Thinking about it now, I should have deferred the vote until the issue was resolved. 36 Mr O'Keefe indicated in oral evidence that the Union had considered the proposed Company rosters and had advised management that they were rejected by the employees. 37 Mr O'Keefe recalled a presentation in 2005 by the management concerning the proposal and that a question had been asked as to what was to happen if there were no volunteers. Mr Veidler (for the Company) had replied "we will deal with that issue at the time". SUBMISSIONS For the Company 38 Mr Goot of Senior Counsel asserted that the Company had the right to direct employees to work the afternoon shift and the appropriate means of resolving the dispute was to make an award in the terms sought. 39 Mr Goot referred to a number of authorities dealing with management's right to organise its work according to its business and operational needs - Dispute between the Federated Engine Drivers and Firemen's Association and BHP Company Limited (1950) AR 371; Australian Telecommunications Commission v Hart (1982) 43 ALR 165; John Lysaght (Household) Ltd - Port Kembla - Slit Recoil Line Award [1994] NSWIRComm 18; Iron & Steel Works Employees (Australian Iron & Steel Limited - Port Kembla) Award [1955] AR 663; BHP Steel (JLA) Pty Limited v Australian Workers' Union, NSW Branch [2003] NSWIRComm 189. 40 Mr Goot relied on Mr Cover's evidence, (largely undisputed) of the need to balance the mechanical maintenance employees on day and afternoon shifts. He submitted that the Unions' only basis for opposing the transfer were: (i) the employees' long periods of service on day shift; (ii) some personal inconvenience for the employees. He put that it would require a significant degree of personal difficulty or inconvenience such as to make it unfair to transfer the employees. Mr Goot noted that two of the employees gave no details of inconvenience; most others were only minimally inconvenienced. 41 Mr Goot further contended that there was nothing in the Award or Enterprise Agreement which prevented the Company from directing the employees to work afternoon shift. Indeed, there is an express right in cl 32(m) of the Enterprise Agreement to transfer employees subject to three limitations: (a) it must be within their classification structure; (b) it must be according to production requirements; and (c) it must be within the West Ryde site. He noted that all three provisos have been met. 42 Mr Goot put that Mr O'Keefe's understanding and interpretation of the Agreement's clause is irrelevant and unhelpful and he had not negotiated the provision when it was first introduced in the 2002 agreement. 43 In the absence of an award being made, the Company would be free to direct employees to work afternoon shift and if they refused, to terminate their employment for refusing to comply with a reasonable and lawful direction of the employer. In those circumstances, redundancy benefits would not be applicable. 44 Mr Goot submitted that the proposed award was not an extra claim and therefore not barred by the No Extra Claim Clause in the Enterprise Agreement. For the Unions 45 Mr Neilson opposed the making of the Award on three grounds: firstly, the existing Award which applies at the site does not permit the type of conduct which the Company seeks to have approved in the proposed award. Both the facilitative provisions and the ordinary hours of work clauses require either majority and/or individual agreement to any proposed changes of shift. Mr Neilson added that what the Company had put concerning the enforcement of its rights, is more appropriately dealt with in the declaratory jurisdiction of the Industrial Court, not through the making of an award. 46 Secondly, the recently registered Enterprise Agreement does not permit the parties to pursue extra claims. The proposed award is clearly an extra claim. Moreover, the general objectives and specific terms of the Agreement must be read in conjunction with the Award, which does not permit the shift changes without agreement. 47 Mr Neilson emphasised that Mr O'Keefe had been involved in the recently negotiated Agreement. He noted that cl 32(n) had never been applied in the past in the circumstances now proposed and was only intended to allow the transfer of employees within their classifications levels at the West Ryde site. Shift changes in the past had been achieved through volunteers. 48 Thirdly, Mr Neilson raised the serious personal and family difficulties identified by Mr Burgess and Mr Luskey if they were forced onto afternoon shift. He also referred to the letters of other employees attached to Mr O'Keefe's affidavit in which all employees expressed opposition to the shift change and the inconvenience it would cause. It was also a relevant consideration that all employees had long periods of service on day shift. 49 Mr Neilson submitted that leaving aside Special Case considerations, the Company had not made out a case for the change it was seeking and the award application should be rejected. 50 In reply, Mr Goot submitted that the Company was not attempting in this case to enforce legal rights; but is simply seeking to resolve a dispute. 51 Further, Mr Goot put that this case was not about changes to start and finishing times as envisaged under the Agreement, nor was the application an extra claim. 52 Mr Goot submitted that just because the terms of the Agreement have not previously been utilised in the manner now proposed, doesn't mean the provisions can't be used in the way sought. 53 As to the equity issues, Mr Goot emphasised that while the change sought might be inconvenient for some employees, it would not be impossible. Moreover, the letters from the other employees were unable to be tested and were thus unhelpful to the Unions' case. CONSIDERATION 54 At the outset it is important to note that the Commission's award making powers are mandated by s10 of the Act; that is "the Commission may make an award in accordance with this Act setting fair and reasonable conditions of employment for employees". I shall return to these statutory powers later. 55 If, as the Company contends, it has the industrial and legal right to direct its employees to work afternoon shift, one might wonder why it has seen fit to pursue an award in settlement of this dispute. Nevertheless, I accept Mr Goot's explanation that the Company merely seeks to have its rights confirmed by the making of an award within what is obviously a narrow and discrete compass. 56 In any event, it seems to me that the tests to be applied in this case are correctly those which deal with management prerogative and specifically whether the Company has the right, either through direction or by the making of a new award, to insist that the relevant employees work afternoon shift. To this end it is necessary to review the principles distilled from the authorities which have considered the question of management prerogative. 57 It is trite to observe that the concept of management prerogative has undergone significant evolutionary development since the old days of the master/servant relationship. It is no longer the case that an employer can demand absolute obsequiousness from his/her employees. On the other hand, it has been well recognised that an industrial tribunal will not lightly interfere with the right of an employer to manage its business as it sees fit, according to its operational needs, unless the work asked to be performed by the employee(s) is unjust or unreasonable. 58 I refer to a number of authorities which serve to demonstrate this principle. In Re Cram; ex parte New South Wales Colliery Proprietors' Association Ltd (1987) 163 CLR 117, the High Court said at p136: These considerations indicate that the objection voiced by O'Connor J. in Clancy to the regulation and control of business enterprises by industrial tribunals is not a matter that goes to the jurisdiction of the tribunals. Rather it is an argument why an industrial tribunal should exercise caution before it makes an award in settlement of a dispute where that award amounts to a substantial interference with the autonomy of management to decide how the business enterprise shall be efficiently conducted. The evident importance of arming such tribunals with power to settle industrial disputes capable of disrupting industry is a powerful reason for refusing to read down the wide and general definition of "industrial matters" in the Commonwealth and State Acts by reference to any notion of managerial prerogatives as such. 59 In Australian Federated Union of Locomotive Enginemen and State Rail Authority of New South Wales [1984] CAR 188, the Full Bench of the then Australian Conciliation and Arbitration Commission observed at p191: The principles which the Commission should apply in circumstances such as those before us have been the subject of a number of submissions to us and reference to a number of cases. The main case relied upon by the State Rail Authority is the decision of Coldham, J in the Airline Hostesses' Case . In that decision Coldham J applied the test whether or not the work asked to be done was "…unjust…unreasonable, harsh or oppressive". In adopting this test his Honour referred to a decision of Wright J in an appeal under the Public Service Arbitration Act. In that case Wright J said "…this Commission, and the Arbitration Court before it, have throughout their existence acknowledged the right of an employer to manage and regulate his own business subject to the protection of his employees from injustice or unreasonable demands". In that case not only did Wright J use that expression but Williams and Franki JJ in their separate decision referred to "…the right of an employer to manage and regulate his own business, unless in doing so he imposes unjust or unreasonable demands upon his employees" and said: "This approach has been accepted by the Commission and the Arbitration Court since the Conciliation and Arbitration Act became operative and has been reiterated from time to time since then." It is not clear why Coldham J added the words "harsh" and "oppressive". It seems to us that the proper test to be applied and which has been applied for many years by the Commission is for the Commission to examine all the facts and not to interfere with the right of an employer to manage his own business unless he is seeking from the employees something which is unjust or unreasonable. 60 That same principle was neatly summed up by Hungerford J in BHP Steel AIS Pty Limited v Federated Ironworkers' Association of Australia, New South Wales Division (unreported, Hungerford J, IRC94/2208, 7 November 1994): The way in which issues of this nature are assessed by the Commission, involving as they do potential intervention in the employer's operation and management of its business, requires the Commission not to assume the role of the employer. Rather, the approach is, and this is a longstanding and established principle, to attend to whether the employer's action imposes unfair or unreasonable demands on employees, not infrequently referred to as industrial injustice. 61 Cahill VP put it in a slightly different way when he said in Department of Water Resources v Australian Workers' Union New South Wales Branch (1992) 43 IR 76 at p80: In my opinion it is for the employer to determine what work is to be performed. That having been determined, it is then a case for the tribunal to decide, upon application being made on behalf of the employees performing the work, and having regard to the work required to be performed and the conditions applicable, whether any manning award at variance with the employer's desires is warranted. 62 In John Lysaght (Household) Limited - Port Kembla - Slit Recoil Line Award (unreported, Hungerford J, IRC94/2374, 21 March 1995), his Honour discussed the principle in this way: A question of manning is, it seems to me, concerned necessarily with the management of an employer's business. The long settled approach to such matters by the Commission is for it not to intervene by assuming the role of the employer but rather to assess whether what the employer proposes would impose unfair or unreasonable demands on employees, including unsafe work practices. So much was acknowledged in Re John Lysaght (Household) Limited - Port Kembla - Slit Recoil Line - Rates of Pay Award when the present award was made. Specifically as to disputes about the level of manning, I refer to what was observed in the unanimous decision of the High Court in Re Cram; Ex parte NSW Colliery Proprietors' Association Limited (1987) 163 CLR 117 at 135-137: Many management decisions, once viewed as the sole prerogative of management, are now correctly seen as directly affecting the relationship of employer and employee and constituting an "industrial matter". A dispute about the level of manning is a good example. It has a direct impact on the work to be done by employees; it affects the volume of work to be performed by each employee and the conditions in which he performs his work. So also with the mode of recruitment of the workforce. The competence and reliability of the workforce has a direct impact on the conditions of work, notably as they relate to occupational health and observance of safety standards. Employees, as well as management, have a legitimate interest in both of these matters. … These considerations indicate that the objection voiced by O'Connor J in Clancy to the regulation and control of business enterprises by industrial tribunals is not a matter that goes to the jurisdiction of the tribunals. Rather it is an argument why an industrial tribunal should exercise caution before it makes an award in settlement of a dispute where that award amounts to a substantial interference with the autonomy of management to decide how the business enterprise shall be efficiently conducted. 63 In Steel Works Employees and Engine Drivers, &c (Australian Iron and Steel Limited - Port Kembla) Awards [1956] AR 855 at 859-860, Richards J observed: The Company is entitled to decide upon and introduce its own system of working and only in very extreme circumstances would the Commission interfere with this right. In Re Iron and Steel Works Employees (Australia Iron and Steel Limited - Port Kembla) Award [1955] AR 663 at p665, when dealing with a question of manning at the soaking pits at the Company's works, the court ( Richards J) said; 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 in 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 to be performed. In Re Dispute Between the Federated Engine Drivers and Firemen's Association of Australasia (Coast District) and the Broken Hill Proprietary Company Limited [1950] at 371 Cantor J at p372 said: On the authorities, summarised the following is the legal position: First, an employer has the right to manage his own business in his own way; secondly, the Commission will not interfere with this right unless it is satisfied that intervention is justified because in the exercise of this right unjust or unreasonable demands or conditions are imposed, or because the action of the employer is taken in bad faith or amounts to victimisation or oppression or the like. However, where the Company has introduced a new system of working the Commission will readily intervene in relation to ancillary matters such as where it is shown that the manning laid down by the Company is insufficient to carry out the work required or if the working conditions are such that they warrant the awarding of specific spell time or special rates of remuneration. 64 This case was later cited with approval by Watson J in Australian Iron and Steel Pty Ltd v Federated Ironworkers' Association of Australia, New South Wales Division (unreported, Watson J, IRC77/254, 18 November 1977) and later by Hungerford J in BHP Steel (AIS) Pty Ltd - Port Kembla Restructured Ironworker Classifications Rates of Pay Award (unreported, Hungerford J, IRC96/582, 12 December 1996). 65 Similarly, the Australian Industrial Relations Commission, in Shell Company Australia Limited and Others v Transport Workers' Union of Australia (unreported, Sweeney C, C No. 3303 of 1986, 13 January 1987) expressed the principle this way: The overwhelming principle involved in this matter is the long established right of management to allocate and arrange work and for employees to respond to reasonable management requirements. 66 I turn now to the merits of this case. The Commission does not cavil (nor I think, do the Unions) with the Company's legitimate desire to balance its maintenance workforce across day and afternoon shifts. That being said, it seems to me that there are other countervailing factors which outweigh the desirability of granting the Company's application in this dispute or the Commission giving its imprimatur to what the Company is seeking. 67 In my view, it would be completely unreasonable and grossly unfair to require long serving day shift employees to move onto afternoon shift against their wishes. The fact that only two employees provided direct evidence of personal and family difficulties with the change, is really not the point. As a matter of common sense and on the basis that no one has volunteered to work afternoon shift (noting it attracts a 15 per cent loading), is demonstrable grounds for accepting that the employees must have, over many years, adjusted their family and personal circumstances to finishing work at 3.15pm, not 11.00pm. It would be unfair and unjust to force them to so dramatically alter their longstanding work arrangements. 68 Further, it is disingenuous to claim that the employees agreed to work shift work when they signed their applications for employment, in all cases, many years ago. It is self evident that the employees' personal and family circumstances would have changed significantly in the ensuing years. 69 Accordingly, I would refuse to grant the Company's application for a new award in settlement of this dispute. In addition, I would refuse to give the Commission's recognition to what the Company believes is its right to direct employees to work the afternoon shift. 70 Even if I had been persuaded to grant the Company's application on its merits, I would determine that the claim as advanced by the Company, is barred by the no extra claims commitment given by all parties when they signed the 2004/05 Enterprise Agreement. In my opinion, there can be no doubt that the proposed change seeks to significantly alter the working arrangements of the employees such as to constitute an extra claim. In the absence of agreement, such a claim cannot be pressed upon unwilling parties to the Agreement. 71 Moreover, I would reject the Company's contention that it has a legal right, in any event, to force the change. Upon a proper reading of the relevant clauses in the Enterprise Agreement and the Award, there cannot be found any words which give comfort to the Company in this regard. Indeed, the fact that the Award contains facilitative provisions to allow shift changes by agreement must, in my view, fortify the argument that such changes cannot be forced upon unwilling employees. 72 While I accept the Company has gone to considerable trouble in preparing alternative rosters and making other suggestions which would obviously reduce the impact of the change on individual employees, these alternatives do not address the fundamental basis of the industrial unfairness propositions I have earlier stated. 73 In addition, I do not believe that the making of the proposed award would be consistent with the Commission's obligation under s10 of the Act to make an award setting fair and reasonable conditions of employment for employees. 74 In view of my conclusions in this matter, it is unnecessary to determine whether the Company's application for a new award requires consideration as a Special Case, pursuant to Principle 11 of the State Wage Case 2005. 75 The Company's application for a new Award, in terms of Exhibit 1, is refused. These dispute proceedings are concluded. Peter J Sams, AM 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.