Australian Workers Union v. BlueScope Steel Limited [2007] NSWIRComm 1022

Industrial Relations Commission (NSW)|2007-06-22

CITATION: Australian Workers Union v. BlueScope Steel Limited [2007] NSWIRComm 1022

APPLICANT Australian Workers Union PARTIES: RESPONDENT BlueScope Steel Limited

CATCHWORDS: industrial dispute - steelworks - referral agreement - meeting of employees - whether meeting constituted industrial action or a communication meeting - loss of wages for minimum of four hours - warnings issued - obligation on employer to pay wages to employees at work - no-work-no-pay concept considered - payment of wages and removal of warnings ordered

LEGISLATION CITED: Industrial Relations Act 1996 Federal Workplace Relations Amendment (Work Choices) Act, 2005

Australian Workers Union v. BlueScope Steel Limited [2005] NSWIRComm 1194 Australian Workers Union v. BlueScope Steel Limited [2006] NSWIRComm 1092 Automatic Fire Sprinklers Pty Limited v. Watson (1946) 72 CLR 435 Briginshaw v. Briginshaw (1938) 60 CLR 366 Csomore v. Public Service Board of New South Wales (1987) 10 NSWLR 587 CASES CITED: Re Dispute between the Metropolitan Meat Industry Board and the Transport Workers' Union of Australia (1952) 107 IG 28 Electricity Commission of New South Wales v. Swieringa (1975) AR 504 Hutchinson v. Metal Manufacturers Limited (1948) AR 818 Mercer v. Associated Electrical Industries Limited Petrie v. Mac Fisheries Limited (1940) 1 KB 258 Suffolk County Council v. Secretary of State for the Environment (1984) ICR 882

HEARING DATES: 24/04/2007, 02/05/2007, 04/05/2007

APPLICANT Branko Gorgievski Australian Workers Union LEGAL REPRESENTATIVES:

RESPONDENT Trent Sebbens Blake, Dawson, Waldron

DECISION: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES

Australian Workers Union and BlueScope Steel Limited

Dispute notification under S.130 of the Industrial Relations Act, 1996 re suspension of employees without pay and warning notices issued to employees

Referral of an industrial dispute under S.146A of the Industrial Relations Act, 1996 by the Australian Workers Union and BlueScope Steel Limited

1 Pursuant to the provisions of S.130 of the 1996 of the Industrial Relations Act, the Australian Workers Union has lodged a notification of an industrial dispute with BlueScope Steel Limited. The issue in dispute is the standing down of employees on the paintline without pay for four hours and for the warning notices placed on their personal files over alleged industrial action taken by them. This industrial dispute arises essentially because of the requirements that now flow from S.507(2) of the 2005 Federal Workplace Relations Amendment (Work Choices) Act, viz:

"The employer must not make a payment to an employee in relation to:

(a) if the total duration of the industrial action on that day is less than 4 hours - 4 hours of that day; or

(b) otherwise - the total duration of the industrial action on that day."

"An employee must not accept a payment from an employer if the would contravene subsection (2) by making the payment."

Civil penalties are imposed on an employer, or its employees, breaching Ss.507(2) or (5).

2 BlueScope Steel had asserted that there was an unauthorised work stoppage for 20 minutes on Wednesday, 11 October, 2006 - between 4.08pm and 4.28pm - by the eight operators engaged on the shift on that day (C crew) and it has deducted four hours wages from them in accordance with S.507(2). However, the AWU has disputed the claim made by BlueScope Steel that the eight members actually attended a work stoppage of 20 minutes. It has conceded that the employees did hold a short and informal "information meeting" at a time when the paintline was not in operation. But when the employees later discovered that they were not being paid their wages for time they were actually working, they not unnaturally did then cease work.

3 The paintline operators are presently covered by the terms of the BlueScope Steel Limited - Springhill and CRM Employees Award which has been converted by a 2006 amendment to the State IR Act into a preserved State agreement [PSA]. Notwithstanding the apparent restrictions Work Choices imposed on the State Commission generally for employment in trading and financial corporations within the meaning of S.51(xx) of the Commonwealth Constitution - ie BlueScope Steel in this hearing - the State Commission may still be empowered to exercise what I understand to be additional functions conferred upon it by the parties to a dispute themselves if such matters are referred to them under a common law collective agreement.

4 In that respect, S.146A(2) of the State IR Act provides as follows:

"A party to a dispute to which this section applies may apply to the Commission for the exercise by the Commission of such functions with respect to the resolution of the dispute as may be specified in the referral agreement."

And the procedure for referral agreements is confirmed by Practice Direction 18.

5 There is a protocol established generally for the Port Kembla steelworks of BlueScope Steel by which individual industrial disputes remain to be dealt with before the State Commission and a S.146A referral agreement has been signed by the AWU and BlueScope Steel to bring the following matter before me for conciliation or arbitration:

"The dispute concerns the determination of the following issues associated with a stoppage by C crew on Wednesday, 11 October, 2006... The Commission will determine:

(i) Does this dispute constitute industrial action?

(ii) Employees should have been notified that they would be taken off pay prior to the returning to duties.

(iii) The amount of time that employees were docked and from what point in time constitutes the four hours.

(iv) Should employees be docked for time already worked?"

6 The jurisdiction of the Commission to arbitrate many issues that now come before it in the BlueScope Steel operations in Port Kembla is dependent upon the actual terms of the referral agreement. It is a requirement flowing from the protocol that has been developed that for a referral agreement to be provided for any particular industrial dispute, the parties must comply with the established dispute settling procedure [DSP] for the steelworks. That means that any unauthorised work stoppage, in breach of the DSP, would negate the jurisdiction of the State Commission to arbitrate the issue in dispute.

7 It is in that light that the current dispute emerges as an issue of some jurisdictional complexity. If the informal "information meeting" of the paintline employees or their subsequent refusal to work upon being informed that they would not be paid constituted industrial action by them, not only would the requirements flowing from S.507(2) of Work Choices come into force but, in fact, the jurisdiction of the State Commission to hear their claim under the terms of the referral agreement would also apparently fail since there would be no compliance with the DSP on the part of the paintline employees and hence a breach of the essential condition on which the referral agreement may be made in the first place.

8 The S.130 notification was allocated to me and I set it down for a conference on Tuesday, 7 November, 2006, Monday, 20 November, 2006, Monday, 27 November, 2006 and Monday, 5 February, 2007 (in the Commission's premises at 90 Crown Street, Wollongong). Conciliation failed to settle this matter. I programmed the matter for arbitration, issuing the certificate of attempted conciliation required by S.135 of the State IR Act and lodging it in the prescribed manner. Ultimately the matter was set down for arbitration in a hearing on Monday, 16 April, 2007, Tuesday, 17 April, 2007 and Tuesday, 24 April, 2007 (in Wollongong). However, the absence of many of the witnesses required to give evidence, necessitated my vacating Monday, 16 April, 2007 and Tuesday, 17 April, 2007. I set down additional days - Wednesday, 2 May, 2007 and Friday, 4 May, 2007 - for the hearing (also in Wollongong).

9 Mr Gorgievski, an AWU organiser, represented it in the hearing. He called as witnesses the eight paintline operators whose wages had been docked on Wednesday, 11 October, 2006: Mr Joseph Pleli (the AWU delegate for the C crew on the paintline), Mr Craig Adam, Mr Ray Komaromy, Mr Tome Karabeleski, Mr Paul Yates, Mr Ibrahim Halilovic, Mr Luis Teixeira, and Mr George Paniagua. Mr Sebbens represented BlueScope Steel in the hearing. He called Mr Gary Meta, the operations manager, two shift supervisors (Mr Mick Farrelly and Mr Grant Costello) and Mr John Sierhuis, the shift technical advisor, to give evidence in the hearing. Recollections of the incident do differ on matters which I do not regard as particularly relevant for my determination of the issues in dispute but I believe that my outline of the evidence in this decision gives a fair interpretation of the incident.

10 The No.3 paintline operates on a continuous basis with four rotating shifts - A, B, C and D crews. The employees work 12 hour shifts. Subject to a change over period C crew were to work from 6.30am to 6.30pm on Wednesday, 11 October, 2006. There have been longstanding industrial disputes concerning the manning of the paintline. In his unreported decision of Wednesday, 14 December, 2005 in Australian Workers Union v. BlueScope Steel Limited [Matter No.IRC 1206 of 2004], O'Neill C determined the appropriate manning level for the paintline operators, reducing it from thirteen employees to nine employees to run under normal operational circumstances or, alternatively, eight employees to run with co-ordinated crib breaks. That decision was based on an agreement which had been reached between the AWU and BlueScope Steel. But the manning of the paintline and, in particular, the work performed by one employee on the paintline (the "safety net" operator) has apparently remained an issue of some industrial sensitivity with the operators.

11 At 11.40am on Wednesday, 11 October, 2006 Mr Meta returned a telephone call he had received earlier from Mr Gorgievski. Mr Meta informed Mr Gorgievski that he would be discussing the role of, and the work allocated to, the "safety net" operator with Mr Pleli and he would be expecting the employees to follow the DSP. Mr Gorgievski requested that the "safety net" operator be taken off one other area of the operations (manual pack) and placed back on the paintline consistent with his understanding of the agreement reached between the parties on which the decision of Wednesday, 14 December, 2005 by O'Neill on the manning of the paintline was based. 12 Mr Meta responded with words to the following effect:

"I will respond to Mr Pleli to follow the DSP. There is no need for you to get involved at this point."

And, according to Mr Meta, Mr Gorgievski indicated that unless the additional employee was transferred to the paintline he would "...stop the line and call a meeting...", viz:

"It's your DSP. You can follow it. You must take (the 'safety net' operator off manual pack and put him back on the paintline. I'm not gunna piss around. Put (him) on the paintline by 1.00pm or I am going to stop and call and meeting. Stuff the DSP."

It was Mr Meta's clear impression, therefore, that there was likely to be some industrial action taken by the employees over the manning of the paintline.

13 Mr Meta arranged with Mr Farrelly to meet with Mr Pleli at 1.30pm but Mr Pleli responded that he did not want to meet with him, saying words to the following effect:

At 3.00pm on Wednesday, 11 October, 2006 there was a meeting between Mr Meta, the operations manager, Mr Mark Davis, the senior human resources advisor, Mr Costello, Mr Pleli and Mr Yates to discuss the issue in dispute concerning the work to be performed by the "safety net" operator. The paintline was in operation at that time and Mr Pleli and Mr Yates were relieved to attend the meeting.

14 Mr Pleli claimed in his evidence that it was a very heated meeting. Mr Gorgievski was also present at the meeting. In fact, he had called the meeting. Mr Meta asserted that Mr Gorgievski adopted an aggressive manner in the meeting and directed Mr Pleli and Mr Yates to "...go back and stop the paintline...". Mr Gorgievski requested a "communication" meeting with C crew in the car park and for the paintline to be stopped while the meeting took place. Mr Meta said to Mr Gorgievski:

"You do not have the authority or my permission to stop the line. Do not do this. I urge you not to stop the line."

Mr Costello's recollection was that at the meeting Mr Meta said to Mr Gorgievski :

"Don't stop the line. There will be consequences. You are not authorised to stop the line."

Mr Yates acknowledged in his evidence that Mr Meta "...was not happy..." about the possibility that the paintline would be stopped for the employees to attend a stop work meeting and Mr Yates claimed that Mr Meta told him that he "...would be in trouble..." if such a stop work meeting occurred.

15 Mr Gorgievski perceived that to be a threat to the AWU members and he allegedly replied:

"Don't threaten my members. I am calling this communication meeting. I will stop the line personally."

And he asked Mr Pleli to inform Mr Farrelly that he would like to have a short "communications" meeting.

16 Following the meeting with BlueScope Steel management, Mr Pleli and Mr Yates went back to work. A threader was scheduled to have been put on the paintline due to a production changes - the conversion of the gauge of the product. Mr Gorgievski, Mr Pleli and Mr Yates made inquiries over how long before the threader came through and when it did they cleaned up the coater heads. It was clearly their intention to hold discussions with the employees over what had transpired at the meeting that had taken place earlier with BlueScope Steel management.

17 It has been estimated by the employees that when a threader is put onto the paintline from 30 minutes to 60 minutes is involved before the paintline is again operational. Mr Sierhuis has provided a chart outlining the length of times for a threader when there is a change of the gauge of the product. The average time has been estimated by him as 11 minutes, although there have been occasions when there has been in excess of 20 minutes and on one occasion the gauge change took 45 minutes.

18 According to Mr Farrelly, at approximately 3.45pm Mr Pleli spoke to him on the telephone and asked him to send Mr Sierhuis up to the coater room to act as a "safety man". The coater room must be continuously manned. Mr Pleli informed Mr Farrelly that:

19 There is a conflict in the evidence at that point. According to Mr Pleli, Mr Farrelly simply asked him if Mr Meta "...knew about this..." and Mr Pleli replied that he did, that Mr Gorgievski had mentioned it at the meeting. Also Mr Karabeleski claimed in his evidence that he have overheard the conversation on the telephone between Mr Pleli and Mr Farrelly. Mr Karabeleski confirmed what Mr Pleli said and he also claimed that he was close enough to the telephone to hear what Mr Farrelly had said in reply on the other end of the telephone. He claimed that Mr Farrelly said to Mr Pleli:

It is Mr Farrelly's evidence that Mr Pleli informed him that Mr Meta had actually authorised the meeting of the employees. That is a very subtle, but important, distinction.

20 I am satisfied that, whilst Mr Meta was aware of Mr Gorgievski's request that there be a "communications" meeting, he had not authorised one. In fact, he had outlawed one. I have to say that I believe that Mr Pleli was not being totally honest with Mr Farrelly at that point and the fact that Mr Farrelly subsequently lost his temper with him, as I believe he did, and took the view that he had been lied to by Mr Pleli, was understandable. Knowing about the meeting and authorising it are, of course, two different things.

21 In any event, Mr Farrelly must have had some suspicions that the "communications" meeting had not been authorised by Mr Meta because when he subsequently received a telephone call from Mr Costello regarding a delivery of paint, he asked him whether Mr Meta had approved a stop work meeting. Mr Costello replied:

"No way. In fact, he made it very clear that they had no authority to have a meeting."

And later Mr Meta confirmed with Mr Farrelly that he had not authorised any such meeting.

22 At approximately 3.55pm the paintline was stopped as the threader came through. The employees congregated in the delivery cabin. In fact, some employees were already at work in the delivery cabin which was their work station at the time (Mr Adams and Mr Komaromy). Mr Farrelly had also gone to the delivery cabin to seek a forklift driver to unload a paint delivery. He spoke firstly to Mr Komaromy and asked him to unload the paint truck. Mr Komaromy responded that Mr Adam was the forklift driver on that shift. Mr Farrelly then asked Mr Adam to unload the truck. According to Mr Farrelly, Mr Adam responded:

Mr Farrelly informed Mr Adam that there was no authorisation for the meeting and instructed him to unload the truck.

23 Other members of C crew then arrived at the delivery cabin. There is some confusion over who attended the delivery cabin at that time and who remained at their work stations. Mr Farrelly and Mr Sierhuis recalled that Mr Pleli, Mr Teixeira, Mr Yates, Mr Paniagua and Mr Halilovic arrived at the delivery cabin. They do not recall Mr Karabeleski being present at the delivery cabin and it is asserted that he was absent and apparently remained at his work station as entry operator some considerable distance away. But Mr Karabeleski's evidence supports the view that he did indeed attend the delivery cabin because he gave evidence of the discussions Mr Farrelly had with the crew there. Mr Yates also claimed that his recollection was that Mr Teixeira also remained at his work station in the coater room but again Mr Teixeira's own evidence in his witness statement refutes that claim, viz:

"...I stayed on the line as a safety man until someone came up. We called Mr Farrelly to ask Mr Sierhuis to come up as a safety man. No one came up. I walked down to the lab. When I got there the rest of the crew was there with Mr Farrelly..."

Where there is any doubt as to who actually attended the discussions in the delivery cabin, I believe that I should primarily rely on the evidence of the individual employees - as Mr Sebbens submitted - and it appears to me that they all admit in their evidence that they attended those discussions.

"No you are not. Please return to your job. You are out of line here. You have been in trouble for DSP breach before. Don't get yourself in trouble again."

There does not appear to be any doubt from the evidence in this hearing that Mr Farrelly was angry and he was yelling and, according to Mr Adam, swearing at Mr Pleli. Mr Komaromy recalled Mr Farrelly informing the employees that the meeting was not an authorised meeting and "...if we went to the car park action would be taken...".

25 Mr Farrelly claimed that Mr Pleli was emphatic that the meeting would go ahead:

The conversation, as Mr Farrelly recalled it, deteriorated at that point with Mr Farrelly and Mr Pleli arguing with one another. The gist of their conversation was as follows:

Mr Farrelly: You lied to me. You do not have authorisation for a meeting. I spoke to Gary (Mr Meta).

Mr Pleli: I didn't lie. I told you that Branko has authorised the meeting.

Mr Farrelly: I asked you if Garry knew about the meeting and had approved it and you said yes.

Mr Pleli: No listen. Branko has approved the meeting to go ahead, right.

Mr Farrelly: I am really annoyed that you lied to me and Branko does not have any authority to approve stop work meetings.

Mr Farrelly: No he doesn't. You, like me and everybody else here, actually work for BlueScope Steel, not Branko. So please return to the job and let the DSP take its course.

Mr Pleli: No. Branko has approved the meeting, right, so we are going to have it.

Mr Farrelly: I am asking you guys to return to your work station and recommence running this line.

26 Mr Farrelly then addressed the crew collectively, viz:

"Fellas, I am instructing you guys not to go ahead and attend this unauthorised stop work meeting. Please return to your work stations and let this matter progress through the DSP. Joseph is at risk of a serious breach on this. His employment could be at risk and you guys could receive disciplinary action for this as well. I am pleading with you guys to return to your work stations."

A conversation between Mr Farrelly, Mr Pleli and Mr Yates, as Mr Farrelly recalled it, continued:

Mr Farrelly: Well guys, one of you needs to talk some sense into Joseph here.

Mr Farrelly: Paul, you work alongside Joseph in the coater room. You have all the time in the world to talk to him. Please return to your job. We have lost too much time already.

27 Mr Farrelly's evidence conflicts with Mr Adam's recollections on that point. Mr Adam recalled in his evidence that when Mr Yates asked for some time to discuss the matter, Mr Farrelly "...said okay...". Mr Paniagua was also left under the impression that Mr Farrelly had no difficulties with Mr Yates' request for a short time to discuss the issues in the delivery cabin. In any event, Mr Farrelly walked away at that time. I do not believe that Mr Farrelly actually gave any approval for any brief meeting in the delivery area. But his comments to Mr Yates - "...please return to your job; we have lost too much time already..." - was not strictly a direction to them that they actually resume work immediately.

28 Mr Farrelly asserted that it was 4.08pm that he left the employees in the delivery cabin. The employees remained in the delivery cabin and held what Mr Teixeira described in his evidence as a "...discussion amongst ourselves about the 'communication' meeting..." and what Mr Karabeleski described in his evidence as "...a few of the employees gathering around to discuss the proposed 'communication' meeting...". According to Mr Yates, the discussions in the delivery cabin took from five to ten minutes.

29 In fact, after that short meeting the employees agreed not to hold the "communications" meeting in the light of the threat of disciplinary action which had been foreshadowed by Mr Farrelly against them, in general, and Mr Pleli, in particular. As Mr Teixeira put it in his evidence, they "...did not want to put Mr Pleli before the firing squad...". They telephoned Mr Gorgievski who was waiting for them in the car park and informed him that they did not want to put Mr Pleli's job at risk by attending the meeting which had been arranged. Mr Gorgievski advised the employees to return to work, which they did - but not until 4.28pm, according to Mr Farrelly and Mr Sierhuis.

30 Mr Gorgievski telephoned Mr Farrelly and told him:

"Look. I called the meeting. It has got nothing to do with the blokes on the line."

At 4.40pm Mr Farrelly received a telephone call from Mr Chris Allen, then BlueScope Steel's human resources officer, who informed him that he had received a telephone call from Mr Gorgievski , asking him if the paintline operators would be docked. Mr Farrelly informed Mr Allen that he believed the employees had been off the job for 20 minutes in an unauthorised stop work meeting. Mr Allen informed Mr Farrelly that therefore under Work Choices they must be docked for a minimum of four hours.

31 At 4.45pm Mr Yates telephoned Mr Farrelly and asked if the operators would be docked for four hours and Mr Farrelly replied:

"Not a good idea. Look, I'll just check again with HR."

32 Mr Farrelly conceded in his evidence that at that time he had not necessarily contemplated the implications which flowed from Work Choices on the situation that had confronted him. He may have acted differently if he had known of the problems that subsequently arose. But he telephoned Mr Allen and confirmed that the employees would be docked for the remainder of their shift - most probably four hours - and he telephoned Mr Yates to inform him of that fact.

33 Ten minutes later (4.55pm) Mr Pleli telephoned Mr Farrelly who recalled the telephone conversation as follows:

Mr Pleli: So we are getting docked four hours are we?

Mr Farrelly: Well it appears so. That is the new IR laws.

Mr Farrelly: I am advising you to stay at work, Joseph.

Mr Pleli: No we are going home. You will have to send a safety man up to the coater room. We are not cleaning up the paint if we are not getting paid.

Mr Farrelly: No way, Joseph. You have a legal obligation to ensure that the job is left in a safe state. You must clean up the coater room and leave it in a safe state.

Mr Farrelly: Yes, you need to do that. This is very important. I am instructing you to comply with this requirement.

Mr Pleli: Okay, but we will be taking this matter further.

Mr Farrelly: Okay, the DSP is the correct process to handle this matter.

Mr Pleli claimed that other employees wanted to leave immediately without cleaning up but he claimed in his evidence that he persuaded them not to do so. 34 With the exception of Mr Adam, it appears to me that the employees cleaned up and ceased work at different times - at or around 5.45pm - and left the site. Mr Adam remained and finished unloading the truck - after 6.00pm, according to him (ie the time he would normally have ceased work) - because he did not wish to abandon the truck driver in that respect. However, he left when the job was finished and not when he was relieved following the change over period. C crew members were all docked four hours wages, applying the penalty retrospectively from 2.30pm to the end of the shift, and given warnings which were placed on their files. Mr Pleli received a final warning.

The Terms of the Referral Agreement 35 As I indicated earlier in this decision, my jurisdiction to arbitrate disputed industrial matters involving BlueScope Steel's Port Kembla steelworks operations referred to me under S.130 of the State IR Act is dependent upon the terms of S.146A of the State IR Act and the individual referral agreement the parties provide to me under it in accordance with the protocol that has been developed between BlueScope Steel and trade unions representing their employees.

36 It is a requirement of the referral agreement (para.1) that it complies with the obligations under the model dispute resolution process provided in Work Choices but also having regard to the objects and procedures of the State IR Act (para.3), viz:

"In exercising its functions, the Commission will have regard to S.3, Objects, and except where inconsistent with an express term of this referral agreement, adopt a procedure and exercise the functions conferred as relevant and appropriate under Part 5 of Chapter 4 of the Act."

And it is an object contained in S.3 of the State IR Act:

"...to provide for the resolution of industrial disputes by conciliation and, if necessary, by arbitration in a prompt and fair manner and with a minimum of legal technicality..."

Also I would think relevantly for the current proceedings:

"...to encourage participation in industrial relations by representative bodies of employees and employers and to encourage the responsible management and democratic control of those bodies..."

37 To that extent, I would have thought that there would be a need for BlueScope Steel management to permit there to be some forum for employees to discuss matters of mutual interest collectively, albeit not to take any industrial action and not to extend for any excessive length of time, provided always that there was no unnecessary disruption of work or that the employees abused the process. As I indicated in my unreported decision of Thursday, 15 June, 2006 in Australian Workers Union v. BlueScope Steel Limited [Matter No.IRC 320 of 2006 at p.15]:

"...I accept that often the most effective way for the employees - and the least inconvenient course of action for the employer - is for the employees to communicate through brief stop work meetings and it is, after all, standard practice for any trade union to conduct its affairs in that manner. But I would expect that the employees would attempt to make sure that the employees would raise the matter with management first and arrange for such meetings to be convened at times when it would cause the least amount of inconvenience to their employer..."

On this occasion with the paintline not operational, why would a short discussion in the delivery cabin present such a problem to the operations of BlueScope Steel?

38 Mr Gorgievski has submitted that the eight operators should be paid for their shift on Wednesday, 11 October, 2007 and that the warning notices placed on the employees' personal file should be removed. He disputed that they had been involved in any industrial action at all on Wednesday, 11 October, 2006. He indicated in written submissions that:

"...the paintline was not in operation due to the product change taking place. A product change involves not only ironworkers but also staff positions and mechanical personnel for this particular procedure to be completed..."

39 Mr Gorgievski further asserts that when the employees ceased work later in the shift it was because they were not being paid for the work they were performing and not due to industrial action. He claims that the employees were "stood down" and BlueScope Steel had no right to do so in the circumstances. Consequently, he sought the payment to the employees for the whole of their shift on Wednesday, 11 October, 2007 and for the warning notices to be removed from their personnel records.

40 As far as the issue in dispute in the first place - the role of the "safety net" operator, Mr Gorgievski recorded in his written submissions:

"...After hearing of the discussions, the union representative advised the employees to remain on the job and that the union would notify the matter to the Commission and get clarification of the decision of O'Neill C and agreed document on the manning of the paintline. The union did notify the Commission and the matter went before McKenna C and was resolved in favour of the employees, as per O'Neill C's decision and the agreed document..."

According to Mr Gorgievski , the employees were instructed to inform Mr Farrelly that there would be no "gate" meeting and that they would be at the work stations and starting normal production once the paintline was ready.

41 Mr Sebbens argued in his submissions that there are no grounds for my intervention in support of the employees. He also indicated in written submissions that, if I found that industrial action in this case had occurred, I should refrain from making any further determination over the operation of the relevant provisions of Work Choices because:

"...to make any decision concerning the application of those provisions would be an exercise of judicial power, which is reserved for exercise by the Federal Court or the magistrate's court..."

42 Mr Sebbens submitted that the onus rested on the AWU to establish that the employees had not taken industrial action on Wednesday, 11 October, 2006 on the civil standard, ie on the balance of probability [Briginshaw v. Briginshaw (1938) 60 CLR 366]. Mr Sebbens took the view, simply stated, that there was clearly no authorisation for any meeting on Wednesday, 11 October, 2006 and by having one the employees were disentitling themselves for the minimum of four hours wages in accordance with S.507(2)(a) of Work Choices. Furthermore, by ceasing work later on Wednesday, 11 October, 2006, the employees were involved in further industrial action or at least, and in the alternative, disentitling themselves to wages whilst they were not at work.

43 In his written submissions, Mr Sebbens had this to say:

"...The facts establish that work had ceased by employees... This amounted to industrial action ... The AWU's focus on whether the operators requested a threader to be placed on the line and stopped the line misdirects attention as to whether their normal work had stopped or was being performed '...in a manner different from that in which it is customarily performed...' [see S.420(1)(a) and (c) of Work Choices]..."

44 Mr Sebbens pointed out that, whilst the paintline was down, work was still available to be performed and it was not being performed whilst the employees remained in the delivery cabin in a meeting that was not authorised and which they knew was not authorised. The location of the meeting - in the car park with Mr Gorgievski or in the delivery cabin without him - was irrelevant. Mr Sebbens suggested in his written submissions that:

"...the operators took the opportunity of a product change as a 'cover' for having a stop work meeting..."

45 There are mutual obligations in any contract of employment: the employees' obligation is to work for the employer and the employer's obligation is to pay wages for all time actually worked by those employees. It is, of course, trite to say that at common law at least employees are entitled to their wages for any time they actually work. In the absence of express provision in an award or special legislation - and S.507(2) of Work Choices appears to me to be such special legislation - an employer has no power to suspend an employee on weekly hiring without paying his wages for all time actually worked [Hutchinson v. Metal Manufacturers Limited (1948) AR 818 and Re Dispute between the Metropolitan Meat Industry Board and the Transport Workers' Union of Australia (1952) 107 IG 28].

46 Moreover, it is service by which an employee earns his wages: not specifically his work. Of course, service will ordinarily denote work, but not necessarily in all cases. Roger J of the State Supreme Court in Csomore v. Public Service Board of New South Wales (1987) 10 NSWLR 587 commented (at p.595) that:

"...payment of wages is conditional upon performance by the employee of the full range of work assigned or, at least, a readiness and willingness to do so ..."

Notwithstanding those comments by Roger J in Csomore v. Public Service Board of New South Wales , as I understand the state of established precedents, a readiness and willingness to work on the part of the employee may not necessarily be sufficient to support a claim for wages where no work was actually performed by that employee. Ultimately, it is the contract of employment which determines the entitlements of the employee and, in particular, whether actual performance of the work or merely a readiness and willingness to perform that work, is the consideration for the contract of employment on the part of the employee [ Petrie v. Mac Fisheries Limited (1940) 1 KB 258 at p.270].

47 In the judgment of the High Court (Latham CJ, Rich, Starke, Dixon, McTiernan and Williams JJ) in Automatic Fire Sprinklers Pty Limited v. Watson (1946) 72 CLR 435 Dixon J pointed out (at p.466) that "...they also serve who only stand and wait...". For instance, a fireman is working even when he is sitting in the recreation area of a fire station waiting for a call [Mercer v. Associated Electrical Industries Limited (1968) 3 ITR 188 and Suffolk County Council v. Secretary of State for the Environment (1984) ICR 882]. An employee on recreational or sick leave is still entitled to wages, even though he is at that time not actually providing his employer with work. Such leave is still part of the employee's service. 48 Of course, no employer is obliged to pay employees for times when employees are refusing to perform work required of them - and a ban on specific work or a stop work meeting which was not authorised by an employer would usually fall into that class of conduct by employees [Electricity Commission of New South Wales v. Swieringa (1975) AR 504]. I note that S.420(1) of Work Choices defines industrial action in the widest of terms, viz:

"For the purposes of this Act, industrial action means any action of the following kinds:

(a) the performance of work by an employee in a manner different from that in which it is customarily performed, or the adoption of a practice in relation to work by an employee, the result of which is a restriction or limitation on, or a delay in, the performance of the work;

(b) a ban, limitation or restriction on the performance of work by an employee or on the acceptance of or offering for work by an employee;

(c) a failure or refusal by employees to attend for work or a failure or refusal to perform any work at all by employees who attend for work;

(d) the lockout of employees from their employment by the employer of the employees;

(e) action by employees that is authorised or agreed to by the employer of the employees;

(f) action by an employer that is authorised or agreed to by or on behalf of employees of the employer;

(i) the action was based on a reasonable concern by the employee about an imminent risk to his or her health or safety; and

(ii) the employee did not unreasonably fail to comply with a direction of his or her employer to perform other available work, whether at the same or another workplace, that was safe and appropriate for the employee to perform."

49 The situation with strike pay, ie payment to employees who are on strike or otherwise refusing work as directed, is confirmed by S.143(1) of the State IR Act which goes so far as to make it an offence for an employer to pay any remuneration or provide any other financial benefit to an employee in respect of time spent by the employee in industrial action, viz:

"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..."

50 But as I indicated earlier in this decision, Work Choices goes one step further: under it, any unauthorised stop work meeting no matter how short that stop work meeting actually takes, would deprive the employees who took part in it of a minimum of four hours wages. It is an offence under S.507(2) for an employer to make such a payment or under S.507(5) for an employee to receive it.

51 There is a no doubt unintended consequence from such provisions in that they may simply act to encourage employees to make sure that any unauthorised stop work meeting they actually do take will extend for at least four hours or, as in this case, prompt them to cease work when they discover that they are not being paid for the work they are otherwise prepared to perform. Of course, it would always be open to an employer to authorise any meeting of its employees to discuss work related issues. That is, in fact, contemplated in S.420(1)(e) of Work Choices. And such authorisation by an employer may be obtained of some meetings of employees retrospectively, I would think. But certainly in this case Mr Meta was emphatic that any stoppage of work was not authorised by BlueScope Steel management and the employees were not at liberty to make their own rules in that respect.

52 As I indicated earlier, in the interests of proper communication at the workplace, it may be in an employer's interests, as much as the interests of the employees, for such discussions to be authorised by the employer, provided that they are conducted at times when work production would not be adversely affected and where the employees do not otherwise abuse the privilege. That is a matter which should be the subject of further discussions between the AWU and BlueScope Steel to establish a method whereby proper communications can be conducted between the AWU and its members without causing unnecessary disruption to production.

53 Clearly, Mr Gorgievski was intending to arrange a stop work meeting (apparently at a time when the paintline was not operational) and his conduct at the earlier meeting with BlueScope Steel management certainly would have left Mr Meta under the clear impression that a stop work meeting, and no doubt a more serious work stoppage, was being contemplated. But was there any unauthorised stop work meeting at all in the circumstances described to me? I do not believe that there actually was one. Mr Gorgievski was waiting in the car park for a stop work meeting that, in fact, never actually took place.

54 Instead, the employees met briefly and informally while the paintline was not in operation and decided that they would not have any stop work meeting at all, communicating that fact by mobile telephone to Mr Gorgievski. The paintline was not running at the time as a threader had been put through it for operational reasons, not because of any stop work, and the paintline had been stopped. How can the employees hold a stop work meeting when at the time there was actually no real work on the paintline to stop? When a paintline is not operational, no doubt there is still some work of a non-urgent nature for the operators to perform, eg general cleaning, emptying bins, preparation and routine maintenance work, etc. There was also the truck to unload on this occasion. But I do not believe that a brief discussion of the employees in the delivery cabin should have provided any real disruption of the work on the paintline, notwithstanding Mr Sebbens' submissions to the contrary.

55 What did take place in the delivery cabin then was, in fact, a "Clayton's" meeting - the meeting you have when your are not having a meeting - to determine whether or not the employees would actually attend the stop work meeting which Mr Gorgievski was arranging. The discussions in the delivery cabin were not a stop work meeting: its outcome was, in fact, to prevent a stop work meeting from taking place. Its purpose, as Mr Yates has described it in his evidence, appears to me to have been to discourage any further industrial action. 56 And, to my mind, it would be natural, and appropriate, for the employees to have some discussions following the meeting which Mr Gorgievski, Mr Pleli and Mr Yates had with BlueScope Steel management concerning the role of the "safety net" operator. Following the earlier meeting Mr Gorgievski, Mr Pleli and Mr Yates had with Mr Meta, Mr Davis and Mr Costello, I would expect that somebody would need to communicate what took place at the meeting to the rest of C crew. The discussions which took place in the delivery cabin was as Mr Gorgievski described it in this hearing - a communications meeting and not a stop work meeting. I am satisfied that the brief meeting the employees took in the delivery cabin was not inconsistent with their contract of employment with BlueScope Steel (while clearly the stop work meeting in the car park, if it had actually gone ahead, would have been). In the circumstances, I therefore categorise the discussions between the employees in the delivery cabin as still falling properly within the scope of their service with BlueScope Steel.

57 Mr Farrelly and Mr Sierhuis assess that the meeting lasted for 20 minutes but that is disputed by the employees who describe it as a very short meeting - from five to ten minutes, it would appear from their evidence. The paintline may have remained out of operation for that length of time but, from the evidence before me, it does not necessarily follow that the discussions of the employees in the delivery cabin really delayed the restart of the paintline. I do not believe that it did.

58 According to Mr Gorgievski (and Mr Farrelly in his evidence), the customary procedure for the restart of the paintline after it has been stopped is primarily the responsibility of the shift technical advisor on duty, ie Mr Sierhuis on this occasion, accompanied by an operator. That is to say, that the paintline could not restart until Mr Sierhuis was ready to restart it. Mr Meta and Mr Sierhuis assert in their evidence that a senior operator may restart the paintline on his own. There may be a need for the correct position to be clarified but it cannot be on the evidence before me in this hearing. In any event, it does not appear from that evidence that any senior operator was actually directed to start up the paintline. On the evidence before me in this hearing, I believe that it is open to conclude that when the paintline was ready to restart the employees would have been ready to man it. In fact, the paintline did not start up at all on that shift. Events clearly overtook it which I do not believe can be sheeted home as the fault of the employees on C crew.

59 In the circumstances, I conclude that the employees had not taken any industrial action which should attract the four hour penalty imposed by S.507(2) and BlueScope Steel should not have deducted their wages. Whilst, bearing in mind the obvious concerns which BlueScope Steel management had to ensure compliance with the penal provisions of Work Choices, the conduct of BlueScope Steel management was understandable, I believe that it was nevertheless technically in breach of its contract of employment with the eight operators in deducting any wages from them.

60 That takes me to a consideration of whether or not the employees were entitled to receive payment of wages for their shift beyond 5.45pm when they had cleaned up and left the site. The familiar passage from the judgment of Dixon J in Automatic Fire Sprinklers Pty Limited v. Watson (at p.465) is that a contract of employment:

"...is commonly understood as involving no liability for wages or salary unless earned by service, even though the failure to serve is a consequence of the master's wrongful act ... The common understanding of a contract of employment at wages or salary periodically payable is that it is the service that earns the remuneration and even a wrongful discharge from the service means that wages or salary cannot be earned however ready and willing the employee may be to serve ... ."

61 Whilst Mr Adam may not have waited until he was relieved before he left work on Wednesday, 11 October, 2006, I have no reason to doubt his evidence that he actually worked to the conclusion of his shift on that day and should be paid for the whole of his shift. The other seven operators on C crew remained ready and willing to work on Wednesday, 11 October, 2006, provided only that they were paid for that work (which remained their entitlement under their contract of employment with BlueScope Steel). I do not therefore regard the fact that the employees ceased work at 5.45pm on Wednesday, 11 October, 2006 as constituting industrial action by them at that point of time. Indeed, the fact that they would leave the plant upon discovering that they were not being paid is perfectly understandable in all the circumstances. But they did cease work and, according to the reasoning of Dixon J in Automatic Fire Sprinklers Pty Limited v. Watson to which I have referred, they are deprived of their entitlements to wages from 5.45pm on Wednesday, 11 October, 2006 for the remainder of their shift. Ceasing work and going home cannot be part of their service for BlueScope Steel.

62 Mr Pleli, Mr Komaromy, Mr Karabeleski. Mr Yates, Mr Halilovic, Mr Texeira and Mr Paniagua, in my view, are therefore entitled to payment for their shift on Wednesday, 11 October, 2006 only up to 5.45pm. The warning notices placed on the employees' files should also be removed since the employees' conduct, as it has been described to me in this hearing and as I have interpreted it, should not give rise to any disciplinary action against them.

63 I therefore order as follows: (i) that Mr Adam be paid for the whole of his shift on Wednesday, 11 October, 2006;

(ii) that the other operators on C crew - Mr Pleli, Mr Komaromy, Mr Karabeleski, Mr Yates, Mr Halilovic, Mr Teixeira, and Mr Paniagua - be paid for their shift on Wednesday, 11 October, 2006 up to 5.45pm; and

(ii) that the warning notices placed on their personal files, including the final warning placed on Mr Pleli's personal file, be removed.

LIST OF WITNESSES Adam, Craig operator Costello, Grant shift supervisor Farrelly, Mick shift supervisor Halilovic, Ibrahim operator Karabeleski, Tome operator Komaromy, Ray operator Meta, Gary operations manager Paniagua, George operator Pleli, Joseph operator (and AWU delegate) Sierhuis, John shift technical advisor Teixeira, Luis operator Yates, Paul operator

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.

[2005] NSWIRComm 1194

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Judgment (156 paragraphs)

Cases Cited (5)

Cited By (3)