Australian Steel Mill Services Pty Limited v. Australian Workers Union [2006] NSWIRComm 1072

LEGISLATION CITED: Industrial Relations Act 1996

Dispute: Australian Iron and Steel Pty Limited re Toshiba Lathe (1973) AR 536 Australian Steel Mill Services Dispute Case NSWIRComm 1186 Clark v. Pittwater RSL Club Limited (1998) 84 IR 309 CASES CITED: Electricity Commission of New South Wales v. Swieringa (1975) AR 504 Re Iron and Steel Works Employees (AIS Limited - Port Kembla Award (1958) AR 281 Mackie v. Weinholt (1880) 5 Qld SCR 211 Re Steel Works Employees (Broken Hill Proprietary Company Limited) Award (1956) AR 562 Steel Works Employees (Broken Hill Proprietary Company Limited) Award Case (1962) AR 204

APPLICANT Jack Henington Australian Steel Mill Services Pty Limited LEGAL REPRESENTATIVES:

RESPONDENT Wayne Phillips Australian Workers Union

DECISION: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES

Australian Steel Mill Services Pty Limited and the Australian Workers Union

Dispute notification under S.130 of the Industrial Relations Act, 1996 re refusal of duties

1 Operators employed by Australian Steel Mill Services Pty Limited have refused to drive dump trucks in its operations in the crushing plant department of the Port Kembla steelworks of BlueScope Steel (AIS) Limited, prompting ASMS to lodge a notification of an industrial dispute under S.130 of the 1996 Industrial Relations Act. These employees are covered by the terms of the Australian Steel Mill Services Pty Limited Enterprise Award, which is within its nominal term. (As such, by virtue of a recent amendment to Schedule 4, Savings, Transitional and Other Provisions, [Part 8A], the ASMS Award is converted into a "preserved State agreement".) The employees concerned are classified at Level 3. They assert that the work is properly to be performed at a lower grade - Level 2 - and that they are under no obligation to perform the work in question.

2 The S.130 notification by ASMS was allocated initially to Macdonald C who on Thursday, 13 April, 2006 convened compulsory conference proceedings (in the Commission's premises at 90 Crown Street, Wollongong) and made directions pursuant to S.134(2) that the employees perform the duties that they had been directed to perform by ASMS management, ie drive the dump trucks. The employees refused to comply with those directions and ASMS requested that Macdonald C reconvene the proceedings. The matter resumed for a further compulsory conference on Wednesday, 19 April, 2006 before Macdonald C (in Sydney).

3 Mr Henington, representing ASMS in those proceedings on Wednesday, 19 April, 2006, pressed for dispute orders against the employees to restrain them from the ban that they had imposed on driving a dump truck in accordance with S.137(1)(a), viz:

"The Commission may order a person to cease or refrain from taking industrial action."

The AWU was not represented in the proceedings at that time. Mr Phillips , who had coverage of this matter for the AWU, had contacted Macdonald C to inform him that he was committed elsewhere - arbitrated proceedings in the Australian Industrial Relations Commission scheduled for Wednesday, 19 April, 2006 and Thursday, 20 April, 2006, that he would therefore not be able to attend the proceedings and that there was no other AWU representative available to cover for him at short notice.

4 Mr Phillips wrote a letter to Macdonald C dated Wednesday, 19 April, 2006 confirming the AWU's position and adding:

"...The union submits that the directions issued by the Commission on Thursday, 13 April, 2006 in this matter have placed our members in an untenable position in that it now requires them to perform an extra skill which is not a requirement for Level 3 within the ASMS career path structure. Further, some AWU members have a genuine lack of confidence in performing this extra skill.

The union submitted an application to the Industrial Registry yesterday seeking to have this matter re-listed. However, we were advised by the Registry this morning that we needed to submit a different application in order to have this matter re-heard. Therefore, we request that the matter set for...today be vacated and re-listed for another day so that the union may put its position on the matter to the Commission..."

5 It is not altogether clear from that letter what were the AWU's intentions in the matter. It was apparently the understanding of Macdonald C that the AWU would be lodging its own S.130 notification but if that has occurred it has not been brought to my attention. Mr Phillips' letter also speaks of "... extra skills..." and the "...genuine lack of confidence..." the higher graded employees have to perform work which they accept was at a lower grade. One thing is clear, however: the employees had not accepted Macdonald C's directions to lift the ban on driving dump trucks in the ASMS crushing plant operations .

6 In the circumstances, Macdonald C was prepared to give the AWU and its members the benefit of the doubt to permit them to put forward arguments in opposition to Mr Henington's application for dispute orders. He therefore did not make the dispute orders sought by Mr Henington but instead adjourned the proceedings for a further compulsory conference in the morning of Friday, 21 April, 2006 (in Wollongong). Conciliation failed to settle the matter at that time, however, and the ban on the driving of the dump trucks remained. Mr Henington requested that Macdonald C proceed into arbitration to make the orders at that time and Mr Phillips pressed an application under S.173 that the arbitration be conducted by another member of the Commission.

7 Macdonald C issued the certificate of attempted conciliation required by S.135, lodged it in the prescribed manner and referred the file for reallocation to another member of the Commission. The file was reallocated to me and I convened the proceedings in the afternoon of Friday, 21 April, 2006 (in Sydney). Again Mr Henington sought dispute orders against the employees. ie :

"...that the employees...abide by the (ASMS Award) with regard to complying with all reasonable duties as requested by company management, including driving dump trucks..."

Mr Henington spoke of the critical need for the ban to be removed because of the substantial backlog of work from the crushing plant and the delays that ASMS's inability to use the dump trucks was having on that operation.

8 Critically, according to Mr Henington, there was a need for the dump trucks to be in operation on Saturday, 22 April, 2006 and Sunday, 23 April, 2006. Mr Phillips claimed that there were sufficient employees ready and willing to perform that work. He gave an undertaking, without prejudice to the position of the employees over the matter or the right of individual employees to decline to drive the dump trucks in future, that sufficient staff would be made available for the work in question to be performed over the weekend, if required. That, Mr Phillips believed, would effectively resolve any problems over the weekend. On the basis of Mr Phillips' undertaking, I declined to make the dispute order sought but instead I adjourned the proceedings until Monday, 24 April, 2006 (in Wollongong) to either hear arguments concerning the issue in dispute or, alternatively, to further conciliate with respect to it.

9 My further attempts to settle this matter by conciliation on Monday, 24 April, 2006 were unsuccessful, however. The matter ultimately proceeded into arbitration on the question of whether or not the Level 3 employees were obliged to drive a dump truck in the course of their employment. Mr Henington continued to argue that the Level 3 operators in the crushing plant operations were obliged to drive dump trucks if requested to do so. Mr Phillips called Mr Richard Walsh, an ASMS plant operator (and AWU delegate) to give evidence in the proceedings. Mr Phillips and Mr Walsh maintain that the Level 3 operators were under no obligation to drive dump trucks. I now set out in more detail the dispute between the parties.

10 Clause 27, Contract of Employment, of the ASMS Award provides that:

"...employees shall perform such work as the employer shall, from time to time, reasonably require and an employee not attending for or not performing the duty shall lose pay for the actual time of such non-attendance or non-performance..." Clause 27 is, in fact, a reflection of the standard industrial practice for such matters. No employee is entitled to payment of wages whilst they are refusing to perform any work reasonably required of them. In Electricity Commission of New South Wales v. Swieringa (1975) AR 504 the Full Bench of the former State Industrial Commission (McKeon, Cahill and Dey JJ) commented (at p.514) in that respect that:

"... in order to be entitled to payment of the wage which the terms of the employment prescribe, an employee must be ready and willing and able to perform in accordance with the lawful and reasonable directions of his employer the service for which he contracted, and that any failure on his part to do just that of itself, and so long as the failure continues, disentitles him to such payment..."

11 But an employee is not under any obligation to obey an order which involves him in doing work which is not part of his contract of employment [Mackie v. Weinholt (1880) 5 Qld SCR 211]. In such a case, an employee would have an option to either accept or reject a request that he perform such work without breaching his contract of employment. For instance, in Clark v. Pittwater RSL Club Limited (1998) 84 IR 309 the Full Bench of the Commission (Wright J - President, Marks J and McLeay C) expressed the position (at p.311) thus:

"…It is necessary to determine what the employment is. The evidence before the Commissioner was to the effect that the appellant at all times was employed as a receptionist/doorperson. There is no evidence that he was employed to carry out any other duties, that there was a contractual requirement to carry out any other duties, or that any applicable award provision permitted the club to unilaterally vary the incidents of employment. In these circumstances, the employment of the appellant was a receptionist/doorperson…"

It is in that area that Mr Phillips has relied to defend the position of the AWU and its members against a dispute order.

12 Mr Phillips drew my attention to the grading scale contained in Clause 10, Wages, of the ASMS Award and submitted that the different levels of operators are not related and should, to that extent, stand alone. According to Mr Phillips, it is not correct to regard the separate levels as part of a career path and employees are engaged by ASMS to perform certain discrete functions, either at Level 2 or Level 3. As Mr Walsh emphasised in his evidence in this hearing, ASMS employees commence work on a three month probation at Level 1 and then progress to either Level 2 or Level 3 - and the two grades are not interchangeable in any respect. 13 An operator at Level 2 is described in Clause 10 as:

"...a person assessed as competent and employed in one furnace department core skill (in training for Level 3) or two of the following operations:

water cart; dump truck , front-end loader (general push-up duties); crushing and screening plant (equivalent to two skills); metal recovery plant (equivalent to two skills); blending plant (equivalent to two skills); road sweeper; fuel truck; bobcat with all attachments or road maintenance (equivalent to two skills); weighbridge operator or storeperson and persons in training for Level 3 classification..."

And Clause 10 describes an operator at Level 3 in the following terms:

"...a person assessed as competent and employed in two furnace department core skills (in training for Level 4), all road maintenance, or two of the following operations:

feed crushing and screening and metal recovery plant; sales loader; 771B and 114B cranes; excavator; belt repairs; D10 dozer; weighbridge operations including invoice/account reconciliation; fuel truck with chain repair; general repair/maintenance tradesperson and higher level tradesperson not yet competent in Level 4 skills..."

14 The ASMS Award provides for "integrated work groups" or work by the employees in teams with responsibility for the area in which they work - crushing, metal recovery, sales, etc. In an appendix to the ASMS Award [Appendix A] the policy underlying the "integrated work groups" is explained, viz: "...It is agreed that the development of 'integrated work groups' is a key to the future of the organisation and its employees. To this end, the organisation supports the concept that people need to have responsibility and authority to control the things which impact on their jobs, and therefore, should be promptly and adequately informed on the matters impacting on their work groups. Equally, group members have a responsibility to seek out information that is important to team effectiveness. Groups given the resources and authority to make decisions have responsibility for the outcome they control. It is accepted that groups may require training to accept the responsibilities recognised as appropriate for the group and such training will be provided through the training plan..."

15 It is Mr Walsh's understanding that the work requirements, and the training, for employees in any particular work group is confined to that group only. The employees in a work group maintain responsibility and hold authority for that group but not with respect to any other group. That is to say the Level 3 operators working in the crushing plant are obliged to perform only the range of duties for that plant and not work of any other work group. It is on that basis that Mr Phillips argues that the driving of a dump truck (under Level 2) is not part of the responsibilities of a Level 3 operator involved in the crushing plant. Consequently, they are under no obligation to perform that work and it would follow from such reasoning that there is, in fact, no refusal of duties by the employees and, therefore, nothing on which to attach a dispute order.

16 I must confess to some surprise that the employees would seek to limit their work in that manner. If they are not required to perform the work in question - and for reasons I will outline later in this decision I do not believe that is really the case - why would they seek to actually limit their range of work and skills? In the current industrial climate, I would have thought that it would have been in their interests to expand their range of work, not constrict them. That is particularly the case in ASMS's operations where in the past I have dealt with instances where the employees were concerned that work they believed that they could competently perform was being contracted out - see, for instance, my unreported decision of Monday, 14 November, 2005 in the Australian Steel Mill Services Dispute Case [Matter No.IRC 1785 of 2006].

17 In any event, the employees' obligations in that respect must be considered in the context of Clause 9, Training, of the ASMS Award which provides that:

"...this award has been formulated on the basis of providing multi-skilling and flexibility opportunities for company employees. In this regard demarcation provisions are not included: providing employees are suitably qualified, they may be required to carry out any work function contained within the employer's operation ..."

"...each work group, with management, will monitor training needs for skills required within the work group, to meet operational requirements..."

And Mr Phillips submitted that direction supported the view of Mr Walsh, ie that the range of work to be required of an employee in a particular work group was confined only to the range of work in that group. 18 There may, in fact, be some ambiguity in the ASMS Award and, in particular, the wording of Clause 9 and Clause 10. But it is clear to me that when Clause 9 refers to the requirement on the employees "...to carry out any work function contained within the employer's operation..." it means the employer's whole operation and not just a part of it. I believe that the range of duties for Level 2 and Level 3 positions in Clause 10 must be considered in the context of the overall requirements flowing from Clause 9, provided always, of course, that the operator is actually competent and accredited to drive the dump truck. (Mr Henington has conceded that not all Level 3 operators hold the necessary accreditation to drive dump trucks but that a brief period of internal training by ASMS operatives - up to four hours - is sufficient to give them the necessary qualifications in that regard. There is no external qualifications for driving the dump trucks and an ordinary vehicle licence will suffice in that respect. But until the Level 3 operators receive such accreditation, they are not authorised to drive dump trucks.)

19 Initially, as ASMS understood the position, the employees were apparently pressing that the Level 3 operators would only perform the work of driving the dump truck if given additional remuneration for doing so. That was Mr Henington's belief, in any case. The employees are no longer pursuing such a claim and in the proceedings on Friday, 21 April, 2006 Mr Phillips was at pains to stress that this industrial dispute is not, in fact, a wage claim. Ordinary industrial practice contemplates mixed functions in the performance of work. It is, of course, common for employees who occupy positions which are paid at a higher wage level to receive that higher wage for times that they work in the higher grade. But, to my mind, it would be difficult to justify a wage increase based on a direction to perform work at a lower level.

20 Conversely, whilst there have in the past been views expressed to the contrary for work in the steel industry [Re Steel Works Employees (Broken Hill Proprietary Company Limited) Award (1956) AR 562 at p.564, Re Iron and Steel Works Employees (AIS Limited - Port Kembla Award (1958) AR 281 at pp.295 to 297 and Dispute: Australian Iron and Steel Pty Limited re Toshiba Lathe (1973) AR 536 at p.545], I do not believe that an employer who engages any employee to perform work which is ordinarily paid at a lower grade should be permitted to reduce the wages to that lower grade. For instance, an employee engaged as a carpenter should always retain the wage that his level of skill would entitle him to receive whether or not he actually exercises those skills in the performance of particular work which may more accurately be described as labouring work.

21 As Kelleher J of the former Commission indicated in the Steel Works Employees (Broken Hill Proprietary Company Limited) Award Case (1962) AR 204 at p.206:

"...The drivers and shunters are specially trained men and, even though not occupied on their normal work, their qualifications and experience are available to the company whenever the need arises... The circumstances are, in my opinion, no less acute than those which on other occasions in the past have influenced members of the Commission to favour the view that, in particular cases, employees transferred to other work carrying a lower rate of pay than their ordinary rate should not have their earnings reduced in consequence..."

I consider that the employees should take some comfort from the fact that they will retain the higher grade for such times as they perform work that is graded at the lower grade level. Mr Henington has given certain assurances in that respect.

22 In arbitrated proceedings, S.136 has given me a certain jurisdiction to resolve industrial disputes, viz:

"(1) The Commission may, in arbitration proceedings, do any one or more of the following:

(a) make a recommendation or give a direction to the parties to the industrial dispute,

(b) make or vary an award under Part 1 of Chapter 2,

(d) make any other kind of order it is authorised to make (including an order on an interim basis).

(2) Any such action may be taken by the Commission on its own initiative or on an application by any person authorised to notify the Commission of the industrial dispute."

23 A dispute order is confined by S.137 to a limited range of matters. It reads as follows:

"(1) The Commission may make the following kinds of dispute orders when dealing with an industrial dispute in arbitration proceedings:

(a) The Commission may order a person to cease or refrain from taking industrial action.

(b) The Commission may order an employer to reinstate or re-employ any one or more employees who were dismissed in the course of the industrial dispute or whose dismissal resulted in the industrial dispute.

(c) The Commission may order an employer not to dismiss employees in the course of the industrial dispute if the employer has threatened to do so.

(d) The Commission may order a person to cease a secondary boycott imposed in connection with the industrial dispute.

(2) If employees are taking industrial action in connection with the industrial dispute, the Commission may order the employees to cease taking that industrial action before it makes any other kind of dispute order against the employer.

(3) A dispute order may not provide for the payment of compensation, lost remuneration or any other amount."

24 It has consistently been Mr Phillip's assertion that there are sufficient employees available to operate the dump trucks for the crushing plant if that work is offered to them but that the employees who were, for one reason or another, uncomfortable in driving dump trucks should not be compelled to do so. In those circumstances, I would regard it as sensible that ASMS management at least give preference to those employees who have expressed a willingness to drive a dump truck over those who do not wish to do so. Mr Phillips has also suggested that a direction to an employee at the crushing plant to drive a dump truck may leave that area short staffed, raising occupational health and safety concerns. That is another possible area of concern. But for the reasons I have outlined earlier in this decision, I conclude that, provided the ASMS employees at Level 3 are competent and accredited to drive dump trucks, they are obliged to do so and their refusal to drive the dump trucks would disentitle them to wages whilst their refusal to perform that work continues. It would also form a proper basis for a dispute order in accordance with S.137(1)(a).

25 However, at this stage I do not believe that it is appropriate or necessary to make the dispute orders sought by Mr Henington. I nevertheless indicate that I will do so, upon request by ASMS if the ban on the driving of the dump truck continues. I propose instead to direct the parties into further discussions concerning this issue in the light of the observations I have made in this decision and will reconvene these proceedings on request of either party. In the meantime, I stand this matter over generally.

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.