Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v BlueScope Steel

Ken Brotherson Duncan Cotterill layers (Respondent) File Number(s): IRC 139 of 2011

INTRODUCTION 1Pursuant to the provisions of s.146B of the Industrial Relations Act 1996 , the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (referred to as the Australian Manufacturing Workers Union) has lodged a notification of an industrial dispute with BlueScope Steel (AIS) Pty Limited. At issue is the scheme for the payment of the bonus - the performance recognition payment [PRP] - provided quarterly to employees of BlueScope Steel and the appropriate criteria to be used for such payment. The PRP is contained in Clause 44, Lump Sum Payment Scheme, of the BlueScope Steel (AIS) Pty Limited - Port Kembla Steelworks Award which is in the following terms: "44.1. Purpose of the Agreement - This clause provides for quarterly performance recognition payments directly related to business performance improvement measured against performance indicators. The purpose of the agreement is to: 44.1.1 reinforce commitment to the understandings set out in Port Kembla Steelworks Steel Industry Agreements to work to ensure a viable steelmaking industry at Port Kembla; 44.1.2 in achieving the company's critical business objectives: in this regard the parties commit themselves to co-operating in measures to achieve and maintain a world class steelworks; and 44.1.3 recognise the contribution of employees to improved performance when this has occurred. 2. Payment - Performance recognition payments at the end of each quarter will be made to all employees of the company on the payroll at the end of that quarter for which the payment is made, except: employees covered by the Port Kembla Product Berth Enterprise Development Agreement 2002 and the Port Kembla Bulk Operations Enterprise Agreement 2002, or any replacement agreement or award; employees off work on non-accident pay workers' compensation. This performance recognition payment will be calculated as a percentage of total gross earnings, as defined. Employees who leave the company during the period will not be eligible for payment. 3. Principles of Payment System - The terms of the performance improvement recognition payments system are: 44.3.1 In addition to other payments, there will be a quarterly performance recognition payment directly related to reasonably achievable business performance improvements measured against the agreed performance indicator. The agreed performance indicator at Port Kembla Steelworks will be determined by the company following consultation with unions who are a party to this award. 44.3.2 The performance recognition payments will be paid at the end of each quarter and will be calculated as a percentage of total gross earnings. For this purpose, total gross earnings does not include payments in respect of absences on workers' compensation by employees not in receipt of accident pay or termination payments or performance recognition payments paid during the quarter but related to a previous quarter. 44.3.3 The percentage of total gross earnings to be paid will be determined by reference to actual performance measured against the 4.5% target performance indicator. 44.3.4 On achievement of the agreed performance targets, 4.5% of total gross earnings, as defined for the purpose of the Scheme, with payments varying above and below this amount possible, depending upon performance. The maximum quarterly payment to be made under this Scheme will not exceed 5.5% of gross earnings. 44.3.5 Payments will be included in the direct deposit and (itemised separately) on the pay docket of the first administratively convenient pay fortnight following the end of the quarter. Payments will be taxed at the individual's appropriate marginal rate in the pay fortnight in which the payment is made. The payments, including tax deductions, will be included in each employee's group certificate. 44.4 Required Actions - The parties acknowledge that the continued viability of the Port Kembla Steelworks is dependent upon taking continual steps to reduce total costs and increase prime product tonnes invoiced. Typical measures which the parties agree to work towards to reduce total cost of sales, increased prime product tonnes invoiced and promote adherence to agreed dispute settling procedures." 2Initially, this dispute emerged in the metal coating line [MCL] of BlueScope Steel Limited: the BlueScope Steel Limited Springhill and CRM Employees Award has a comparable provision to that of Clause 44 of the AIS Award. The AMWU lodged a notification of a dispute under s.146B with respect to that matter. The dispute involving the MCL was the subject of conference proceedings on Tuesday, 26 October, 2010, Tuesday, 9 November, 2010, Monday, 31 January, 2011 and Wednesday, 16 February, 2011. The Electrical Trades Union of Australia and the Australian Workers Union intervened in the proceedings in support of the AMWU position. 3The issue insofar as it affects the MCL employees has been resolved by conciliation and I granted the AMWU leave to discontinue that matter pursuant to Rule 12.1 of the Uniform Civil Procedure Rules. The issue in dispute over the interpretation of the entitlements for lump sum payments remains unresolved, however, prompting the AMWU to lodge its current s.146B notification seeking essentially a declaration of the issue in dispute. 4I set the matter down for a conference on Wednesday, 2 March, 2011 and Monday, 28 March, 2011. Ultimately, the matter was to proceed to hearing and I held further proceedings on Monday, 6 June, 2011 and Thursday, 16 June, 2011 for directions to be issued for the matter to be arbitrated. The hearing scheduled initially for Monday, 29 August, 2011 was vacated at the request of the parties and rescheduled for Wednesday, 28 September, 2011. The parties were content to rely on the written submissions they had provided at my direction. The proceedings (in chambers) were conducted in the Commission's premises at 90 Crown Street, Wollongong. In the proceedings Mr Walkaden has represented the AMWU and Mr Brotherson has represented BlueScope Steel.