Australian Workers Union v. BlueScope Steel (AIS) Pty Limited [2008] NSWIRComm 1071

Australian Workers Union v. BlueScope Steel (AIS) Pty Limited [2008] NSWIRComm 1071 - NSWIRComm 2008 case summary — Zoe

[89]

43 The AWU is seeking a wage increase for the HSM operators and it originally proposed that the wage matrix be amended to include a new Level 17 for the HSM operators at Level 3. For its part, BlueScope Steel does not agree to any wage increase at all and, in particular, were opposed to any alteration to the current wage matrix. As suggested earlier in this decision, BlueScope Steel had originally suggested that the work of the HSM operators at Level 3 had, in fact, exceeded the BlueScope Steel Award and had, in effect, ceased to be wages positions but had become salaried staff positions. The HSM operators wished to retain their existing status, and entitlements, as wages employees and remain within the BlueScope Steel Award, however. 44 Nevertheless, as I indicated earlier in this decision, BlueScope Steel did not oppose the industrial dispute being determined in the Commission according to current wage fixation principles for work value changes. The wage fixation principles for work value claims have remained unaltered for some considerable time and are presently confirmed in the 2008 State Wage Case. Mr Brotherson does not dispute that there have been changes in the work of the HSM operators since their rates of pay were last reviewed in 1996 but he claims that those changes have been "...evolutionary in nature..." only and did not justify a further wage increase to the HSM operators based on the strict test of the current wage fixation principles. Notwithstanding Mr Hatcher's assurances given in this hearing that the AWU would make no claim to other steelworks employees in the light of my decision in this current matter, Mr Brotherson expressed concerns over the possible erosion of relativities in the Port Kembla steelworks, particularly with respect to maintenance staff, and the flow on of any wage increase to other steelworks employees. Both are matters of relevance for the Work Value Change principle which makes specific reference to "...external classifications... and "...wage leapfrogging...".

[423]

163 As Mr Brotherson has suggested in his submissions, the AWU claim for HSM operators must be considered having regard to the structural efficiency measures which goes as far back as the 1984 Steel Industry Plan and the obligations generally for all steelworks employees flowing from their acceptance of the structural changes which BlueScope Steel is continuing to implement in the Port Kembla steelworks. From those structural improvements to steelwork operations, BlueScope Steel has certain benefits but the employees have received certain benefits as well - wage increases, lump sum payments and, most importantly, a level of job security which they might otherwise have lost in the current uncertain economic climate. 164 More recently, the AWU claim in this hearing must be considered in the context of the recently concluded negotiations, culminating in the retention of the current BlueScope Steel Award as a PSA with substantial wage movements generally across the Port Kembla steelworks - 5% early in 2009, a further 5% early in 2010 and 4½% early in 2011. It would be anticipated that, in accepting those wage movements, the AWU would generally be acknowledging that no extra claims would be made during its life (outside the limitations of specific work value assessments which are recognised in Clause 5, No Extra Claims of the BlueScope Steel Award). It is, of course, a long established policy of State industrial tribunals that industrial instruments such as the BlueScope Steel Award should not be opened within their nominal term unless there are good and cogent reasons to do so but the parties should remain committed to those instruments and restricted to the benefits which flow from them [the Soap and Candle Makers Case (1946) AR 264]. The ink is not yet dry on that agreement of the parties on the current BlueScope Steel Award and BlueScope Steel is entitled to resist any further wage movements outside the terms of the agreements reached. But the current AWU claim for the HSM operators is contemplated under Clause 5.

[428]

167 In assessing the appropriate rate of pay for one group of employees, the Commission has often had regard to the work performed by similar groups of employees. That is the concept of comparative wage justice. Certainly, when in 1996 in his decision in the BHP Steel (AIS) Pty Limited - Hot Strip Mill Restructured Ironworker Classifications Rates of Pay Award Case, Hungerford J contrasted the work of the HSM operators at Level 3 with the position of Slab Caster Operator 5, he was giving some attention to the concept of comparative wage justice. But even where similarity of work has been established, it is not enough to look merely at the rates of pay awarded, distinct from other conditions of employment in each case. And the concept of comparative wage justice has also been modified by the current wage fixation principles. 168 As Mr Hatcher pointed out in his written submissions: "....in the Metalliferous Miners Case (1928) AR 466 (at p.471) the Commission established the principle that the rate of pay awarded in one industry is not to be accepted as a guide to the rate to be awarded in another unless the tribunal is satisfied that the work done in each is fairly comparable. This principle was entrenched and indeed extended by the Commission in the Crown Employees Scientific Officers Award Case (at p.283) where the Commission rejected even any comparison between different groups of employees within one employer - there the State public service. Although the Metalliferous Miners principle was modified in the Crown Employees - Legal Officers Award Case (1972) AR 376 (at pp.391 and 392) to allow for work value comparisons to be made with other groups of employees performing dissimilar work, this modification was subject to two strict conditions: firstly, that there had been a '...proved historical relationship...' between the groups of employees being compared and, secondly, the dissimilar work of the comparator group has to be '...shown by documentary or oral evidence to be comparable in value...'. Therefore, attempts by BlueScope to draw comparisons with the dissimilar work of staff employees or trades employees as a basis for determining the matter should be rejected as contrary to the modified Metalliferous Miners principle. There is no evidence of any industrial nexus or established wage relativity between HSM operators and trades or staff groups. Nor is there any evidence to establish comparability in the value of work performed..." I agree with Mr Hatcher's comments with respect to the current claim by the AWU for the HSM operators. The upshot is that, in my opinion, what is currently paid as wages or salaries for other groups of employees in the Port Kembla steelworks no longer provides any effective guide for the rates of pay for the HSM operators. Equally, in this hearing what is paid as wages to HSM operators should provides no real guide to what is paid to any other groups of employees in the steelworks. 169 To satisfy the Work Value Change principle from the current wage fixation principles for any particular group of employees, there must be "...changes in the nature of the work, skill and responsibility required or the conditions under which work is performed..." to the extent that there has been "...a significant net addition to work requirements as to warrant the creation of a new classification or upgrading to a higher classification...". The fact remains that in the unsuccessful negotiations for the HSM operators, BlueScope Steel management made an offer to them which, whilst it may have lacked some precision, still represented a significant adjustment to their rates of pay (which the employees refused). More significantly, to my mind, that offer constituted a recognition that the Level 3 HSM operators, or at least a substantial number of them, had moved into a new classification, ie as staff positions. Notwithstanding Mr Brotherson's submissions in this hearing to the contrary, that must represent an acknowledgement by BlueScope Steel that the changes to the work of those HSM operators had reached a stage where they had moved into an a new classification, even though the employees themselves had rejected that new classification.

[444]

I appreciate that those allowances may, as Mr Brotherson has emphasised in his submissions, upset existing wage relativities for the HSM operators and some trades staff paid according to the Graded Trades Model to some degree but Mr Corkish conceded in his evidence that already there was some overlap in the rates of pay for production staff and trades based groups in the Port Kembla steelworks. And the wage relativities between the production staff and the trades staff appears to me to have had no established nexus in the past, apart from as some type of rough guide between the two groups. 181 However, I also note that most production employees at Level 16 of the matrix, comparable trades staff and, certainly, staff officers occupy their positions by appointment, ie based on individual performance and meeting proper performance standards. I consider that Level 3 HSM operators have now entered the territory where I would expect that condition to apply to their employment. Therefore, in future HSM operators attracting either allowance should be by appointment. That requirement would apply only to future employees, however. It should not be construed as applying to existing Level 3 HSM operators. But I hasten to add, that should in no way be construed as meaning that BlueScope Steel would lose its right to remove such allowances from any employee who fails to perform to the standard required of the employees to receive those allowances. 182 Mr Baraldi, Mr Potts and Mr Munn impressed me as very experienced and competent operators for the HSM and it is their evidence which provides a yardstick for the rest of the current Level 3 HSM operators. I do not believe that view of those three employees is open to any serious challenge by BlueScope Steel. As I noted earlier in this decision, in the offer made by BlueScope Steel to the HSM operators during the unsuccessful negotiations, BlueScope Steel appears to have recognised the equal status for the existing Level 3 HSM operators when it produced a proposal which, in effect, would have likely led to a general movement in the remuneration to them of in the vicinity of either $40.19 per week or $127.42 per week. 183 But are Mr Baraldi, Mr Potts and Mr Munn atypical HSM operators? That seems to be a view which Mr Brotherson advanced, particularly in his cross-examination of Mr Baraldi. There may no doubt be different capabilities for different HSM operators but my decision can only be based on the evidence that has been produced in this hearing and that means I must rely principally on the evidence of Mr Baraldi, Mr Potts and Mr Munn on the nature of the work. And there is no basis on the evidence available to me to distinguish between those three employees and other existing Level 3 HSM operators - other than the distinction the AWU has itself made with the proposed Grade 4 and Grade 5 (and the different allowances I have awarded for the WBFRM operator/DC operator or the CBFM operator/DC operator, on the one hand, and the DC operator/WBFRM assistant, on the other hand). I accept that, even within the two-tier allowance structure I have adopted, there would be different HSM operators with different standards of work. The allowances I have awarded may therefore involve some fairly rough averaging with some employees possibly having a legitimate claim for a higher remuneration if treated individually but, the AWU claim does not permit me to consider the claim individually but with respect to the employees as a group.

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Judgment (467 paragraphs)

Cases Cited (7)

Cited By (2)