Australasian Meat Industry Employees' Union, Newcastle and Northern Branch v Sunnybrand Chickens and another re independent contracting

Industrial Relations Commission (NSW)|2003-10-27|Before: Harrison DP, Mr J

CITATION : Australasian Meat Industry Employees' Union, Newcastle and Northern Branch v Sunnybrand Chickens and another re independent contracting [2003] NSWIRComm 361 Australasian Meat Industry Employees' Union, Newcastle and Northern Branch PARTIES : Sunnybrand Chickens Australian Independent Contractors Agency FILE NUMBER: IRC 3601 and IRC 4677 of 2003 CORAM: Harrison DP CATCHWORDS : Notification pursuant to s130 of the Act - Decision Re Notice of Motion - Operation of disputes procedure- establishment of status quo Held - must have substantive dispute to invoke disputes procedure - contracting not unusual in industry - objection to contracting not sustainable - form of independent contracting challenged - subject to future proceedings - claim for wages lost by strike action refused. LEGISLATION CITED : Industrial Relations Act 1996 HEARING DATES: 09/02/2003; 09/12/2003; 09/22/2003; 09/25/2003; 10/16/2003 DATE OF JUDGMENT: 10/27/2003

LEGAL REPRESENTATIVES: RESPONDENT Mr J Phillips Council and Mr H Lee Solicitor for Sunnybrand Chickens Mr Young of Counsel for Australian Independent Contractors Agency

JUDGMENT: - 12 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: HARRISON DP Monday, 27 October 2003

Matter No IRC 3601 of 2003 Notification under s 130 by The Australasian Meat Industry Employees' Union, Newcastle and Northern Branch of a dispute with Sunnybrand Chickens re independent contracting

Matter No IRC 4677 of 2003 Notification under s 130 by The Australasian Meat Industry Employees' Union, Newcastle and Northern Branch of a dispute with Australian Independent Contractors Agency and another re breach of award

DECISION RE NOTICE OF MOTION [2003] NSWIRComm 361

1 Matter No IRC 3601 of 2003 was subject to proceedings before the Commission as presently constituted subsequent to unsuccessful conciliation before Mr Commissioner Ritchie and the exercise of right pursuant to s173 of the Industrial Relations Act 1996 ("the Act") by the Australasian Meat Industry Employees' Union, Newcastle and Northern Branch ("the Union").

2 Orders, Directions and Recommendations were issued on 15 August 2003 setting out the relevant background, which need not be repeated here. It is sufficient to restate paragraphs 9, 10, 11 and 12 which set out the substance of the application by the Union and attendant circumstances. 9 Mr Davis submitted that the employees, whilst having taken strike action on 12 and 13 August 2003 presented for work in accordance with the Commissioner's directions on 14 August 2003 and were denied that employment in accordance with the application of the disputes settlement procedure. Mr Davis made application for orders of an interim nature in the following terms: 1. The employer will apply the Status Quo in the Dispute Settlement Procedure as follows: · All boners engaged on boning duties on 1 July 2003 will continue to perform boning duties at the Byron Bay premises under the same terms and conditions (including the tally system applying at the time); · The employer will desist from training other workers in boning duties; and · The employer will not enter into any contract, agreement or arrangement which was not in force at 1 July 2003 for the boning of chicken meat by any other party, person or corporation. 2. The employer will desist immediately from allowing representatives of Australian Independent Contractors Agency (AICA) to speak with or meet with its employees at its premises located at Ewingsdale Road, Byron Bay; 3. The employer will cease promoting independent contracting to its employees or cause others to do so;

The employer will cease recommending employees terminate their employment to become independent contractors;

The employer will pay all employees not offered work by the employer on 14 and 15 August 2003 two days' pay at the rate of the employee's average daily earnings of the last 12 months.

These Interim Orders to remain in force until the matter is resolved by the Industrial Relations Commission of New South Wales.

10 Clause 28.7 of the Poultry Industry Preparation (State) Award 334 IG 322 at 343 states: During the discussions the status quo will remain and work will proceed normally in accordance with this award and without stoppage or the imposition of any ban, limitation or restriction. "Status quo" will mean the situation existing immediately prior to the dispute or the matter giving rise to the dispute.

11 During the course of proceedings it emerged that there is a significant difference between the parties as to the situation existing on 1 July 2003 which, in its application for orders the Union concedes is the relevant date for application of the dispute settlement procedure.

12 It is established in the instant proceedings that the substantive dispute is a decision by the Company to contract out certain deboning work to be carried out at a facility at the nearby town of Bangalow. Mr Lee submitted that arrangements were in place for this to occur prior to 1 July 2003 and that there had been advice to and concurrence by the Union. Mr Lee acknowledged that the Union's concurrence is disputed.

3 The relevant determinations are found in paras 16, 17 and 18 in the following terms: 16 There is a fundamental obligation upon both parties to comply with the Award. As stated in the Interlocutory Decision issued on 1 August 2003 in Matter NO IRC 2200 of 2003: There is in my view an overwhelming public interest in the fundamental requirement that employers and employees comply with their obligation pursuant to the industrial instrument regulating employment. There can be no issue that the Commission lacks power pursuant to s136 of the Act to require industrial parties to meet their obligations and equally there can be no issue that s175 of the Act affords appropriate authority for interpretation of those obligations where required.

17 I note that the directions of Commissioner Ritchie required no more or less than that compliance, the difficulty being a practical approach by the parties to returning to the situation as of 1 July 2003.

18 I am not persuaded that dispute orders are necessary at the present time. I make orders, directions and recommendations pursuant to s136 of the Act in the terms as directed by Commissioner Ritchie. I make further directions to the parties in compliance with these orders. 1. In particular, I direct all boners engaged on boning duties as of 1 July 2003 will, so far as work is available, return to those duties in the same terms and conditions, including the tally system applying at the time.

I do not require for the purpose of the present orders and directions that the Company immediately cease and desist the Bangalow operation, however, I strongly recommend that they take such action as is open to them to scale back or suspend that operation with a view to minimising or eliminating the displacement of those boners employed on 1 July 2003 from boning work. To the extent that members of the Union are displaced from boning work by the ongoing Bangalow operation I will consider such application for recompense as the Union is advised to put in appropriate proceedings.

I further recommend that the Company heed the intent of orders 2, 3 and 4 sought by the Union. I make no order or direction in that regard.

Claim for wages in respect to 14 and 15 August 2003 enunciated in item 5 of the orders sought by the Union may be subject to application in the substantive proceedings. I direct the Union to provide an outline of case and statement of remedy sought in the substantive proceedings in the form of draft order, award or direction available pursuant to s136 of the Act by close of business on Friday 22 August 2003.

I relist these proceedings for 11.00 am Tuesday, 26 August 2003 for the purpose of programming arbitration in respect to the substantive issues.

4 On 28 August 2003 the Union filed a Notice of Motion with an Affidavit of Urgency asserting that Sunnybrand Chickens ("the Company") had failed to comply with the terms of the Orders, Directions and Recommendations made on 15 August 2003 in that members of the Union employed on boning duties as at 1 July 2003 were not being offered boning work in the same way that they were on that date; and that the Company continued to move work to the Bangalow facility. The Union sought Orders in the following terms: 1. The Respondent will offer all poultry boning work to the boners employed on such duties on 1 July 2003 before offering it to others not so employed on 1 July 2003.

The Respondent will not redeploy such boners as were employed on 1 July 2003 to other duties until all poultry boning work is completed for the day.

These Orders will operate from 22 August 2003 until matter IRC 3601/03 is determined by the Industrial Relations Commission of NSW.

5 Due to the unavailability of the Commission as presently constituted the matter was reallocated to his Honour Haylen J who heard the application for Orders pursuant to the Notice of Motion in part.

6 The matter was before Haylen J on 2 September 2003 resulting in some ventilation of argument and the establishment of a holding position pending further proceedings before his Honour on 12 September 2003.

7 On 12 September 2003 Mr Davis continued his appearance for the Union. Mr J Phillips of Counsel replaced Mr Lee in representing the Company. Ms Carl sought leave to intervene on behalf of the Labor Council of New South Wales. Mr Young of Counsel sought leave to intervene on behalf of the Australian Independent Contractors Agency (AICA).

8 Subsequent to further ventilation of argument and some discussion in private conference between the parties his Honour noted the difficulty faced by both sides of the argument arising from a lack of necessary documentation and evidentiary basis. Arrangements ensued to allow the Union discovery during the course of the subsequent week in order that the true nature of the case be determined. His Honour made recommendation that for the next 14 days there be no increase in employment at the Bangalow facility.

9 The matter was next before Haylen J on 22 September 2003. The parties continued their respective appearances.

10 On that occasion Matter No IRC 4677 of 2003, a notification pursuant to s130 of the Act by the Union of a dispute with AICA and the Company re breach of award, was joined with the instant matter.

11 His Honour made the following Orders and Directions: 1. That the matters 3601 of 2003 and 4677 of 2003 be joined and heard together.

As a preliminary issue, the Commission will determine whether the independent contractors supplied by AICA to the Sunnybrand Chickens Pty Limited plant at Bangalow are employees of independent contractors.

That the existing hearing date listed for Monday 13 October to Friday 17 October 2003 be used for the hearing of this preliminary issue.

That the Union file and serve statements or affidavits of evidence to be relied upon for the determination of the preliminary issue by 4 pm on 26 September 2003.

That the respondents Sunnybrand and AICA file and serve statements or affidavits of evidence to be relied upon for the determination of the preliminary issue by twelve noon on 9 October 2003.

That the preliminary issues be heard in Murwillumbah on Monday 13 October to Friday 17 October 2003. 12 The proceedings were then adjourned to 25 September 2003 on which occasion his Honour heard evidence in respect to the Notice of Motion of 28 August 2003. The evidence received by his Honour involved particulars of small claims for 36 employees (Ex A); the AICA hiring agreement with Sunnybrand Chickens (Ex B); the lease of industrial factory at Lismore Road, Bangalow applicable from 1 August 2003 to 31 July 2006 (Ex C); weekly production and yield reports and weekly boning summary of work undertaken by independent boning contractors (Ex D); and the statement of Mr Corey Windle, employed by the Company as a boner and Union delegate at the Byron Bay facility (Ex E).

13 The evidence brought by the Company involved correspondence to the Union of 14 August 2003 (Ex 1); the recommendations of Ritchie C. (Ex 2); the Poultry Industry Preparation (State) Award (Ex 3); a computer printout giving details of relevant employees' income and leave arrangements (Ex 4); and an affidavit of Mrs R Holloway, Assistant General Manager of the Company (Ex 5).

14 At the conclusion of proceedings on 25 September 2003 the evidence of Mrs Holloway was incomplete. The matter was adjourned on the basis that undertakings described by Mrs Holloway in para 6 of her affidavit (repeated below) would represent the holding position until the conclusion of proceedings then scheduled for 13 October 2003 at Murwillumbah Court House before the Commission as presently constituted. 6 Following the recommendation made by His Honour Deputy President Harrison on 15th August 2003 the company reduced its reliance on contract labour supplied by AICA to the point where it is currently:- Skilled boners 5 Trainee boners Nil Labourers 1 Manager 1

15 For good and cogent reasons, not objected to by any party and with the consent of the Commission, the Union sought rescheduling of proceedings to 16 and 17 October 2003. In making that request Mr Davis advised on 10 October 2003 that he wished to conclude the evidence and argument on the Notice of Motion part heard by Haylen J., and with the remaining time available sought the parties be heard on programming matters for arbitration.

16 A Notice of Appearance was filed identifying Mr Stropiano as taking carriage of the matter on behalf of the Union.

17 The matters resumed at Murwillumbah Court House on 16 October 2003. Mr Stropiano appeared with Mr Davis on behalf of the Union. Mr H Lee, Solicitor, appeared on behalf of the Company. Mr Young appeared on behalf of the AICA. Ms Carl appeared on behalf of the Labor Council.

18 Cross examination of Mrs Holloway was completed and further evidence in the form of staff lists and overtime schedules (Ex 6) introduced during the course of Mrs Holloway's evidence.

19 Mr Lee sought alternative Orders and Directions in the following terms: 1. Subparagraphs 1, 2 and 3 of the "further directions" under paragraph 18 of the "Orders Directions and Recommendations" made 25th August 2003 by Deputy President Harrison are vacated.

The applicant is discharged from its undertakings given on 25th September 2003 to the Commission as constituted by His Honour Mr Justice Haylen.

Until further order of the Commission the applicant shall forwith enter into the following undertakings to the Commission and to the AMIEU: (a) The Company will not terminate the employment of any employee engaged in boning work as at 1st July 2003 for reason of redundancy.

(b) In respect of each weekly (permanent) employee with one year or more of continuous service as at 1st July 2003 and engaged in boning work at that date the Company will continue to work such employees in boning work at its Byron Bay plant and otherwise under the same terms and conditions as applied as that date, subject only to paragraph 5(a) below.

(c) The Company will not allow representatives of Australian Independent Contractors Agency (AICA) to speak with or meet with its employees at its premises located at Ewingsdale Road, Byron Bay;

(d) The Company will not promote independent contracting to its employees or cause others to do so;

(e) The Company will not recommend employees terminate their employment to become independent contractors.

The Company may at its discretion deploy its employees, whether weekly (permanent) or casual, other than those described in paragraph 3(b) above, who were engaged in boning work at the Byron Bay plant as at 1st July, in duties throughout its plant according to production requirements as determined by the Company on a daily basis

Subject to the undertakings given by the Company under paragraph 3 above: (a) The Company may at its discretion according to production requirements regulate the amount of overtime offered to workers engaged in boning work.

(b) The Company may without restriction or limitation utilise all such labour supplied by Australian Independent Contractors Agency Pty Limited as it requires in order to enable the Company to meet its production requirements.

20 At the heart of the Notice of Motion is the Union's contention that the Company has failed to scale back or suspend the Bangalow boning operation in accordance with Recommendation 2, which it is contended is necessary to comply with the status quo as described in the disputes settlement procedure.

21 The contentious issue in the proceedings giving rise to the recommendation and pursuant to the Notice of Motion is whether there was agreement prior to 1 July 2003 from the Union that the contracting out arrangements could take place. 22 During the course of the proceedings a number of small claims are made in accordance with the final sentence of Recommendation 2 and an application made for payment of wages for 14 and 15 August 2003, which Mr Stropiano asked that I determine on the evidence before me. The small claims detailed in Ex A were not pressed, though the detail therein is relied upon by both parties to demonstrate earnings potential and in particular the availability, acceptance and refusal of overtime as a component of earnings potential.

23 The evidence of Mrs Holloway is that the Company undertook consultation with senior officials of the Union in early June 2003 in respect to the contracting out of boning work to the Bangalow facility. Mrs Holloway's evidence is that there was no specific objection to the proposals, which she construed and acted upon as agreement.

24 Mrs Holloway's evidence is that the Company was motivated to contract out boning work as a means of reducing costs in difficult economic circumstances, deposing that the monthly feed bill had increased by $1.2 million, and that unreliability in respect to attendance and an inclination to refuse overtime by boners made a restructure of that function essential.

25 There was robust debate between the parties as to whether the Company eliminated overtime to make engagement at the Bangalow operation more attractive; or whether boners were disinclined, for a range of reasons, to be available for overtime subsequent to a change in working hours from 5am-2pm to 8am-4pm.

26 Mr Stropiano contended that any difficulty with the availability of employees for overtime is created by the late finishing time which rendered people less available due to prior commitments.

27 Mrs Holloway deposed that the earlier starting time was impractical as employees tended to arrive at whatever time suited them from 5 am onwards, creating substantial inefficiencies in the boning operation.

28 Mrs Holloway's evidence is that the Company did comply with the recommendation to scale back the Bangalow operations and removed all trainees from that location, significantly reducing the number of persons involved in that operation. Mrs Holloway further deposed that notwithstanding arrangements entered into with the Union prior to 1 July 2003 a return to the circumstances of that time was not possible as there had been a significant reduction in the number of boners engaged at Byron Bay through a process of natural attrition. Mrs Holloway's evidence is that of the 45 employees engaged on boning as at 1 July 2003 only 36 remained at the time she swore her affidavit (Ex 5) on 10 September 2003; and by the time of cross examination on 16 October 2003 the number had reduced further to 31, 12 of whom had greater than 12 months service, five less than 12 months service, and 14 casual employees.

29 Mrs Holloway's evidence is that the effect of the dispute and uncertainties surrounding the status quo had resulted in a general suspension of training of boners at both locations.

30 The application of the disputes procedure must of necessity be linked to a fundamental dispute. It is not available in my opinion simply to have a dispute concerning the application of the dispute settlement procedure alone. Accordingly, it is necessary to analyse the development of the matter to determine precisely the issue in dispute giving rise to the notification of the dispute settlement procedure and thereby the status quo.

31 Matter No IRC 3601 of 2003 arises by notification pursuant to s130 of the Act by the Union on 1 July 2003. The dispute notified is described in the following terms: i) The employer is actively encouraging workers to cease their employment and become independent contractors;

ii) The Union has sought discussions with the employer and the provision of all relevant information to employees by persons other than the employer or independent contracting agency;

iii) The Union has requested the status quo under the Award's Dispute Settlement Procedure. The employer has refused to apply the status quo and arranged for an officer of an agency promoting independent contracting to speak to workers tomorrow;

iv) The Union seeks urgent ex parte directions that the employer abide by the Award's Disputes Settlement Procedure by applying the status quo and that the Commission convene a conference at its earliest opportunity. (Attached is a letter faxed to the Company today); v) This has previously been the subject of proceedings in the Commission in matter No IRC 6043 of 2001.

32 The Union also sought urgent proceedings in pursuit of the notification. On the same date, 1 July 2003, the Union wrote to the Company in the following terms: RE: INDEPENDENT CONTRACTING

I write to advise you that we require discussions with all the employing companies at your site under Clause 29 - Redundancy and Change of the Poultry Industry Preparation (State) Award. Specifically sub-clause 29.3 requires discussions with the employees and their Union, and the provision of all relevant information etc. In our view this would include the provision of independent information on tax matters, workers compensation, award entitlements, public liability, superannuation etc. That is, information should be supplied by persons other than the employer or the independent contracting agency.

Despite requests for such consultation with us, the Company has arranged for workers to be coerced into signing independent contracts tomorrow. I wish to advise that we have today notified the Industrial Relations Commission of NSW of a dispute between the Union and your Company and sought an urgent conference in relation to this matter.

We put you on notice that we rely on Clause 28 - Dispute Settlement Procedure of the Award and its requirement that "during discussions the status quo will remain". According to the Clause the "status quo" is "the situation existing immediately prior to the dispute or the matter giving rise to the dispute". We therefore request the Company cease encouraging workers to become independent contractors and specifically request officers of contracting agencies not hold meetings with workers. 33 The matter was first listed by Ritchie C in Lismore on 3 July 2003. The Union was represented by Ms K Radnidge, a Union Official, and Mr Windle, site delegate. Mr H Lee, Solicitor, appeared on behalf of the Company with Mrs Holloway.

34 The opening submission by Ms Radnidge described the issues in the following terms: RADNIDGE: Commissioner, this Company is not the first to contract out work, nor will it be the last. The industry is changing. This company is actively encouraging workers to cease their employment, to become independent contractors. We don't accept that. This is denying our members their entitlement and benefit to redundancy under the Poultry Industry Preparation State Award. The Union has sought discussions with the company, and written several letters requesting information for our members. The company has seen not fit to respond in writing, for whatever reason.

35 Mr Lee informed the Commissioner that there had been discussions between the Company and the Union in early June 2003 concerning the outsourcing of boning operations. Mr Lee suggested that the Union had agreed to the outsourcing proposals. Ms Radnidge vehemently refuted this assertion, putting that the Union had objected strongly to the proposal. Mr Lee made the undertaking that all employees, then a total of 48, (approximately half of whom are regarded as casual employees on the basis that they have less than 12 months service) engaged as Level 5 Boners who remain in the employ of the Company would not be terminated from that employment or suffer an alteration in classification whatever work they may be required to undertake as a result of the outsourcing of boning operations.

36 Arrangements for a further meeting between the Company and senior union officials were confirmed for 9 July 2003.

37 Ms Radnidge then sought compliance with Clause 28, Disputes Settlement Procedure by application of the status quo. Mr Lee sought definition of the status quo, submitting that if it meant that the Company go no further with the contracting out arrangements then this was not possible as commercial commitments had been made following the meeting with senior union officials in early June 2003, however, if it meant that current employees not be altered in their employment status such commitment was freely given. Ms Radnidge was unable to provide further definition of the status quo.

38 These proceedings concluded on the basis of arrangements for meetings between the Company and senior union officials to take place on 9 July 2003 with leave to either party to have the matter relisted.

39 The nature of the dispute as enunciated by the Union then moved from one of a question of redundancy for those employees leaving Byron Bay to take up positions at Bangalow, which was subsequently dropped, confirmation found in Mr Windle's evidence at pp 89 and 90 of transcript before Haylen J. During the course of those proceedings the nature of the dispute became one of objection to contracting per se and more particularly to the form of contracting, in particular the independent contractor model adopted at Bangalow. This dispute is the substance of the notification in matter No IRC 4677 of 2003.

40 Arguments then advanced by the Union go to the legality of the independent contractor model and whether persons so engaged are indeed independent contractors or caught by a common rule award or should have a specific award made.

41 Argument against contracting out is advanced on the basis of diminution in earnings potential for employees at the Byron Bay operation.

42 During the course of this development the issues of concern expressed in the original notification dealt with by Ritchie C., that the Company was aiding, abetting and encouraging employees to leave their employment at Byron Bay and take up positions as independent contractors, has been met and resolved by the undertakings made by the Company a number of times during the course of these proceedings and set out within point 3 of the alternative orders and directions sought by Mr Lee.

43 Mr Lee argued that given the undertakings made and the developments in the nature of the dispute, in particular the notification in IRC 4677 of 2003, the entire substance of the notification in IRC 3601 of 2003 had been resolved and that the matter should be concluded.

44 Mr Lee submitted that the Company was entitled to and obliged to seek the most efficient operation of its business having regard to economic circumstances set out in the evidence of Mrs Holloway. Mr Lee submitted that there is a public interest in the pursuit of the most efficient operation, submitting that the Company supported a vast number of people in the Northern New South Wales region engaged in growing, transport and distributions of chicken products, noting that the boning staff as currently depleted are a small proportion of the direct employees (which fluctuate from 240 to over 300 at peak) and a smaller proportion of the larger number who rely in some way on the Company's operations.

45 I find that the objection to contracting some or all of the boning operation is not sustainable on the evidence.

46 It is first appropriate to consider whether there was agreement between the Company and the Union in June 2003 which removed objection to contracting. The evidence available in this regard reveals an unsatisfactory level of precision in the communication leaving open the conclusion reached by Mrs Holloway. I do not believe the conclusion reached by Mrs Holloway was one the Union intended to be taken.

47 In analysing the notification in IRC 3601 of 2003 and the proceedings before Ritchie C., there was no clear enunciation of a dispute about contracting out per se; nor is there in the transcript of the earlier proceedings before him as set out above. Moreover there is an acceptance that contracting is an increasing feature of the industry and the objection or dispute being as to form.

48 So far as a dispute about the operation of the status quo is concerned, such issue is not available without an issue of substance. The purpose of the disputes procedure and the invocation of the status quo is to allow resolution of the substantive dispute to occur without prejudice or with minimal prejudice to either party. The disputes procedure and insistence on the status quo cannot be used as an open ended mechanism for delay or obstruction of lawful and legitimate management initiative.

49 So far as it may be said that the Company has failed to consult, these exhaustive proceedings resolve that issue. The parties have engaged in substantial discussion and discovery through the course of these proceedings, which has improved the level of knowledge and understanding of each party and, whilst resolving some matters, have crystallised the issues in dispute and identified the primary matter as being the form of contracting out.

50 There has been some diminution in earnings potential for some employees at the Byron Bay facility. This is difficult to quantify given the prominent role afforded overtime by both parties and the aforementioned robust argument as to whether overtime was more often refused by employees or avoided by management.

51 There is an emphasis in the evidence of Mrs Holloway that overtime more often arises due to absenteeism and that refusal by those attending work to complete required production on overtime creates real difficulty.

52 So far as the so called permanent employees, the undertakings by the Company meet all concerns. So far as the casual employees are concerned, the nature of their casual employment is uncertain and surrounded by fluctuation in the availability of work and consequent earnings consistent with the usual nature of casual employment.

53 Mrs Holloway's evidence is that there are many factors affecting the amount of boning work and overtime, including availability and size of chickens for processing, seasonal issues effecting demand for product, and volume and type, which impact upon the tally earnings potential of boners. The establishment of the Bangalow operation will not alter these type of fluctuations and so far as Bangalow is lawful, the effect on earnings of employees at Byron Bay is not a basis to prevent the employer from obtaining efficiencies available to it. Whether the Bangalow experiment proves more efficient than the Byron Bay operation is an unresolved issue and is an aspect of business risk taken by management. That risk includes the unresolved questions that arise in matter No IRC 4677 of 2003.

Application For Payment Of Wages For 14 And 15 August 2003

54 The Union seeks payment of wages in respect to these two days on the basis that the employees were ready and willing to work in accordance with the award and the contract of employment but were not allowed to do so by management.

55 The Company argues that the employees were in fact on strike in respect to an industrial matter and were not prepared to return to work unless conditions imposed by them were met.

56 In cross examination by Mr Phillips (TR p 83) Mr Windle acknowledged that by taking strike action the Union did not comply with the disputes procedure and thereby did not comply with the status quo. At p 92 of transcript Mr Windle acknowledged that the Union did not comply with the recommendations of Ritchie C., though contending that the employees "presented themselves to the Company to work, willing and able to work under the status quo as set out by the Union". Mr Windle acknowledged that there were resolutions taken at meetings of employees at this time which he conceded he could not recall and did not document.

57 Mrs Holloway's evidence (TR pp 100 and 101) is that the employees presented for work subject to the following conditions: 1. All boners engaged on boning duties on 1 July 2003 will continue to perform boning duties at the Byron Bay premises under the same terms and conditions (including the tally system applying at that time. 2. The employer will desist from training other workers in boning duties. 3 The employer will not enter into any contract, agreement or arrangement which is not in force on 1 July 2003 for the boning of chicken meat by any other party, person or corporation.

58 Mrs Holloway's evidence is that the Company was prepared to comply with the status quo as they understood described by Ritchie C., but would not concede to the additional three conditions.

59 These circumstances must be considered against s143 of the Act which prohibits strike pay, in particular ss 143(4) and (5), set out below: 143. Strike pay prohibited

(1) An employer who pays any remuneration or provides any other financial benefit to an employee in respect of time spent by the employee in engaging in industrial action is guilty of an offence.

(2) The employer is not guilty of an offence if the payment of the remuneration or provision of the financial benefit was authorised or ordered by the Commission.

(3) The Commission may, on the application of an industrial organisation of employees, authorise the payment of remuneration or the provision of financial benefits that would otherwise constitute an offence under this section. The Commission may, instead, order the employer to pay any such remuneration or provide any such benefit if it considers it appropriate in the circumstances.

(4) The commission may authorise or order an employer to do so: (a) only if the applicant satisfies the Commission that the relevant industrial action was based on a reasonable concern for health and safety, and

(b) only to the particular employees whose health or safety caused that concern.

(5) For the purposes of this section, industrial action is not based on a reasonable concern for health or safety if the employees whose health or safety is alleged to be involved have engaged in industrial action instead of complying with a direction by the employer: (a) to move to a specified safe place in the work place or to another suitable workplace, and

(b) to do other appropriate and available work there if required.

(6) In this section, employer includes a person acting on behalf of the employer.

60 The inescapable conclusion is that the issues dealt with industrial matters and had no element of concern for health and safety and accordingly payment is prohibited by operation of the Act.

61 For the above reasons I conclude that the notification in matter No IRC 3601 of 2003 is spent and that there is no basis for furtherance of the disputes procedure and the status quo thereby.

62 The Company is held to the undertakings made. There is no basis for the imposition of any further restrictions on the operations at Bangalow or Byron Bay.

63 I make the following Orders pursuant to s136 of the Act: 1. Sunnybrand Chickens Pty Ltd is discharged from its undertakings given on 25th September 2003 to the Commission as constituted by his Honour Justice Haylen.

Until further order of the Commission Sunnybrand Chickens shall forwith enter into the following undertakings to the Commission and to the AMIEU: (a) The Company will not terminate the employment of any employee engaged in boning work as at 1 July 2003 for reason of redundancy.

(b) In respect of each weekly (permanent) employee with one year or more of continuous service as at 1 July 2003 and engaged in boning work at that date the Company will continue to work such employees in boning work at its Byron Bay plant and otherwise under the same terms and conditions as applied as that date, subject only to paragraph 5(a) below.

(c) The Company will not allow representatives of Australian Independent Contractors Agency (AICA) to speak with or meet with its employees at its premises located at Ewingsdale Road, Byron Bay;

(d) The Company will not promote independent contracting to its employees or cause others to do so;

(e) The Company will not recommend employees terminate their employment to become independent contractors.

The Company may at its discretion deploy its employees, whether weekly (permanent) or casual, other than those described in paragraph 3(b) above, who were engaged in boning work at the Byron Bay plant as at 1 July 2003, in duties throughout its plant according to production requirements as determined by the Company on a daily basis

Subject to the undertakings given by the Company under paragraph 3 above: (a) The Company may at its discretion according to production requirements regulate the amount of overtime offered to workers engaged in boning work.

FURTHER PROCEEDINGS 64 The parties were in agreement that the issues arising in matter No IRC 4677 of 2003 as to the form of employment at the Bangalow facility should be resolved as quickly as possible. To this end the parties undertook to confer with a view to establishing a statement of agreed facts which, if achievable, would expedite proceedings.

65 The matter is stood over to report back at 10am on Tuesday, 4 November 2003 at Level 3, 237 Wharf Road, Newcastle. oo0oo

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At a glance

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Judgment (121 paragraphs)

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