Australian Workers' Union v. BlueScope Steel (AIS) Pty Limited [2005] NSWIRComm 1151

LEGISLATION CITED: Industrial Relations Act 1996

Automatic Fire Sprinklers Pty Limited v. Watson (1946) 72 CLR 435 CASES CITED: Csomore v. Public Service Board of New South Wales (1986) IR 275

APPLICANT Dave Hancock Australian Workers' Union LEGAL REPRESENTATIVES:

RESPONDENT Jack de Flamingh Blake Dawson Waldron

DECISION: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES

Australian Workers' Union and BlueScope Steel (AIS) Pty Limited

Dispute notification under S.130 of the Industrial Relations Act, 1996 re refusal of employees to attend testing

1 Pursuant to the provisions of S.130 of the 1996 Industrial Relations Act, the Australian Workers' Union has lodged a notification of an industrial dispute with BlueScope Steel (AIS) Pty Limited. In the S.130 notification the AWU has described the refusal of some operators in the packaging products department to take part in a training programme to assist in placement of surplus staff following a major restructuring. The matter was allocated to me and I set it down for a conference on Tuesday, 21 September, 2004 and Thursday, 30 September, 2004 (in Sydney) and a further mention on Monday, 8 November, 2004 (in the Commission's premises at 90 Crown Street, Wollongong).

2 Conciliation failed to settle the matter. The issue in dispute has evolved into a claim by the AWU for payment of wages to the surplus employees who had been stood down without pay on Monday, 20 September, 2004 and Tuesday, 21 September, 2004 for refusing to take tests as part of their training programme. I programmed the matter for arbitration on Monday, 21 February, 2005, issuing the certificate of attempted conciliation required by S.135 and lodging it in the prescribed manner.

3 The hearing of the matter was to occur on Monday, 21 February, 2005 but it was vacated at the request of Mr Hancock representing the AWU who required further time to examine evidentiary material provided for and on behalf of BlueScope Steel. The hearing was scheduled instead for Tuesday, 21 June, 2005 but again that hearing was vacated at the request of Mr Hancock when one of his witnesses had been hospitalised and was unavailable to give evidence. Ultimately I set the matter down for the hearing on Monday, 12 September, 2005.

4 Mr Hancock had intended to call two operators to give evidence in the hearing - Mr Ron Roberts and Mr Pat Murphy - and they had both prepared written statements to support their evidence. Those employees were at the relevant time surplus to requirements and they are no longer employed by BlueScope Steel. Ultimately, Mr Roberts was not available to give evidence and Mr de Flamingh, representing BlueScope Steel in the hearing, opposed Mr Robert's written statement being admitted into evidence without the right to cross-examine him. Mr Hancock therefore relied only on the evidence of Mr Murphy alone. Mr de Flamingh called Mr Brian Rooney, the manager of annealing and temper rolling for the packaging products department, and Mr Karl Fort, at that time the outplacement co-ordinator for the packaging products department.

5 This claim must be considered in the context of a significant industrial dispute in the Port Kembla steelworks. BlueScope Steel had commenced a project - the Coil Handling and Packaging Project - in 2003 with the purpose of improving the quality of packaging products and to reduce damage to coils. As part of that project in the middle of 2003 BlueScope Steel announced its intention to enter into a service agreement with Brambles Australia Limited to install and operate new coil handling and packaging plant. Production employees, members of the AWU, had opposed the new arrangements from the outset, especially since it was to lead to from 55 to 65 production employees, principally from the coil preparation line and the full width coil line, being regarded as surplus to BlueScope Steel's requirements.

6 What followed was a period of industrial disruption, the history of which I do not intend to record in this decision, except to say that a series of strikes led to me making dispute orders under S.137 on Monday, 16 February, 2004 which among other things, restrained further industrial action by the employees. The employees breached those dispute orders. The AWU convened a mass meeting of the employees on Tuesday, 17 February, 2004 and following that meeting production and mechanical maintenance employees in the hot strip mill, plate processing and hot coil processing and despatch areas also ceased work. I amended my dispute orders accordingly to address the unfortunate escalation of this industrial dispute, extending them to include both production and maintenance employees at the Springhill works.

7 The AWU obviously had certain concerns generally over the question of outsourcing of steelworks operations. I was informed by the AWU that it proposed to bring an application before the Commission to deal with this issue in a global way. But I did not wish for the issue before me, and the employees who were so concerned with the issue, to be lost in any considerations of that issue generally throughout the steelworks. And it had been known from the outset by all concerned that that there would be few positions available in the Brambles operations for BlueScope Steel employees. It was for that reason that I was anxious to ensure that the surplus employees were given every opportunity for retraining, consistent with BlueScope Steel's obligations to them.

8 To this end, BlueScope Steel had initiated a training programme to provide information and assistance to the employees who had been made surplus to requirements on this occasion. What was provided appears to have been the standard type of assistance for such matters - advisors on technical and further education opportunities, financial assistance, work/life style balance experts and advisers on career opportunities outside the steelworks). Mr Fort was recruited to assist the employees in career transition. The training programme was to take four weeks and was held off-site - at the Kembla Grange Golf Club. It included the involvement of recruitment and employment agencies to explore external job opportunities. It also provided sessions on interview techniques, how to search for jobs on the internet and how to write a resume for a new job.

9 Mr Rooney outlined the nature of the programme in a written statement which formed the basis of his evidence in this hearing, commenting that:

"...an important part of the programme was to assess the skill levels of employees and provide additional training if skill deficiencies were identified. A part of these assessments were tests which the company uses on a regular basis to evaluate applicants when filling jobs or training vacancies within the company. Once an assessment was made, the surplus employees were provided with additional training in numeracy, literacy and safety to improve their prospects in job evaluation..."

The surplus employees came off shift on Sunday, 22 August, 2004 and those employees who did not accept the voluntary redundancy package at that time were placed on the training programme. Initially 39 employees took part in the programme but as positions became available in the steelworks or employees chose to later take up the voluntary redundancy package, the number of employees in the training programme diminished.

10 The employees are covered by the BlueScope Steel (AIS) Pty Limited - Port Kembla Steelworks Award which provides relevantly [Clause 34.4.4(c)] as follows:

"Each employee will be managed on a case by case basis. Employees will be required to participate in career transition, training, job search or outplacement programmes sponsored by the company to maximise opportunities for alternative employment, recognising that employees cannot be maintained as surplus indefinitely."

11 During the first week of the programme Mr Hancock had telephoned Mr Rooney and told him that, in particular, the AWU was opposed to the off-site location of the programme. I have formed the impression from the evidence before me in this hearing that there was general opposition to the programme from the AWU executive. I must say that I am surprised by that opposition. There is no doubt in my mind that the programme, and the testing contained in it, was as much for the benefit of the surplus employees as it was for BlueScope Steel. I do not believe that the AWU was really acting in the interests of its members from the outset in opposing the programme, as it appears from the evidence was initially the case. It appears to me that the employees were acting throughout under the directions of the AWU executive. They are entitled to better advice, in my opinion.

12 Mr Fort was conducting the programme on Friday, 10 September, 2004 when he was approached by officials of the AWU who interrupted a presentation by a representative of the Department of Technical and Further Education with a request that they talk to the employees. Mr Fort overheard Mr Andy Gillespie, the branch secretary of the AWU, commenting with words to the following effect:

"I want this programme shut down and the men to go back to work."

And later he overheard employees making the same comment. Not a particularly auspicious beginning for a programme.

13 In his evidence Mr Fort claimed that on Wednesday, 15 September, 2004 he had announced to the surplus employees that positions of crane driver trainees and work on the pickle line had become available within BlueScope Steel's operations and that tests to determine suitability for the positions would take place on Thursday, 16 September, 2004. It is Mr Murphy's recollection that at no time did Mr Fort identify specific jobs for which the testing was linked. He claimed that the employees simply believed that testing was of a general nature. I do not believe that a great deal turns on that conflict in the evidence. Whether the testing was directed to specific jobs or of a more general nature, I am satisfied that it was designed to assist the employees. Nevertheless, the employees, many of whom were from non-English speaking backgrounds, appear to have believed that the testing would in some way be used against them.

14 After the employees had met in the morning of Thursday, 16 September, 2005 - and after telephone calls made by two of the employees to a person whom Mr Fort believed to have been Mr Gillespie - Mr Roberts approached Mr Fort and informed him that:

Mr Roberts gave as his reason that the employees had been advised by the AWU not to do the tests until it had the opportunity to look at them. And Mr Fort recalled Mr Hancock communicating with him in the same terms, viz:

"I have told the men not to take the tests until we've had a look at them. Don't give them a hard time."

15 Mr Fort contacted Mr Rooney and informed him of the refusal of the employees to take the tests:

"They've contacted the union and they've been instructed not to take the tests."

Mr Rooney responded to Mr Fort with words to the following effect:

"We need to let them know that this is part of the process we've got them on and they are required to participate in any career transition, retraining and outplacement programmes sponsored by the company. We're fulfilling our obligations and they have to fulfil theirs."

16 On Monday, 20 September, 2004 Mr Rooney addressed the employees off-site. Mr Rooney told them:

"The testing is not designed to weed you out of the business but to help the company focus on the right areas of training for you. The training so far has been what are the possibilities open to you. Now we want to target the training specifically to find a job that you are interested in. It is fundamental to do a needs analysis."

Mr Murphy explained why the employees did not want to do the tests - because some of the employees thought that if they performed badly in the tests it would be held against them. The employees remained adamant that they wanted an AWU official to oversight the tests. Mr Rooney stood them down without pay.

17 On Tuesday, 21 September, 2004 the employees met at the steelworks visitors' centre. Mr Murphy claimed that Mr Fort asked the employees if they were ready to be tested and they responded that they were not prepared to take part in the tests. Mr Fort communicated with Mr Rooney over the telephone and Mr Rooney reportedly responded:

Mr Fort indicated that the employees were to be sent home. They sought confirmation of the position from Mr Rooney and when Mr Rooney arrived at the visitors' centre he informed the employees:

18 Again the employees were stood down. The S.130 notification by the AWU came before me for a conference later on Tuesday, 21 September, 2004. My recommendation was that the employees take part in the tests. That recommendation was accepted by them and on Wednesday, 22 September, 2004 they completed the tests.

19 Any employment contract involves mutual obligations by employers and employees. It is the obligation of the employee to perform all work reasonably given to him by the employer and the obligation on the employer to pay wages for that work. The payment of wages is essentially dependent upon the employee providing a service and no employer is obliged to pay employees for times when they are refusing to perform work required of them [Automatic Fire Sprinklers Pty Limited v. Watson (1946) 72 CLR 435 at pp.465 and 466 and Csomore v. Public Service Board of New South Wales (1986) IR 275 at p.281]. That is to say, the refusal of an employee or a group of employees to perform any work which they are properly directed to perform is tantamount to a strike. But was the direction to attend the tests part of their ordinary duties? Mr Hancock argued in his submissions that it was not and that the employees had at all times been prepared to work - but not to take the tests.

20 Mr de Flamingh submitted that there was an obligation at common law on employees who were declared surplus to requirement to undertake all measures designed for their retraining. However, at common law I would say that it remains essentially a matter for the surplus employees themselves whether they attend to any measures to assist in placing them in other employment. Recognising that the retention of surplus staff on the BlueScope Steel payroll is not indefinite, if an employee choses not to take advantage of what has been offered to him by way of retraining, but simply fritter away his opportunities in that respect, that is nobody's business but his own - and his family's. Not, I might add, the AWU, which seems to me to have taken a less than positive role in this matter from the outset.

21 However, the contracts of employment under which the surplus employees are engaged must be read in conjunction with the BlueScope Steel Award and it is a provision in the BlueScope Steel Award which requires that they "...participate in career transition, training, job search and outplacement programmes...". That stipulation places an obligation on them which, in my opinion makes it a condition of employment which they are obliged to obey. Their failure to do so, in my opinion, disentitles them to wages whilst their refusal continued.

22 For that reason, I dismiss the AWU claim before me in this hearing.

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