Industrial Relations Commission of New South Wales CITATION: Australian Workers Union v. BlueScope Steel Limited [2008] NSWIRComm 1019 APPLICANT Australian Workers Union INTERVENORS PARTIES: Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union Electrical Trades Union of Australia RESPONDENT BlueScope Steel Limited FILE NUMBER(S): IRC 502 of 2006 CORAM: Connor C CATCHWORDS: industrial dispute - work stoppage - warning notices given to employees - jurisdiction - applications for civil penalties against a trade union - matter resolved - discontinuance granted LEGISLATION CITED: Industrial Relations Act 1996 Federal Workplace Relations Amendment (Work Choices) Act 2005 BlueScope Steel Limited v. Australian Workers Union [2007] NSWIRComm 307 CASES CITED: Council of the City of South Sydney v. Horiatopoulos (1992) 47 IR 93 Gorman v. BHP Integrated Steel Division - unreported State of New South Wales v. Commonwealth of Australia (2006) 156 IR 1 HEARING DATES: 26/02/2008 EXTEMPORE JUDGMENT DATE : 26 February 2008 APPLICANT Brad Hattenfels Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union LEGAL REPRESENTATIVES: RESPONDENT Mark Davis BlueScope Steel Limited DECISION: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: CONNOR C Tuesday, 26 February, 2008 Matter No IRC 502 of 2006 Australian Workers Union and BlueScope Steel Limited Notification of an industrial dispute under S.130 of the Industrial Relations Act, 1996 re warning notices placed on the files of employees Referral of an industrial dispute under S.146A of the Industrial Relations Act, 1996 by the Australian Workers Union and BlueScope Steel Limited DECISION [2008] NSWIRComm 1019 Introduction 1 On Monday, 6 February, 2006, acting pursuant to the provisions of S.130 of the 1996 of the Industrial Relations Act, the Australian Workers Union lodged a notification of an industrial dispute with BlueScope Steel Limited over: "...warning letters given to employees at Springhill over industrial disputation..." The relevant employees are covered by the terms of the BlueScope Steel Limited - Springhill and CRM Employees Award (which has been converted by a 2006 amendment to the State IR Act into an enterprise agreement and, as such, has become a "preserved State agreement" - or PSA - under the 2005 Federal Workplace Relations Amendment (Work Choices) Act). The warning notices placed on the individual personnel files of BlueScope Steel employees concerns industrial action taken by those employees on Tuesday, 31 January, 2006. 2 At that time the BlueScope Steel employees in the metal coating lines, the coupled pickle cold mill and the painting and finishing department ceased work to attend an unauthorised stop work meeting in protest at the standing down of Mr Billy Beaumont, a paintline employee (and AWU delegate). Mr Beaumont had certain restrictions imposed on his employment due to a medical condition. He had become surplus to requirements following a reorganisation of the paintline operations and had been directed to remain at home (whilst still on the payroll). History 3 This S.130 matter has been complicated, among other things, by Work Choices. It was allocated to me and I set it down for a conference on Tuesday, 7 February, 2006 and a mention on Friday, 10 February, 2006. The Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union and the Electrical Trades Union of Australia have intervened in the proceedings. Their members employed by BlueScope Steel had also ceased work on Tuesday, 31 January, 2006 and received the warning letters. (Apart from the proceedings on Friday, 10 February, 2006, which were held in Sydney, all proceedings with respect to this matter have been convened in the Commission's premises at 90 Crown Street, Wollongong). 4 Conciliation failed to resolve this matter. I have been informed that BlueScope Steel was, in fact, pursuing proceedings for a civil penalty against the AWU (but not the AFMEPKIU and the ETU) under S.357 of the State IR Act. I understood that the S.357 proceedings were scheduled for hearing before Boland J on Tuesday, 14 November, 2006 and Wednesday, 15 November, 2006. I nevertheless programmed the S.130 matter before me for arbitration, issuing the certificate of attempted conciliation required by S.135, lodging it in the prescribed manner and programming the matter for hearing. The AWU was to file and serve its evidentiary material by no later than Wednesday, 8 March, 2006 and BlueScope Steel was to respond with its evidentiary material by no later than Monday, 10 April, 2006. I scheduled the matter for a further mention on Tuesday, 18 April, 2006 to provide a programme for the subsequent hearing. 5 The trade union parties did not provide their evidentiary material by the time of the mention on Tuesday, 18 April, 2006. Solicitors representing BlueScope Steel wrote to the AWU on Thursday, 13 April, 2006 and provided me with a copy of a letter, indicating that, in the light of the failure of the AWU to provide its evidentiary material, it would be opposing the matter proceeding to hearing. It appears from the solicitor's letter that there was some misconception on its part that the matter was scheduled for hearing on Tuesday, 18 April, 2006: that was not so. The letter also pointed out that: "...we also reserve our client's rights in respect of the application, and also the effect of the Workplace Relations Act, 1996 (Cth), as amended by the Workplace Relations (Work Choices Amendments) Act, 2005 (Cth) on these proceedings..." Work Choices came into operation on and from Monday, 27 March, 2006 and, in particular, much of the S.130 jurisdiction was circumscribed with respect to all foreign, trading and financial corporations within the meaning of S.51(xx) of the Commonwealth Constitution, ie unquestionably BlueScope Steel in this hearing [ State of New South Wales v. Commonwealth of Australia (2006) 156 IR 1]. 6 Nevertheless, a member of the Commission remains empowered to exercise what I understand to be additional functions conferred upon him by the parties to a dispute themselves. Such a referral is part of a common law collective agreement between the parties. In confirmation of such jurisdiction for the State Commission, S.146A(2) of the State IR Act provides as follows: "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." At that time BlueScope Steel had not agreed to a referral agreement on this matter, however. 7 The matter resumed before me for a further mention on Monday, 8 May, 2006 and Monday, 22 May, 2006. BlueScope Steel confirmed its arguments on jurisdiction. I stood the matter over generally to allow the parties the opportunity to consider their respective positions over the matter and reconvened the proceedings again on Tuesday, 13 June, 2006 on my own initiative to determine the appropriate course of action with respect to it, setting the matter down for further mention on Tuesday, 1 August, 2006 for programming for the determination of a jurisdiction issue, ie what arbitration powers remained to me under S.130 to deal with the matter independent of Work Choices and any S.146A referral agreement. 8 I directed the parties to provide statements of their contention, reserving their right to argue for the matter to be referred to a Full Bench of the Commission, if they considered that to be appropriate. The issue at that time was essentially, in the light of the restrictions flowing from Work Choices, what residue remained for me to resolve this particular industrial dispute. In particular, the issue centred around whether or not the issue in dispute was part-heard at the time that Work Choices came into effect. If that were the case, the matter may effectively proceed before the Commission [Council of the City of South Sydney v. Horiatopoulos (1992) 47 IR 93 at pp.95 to 98]. 9 However, I had received no statements of contention when the S.130 matter resumed before me on Tuesday, 1 August, 2006. A letter had been forwarded on behalf of BlueScope Steel on Monday, 10 July, 2006 informing me that: "...in all of the circumstances, the company does not propose to take any further steps in relation to this matter, other than to appear on Tuesday, 1 August, 2006 and confirm its prior submission that the proceedings should be discontinued for want of jurisdiction..." The letter went on to suggest: "...We would, however, invite the Commissioner to take that step administratively prior to Tuesday, 1 August, 2006 to avoid the need for appearance at the mention..." 10 But, in the circumstances, although the matter had apparently not been advanced since the previous time it was before me, I had received nothing from the AWU, AFMEPKIU or the ETU to suggest that I may act administratively to abandon the proceedings on Tuesday, 1 August, 2006. I do not believe that I may act administratively in that manner without the concurrence of all parties and, whilst the matter has not being progressed with any vigour, it was not something I could confidently dispose of without giving the parties the opportunity to present arguments. 11 And, in fact, ultimately, the AWU, AFMEPKIU and ETU did provide jointly a statement of their contentions. But before BlueScope Steel could respond to them, a general protocol had, in fact, been determined for the processing of claims of this nature throughout BlueScope Steel's operations in Port Kembla. That protocol involves the completion of S.146A referral agreements for each individual issue in dispute between the parties (provided there was compliance with the established grievance settling procedure). The parties indicated their intention to complete a S.146A referral agreement over the matter. The AFMEPKIU wrote to me on Friday, 22 September, 2006 in the following terms: "...We have been advised by BlueScope that they have withdrawn their jurisdictional objection on the basis that the parties have agreed to enter into a referral agreement. This now means that this matter may proceed to arbitration..." 12 It is a clause of the referral agreement, consistent with the protocol that has been developed, that unless the parties agree to waive the requirement: "...an application for leave for the matter to be arbitrated will be heard by a Presidential member of the Commission..." In a letter dated Thursday, 28 September, 2006 solicitors representing BlueScope Steel invoked that clause, seeking that I refer the matter in accordance with the provision. I therefore directed the parties to file brief written submissions concerning their claim for the consideration of Grayson DP. The file was forwarded to him and on Thursday, 12 October, 2006 and he granted leave for the arbitration of the matter to proceed, referring the file again to me. 13 I set the matter down for further mention and programming on Monday, 30 October, 2006 but adjourned the proceedings until Tuesday, 21 November, 2006, Tuesday, 5 December, 2006, Monday, 28 May, 2007 and Tuesday, 16 October, 2007 to await the outcome of the S.357 proceedings which remained unresolved before Boland J during that time. BlueScope Steel had argued that the S.130 matter should not proceed ahead of the resolution of the outstanding S.357 matter and I agreed, notwithstanding the fact that neither the AFMEPKIU nor the ETU were actually involved in those S.357 proceedings. 14 His Honour handed down his decision on the S.357 matter on Friday, 14 December, 2007 - BlueScope Steel Limited v. Australian Workers Union [Matter Nos. IRC 923 and 2427 of 2006], dismissing the summons issued by BlueScope Steel against the AWU (and by the AWU against BlueScope Steel). I reconvened the S.130 proceedings on Monday, 17 December, 2007, Monday, 4 February, 2008 and Tuesday, 26 February, 2008. The S.357 Proceedings 15 There were, in fact, two applications before Boland J, viz: (i) an application by BlueScope Steel alleging contravention by the AWU of the BlueScope Steel Award by the AWU in taking the industrial action over which the warnings in dispute in these S.130 proceedings relate, ie in convening a work stoppage on Tuesday, 31 January, 2006 contrary to the established dispute settling procedure; and (ii) an application by the AWU against BlueScope Steel alleging it also contravened the established grievance settling procedure contained in the BlueScope Steel Award in that it directed Mr Beaumont to not attend work (whilst remaining on pay). 16 As far as the application by BlueScope Steel against the AWU was concerned, the issue revolved essentially around a determination of whether the AWU had directed the work stoppage. BlueScope Steel relied on the dictionary meaning of the word 'directed' in that respect - "...to guide with advice, regulate the course of; conduct; manage; control; to give authoritative instructions to; command; order or ordain (something)...". Boland J had this to say on that issue (at p.22): "...I do not accept that the use of the word 'directing' as it is understood in the context of the summons was meant to convey the meaning '...to guide with advice...' or '...to manager...'. To '...guide with advice...' is to, for example, advise someone of the location of something; to answer the inquiry: '...Could you direct me to the train station...?'. Nor do I consider that the word 'directing', as it is used in the charge, contemplates a situation where the employees themselves may have, on their own accord, decided to stop work to attend a meeting and thereafter AWU officials 'managed' the process by ensuring that the paintline stopped and that employees attended the meeting. We are concerned here with the serious question of whether an industrial organisation of employees unilaterally directed its members, that is commanded, or ordered, or issued an authoritative instruction to them from the outset, to contravene an award provision - an offence that attracts a pecuniary penalty not exceeding $10,000.00. Given the seriousness of the consequences for an organisation that is found to have contravened S.357 of the Act, any summons alleging contravention of an industrial instrument must be framed with precision. I do not consider it was open to BlueScope to use a word in a charge that on a plain reading has a particular meaning and then, shortly before the proceedings are to be heard, to expand the meaning of that word by referring to a dictionary definition that happens to allow for the word to have more than one meaning. If BlueScope had meant to capture in its charge a situation where members of the AWU had sought the advice of officials as to whether they should stop work and attend a meeting and the officials had offered that advice then the charge should have been framed accordingly by using words such as 'advised' or 'encouraged' or 'incited'. I note that in proceedings on Tuesday, 23 October, 2007 BlueScope sought leave to amend the summons by adding the words 'encouraging', 'inciting' and 'organising' after the word 'directing'. Leave was refused, the application having been made far too late..." 17 Likewise, his Honour, in dismissing the AWU application, commented (at p.29) that: "...there is nothing inconsistent with striving to ensure employees have employment security and directing them to go home on full pay whilst the employer undertakes its obligations (under the relevant grievance settling procedure in the BlueScope Steel Award). Sending an employee home on full pay whilst the employer attempts to find alternative employment for an employee whose position is surplus to requirements is not something that adversely affects the employee's security of employment. The employee remains in employment on full pay..." And further stating (at pp.30, 31 and 32) that: "...I accept that BlueScope was genuinely unable to find suitable employment for Mr Beaumont...especially because of Mr Beaumont's medical limitations. That meant Mr Beaumont was surplus to requirements and no suitable positions were available. In that situation BlueScope was required to manage Mr Beaumont, not according to some general rule, but rather having regard to the particular circumstances of that employee. Mr Beaumont was advised that the company intended to manage his situation in accordance with Clause 34.4 of the award and, in the meantime, he was required to go home on full pay. In the absence of a suitable position being available, and given the employer's concern about Mr Beaumont's medical limitations, whilst it was an unwise decision to send him home without first engaging in discussions with the AWU, it was not impermissible to do so. Where there is no work for an employee to perform, the provision in Clause 34.4.4(iv) of the award that '...each employee will be managed on a case by case basis...' provides sufficient latitude to the employer to require the employee not to be at work whilst measures were being taken by the employer to find alternative suitable employment. Whilst a decision to send a surplus employee home might be an unusual course to follow, there is certainly no obligation on the employer under the award to invent work. Any direction to go home would be on the basis that the employee was paid. Non-payment would certainly undermine the principle of employment security expressly provided for in clause 34.4 and would be inconsistent with the intent of that clause. One can imagine, as a matter of practicality and for reasons associated with occupational safety, that the most appropriate course to follow, where an employee is surplus to requirements and is limited in what they can do because of medical restrictions, may be to require the employee to stay at home if the contract of employment and relevant award permits such an arrangement. Other than the provisions of the award relied upon by the AWU, no other basis was put forward as preventing a direction by BlueScope to Mr Beaumont that he go home on full pay. I mentioned that it was unwise of BlueScope, in the circumstances, to send Mr Beaumont home without first conferring with the AWU. Sending an employee home because no suitable positions were available was, I gather, a most unusual course to take. BlueScope should have expected, in the light of Mr Beaumont's position as a delegate of the AWU and his high profile role in disputes that had occurred affecting the paintline, the unilateral decision to send him home on the first day of his return from leave would receive an unfavourable reaction amongst members of the AWU. The preferable course would have been to engage the AWU in discussions before any decision was taken to send Mr Beaumont home, to explain to the union the position it faced with Mr Beaumont and his medical limitations, to invite Mr Beaumont to provide updated medical opinions if he insisted he was fit for work and, if disagreement remained, to follow the disputes procedure in Clause 36 of the award. This approach may or may not have produced a solution. It may have been that in the absence of a flat-footed stand by BlueScope whereby it insisted that Mr Beaumont go home, with the union's input other suitable work could have been found. It may have been the AWU could have convinced Mr Beaumont to produce updated medical opinions that showed whether he was, as he claimed, fit for work on the paintline. It may have been, if disagreement prevailed, that the disputes procedure would have led to the matter being referred to the Commission without resort to industrial action. But whatever the result, it would have demonstrated BlueScope's commitment to treat all employees with the utmost fairness. As it was, BlueScope's decision to send Mr Beaumont home led to accusations by the union that the company had failed to follow the proper award procedures. What followed, predictably, was industrial action with a consequential loss of production and wages... The matter was notified to the Commission and Connor C recommended a position that had the effect of achieving a return by the striking employees and BlueScope finding work for Mr Beaumont to perform. Overall, an unproductive outcome for the company both in terms of industrial relationships and production output. I find, nevertheless, that BlueScope did not contravene clause 34.4 of the award..." Conclusion 18 In the proceedings before me on Tuesday, 26 February, 2008, Mr Hattenfels represented the AWU, the AFMEPKIU and the ETU and Mr Davis represented BlueScope Steel. Mr Davis informed me that, in fact, BlueScope Steel had now agreed to remove the warning notices concerning the industrial action from the personnel records of its employees. I concur with that action. Particularly in the light of the outcome of the S.357 matter before Boland J, I do not believe that the warning notices serve any good purpose in this particular case - especially since they are now over two years old and are therefore stale. 19 My experience has been that such warning notices tend to keep an industrial dispute alive longer than is necessary. And as I indicated in my unreported decision of Thursday, 13 July, 2000 in Gorman v. BHP Integrated Steel Division [Matter No.IRC 4242 of 1999 at pp.29, 30 and 31]: "...As a general rule, industrial action does not form a proper basis for a notice of this nature to be placed on personal files... I note that BHP has in the past made such notations on personal files of employees involved in industrial action and on one occasion the notation was a reflection of a ruling of a member of the Commission. I nevertheless still question whether such notations may be proper to include as part of any personal disciplinary programme. Industrial action is a group act and should be ordinarily considered in that light. For all BHP management may know, a particular employee against whom such a notation is recorded on his personal file may have voted against the industrial action at the meeting of the employees out of which the industrial action emerged... For these reasons I have reservations over any proposal to treat industrial action as a matter to record, for disciplinary purposes, on the personal files of the employees who took part in the industrial action. Such industrial action is group activity and BHP should address such a problem at group level..." 20 But this matter is now concluded satisfactorily. Mr Hattenfels indicated that the AWU proposes that these proceedings be discontinued and the AFMEPKIU and the ETU support that position. In those circumstances, I grant leave for the discontinuance of this matter in accordance with Rule 138. 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.