Industrial Relations Commission New South Wales Medium Neutral Citation: Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union and Australian Workers Union v BlueScope Steel (AIS) Pty Limited [2011] NSWIRComm 1006 Hearing dates: 28 February, 2011; 2 March 2011 Decision date: 24 March 2011 Jurisdiction: Industrial Relations Commission Before: Connor C Decision: Mr Frank Drakos, a metal tradesman, and Mr Len Bendall, an operator, employed by by BlueScope Steel (AIS) Pty Limited at its coil processing plant, breached established safety procedure when they entered an area without proper isolation procedure being adopted. Disciplinary action taken against both employees in the form of a four shift unpaid suspension was appropriate. The formal final warning which Mr Drakos received was also appropriate but Mr Bendall's final warning should be converted to a first warning only. Catchwords: SUSPENSION - steelworks - referral of an industrial dispute for arbitration - safety issue - isolation procedure - final warning and suspension given - grounds for only limited intervention by the Commission warranted Legislation Cited: Industrial Relations Act 1996 Occupational Health and Safety Act 2000 Federal Fair Work Australia Act 2009 Federal Workplace Relations Amendment (Work Choices) Act 2005 Cases Cited: Abbott and Markham v BlueScope Steel (AIS) Pty Limited [2007] NSWIRComm 1087 Homebush Abattoir Case (1966) AR 371 Jovanovski v BlueScope Steel (AIS) Pty Limited [2007] NSWIRComm 1019 Laws v London Chronicle (Indicator Newspapers) Limited (1959) 2 All ER 285 Metropolitan Meat Industry Board v Australasian Meat Industry Employee's Union (1973) AR 231 New South Wales v Commonwealth of Australia (2006) 156 IR 1 Pacific Power v Crump (1993) 48 IR 296 Category: Principal judgment Parties: Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (first applicant) Australian Workers Union (second applicant) BlueScope Steel (AIS) Pty Limited (respondent) File Number(s): IRC 1151 and 1194 of 2010 DECISION INTRODUCTION 1The Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (commonly referred to as the Australian Manufacturing Workers Union) has lodged a notification of an industrial dispute with BlueScope Steel (AIS) Pty Limited. At issue is a final warning and suspension for four shifts of Mr Frank Drakos, a metal tradesman and AMWU member employed by BlueScope Steel in a separate section of the hot strip mill - Unanderra Coil Processing [UCP] - for his failure to follow safety requirements, ie not complying with full isolation procedure in accordance with the job safety and environmental analysis [JSEA] and the standard operating procedures [SOP] for that work. 2The matter was allocated to me. I set it down for a conference on Wednesday, 20 October, 2010, Tuesday, 30 November, 2010 and Tuesday, 7 December, 2010. Conciliation failed to resolve the matter and I programmed the matter for arbitration. 3BlueScope Steel had written to Mr Drakos on Tuesday, 12 October, 2010 informing him of his final warning and suspension, viz: "...This is to inform you that the company has investigated an incident involving yourself that occurred on Thursday, 30 September, 2010 at UCP. The incident occurred as a result of you knowingly and deliberately not following safety critical operating procedures. The findings have shown that you have been trained in, and breached the requirements of...UCP-GEN-C-006 Safe Access Critical Operating Procedure. This behaviour is in breach of the company's code of conduct and cardinal rules, hence is a dismissible offence. Your length of service and employee history has been taken into account. On this basis you will be issued with a final written warning and 4 shift unpaid suspension for unacceptable behaviour in the form of not following a safety critical operating procedure. Please be aware that...any future breach of critical operating procedures or behaviour of a similar kind will lead to further disciplinary action, which may include termination of your employment. Prior to you resuming your normal duties the company will arrange to have you complete a safe access refresher training course. Once this has occurred you will have a job procedure check [JPC] completed for Isolation, JSEA and Safe Access. The company would also like to take this opportunity to remind you that a company sponsored employee assistance programme [EAP] is available to all employees... I encourage you to take advantage of this EAP. Through this confidential, no-cost service you may also be referred to community based support services where appropriate..." 4Mr Len Bendall, an operator at the UCP and member of the Australian Workers Union, was also involved in the incident and the AWU has lodged a separate notification of a dispute concerning the warning notice and suspension he received. The letter which BlueScope Steel wrote to Mr Bendall on Tuesday, 12 October, 2010 was in identical terms to that received by Mr Drakos on that day and the penalty imposed on him was the same, ie a final warning and a four shift suspension. 5That AWU notification on behalf of Mr Bendall was the subject of conference before Grayson DP on Friday, 5 November, 2010, Friday, 19 November, 2010 and Friday, 3 December, 2010. It was not settled by conciliation and because it was related to the matter before me from the AMWU, it was referred to me for arbitration. I set it down for a mention and programming on Tuesday, 7 December, 2010. 6On Wednesday, 16 February, 2011 I attended an inspection of the UCP site which is in premises leased to BlueScope Steel. The UCP receives metal coils from the hot strip mill at Port Kembla and cuts those coils into strips according to the requirements of particular clients. There are two lines at the UCP: one line slits coils (the slitter) and the other line cuts coils to length. There are two mechanical tradesmen and one electrician in the UCP involved in performing preventative maintenance and repairing breakdowns of the lines. Mr Drakos is one of the mechanical tradesmen in the UCP. Mr Bendall was engaged on the slitter on the day of the incident - Thursday, 30 September, 2010 - and on the inspection I observed his work station and the area in which Mr Drakos worked on that day. 7The matters were to proceed to hearing on Monday, 28 February, 2011 and Wednesday, 2 March, 2011. All proceedings have been conducted in the Commission's premises at 90 Crown Street, Wollongong. In proceedings which preceded the inspection on Wednesday, 16 February, 2011 Mr Brotherson , representing BlueScope Steel in the proceedings, requested that the two matters be joined and heard together. That course was not opposed by the AMWU but the AWU at first sought that the matters be dealt with separately - the hearing of the claims made on Mr Drakos (the AMWU member) to take place on Monday, 28 February, 2011 and the hearing for Mr Bendall (the AWU member) take place on Wednesday, 2 March, 2011. 8The reason the AWU matter was allocated to me from Grayson DP in the first place was so that the two related matters could be heard together. It is sensible that they be heard together and in the proceedings before the inspection on Wednesday, 16 February, 2011 I determined that both matters would be dealt with together on both Monday, 28 February, 2011 and Wednesday, 2 March, 2011. 9In the hearing Mr Walkaden represented Mr Drakos and the AMWU and Mr Gorgievski represented Mr Bendall and the AWU. They jointly called Mr Drakos and Mr Bendall to give evidence in the hearing. Mr Walkaden does not dispute the breach of the isolation procedure by Mr Drakos, ie that he failed to perform a full isolation procedure, and that his conduct may warrant some disciplinary measure but he asserted that the penalty imposed on him was too harsh. Mr Gorgievski asserted that Mr Bendall's conduct did not justify a penalty being imposed on him, that BlueScope Steel management has not been consistent in its treatment of safety issues with other employees in the past and, in that light, the action taken against Mr Bendall was too harsh. Mr Brotherson called Mr Michael McPhan, the UCP manager, and Ms Michelle Rizovski, a team leader in the hearing. He argued that the penalty imposed on Mr Drakos and Mr Bendall was, in all the circumstances, fair and reasonable and I should decline to intervene in support of them. 10This industrial dispute was originally notified by the AMWU under s.130 of the Industrial Relations Act 1996 . BlueScope Steel is, of course, a trading corporate within the meaning of S.51(xx) of the Commonwealth Constitution and therefore now falling under the Federal jurisdiction - the federal Workplace Relations Amendment (Work Choices) Act 2005 and the federal Fair Work Australia Act 2009 which has replaced it [ New South Wales v Commonwealth of Australia (2006) 156 IR 1]. However, its Port Kembla steelwork operations are covered by a protocol by which industrial disputes are dealt with, initially by conciliation but ultimately, if necessary, by arbitration, by members of the State Commission. That procedure is now recognised under S.146B of the State IR Act (and Ss.738 and 740 of the FW Act). The AMWU notification over this industrial dispute was made initially under s.130 but it will now proceed by way of s.146B. The AWU notification concerning Mr Bendall was from the outset lodged under s.146B. THE INCIDENT 11On Thursday, 30 September, 2010 Mr Drakos was called to the slitter by Mr Bendall and was informed that the machine had lost line reset and hydraulics. Mr Bendall recorded in a written statement which formed the basis of his evidence in this hearing: "....I had finished my first coil of the day, which was a heavy gauge rod and bar coil. I was in the process of transferring it from the mandrel to the strappers when I lost my hydraulics. The moults were half way off the mandrel and half on the coil car. I immediately called the fitter and told him my situation and that I needed power back quickly in the event the coil car drops and compounds my problem..." 12There is independent hydraulics to the coil car that Mr Bendall may have been able to use to lift the coil but he did not know that. He spoke to Mr Drakos: "We have a bit of a situation here. We have a 26 tonne coil and half of it is on the mandrel and half is off the mandrel. If the hydraulics don't hold, the coil could fall off the mandrel and into the pit." 13Mr Drakos explained in the written statement which formed the basis of his evidence that at that point he and Mr Bendall: "....were standing on a raised platform overlooking the slitter line. I recall observing that there were approximately six moults that were currently on the line and had reached the mandrel. I recall observing that the slitter line had stopped running. The mandrel is at the end of the line. At that point of the process, the moults wrap around the mandrel. Once the moults wrap around the mandrel a coil car is brought under the mandrel and lifted up to touch the moults. The coil car is then used to remove the moults. The coil car requires hydraulics to operate. Of the moulds that I observed on the line, I recall observing that four of the moults remained on the mandrel. I recall observing that two of the moults had moved off the mandrel and were in the coil car. Given the line was without hydraulics, I was concerned that these two moults could fall out of the coil car and into the pit. I was aware that work was performed in the pit. I then walked down from the platform and opened a gate that enclosed the line. This gate is interlocked with the slitter line and on being opened automatically stops the slitter line. I left the gate open and walked across to the hydraulic tank area. On reaching the tank, I checked the oil level and observed that the level was low. In my view, the low level of oil had caused the slitter line to lose hydraulics. Once the slitter line loses hydraulics, the line automatically stops and the pieces of the line remain immobile. This means that the pieces are unable to rotate, move in or out, up or down. This makes it impossible to perform a full isolation of the line. At this point, I filled the oil tank. 14The area where Mr Drakos was working on the hydraulics for the splitter is in an area fenced off with wire mesh to prevent unauthorised or unnecessary access by employees to the slitter, which I accept from my inspection is a large and potentially dangerous piece of machinery. The gate which Mr Drakos opened to access the area has a sign clearly identifying that the area as dangerous, viz: DANGER Live Equipment Access Beyond this guard/point requires Full Energy Isolation Complete an JSEA or SOP and ensure all relevant Isolation Procedures are performed and verified 15Mr McPhan asserted in his evidence that such signage at the site, requiring a JSEA, has been in existence for some considerable time but he conceded in the written statement which formed the basis of his evidence that "...previous adherence to the requirement of the sign may have been inconsistent..." in the past. Recognising that fact, Mr McPhan gave the UCP employees some little time to adjust to stricter safety requirements and during a period which he asserts came to an end in the middle of 2010 he acted to coach and counsel employees over any safety breaches: no doubt this is the inconsistency in treatment of employees over safety breaches which Mr Gorgievski has referred in his submissions. But Mr McPhan indicated in his evidence that after the middle of the year any such so-called moratorium on disciplinary action to employees breaching safety obligations at work had ceased. 16In any event, Mr Drakos entered the area to work on the hydraulics without reference to a JSEA and without a full isolation. Mr Bendall at first walked over to an area adjacent to the slitter and had a drink of water from a bubbler. He then walked over to join Mr Drakos who was by that time working on the hydraulics for the splitter. Mr Bendall entered the restricted area, standing beside Mr Drakos and in front of the opened gate. As an operator at the UCP Mr Bendall may on occasions be called upon to work in that restricted area to assist a tradesman involved in maintenance but he was not assisting Mr Drakos on Thursday, 30 September, 2010. He was simply standing beside Mr Drakos and asking him what the problem was. Mr Drakos told Mr Bendall that he believed the problem with the hydraulics was low oil and that he would take about ten minutes to fix it. In his evidence Mr Drakos claimed that at that time he was 99.9% sure that hydraulics was the problem - as it was. 17At that time Ms Rozovski walked past the area where Mr Drakos was working and asked him why he had not isolated the line. Mr Drakos replied: "Normally we don't do it." 18Ms Rozovski then asked Mr Bendall what he was doing and he informed her: "Having a chat." 19Ms Rozovski told Mr Drakos and Mr Bendall that they were not allowed in that area without a full isolation and a JSEA and she instructed them to leave the area. She left but returned shortly thereafter with Mr Bill Allen, the maintenance supervisor for the UCP. Mr Allen asked Mr Drakos if he had isolated the line. Again Mr Drakos replied: "No, we have always done this task without isolating." 20Mr Drakos accompanied Mr Allen and Ms Rozovski to Mr Allen's office to look for a JSEA and found one, dated Tuesday, 27 July, 2010 which, in fact, required isolation procedure - and on which Mr Drakos should have relied. 21There is some conflict concerning the words in that JSEA in this hearing, however. The work described in it - hydraulic pump - coupling and oil check and fill - is, of course, relevant for the task Mr Drakos undertook on Thursday, 30 September, 2010. However, whilst the JSEA has been completed in black pen, the words I have highlighted in italics - "and fill" - were written in blue pen, the implication being that they were added later. How much later becomes a moot point in this hearing. The suggestion is that those additional words were added to the JSEA after the incident of Thursday, 30 September, 2010, either on that day or subsequently. 22I accept from the evidence that, although the words in question may have been written in some time after the bulk of the JSEA had actually been completed on Tuesday, 27 July, 2010, there is no reason to believe other that those additional words were already contained on the JSEA at least prior to Thursday, 30 September, 2010. Indeed, Mr McPhan recorded in his written statement that any assertion that the words "and fill" were added after the incident on Thursday, 30 September, 2010 was inconsistent with what Mr Drakos had claimed to him during the interviews he held with him. He recorded in his written statement: "....Mr Drakos spoke of specifically having added the step of filling the oil tank to the JSEA completed to enter the area on Tuesday, 27 July, 2010... I do not accept any suggestion now by Mr Drakos that the words 'and fill' in the description of work component of the... JSEA were added on Thursday, 30 September, 2010...." 23Moreover, since there is no dispute that the words "oil check" were in the JSEA from the outset, and that was the task which Mr Drakos was required to perform in the first place, that task alone was covered by the JSEA already: the words "and fill", in that sense, really add nothing of significance to change the situation. 24Mr Drakos and Mr Bendall were stood down on pay from Thursday, 30 September, 2010 and Thursday, 7 October, 2010 and without pay from Monday, 11 October, 2010 until Thursday, 14 October, 2010. They had attended separate meetings with BlueScope Steel management on Tuesday, 5 October, 2010 and further meetings on Monday, 11 October, 2010 and Tuesday, 12 October, 2010 at which they were given the final warning letter. They returned to work on Monday, 18 October, 2010. CONCLUSION 25Mr Bendall recorded in his written statement that the loss of hydraulics to the slitter is the equivalent of a full isolation "...as no matter what buttons you push or keys you turn, these attempts will prove ineffective as the machine will remain stone dead...". Mr Drakos and Mr Bendall are also suggesting in their evidence that they were confronted on Thursday, 30 September, 2010 with an emergency situation which required immediate attention. For instance, in his written statement Mr Bendall goes on to say: "Mr McPhan has said, since the incident, that if we are faced with a situation on the line that is a crisis or emergency, it should be fixed immediately. I had a 26 tonne coil half on the coil car and half on the mandrel I considered this an emergency that required an immediate response..." 26Mr McPhan rejects Mr Bendall's claim that a hydraulic trip was the equivalent of full energy isolation, pointing out in his written statement that only a full energy isolation procedure may effectively remove all stored energy to the slitter and it was common knowledge that there were some faults already in the electrical power to in the UCP at the time. Mr McPhan also rejects the assertions of Mr Drakos and Mr Bendall that they were confronted with an emergency situation on Thursday, 30 September, 2010. When he was addressing the workforce about emergency situations he described two scenarios: where some person's life was in danger or where a fire had broken out. Under those circumstances the operator may render the line as safe as possible by using the emergency stop and key switch and then, when it was safe to do so, enter the isolation area. 27Mr McPhan recorded in his written statement that the situation on Thursday, 30 September, 2010: "....does not qualify as either a risk to life or of fire. Further, I have never stated that signage is to be disregarded, particularly signage that clearly states 'Danger - Live Equipment - ' which is the signage in question in this matter. This...reaffirms to me that Mr Bendall's lack of credibility in this. On one hand, he claims an emergency, but on the other he goes off for a period for a drink and claims there was no risk for anyone's safety..." 28In my opinion, both Mr Drakos and Mr Bendall have on this occasion adopted what I regard as a far too casual approach to safety issues. They were very vague about their understanding of the "cardinal rules" on safety and the deficiencies they allege in the training they have received over safety issues. But this is not rocket science here. It should have been common knowledge and, after all, they both did enter an area clearly marked with an unambiguous sign that should have restricted their access. 29What chiefly appears to concern Mr McPhan is the impression he has formed at safety meetings that both Mr Drakos and Mr Bendall regard safety issues as a waste of time. He claims that at those meetings they have both expressed views along those lines. If the two employees have such a view they should modify their attitude and treat occupational safety as a more serious concern. 30Mr Brotherson spoke in his submissions of the responsibility all employers in New South Wales had both at common law and by virtue of s.8(1) of the Occupational Health and Safety Act 2000 to ensure a safe working environment for all of its employees. He referred in his submissions to comments I made in my decision of Wednesday, 11 April, 2007 in Jovanovski v BlueScope Steel (AIS) Pty Limited [2007] NSWIRComm 1019 at para.27, viz: "....I am uncomfortable to intrude in these proceedings in any manner which would possibly undermine the sensible emphasis which BlueScope Steel places on safety issues in the steelworks with its cardinal rules. There is a need for employees to appreciate that, among other things, their continued employment in the steelworks is largely dependent upon their compliance with those cardinal rules..." 31Indeed in the past in dealing with disciplinary matters involving steelwork employees I have, in fact, raised safety issues in the Port Kembla steelworks to the level of a fundamental condition for all employees working there. For instance, in my decision of Wednesday, 19 December, 2007 in Abbott and Markham v BlueScope Steel (AIS) Pty Limited [2007] NSWIRComm 1087, involving the dismissal of two employees who failed to isolate power to equipment in coke ovens at the steelworks, I went so far as to suggest (at para.45 and 46) that: "...such a fundamental breach of an important condition of contracts of employment in the steelworks is... misconduct. (The two dismissed employees) recklessly disregarded what I consider to be an essential condition in their contracts of employment at the steelworks [ Laws v London Chronicle (Indicator Newspapers) Limited (1959) 2 All ER 285]. That is sufficient to ground (the) allegation that they were guilty of misconduct. I do not consider that (the respondent's advocate) has to prove their act was deliberate , only that they were recklessly negligent . I believe that they were. I note in that respect the comments of Cook J of the former State Industrial Commission in the Homebush Abattoir Case (1966) AR 371 at p.374), viz: '...In my view, the question of whether the conduct of an employee amounts to misconduct justifying instant dismissal would generally depend upon whether or not the act complained of can properly be regarded as deliberate or wilful or of such a nature as to strike at an essential element in the contract of service ...'. My emphasis. The conduct of the (dismissed employees) strikes at the heart of their employment in the steelworks..." 32However, it is always open to an employer to chose a lesser penalty to dismissal, eg counselling or a warning, having regard to an employee's otherwise overall clean employment record. It is also a legitimate function of industrial tribunals in the country to examine the severity of a particular penalty to an employee and to determine if, in all the circumstances, it is excessive: the punishment should fit the crime [ Metropolitan Meat Industry Board v Australasian Meat Industry Employees' Union (1973) AR 231 at p.233 and Pacific Power v Crump (1993) 48 IR 296 at p.302]. 33Both Mr Drakos and Mr Bendall have lengthy periods of employment with BlueScope Steel - over 30 years. Their employment with BlueScope Steel appears to have been without any serious incident, certainly in recent years. And apparently neither Mr Drakos nor Mr Bendall have previous warnings placed on their personal file. It is in that light that Mr Walkaden and Mr Gorgievski argue that it was inappropriate to move immediately to a final warning and a four shift suspension. But it is clear from the letter they received that the length satisfactory service of Mr Drakos and Mr Bendall was taken into account by BlueScope Steel management when considering the disciplinary action to take against the two men. 34As I see the position, the compliance or non-compliance with the safety requirements and with the JSEA was primarily the responsibility of Mr Drakos, the mechanical tradesman. He is certainly the more culpable employee by his conduct, in my opinion, and he would be wise to reassess his attitude and treat safety issues more seriously at work. I accept, as Mr Walkaden submitted in the hearing, that a final warning, a permanent notation placed on the personal file of a BlueScope Steel employee represents a serious penalty to him. Nevertheless, I see no grounds to intervene in support of him in this hearing. 35However, I see the position with Mr Bendall in a slightly different light. His breach of safety was no doubt equally wrong but he had actually entered the restricted area after Mr Drakos had already commenced working there. Of course, he should not have entered the area at all and it was unsafe for him to do so - albeit, as Mr Gorgievski submitted, he was only just inside the restricted area. Mr Bendall would also be wise to revise his attitude to safety issues generally. I do not propose to alter the suspension he received but, in the circumstances, I believe that the final warning he received should be replaced by a first warning. 36I direct BlueScope Steel to alter that final warning to Mr Bendall accordingly. 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. Decision last updated: 24 March 2011