Industrial Relations Commission of New South Wales CITATION: Australian Workers Union v. BlueScope Steel (AIS) Pty Limited [2006] NSWIRComm 1152 APPLICANT Australian Workers Union PARTIES: INTERVENOR Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union RESPONDENT BlueScope Steel (AIS) Pty Limited FILE NUMBER(S): IRC 3142 of 2006 CORAM: Connor C CATCHWORDS: industrial dispute - transfer of employees - changes to working conditions - referral agreement - requirements for conciliation in settling industrial dispute - directions to confer - interlocutory decision LEGISLATION CITED: Industrial Relations Act 1996 Federal Workplace Relations Amendment (Work Choices) Act, 2005 Construction, Forestry, Mining and Energy Union v. Newcrest Mining Limited (2005) 139 IR 50 CASES CITED: Re Cram; ex parte New South Wales Colliery Proprietors Association Limited (1987) 61 ALJR 401 Sugar Manufacturers Case (1926) AR 113 New South Wales Teachers' Federation v. New South Wales Department of Education and Training (2000) 100 IR 441 HEARING DATES: 09/10/2005 DATE OF JUDGMENT: 10/09/2006 EXTEMPORE JUDGMENT DATE : 10/09/2006 APPLICANT Dave Hancock Australian Workers Union INTERVENOR LEGAL REPRESENTATIVES: Brad Hattenfels Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union RESPONDENT Chris Allen BlueScope Steel (AIS) Pty Limited DECISION: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: CONNOR C Monday, 9 October, 2006 Matter No IRC 3142 of 2006 Australian Workers Union and the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union and BlueScope Steel (AIS) Pty Limited Notification of an industrial dispute under S.130 of the Industrial Relations Act, 1996 re transfer of maintenance employees in the hot strip mill INTERLOCUTORY DECISION [2006] NSWIRComm 1152 1 Pursuant to the provisions of S.130 of the 1996 Industrial Relations Act, the Australian Workers' Union lodged a notification of an industrial dispute with BlueScope Steel (AIS) Pty Limited concerning employees involved in maintenance in the hot strip mill. BlueScope Steel has transferred four employees to different teams in the same shift. It claims that the transfer has been dictated to ensure an equalisation of skills across the hot strip mill operations. As I understand the position, there is no real change to working conditions or the level of remuneration the employees receive but the employees will now work in different teams than those with which they were familiar. 2 Essentially, the employees remain concerned at what they see as the lack of consultation over this shift change and they would like to know more details concerning the change. They assert that they have been frustrated by BlueScope Steel in their attempts in that respect. They also claim that there is not the skills shortage in the first place to warrant the shift changes and they are opposed to the shift changes. They have asserted that the transfers involve some hardship (unspecified) to them. 3 The matter was allocated to me and I set it down for conference on Tuesday, 19 September, 2006 (in the Commission's premises at 90 Crown Street, Wollongong). The Automotive, Food, Engineering, Printing and Kindred Industries Union intervened in the proceedings. I recommended that the parties confer and adjourned the proceedings for further conference on Friday, 22 September, 2006 (also in Wollongong). A recommendation to the parties to confer over a particular industrial issue is hardly a novel approach to resolving any industrial dispute but this particular recommendation seems to have caused a considerable amount of unnecessary friction between BlueScope Steel management, the AWU and the AFMEPKIU - out of all proportion to the issue itself, which should not have been allowed to grow into the major concern that it appears to have done. 4 Not a great deal of progress has apparently been made in the discussions that I had recommended take place. Nor was the matter progressed in the proceedings up to Friday, 22 September, 2006 in any constructive manner. The AWU and the AFMEPKIU claim that BlueScope Steel management has refused to outline any reasons for the change. According to the AWU and AFMEPKIU, BlueScope Steel simply confirmed that it was its right to make the change to the work teams. The AWU and the AFMEPKIU assert that the dispute settling procedure has therefore been exhausted. 5 BlueScope Steel has indicated to me that it is prepared to address any issues where employees encounter some difficulties in the changes it proposes but it sees no reason for further discussions concerning the matter either. It appears to be concerned that the employees will impose some veto on the arrangements which will impede it in its organisation of the hot strip mill. The AWU and the AFMEPKIU dispute that they propose any such veto. And they do not have that right in any event. A classic Mexican standoff has developed with this matter which is unnecessary, in my opinion. 6 I adjourned the proceedings for a further conference on Thursday, 28 September, 2006 (in Sydney). By that time I expected that a referral agreement pursuant to the provisions of S.146A and Practice Direction No.18 would have been completed in accordance with the protocol which had been developed for the BlueScope Steel operations in Port Kembla. However, when I was informed that the dispute was unresolved, I adjourned the proceedings for further mention on Monday, 9 October, 2006 (in Wollongong), again recommending that the parties hold further discussions over the matter. I had formed the impression that, indeed, those discussions may result in the resolution of the matter without the need for the matter to be advanced further. I have to say that I have been disappointed by the attitude of the parties to my recommendations to confer. 7 I have nevertheless been provided with a referral agreement, signed by both parties, which refers the following matter for conciliation and/or arbitration: "...the transferring of shift employees to different shift crews..." The referral agreement makes no reference to consultation, however. It is a clause of the referral agreement, consistent with a 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..." BlueScope Steel has indicated that it opposes leave for arbitration. I made directions that within seven days the parties should file brief written submissions concerning their claim for the consideration of a Presidential member to permit arbitration to proceed. But should this matter proceed to arbitration at all? I do not believe that should be necessary. 8 I have not issued the certificate of attempted conciliation which is required for arbitration of any S.130 matter and lodged it in the prescribed manner for the simple reason that, as far as I was concerned, if the discussions that I recommended have not occurred, the process of conciliation has not been exhausted for the matter to proceed to arbitration. In terms of S.135(1): "The Commission is to deal with an industrial dispute by arbitration only if it is not resolved by conciliation ..." 9 S.135(1), in fact, follows the long established policy of industrial tribunals in this country that the process of conciliation be exhausted before any arbitrated decision is made. As far as I am concerned, conciliation has not concluded if the parties are not holding the discussions that I have recommended or, at least as far as I can see, not following the spirit of my recommendations. I would have thought that the strict application of the protocol that has been developed for BlueScope Steel operations should not replace the customary procedure that has been developed for discussions between management and the trade unions representing their employees as a necessary preliminary step before a matter proceeds further before the Commission. In the Sugar Manufacturers Case (1926) AR 113 the traditional role of conciliation before industrial tribunals was explained (at p.115) in the following terms: "…Conciliation should be tried as far as possible, but that in the last resort, if conciliation fails, there shall then be some compulsory authority which will deal with matters in dispute - matters that are claimed, claims that are rejected - by the method of arbitration…" 10 As I understand the position, BlueScope Steel has argued that the S.130 notification on its own is not competent jurisdictionally but relies on the referral agreement which, in turn, depends upon the dispute settlement procedure adopted for BlueScope Steel operations in Port Kembla being followed by the employees. But recommendations made by members of the Commission are a longstanding part of the conciliation process for the resolution of any industrial dispute - in fact, a basis of the 1996 State Act [S.3(g)], as I see it. In my opinion, my jurisdiction to make recommendations or directions under S.134(2) as part of the conciliation process remains unchanged, notwithstanding any restrictions which may otherwise now flow from the 2005 Federal Workplace Relations Amendment (Work Choices) Act with respect to arbitration. 11 Moreover, independent of the protocol developed with referral agreements for BlueScope Steel's operations in Port Kembla, I would have thought that it was no more than commonsense for the parties to fully ventilate their concerns in discussions - and, in any event, something demanded by the dispute settlement procedure itself - prior to advancing the matter within the Commission. In view of what I have been informed in the proceeding, I am not satisfied that has actually occurred in this case. 12 As the Full Bench of the Commission (Walton J - Vice President, Boland and Staff JJ) indicated in Construction, Forestry, Mining and Energy Union v. Newcrest Mining Limited (2005) 139 IR 50 at p.57: "...The Commission will not lightly issue certificates of attempted conciliation because they signal a failure of the primary dispute settling mechanism under the Act. Such certificates may also be the gateway to sanctions under the Act if the industrial dispute is accompanied by industrial action and a dispute order is later made. Before a certificate is issued the relevant party must be given an opportunity to be heard as to whether a S.134(2) direction should be taken into account: [ New South Wales Teachers' Federation v. New South Wales Department of Education and Training (2000) 100 IR 441 at p.15]. Conciliation (or more aptly its failure) is, therefore, the jurisdictional prerequisite to the exercise of any powers by the Commission in arbitral proceedings under S.134(1)... We note that the issue by the CFMEU in its dispute notification is the attitude of Newcrest in refusing to discuss with the union a final written warning that has been issued to one of its members... We are not privy to the reasons why Newcrest has adopted the position it has in refusing discussions with the CFMEU...but it does seem to us the issue is eminently resolvable by the process of conciliation..." I take a similar view in the matter before me in these proceedings that conciliation should resolve this matter without the need to programme it further for arbitration. 13 That does not mean, of course, that the employees, or the AWU and the AFMEPKIU which represents them, are entitled in any discussions to dictate to BlueScope Steel management any of the terms under which the employees may be engaged. Members of the Commission will ordinarily intervene in issues of this nature only where they are satisfied that a decision of management acts unfairly, unreasonably or unsafely in some way to the employees. And the Commission will always exercise caution before it makes an order in settlement of a dispute where that order amounts 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]. 14 In the circumstances, in the proceedings on Monday, 9 October, 2006 I made a direction in accordance with S.134(2) that BlueScope Steel, the AWU and the AFMEPKIU hold further discussions prior to my referring the matter to a Presidential member for consideration on the question of leave for arbitration. In the light of the written submissions on that question of leave, I propose to reconvene these proceedings to have reported to me the outcome of the discussions I have directed take place. I also indicate my preparedness to chair a conciliation conference, if that is required, so that the issues in dispute may be properly ventilated. 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.