BlueScope Steel Limited v. Australian Workers Union [2008] NSWIRComm 1054

Industrial Relations Commission (NSW)|2008-06-10

CITATION: BlueScope Steel Limited v. Australian Workers Union [2008] NSWIRComm 1054

APPLICANT BlueScope Steel Limited PARTIES: RESPONDENT Australian Workers Union

CATCHWORDS: industrial dispute - steelworks - paintline operations - referral agreement - questions of jurisdiction - shift arrangements - 12 hour shifts rejected by a group of employees - claim to revert to 8 hour shifts - interpretation of provisions in an award - whether an agreement made to move from 8 hour shifts to 12 hour shifts may later be revoked by the employees - meaning of words "relevant work area"

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

Amcor Limited v. Construction, Forestry, Mining and Energy Union (2004/2005) 222 CLR 241 Australian Licensed Aircraft Engineers Association v. Qantas Airways Limited (2007) 166 IR 388 Australian Workers Union v. BlueScope Steel Limited - unreported BHP Steel (JLA) Pty Limited - Springhill and CRM Works Employees Award Case [2001] NSWIRComm 178 BlueScope Steel Limited v. Australian Workers Union - unreported Bryce v. Apperley (1998) 82 IR 448 Cepus v. Heggies Transport Pty Limited (1994) 52 IR 123 Codelfa Construction Pty Limited v. State Rail Authority of New South Wales (1982) 149 337 Construction, Forestry, Mining and Energy Union v. Newcrest Mining Limited (2005) 139 IR 50 CASES CITED: George A Bond and Company Limited v. McKenzie (1929) AR 498 Goodwin v. Phillips (1908) 7 CLR 1 Hot Strip Mill Maintenance Dispute Case [2006] NSWIRComm 1152 Kellogg (Australia) Pty Limited v. National Union of Workers (1998) 89 IR 391 Kingmill Australia Pty Limited v. Federated Clerks' Union of Australia (2001) 106 IR 217 New England Health Service Disputes Case - unreported Perisher Blue v. Australian Workers Union (1999) 91 IR 274 South Eastern Sydney and Illawarra Area Health Service v. Health Services Union (2007) 165 IR 43 Waterside Workers' Federation of Australia v. Gilchrist, Watts and Sanderson Limited (1924) 34 CLR 482 Zoological Parks Board v. Australian Workers Union (2004) 135 IR 56

APPLICANT Ken Brotherson Duncan Cotterill Lawyers LEGAL REPRESENTATIVES:

DECISION: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES

BlueScope Steel Limited and the Australian Workers Union

Notification of an industrial dispute under S.130 of the Industrial Relations Act, 1996 by BlueScope Steel Limited re shift patterns for the paintline

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

1 On Monday, 4 February, 2008 BlueScope Steel Limited lodged a notification of an industrial dispute with the Australian Workers Union. At issue is an interpretation of a provision in the BlueScope Steel Limited Springhill and CRM Employees Award [Clause 13, Hours of Duty], concerning the 12 hour shifts for the No.3 Paintline. In particular, Clause 13.1.1 provides that ordinary hours of work for the employees will not exceed:

"...eight hours during any consecutive 24 hours, or up to twelve hours during any consecutive 24 hours where there is agreement between the company and the majority of employees concerned in the relevant work area..."

It was the intention of the employees on the paintline to revert from the current 12 hour shift pattern to 8 hour shifts from Sunday, 10 February, 2008. The AWU had, in fact, written to BlueScope Steel on Tuesday, 8 January, 2008 on behalf of the paintline operators announcing their intention to revert to the 8 hour shift pattern from Sunday, 10 February, 2008.

2 The matter was allocated to me and I set it down for a conference on Tuesday, 5 February, 2008. Those proceedings, and the subsequent proceedings, were convened in the Commission's premises at 90 Crown Street, Wollongong. Consistent with the protocol that has been developed between BlueScope Steel and the AWU, the parties have signed a referral agreement pursuant to S.146A of the 1996 Industrial Relations Act in the following terms:

"Disagreement over the interpretation of Div.3, Hours of Work, of the BlueScope Steel Limited Springhill and CRM Employees Award as it relates to the working of 12 hour shifts at No.3 Paintline."

3 I formed the view that further conciliation would not assist in resolving this matter. Firstly, the question before me did not lend itself to conciliation but simply an issue of interpretation of a provision of the BlueScope Steel Award: the parties sought a determination of the issue in dispute. Secondly, the issue of the hours of work on the paintline has, as I outline later in this decision, been a matter which has produced a considerable amount of industrial heat in the past and it appears to me that the attitude of the parties to the 8 hour shift question on the paintline is fairly settled.

4 I treated the notification by BlueScope Steel in these proceedings under S.130 of the State IR Act and issued the certificate of attempted conciliation required by S.135, lodging it in the prescribed manner and programming the matter for an inspection of the paintline and a hearing. The inspection was to occur on Monday, 25 February, 2008 and the subsequent arbitration on the interpretation of the relevant provision in the BlueScope Steel Award was scheduled for Monday, 14 April, 2008. I made directions on which the further conduct of these proceedings relied. In particular, the progress of this matter was dependent upon the employees continuing to work according to the existing 12 hour shift arrangements until the matter was resolved in the arbitration.

5 A meeting of the four crews of the paintline was arranged for the morning of Wednesday, 6 February, 2008. I reconvened the proceedings before me on Wednesday, 6 February, 2008 to have reported to me the outcome of that meeting. I was informed that a majority of the employees had resolved to accept my directions and for the present time to retain the 12 hour shift arrangements until the question of interpretation in the arbitration scheduled for Monday, 14 April, 2008 was resolved. Nevertheless, notwithstanding the resolution of the meeting, I was also informed that some paintline operators had communicated their dissatisfaction with that situation and had directly approached the AWU office over it. The AWU indicated in the proceeding that it was seeking legal advice concerning the matter and there was some uncertainty over whether or not, in the meantime, the paintline operators would restrict their work to 8 hours only from Sunday, 10 February, 2008.

6 Ultimately, the employees chose to follow the programme that I set up for this matter, ie they were to continue to work the 12 hour shifts from Sunday, 10 February, 2008 until this matter was resolved before me in the arbitration. But the AWU reserved the right to make a claim for overtime from Sunday, 10 February, 2008, depending upon the outcome of the arbitration of the matter. The inspection took place on Monday, 25 February, 2008, as was originally proposed. But, in fact, the hearing of the matter did not proceed on Monday, 14 April, 2008. Those proceedings were adjourned at the request of the parties. Instead, the hearing was scheduled to take place over two days - Tuesday, 10 June, 2008 and Wednesday, 11 June, 2008 - but it was completed on Tuesday, 10 June, 2008.

7 Mr Brotherson represented BlueScope Steel in the hearing. He called Mr Sam Gerovasilis, the Vice President of Metal Coating, Painting and Finishing [MPF], to give evidence in the hearing. Mr Taylor represented the AWU in the hearing. He called two witnesses to give evidence in the hearing: Mr Bradley O'Hare, a paintline operator (and AWU delegate for the paintline), and Mr Branko Gorgievski, an AWU organiser.

8 The interpretation of any documents has historically been regarded as a judicial function - a declaratory judgment - and reserved by S.154 of the State IR Act to the Commission in Court Session, viz:

"(1) The Commission in Court Session may make binding declarations of right in relation to a matter in which the Commission (however constituted) has jurisdiction. The Commission in Court Session may do so, whether or not any consequential relief is or could be claimed.

(2) Proceedings before the Commission in Court Session are not open to objection on the ground that a declaration of right only is sought."

In Kellogg (Australia) Pty Limited v. National Union of Workers (1998) 89 IR 391 Hungerford J commented in that respect (at p.392):

"…Although the arbitration was before the Commission, moved by Kellogg pursuant to S.136(1)(d) of the Act to '…make any other kind of order it is authorised to make…' in relation to the dispute, it was clear that the relief sought arose in the dispute proceedings but was in the nature of a declaration as to the right of Kellogg to implement its proposals having in mind the provisions of the award. By reason of S.154 of the Act, relief of that nature is exclusively within the declaratory jurisdiction of the Commission in Court Session…"

9 S.175 of the State IR Act does contemplate interpretation of various instruments in the course of S.130 proceedings (or any other proceedings before non-judicial members of the Commission). It reads as follows:

"The Commission may, for the purpose of exercising its functions in connection with a matter before it , determine any question concerning the interpretation, application of any relevant law or instrument (including the industrial relations legislation and any industrial instrument)."

By a 2006 amendment to the State IR Act, the BlueScope Steel Award has been converted into an enterprise agreement and, as such, has become a "preserved State agreement" [a PSA] under the 2005 Federal Workplace Relations Amendment (Work Choices) Act. It remains an industrial instrument for the purposes of S.175, however. But I do not regard S.175 as the source of my jurisdiction to interpret any industrial instrument. It is facilitative only and as the words that I have highlighted above - "...for the purpose of exercising its functions in connection with a matter before it..." - suggest, it depends upon there being some identified head of jurisdiction on which I may rely for the arbitration of a matter before me.

10 Formerly, as I understood the position, there were considerable restrictions in that respect in S.130 proceedings. As I indicated in my unreported decision of Wednesday, 23 May, 2001 in the New England Health Service Dispute Case [Matter No.IRC 3547 of 2000 at p.6]:

"...The key to my jurisdiction under S.136(1)(d) is the words of the provision itself - that such an order must be one that I am authorised to make ... Such authority must be found in some other part of the 1996 Act as, for instance, it is found for a stand-down order in S.126, the order of secret ballots in S.172 or orders for small claims in Ss.379 and 380. If such authority for an order of interpretation is not found in S.175, as I have concluded is the case, it does not assist in that respect... The Commission may, for instance, make an order for reinstatement under S.84(1) or S.137(1) and, in the process, using S.175, interpret any instrument relevant to that order. But it may not make an order of interpretation to stand alone since there is no authority for it..."

But S.146A, and the terms of the referral agreement that has flowed from it in this case, now provide a further source of jurisdiction. As I understand the position, S.146A actually provides jurisdiction to the member of the State Commission to, in a sense, do whatever the parties agree that he may do and the jurisdictional uncertainties which formerly existed no longer arise.

11 What appears to be contemplated in this hearing by Mr Brotherson and Mr Taylor is an arbitral interpretation of a provision in the BlueScope Steel Award and not declaratory relief. The concept of an arbitral interpretation, in the context of a particular industrial dispute, has long been recognised in the Federal industrial jurisdiction [Waterside Workers' Federation of Australia v. Gilchrist, Watts and Sanderson Limited (1924) 34 CLR 482 at pp.528 and 529]. And that is the course I propose to adopt in this hearing.

12 The Springhill site of BlueScope Steel produces steel coil in the form of cold rolled coil, metal coated coil or painted coil. It comprises a coupled pickled cold mill [CPCM] and a department of metal coating, painting and finishing [MPF] which is itself split up into two operational areas - the metal coating lines [MCL] and a painting and finishing department [PFD]. The PFD came into operation in 1999, bringing together two distinct departments - the finishing department and organic finishes - which had their own separate management structures and systems and their own maintenance crews. Coils are processed through the CPCM and then the MCL from which they pass either to the paintline or the packline. Coils processed through the paintline are subsequently sent to the packline before being sent to despatch. There are 37 paintline operators out of 131 continuous shift workers in the PFD. There are 4 trades positions and 2 fixed term employees who may from time to time work in the area of the paintline. Each shift on the paintline has a supervisor.

13 There is some history to the AWU's claim that the No.3 Paintline should revert to 8 hour shifts from the 12 hour shifts presently worked. Mr Brotherson emphasised in that respect the structural efficiency measures introduced into the Springhill site of BlueScope Steel as part of a review of a precursor to the BlueScope Steel Award - the BHP Steel (JLA) Pty Limited - Springhill and CRM Employees Award - under S.19 of the State IR Act. That S.19 review came before Walton J - Vice President of the State Commission and was confirmed by his Honour in his unreported decision of Tuesday, 14 August, 2001 in the BHP Steel (JLA) Pty Limited - Springhill and CRM Works Employees Award Case [Matter Nos. IRC 2612, 2614, 2624, 2648, 2650 and 5122 of 1999]. Pursuant to S.19(4), in any S.19 review:

"...the Commission must...take account of the effect of the awards on productivity and efficiency in the industry concerned..." It must be appreciated therefore, as Mr Brotherson emphasised in his submissions in this hearing, that the BHP Award made by Walton J in 2001, and its successors up to and including the current BlueScope Steel Award, have as their foundation structural efficiency measures and the acknowledgement by the employees of the needs for change in all parts of the operations of the Port Kembla steelworks. Mr Brotherson submitted that the terms of Clause 13.1.1 must be read in that light.

14 All employees throughout the Springhill works of BlueScope Steel - the CPCM, the MCL and MPF - were progressively placed on 12 hour shifts and they are apparently contented to remain on the 12 hour shifts. The No.3 Paintline operators resisted the move from 8 hour shifts to 12 hour shifts from the outset, however, and were the last group of employees to move onto the 12 hour shifts.

15 The existing arrangements for a 12 hour shift system for paintline operators was part of a trial commenced in 2002, involving at that time annualised salaries - the Trial Annualised Salary Work System July, 2002. The document outlining the annualised salaries system described it in the following terms:

"...The annualised salary is an all purpose payment which includes a prepaid overtime component which is to be worked when the workload requires. An annualised salary provides a more stable income and is applied to all pay periods, including periods of annual leave and sick leave, provided the employee has sick leave credits. For long service leave, the base rate of pay plus the pre-paid overtime only is paid. This excludes shift and weekend penalties as well as payment for leisure days..."

16 Mr O'Hare recalled in his evidence that the trial was to be for a period of 12 months (or until the introduction of a new packing system if that occurred earlier). Instead, it has run for over five years, most of which, it would seem to me, was without any real complaint from the paintline operators. I would think that BlueScope Steel was entitled to regard the trial as being at an end some considerable time ago. But no formal notification that the trial arrangements have actually been accepted by the paintline operators was apparently given by them or on their behalf by the AWU. The trial simply continued to run.

17 A change of shifts from 12 hours to 8 hours for the paintline now would no doubt produce considerable difficulties for BlueScope Steel operations, especially since, as I indicated earlier in this decision, other departments of BlueScope Steel at the Springhill site, by agreement, continue to work 12 hour shifts. As do maintenance trades employees (16) and fixed term employees (2) who work in all areas of the PFD, including the No.3 Paintline. Supervisors in all parts of the PFD, including the paintline, also work 12 hour shifts. I do not believe that it is really possible to have one group of employees working entirely different shift arrangements than the rest of the steelworks.

18 Mr Gerovasilis recorded in the written statement which formed the basis of his evidence in this hearing that:

"...if the paintline was to revert to 8 hour shifts, and the balance of the PFD was to stay on 12 hour shifts, then some critical issues would arise, including:

(a) shift change over systems would alter, meaning shift changeover meetings and end of block reviews would need to be separated and/or occur more often: this would eat into management and supervisory time, as well as creating significant duplication;

(b) shift trades persons would need to either attend more meetings, or be separated into finishing or painting groups;

(c) where production operators work with shift trades persons (eg. problem solving, correcting breakdowns, etc), delays and other continuity issues would arise if people change shifts at different times; and

(d) need to revisit the award procedure for meeting urgent customer needs...."

Inevitably, if the paintline operators revert to the 8 hour shifts, BlueScope Steel would be faced with considerable administrative and logistical problems which must mean that the whole 12 hour shift arrangements throughout the Springhill site would have to be reappraised and placed in jeopardy. If that were to occur, it would certainly be a case of the tail (the paintline operators) wagging the dog (the rest of the PFD).

19 Moreover, I have consistently held the view that the 8 hours shift pattern may not really be in the best interests of many of the paintline employees themselves. But Mr O'Hare and Mr Gorgievski spoke in their evidence of a recent secret ballot of the paintline operators conducted in the offices of the AWU in which a majority (60% to 40%) of those casting a vote expressed the wish to revert to the 8 hour shift. Mr O'Hare has indicated in his evidence that he was not happy with the way the vote was conducted. Some of the paintline operators were apparently opposed to any secret ballot at all and wanted the matter addressed more simply in the traditional manner, as a show of hands. 20 The number of operators who actually cast their vote in the ballot has not been clearly indicated in this hearing. The ballot was confined to the operators and fixed term employees were specifically excluded from the vote. So too were the trades staff. And the secrecy of that vote by paintline operators, based on the evidence before me in this hearing, is also open to some challenge. For one thing, Mr O'Hare seems to have some knowledge of how particular employees actually cast their vote. For instance, with the recent departure of four or five operators, he is confident that the vote for the 8 hour shift would now be even stronger among the operators. He could only have formed that view if he had some prior knowledge of the way those particular employees actually voted. 21 Nevertheless, I have no doubt that the views expressed by the employees who did actually cast a vote reflected the opinion of a significant number of the paintline operators - if not of the PFD as a whole - that they would prefer to work according to an 8 hour shift arrangement. As revealed by the lengthy history of this matter, to which I will refer shortly in this decision, many of the paintline employees have held very strong negative views concerning the preservation of the 12 hour shifts, which they see as acting unfairly to them and they appear determined to revert to the former 8 hour shift arrangement. Whether those employees opposed to the preservation of the 12 hour shifts represent the majority of the paintline operators, as Mr O'Hare and Mr Gorgievski asserted in their evidence, is a matter of some doubt, notwithstanding the ballot that was conducted in the AWU office. To my mind to get a better picture of the majority view of the paintline operators something more would be required than the ballot that has already taken place.

22 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 appears to me to have been the catalyst which prompted the paintline operators to begin their agitation for a return to the 8 hour shifts. For instance, Mr Gorgievski has argued that with changes in the operations of the paintline, including reduced manning levels, the 12 hour shifts for paintline operators had become unworkable. He recorded in the written statement which formed the basis of his evidence in this hearing that:

"...employees informed the AWU that they had concerns that working a 12 hour shift pattern was not a workable position as fatigue had started to play a big part in safety involvement of the painting and finishing employees. Employees said they felt they were all at risk of getting injured due to having to work 12 hours straight in circumstances where there was the reduction of manning and associated extra work load and pressure imposed on the employees. The employees told the AWU that they believed that it was unbearable to continue working on the 12 hour shift pattern..."

23 On Tuesday, 14 November, 2006 the AWU had written to BlueScope Steel informing it of the decision of a combined meeting - four shifts - of the paintline operators, ie that the trial of the annualised salaries cease and that the document on which the trial was based:

"...now no longer has any relevance to the situation as it currently exists. When this trial was proposed the paintline had 63 employees and the actual document was introduced 2 weeks after the proposed trial started. Through changes in manning due to the introduction of technological changes, there are now only 38 people in operations at the paintline across the 4 crews.

Therefore this 4 crew meeting rejects the current document in its entirety and asks that a new document be drawn up by Friday, 15 December, 2006, failing which the employees have no alternative than to give the company 28 days notice that we will revert to the 7 x 3 x 8 hour shift pattern on normal wages and conditions as per the award. This gives the company enough time to implement the changed roster system by Friday, 15 December, 2006.

The union and the employees are prepared to enter into meaningful discussions on a new annualized salary package that would include a proper consultation process whereby employees have involvement in the decisions and, if necessary, the right to seek the assistance of a third party, namely the Industrial Commission of New South Wales, in addressing any problems that may arise..."

24 Essentially, the AWU position then was that any current problems being experienced were due to reduced manning levels since the annualised salary system was introduced in 2002, that there was excessive call outs, that the employees were not being adequately compensated for the overtime they actually worked by the component for overtime in the annualised salaries. The AWU claimed that occasions where unforeseen circumstances arose and where additional overtime may be required were far too frequent. It was a feature of the annualised salary arrangements that a "safety net group" was set up for operators to work across the 4 crews to cover long term absences of employees due to ill health, workers compensation, etc. One employee was in the "safety net group" at that time. The AWU regarded that as inadequate.

25 The response from BlueScope Steel was a letter to the AWU dated Monday, 20 November, 2006, viz:

"...While initiated as a trial system, the paintline annualised salary work system has been in operation for approximately four years and four months. Notwithstanding issues raised by both the company and the employees over that time, the system has continued to operate. As such, the company has no interest in entering into discussions to formulate a new annualised salary work system. The company accepts your proposal to return to '...normal wages and conditions as per the award...', given the paintline employees rejection of the current annualised salary work system as detailed in your correspondence. We will investigate if this can be achieved on or around Friday, 15 December, 2006..."

26 However, the letter referred to the obligations flowing from the BlueScope Steel Award [Clause 36.4.2(c)] that where changes of a "significant nature" arose in the steelworks operations, the status quo should be preserved, without industrial action, whilst the matter was the subject of consultation, conciliation and, if necessary, arbitration. The letter went on to say:

"...manufacturing operations...are based on 12 hour shift rosters that are critical to the manufacturing excellence model that underpins our operations. It is imperative that a common shift roster, whether it is 8 or 12 hours, be in operation throughout the business. Any such proposal to change the shift roster will significantly impact others in the...company's community, including mechanical and electrical shift tradespersons, packline and despatch operators and shift staff and their respective unions.

This means any proposed revision to a 7 x 3 x 8 hour shift roster would constitute a significant change to this business. Under the BlueScope Steel Award shift pattern changes such as that suggested in your correspondence are considered to be significant in nature.... This requires the AWU and its members along with those other affected employees to follow the process for the introduction of significant change, as detailed generally in the BlueScope Steel Award. I would be pleased to discuss this response with you at a mutually convenient time..."

27 The AWU wrote in reply on Friday, 24 November, 2006, explaining its position as follows:

"...The union's position is that, although the Annualized Salary Working Document 2002 has been in place for some time there has never been a proper review through consultation and agreement to finalise the document. In fact, in the time it has been operating, there has been a series of misleading and different interpretations of the document which at times has had both parties at breaking point. The matter has been before the New South Wales Industrial Relations Commission on a number of occasions and there are still problems regarding the interpretation of the document to the extent that the onus is on the employees where they have been warned, given final warnings, stood down without pay and even threatened with dismissal. The document, which was intended to be a trial in good faith, and subject to review, has never been worked through as it should have been. With reference to the point you make about the shift changes being a significant change and therefore should be treated as per Clause 36.4.2(c) of the BlueScope Steel Award, we believe this is not the case. According to Clause 13.1, Hours of Work, of the BlueScope Steel Award '...ordinary working hours will not exceed 8 hours during ordinary consecutive 24 hours, or up to 12 hours during any consecutive 24 hours where there is agreement between the company and the majority of employees concerned in the relevant work area...' To that point the agreement was only on a trial basis and it has never been agreed on or signed off. Therefore, unless agreement is reached between the parties on an accepted annualised salary work system, we will have no alternative but to revert to the pre-trial working arrangement, ie 7 x 3 x 8 hour shift pattern on normal wages and conditions as of Friday, 15 December, 2006..."

28 BlueScope Steel replied to the AWU in a further letter on Monday, 11 December, 2006, viz:

"...The issues relating to the operation of the annualised salary work system, particularly those relating to the call out system, have been discussed at length in the New South Wales Industrial Relations Commission... During those matters no issues were raised or solutions proposed that warranted alteration to the operation of the existing system. We know the existing system can work to everyone's benefit when operated effectively and flexibly to minimise disruption to employees and the line. Unfortunately, the company still suffers operational losses due to equipment failures, while employees have so far worked significantly less hours than they have been pre-paid for. Hence, I confirm that the company has no interest in discussions to formulate a new annualised salary work system.

That the employees reject the annualised salary work system, as you advised in your first letter is understood and accepted. We understand that the majority of the...employees prefer to work under the current twelve hour roster system and our expectation is that the roster would continue in the absence of the annualised salary work system. Also we still hold the view that any change to the shift pattern is significant in nature as it impacts the broader employee community.

The hours of work are best determined by agreement and the significant change Clause 36.4.2 of the BlueScope Steel Award is the process to achieve such agreement. In any event, changes to employee shift roster take time for payroll to administer once it has been determined that a change is required. At this time of year any such a change is problematic and will impact the timeliness and accuracy of wages payment as it coincides with the administration of public holidays and annual leave arrangements over this busy period..."

29 In the letter it was proposed that a convenient time would be arranged with the AWU to:

"...discuss the preferred date in the new year for a reversion from the salary arrangements back to an hours paid for hours worked model..."

And the letter recommends that the AWU discuss the issue of the proposed change to the roster pattern with other trade unions with members involved in the current 12 hour shift pattern - the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union and the Electrical Trades Union of Australia - a very sensible and courteous course of action in the circumstances, I would think, since PDF trades staff would be effected by any change in shift patterns for the No.3 Paintline.

30 On Wednesday, 13 December, 2006 the AWU responded:

"...We first notified the company on Tuesday, 14 November, 2006 that if the company has no intention of meeting with the employees and the union to address all the concerns...then it leaves us with no alternative but to discontinue the trial of the annualised salary document and go back to pre-trial, ie a 7 x 3 x 8 hour shift pattern at normal wages effective from Sunday, 17 December, 2006. Therefore, employees will be reporting for normal duties as at that date. We attach a copy of the roster system that will apply from that date.

You also mention in your letter that due to short notice given to you, it will be very difficult for the paymaster and shift pattern changes to be made accordingly. However, we remind you that this is not the case..."

But the deadline imposed by the AWU passed. A meeting between the AWU and BlueScope Steel management was held on Wednesday, 17 January, 2007 and on Monday, 29 January, 2007.

31 BlueScope Steel had indicated in a letter to the AWU on Monday, 29 January, 2007 that, as far as it was concerned:

"...the high level of absenteeism is at the core of the issues to the paintline annualised salary work system that results in shortage of labour that stops and delays production through lack of manning. To ensure that our business and customers are not further hindered through lost shifts, the company notifies employees that it will now require having 4 employees on call for each roster period. This is to take effect from day shift on Wednesday, 31 January, 2007..."

32 On Friday, 2 February, 2007 BlueScope Steel lodged a notification of an industrial dispute with the AWU over this issue and the matter came before me. The notification by BlueScope Steel described the industrial dispute at that time in the following terms:

"...The dispute concerns a disagreement over the operation of a common shift roster of either a 12 hour day/night or an 8 hour x 3 shift roster with paintline operators following agreement by the parties today to discontinue the annualised salary work system. The operators are employed by the company in the painting and finishing department at its Springhill site at Port Kembla. If unresolved, the paintline employees have advised their intention to resume an 8 hour shift roster pattern commencing from Sunday, 4 February, 2007 regardless of company requests not to take that course of action. Such resumption is impractical from operational, administrative (payroll) and industrial perspectives as well as raising safety concerns..."

33 The paintline operators indicated through the AWU in the proceedings before me on Friday, 2 February, 2007 that they rejected the annualised salary system. Essentially, as I initially understood their position, their view was that they were not being properly compensated for the level of overtime and call backs which they actually worked and the fact that they were all expected to remain on call at all times when a simple rotating roster should suffice to provide adequate manning of the plant for unexpected absences from crews.

34 BlueScope Steel and the AWU had, in fact, reached agreement to terminate the annualised salary system as far as it concerns the paintline operators. A further agreement of an interim nature was reached between the parties in the proceedings before me on Friday, 2 February, 2007. It was agreed to defer the changes to shift patterns proposed by the paintline operators until the end of February, 2007 and that, in the meantime, I was requested to convene a conference to conciliate the matters in dispute. I set the matter down for a conference on Tuesday, 13 February, 2007 and Friday, 16 February, 2007.

35 At that time there was no S.146A referral agreement provided to me to confirm my jurisdiction: the AWU had, in fact, declined to sign one. As I indicated in my unreported interlocutory decision of Monday, 9 October, 2006 in the Hot Strip Mill Maintenance Dispute Case [Matter No.IRC 3142 of 2006 at pp.4 and 5], insofar as this matter proceeds before me for conciliation only at this stage, my jurisdiction was not, I believe, necessarily dependent upon a referral agreement at all [Construction, Forestry, Mining and Energy Union v. Newcrest Mining Limited (2005) 139 IR 50 at p.57]. But to advance the matter further for arbitration, I would need a S.146A referral agreement signed by the parties.

36 The AWU had continued to argue that the trial period for the 12 hour shifts had ended with the employees' decision to no longer work it and the employees were entitled to return to the 8 hour shifts - a right it claimed was guaranteed to it by the terms of the BlueScope Steel Award, provided adequate notice was given of its intentions (and that had occurred). I would think that the initial concern the employees had over overtime and call backs would have disappeared with the abolition of the annualised salary arrangements effective from Sunday, 25 February, 2007 with the employees now being paid their overtime entitlements for any call backs as a matter of course.

37 Nevertheless, the AWU was seeking to negotiate a new "package", claiming that the changes with reduced manning levels and the abolition of the annualised salary arrangements dictated the need for a review of the shift arrangements. Essentially, the AWU was seeking a 20th (overtime) shift for the employees in each cycle. At that time, the employees worked 19 shifts in each cycle with the employees being called in by BlueScope Steel management on a 20th shift only as required.

38 In a statement I issued on Friday, 16 February, 2007 I commented (at pp.2 and 3):

"...Little progress appears to have been made between the parties in the private discussions that I have recommended take place. But this is early days yet and the parties should appreciate that some further efforts will be necessary to rationally examine the options which are raised in these proceedings. I recommend strongly that the parties hold further discussions concerning this matter... I have in mind a monitoring committee to examine the full range of issues thrown up with the shift arrangements for the paintline operators. I indicate my preparedness to assist the parties with further conciliation or, if necessary, upon the finalisation of a S.146A referral agreement, by arbitration..."

But I went on to say this (at p.3) on the issue of the 8 hour shifts:

"...The parties themselves should review the position with a view to identifying an agreed position with it, especially since there will already be changes in shift arrangements from the departure from the annualised salary arrangements. I would not believe that it was in anybody's interests to now take the unilateral step involving such a fundamental change to shift patterns in BlueScope Steel's operations until the safety, administrative and operational implications and the effects thrown up for other groups of employees in the steelworks are fully explored in further discussions...."

I strongly recommended that the employees refrain from imposing the deadline of Tuesday, 27 February, 2007 for the return to the 8 hour shifts. I set the matter down for a further conference on Tuesday, 27 February, 2007.

39 However, the paintline employees, across the shifts, continued to indicate that they would work only an 8 hour shift from Sunday, 25 February, 2007. BlueScope Steel rejected work on that basis, refusing to allow them to start work and requesting an urgent re-listing of the matter. I reconvened the proceedings on Monday, 26 February, 2007 and in a further statement I issued at that time, I commented (at p.4) that:

"...This is not a satisfactory situation for either the employees or BlueScope Steel. I do not resile from what I recommended on Friday, 16 February, 2007. It should be clear to anybody that these types of problems may only be effectively addressed by proper, mature discussions between the parties. That should take place in everybody's interests. But, in the meantime, the existing status quo should prevail. That means that for the current dispute before me the employees should refrain from their decision to revert to the 8 hour shift pattern. The existing 12 hour shift arrangements are consistent with the rest of the plant and, whilst it may only be a trial, the fact remains that the 12 hour shift pattern has been in operation on the paintline since 2002.

That having been said, all issues concerning the shift arrangements for the paintline should be discussed between the parties and a way forward developed by them. The question of the 20th shift should be on the table in those discussions and a referral agreement drafted to reflect that position. I was under the impression that the employees had greater benefits out of the 12 hour shifts than the 8 hour shifts they previously worked. I would not wish the employees to cut off their noses to spite their faces. If the arrangements which were originally put in place ultimately have been less attractive than what first attracted them to the 12 hour shift arrangements, then it is open to them to review them.

Mr Gillespie , representing the AWU in the proceedings, has suggested that I should chair a further conference concerning the shift arrangements. I am willing to do so but I am not being helped in that respect by the AWU's refusal to complete a S.146A referral agreement. Without a referral agreement, of course, and the clarification of the issues in dispute between the parties, this matter may not proceed to the next logical step..."

I directed the employees to remain on the 12 hour shift pattern, that the AWU reconsider its position on completing a S.146A referral agreement and that there be further discussions between the AWU and BlueScope Steel, including the question of the 20th overtime shift for the paintline operators.

40 A range of issues had therefore been highlighted by the AWU in the proceedings before me. Many of those issues were apparently long outstanding claims made by the employees which, for one reason or another, remained unaddressed. Some of those issues fell either directly or indirectly as part of a review of the shift arrangements which were the subject of these proceedings: some of them, in my opinion, did not, eg the salary level for employees engaged in the "safety net group".

41 I reconvened the proceedings on Tuesday, 27 February, 2007 to progress the matter further. It was my attention to assist the parties in drafting the terms of a particular referral agreement which would accommodate the views of both BlueScope Steel and the AWU. But the AWU still refused to sign off on any referral agreement. Independently, BlueScope Steel had mounted a claim in the Australian industrial jurisdiction, alleging that the refusal of the employees to work their existing shift pattern of 12 hours constituted industrial action by them in breach of the dispute settlement procedure set out in the BlueScope Steel Award. The AWU had foreshadowed its own litigation - alleging a breach of the BlueScope Steel Award and a lockout of the employees. The matter had clearly got out of hand.

42 Nevertheless, in the proceedings before me on Tuesday, 27 February, 2007 BlueScope Steel made a further offer, viz:

that the parties enter into a referral agreement on the question of a common shift pattern for the painting and finishing department or, in the alternative, an application be made under S.154 for declaratory relief concerning hours of work and the process for change;

that until a determination of the matter by the relevant forum, BlueScope Steel offer, and expect the employees to accept, work on the 20th shift; and

that BlueScope Steel establish a conference with crew representatives and the officials of the AWU to discuss the operational and market complexities concerning the 20th shift.

On that basis, there was to be an immediate return to the 12 hour shift pattern and that occurred.

43 Nevertheless, there had been no referral agreement completed for this matter. Nor had the AWU proceeded under S.154 for declaratory relief. The paintline employees were continuing to work the 12 hour shifts and the 20th shift was continuing to be worked, however. In proceedings before me on Monday, 18 June, 2007 BlueScope Steel requested that the proceedings be discontinued. That course was not opposed by the AWU. I granted BlueScope Steel leave to discontinue the matter in accordance with Rule 138, recording that fact in my unreported decision of Monday, 18 June, 2007 in BlueScope Steel Limited v. Australian Workers Union [Matter No.IRC 121 of 2007]. The issue of the shift work patterns for the paintline operators has remained dormant up to the present proceedings before me.

44 Mr Brotherson's argument in this hearing is in two parts. Firstly, he asserted in his written statement that Clause 13.1.1 was facilitative only, to allow for the introduction of a particular change to working arrangements throughout the Port Kembla steelworks of BlueScope Steel on which the current BlueScope Steel Award is based. With the completion of the process of introducing the 12 hour shifts throughout the Springhill works, Mr Brotherson suggested in his submissions that Clause 13.1.1 had completed its task some considerable time ago and should confidently be regarded as redundant in its present form. I would ordinarily agree. Clause 13.1.1 has gone well beyond its "use by date", in my opinion, and I would have expected that shift patterns in any part of the BlueScope Steel operations would no longer be a negotiable matter. 45 No doubt BlueScope Steel may have entertained an application to amend it to reflect the current position were it not for the current restrictions imposed by Work Choices on such a course. One thing is clear in the current uncertain industrial landscape, the variation of State instruments is proscribed at present and, consequently, BlueScope Steel is prevented from taking the action it would formerly have contemplated, ie varying Clause 13.1.1 to reflect a more sensible course of action. Mr Brotherson claimed that, in fact, the AWU was relying on that gap in the industrial landscape to authorise its claim that the paintline operators revert to the 8 hour shifts.

46 However, Mr Brotherson further claimed that once the paintline operators made their agreement under Clause 13.1.1 to work the 12 hour shifts in 2002, they may not unilaterally revoke, rescind or vary it by simply giving notice of their intentions in that respect, notwithstanding that as far as the paintline operators are concerned the 12 hour shift was introduced on a trial only. That is particularly the case, he asserted, because the 12 hour shift patterns was an integral part of the structural efficiency measures on which the current BlueScope Steel Award is based. Mr Brotherson's written statement of contentions speaks in that respect of the:

"...long-standing underlying principles of the industrial arrangements of the parties and the benefits afforded employees, including in particular employment security..."

According to Mr Brotherson , any other construction of Clause 13.1.1 would "...negatively impact on the efficiency of the company and prejudice the industrial arrangements of the parties..." and would be "...contrary to the stated intention of the parties...".

47 Mr Brotherson submitted that Clause 13.1.1 had to be read in the context of the comprehensive provisions addressing all workplace changes in Clause 36, Procedure for Resolving Claims, Issues and Disputes, of the BlueScope Steel Award. That means, among other things, that any change to workplace arrangements must be measured against the test that the change be safe, efficient, legal and fair - in particular, efficient and it would hardly be efficient to have one group of employees out of step with the rest of the BlueScope Steel workforce on their shift arrangements.

48 Secondly, and in the alternative, Mr Brotherson submitted that for the purpose of Clause 13.1.1 the PFD is the "...relevant work area..." and, consequently, a majority of the paintline operators alone is not sufficient to revoke the agreement to revert to the 8 hour shifts. Mr Brotherson commented in his written statement of contentions that:

"...the term '...relevant work area...' is not defined in the award and only appears in Clause 13.1.1 of the award. Elsewhere in the award the term 'department' is commonly used and the term 'section' is also used in a number of places. However, in the context of Clause 13.1.1 a '...relevant work area...' must be one which recognises the stated aims of the parties and must also be consistent with the matters the Commission had to give consideration to at the time of the making of the award.

The '...relevant work area...' needs to allow the operations of the company to function efficiently. It also therefore needs to be looked at in the context of the operations of the Springhill site and also have regard to the organisational structure and systems under which work is performed and the necessary interactions of work groups, ie staff, maintenance and production operators. Indeed, the use of the word 'relevant' is indicative that consideration needs to be had of all things, including all work groups, with a bearing upon a work area.

There is nothing to suggest the term '...relevant work area...' is confined to a particular union or task group or to a single piece of plant. A construction of '...relevant work area...' for the purposes of hours of work which recognises one group of production employees operationally as an 'island' at the expense of the functionality of the wider organisation is counter productive. In the present case, such a construction would lead to a number of inefficiencies, including duplication of shift changeovers and associated meetings, lack of co-ordination of maintenance and production employees and supervision, and may even require a restructure of the PFD management structure and systems. Such a construction is therefore contrary to the intentions of the parties to the award and the matters to which the Commission must have regard..."

49 Mr Taylor agreed with the facilitative nature of Clause 13.1.1 but he rejected Mr Brotherson's submission that it must be read in conjunction with the provisions of Clause 36 dealing with all workplace changes and he argued that the plain meaning of Clause 13.1.1 was that the 12 hour shifts may only be worked with the agreement of the employees who worked it. He categorised Clause 13.1.1 as a specific provision which, to that extent, had to be read as a qualification to the more general provisions of Clause 36 - generalia specialibus non derogant [Goodwin v. Phillips (1908) 7 CLR 1 at p.14]. It would follow that Clause 13.1.1 provided primarily for 8 hour shifts and employees may work up to 12 hour shifts only by agreement. Once the employees were no longer prepared to work 12 hour shifts (or equally BlueScope Steel was no longer prepared to offer them), then the agreement ceased.

50 According to Mr Taylor the agreement made by the paintline operators in 2002 to work the 12 hour shifts was not set in stone but may be revoked at any time, subject only to there being proper notice. In that respect, Mr Taylor referred to the decision of the Full Bench of the Australian Industrial Relations Commission (Giudice J - President, Drake SDP and Raffaelli C) in Australian Licensed Aircraft Engineers Association v. Qantas Airways Limited (2007) 166 IR 388 which concerned an appeal against a decision at first instance concluding that a clause comparable to Clause 13.1.1 in a Federal enterprise agreement was not a "...once and for all agreement...". The Full Bench considered that there was no appealable error in the decision at first instance and it dismissed the appeal.

51 The Full Bench in Australian Licensed Aircraft Engineers Association v. Qantas Airways Limited did not read the provision in the manner suggested by Mr Brotherson in this hearing as being dependent upon requirements of reasonableness or efficiency for the operations of the business, commenting (at p.371) that to read the provision subject to implied reasonableness or efficiency:

"...would be a provision of a distinctly different character to the one the parties have agreed upon. Qantas could select the shift duration it wished, up to a maximum of 12 hours, provided the duration could be demonstrated to be reasonable or efficient and the agreement of the Association would be rendered irrelevant. Furthermore, such a construction would lead to considerable uncertainty in the operation of the provision. While the concept of efficiency might focus predominantly on the interests of the employer, the concept of reasonableness would include the interests of both Qantas and the employees. The potential for prolonged inquiry and disputation is clear.

There is another reason to doubt that the framers of the clause intended that it should operate subject to an implication of the kind Qantas supports. The clause prescribes what is to occur if there in no agreement, namely: the shifts are to be of 8 hours. On its face, the clause provides two alternatives only. Shift lengths of more than 8 hours but not exceeding 12 hours may be worked by agreement. In default of agreement 8 hour shifts must be worked. If the framers of the clause had intended that in some circumstances shifts of more than 8 hours might be worked without agreement, a clearer indication of those circumstances might have been expected..."

However, Mr Brotherson would no doubt argue that in this case there is no question of implied reasonableness and efficiency, because the tests of reasonableness (fairness) and efficiency are clearly specified in Clause 36. 52 Mr Taylor indicated in his written outline of contentions that:

"...it can be conceded that only limited assistance as to the interpretation of an award clause can be garnered from the conduct of the parties post the making of the award. Nevertheless, to the extent to which assistance can be gained, the conduct of the parties clearly indicates that they have operated on the assumption that an agreement is not made on a '...once and for all...' basis. As the evidence of Mr Gerovasilis and the AWU make clear, the No.3 Paintline went to a 12 hour shift as a 'trial'. The trial was intended to be for a maximum of 12 months. The AWU both during that 12 month period and thereafter has consistently raised concerns as to the 12 hour shift, ultimately resulting in notification to the company that the employees no longer agreed to work a 12 hour shift. The word 'trial' clearly envisaged a situation where both parties would see how it worked and review the position at a future time..."

53 Mr Taylor also claimed that the "...relevant work area..." for the purposes of Clause 13.1.1 was the paintline itself and not the PFD as Mr Brotherson submitted. Whilst the words "...relevant work area..." is not defined in the BlueScope Steel Award, Mr Taylor submitted in his written outline of contention that:

"...the fact that the award elsewhere uses 'department' is instructive. It suggests that a '...relevant work area...' may well be an area that is less than an entire department..."

"...That No.3 Paintline is itself a '...relevant work area...' is demonstrated by the way in which it moved to a 12 hour shift. It is clear from the history, as set out in Mr Gerovasilis' statement, that the other parts of the PFD had moved to a 12 hour shift in circumstances where the workers on the No.3 Paintline were not prepared to do so. Eventually, following extensive negotiation and conciliation in the Commission, agreement was reached to 'trial' a 12 hour shift on the No.3 Paintline. That 'trial' was not a trial for the whole of the PFD. It was a trial for a particular work area, namely the No.3 Paintline. The facts simply do not support the contention that the No.3 Paintline was not a separate work area for the purpose of determining to move to a 12 hour shift. It went onto a 12 hour shift as a separate work area and, notwithstanding any reorganisation at management level, it remains a separate work area..." The Status Quo Argument

54 Clearly, what is contemplated by the paintline operators in this hearing is a change to shift patterns, which by any standards must be considered to be significant. I would have thought therefore that any change from the 12 hour shift to an 8 hour shift by any group of employees at the Port Kembla steelworks, at their initiative, would still constitute a change which was "...significant in nature..." within the meaning of Clause 36.4.2(c), and that would mean that the status quo arrangements would remain relevant, ie 12 hour shifts would be preserved until the issue was ultimately resolved by conciliation or, if necessary, arbitration in the State Commission [Clause 36.4.3(j)]. That was certainly the position taken in the correspondence by BlueScope Steel to the AWU to which I referred earlier in my decision. I note in that respect that any change in shift patterns is described as "...significant in nature..." in Clause 36.4.2(c)(viii). 55 It would naturally appear to follow from such a conclusion that, notwithstanding the provisions of Clause 13.1.1, and proper notice by the paintline employees to revert to the 8 hour shifts, there would still need to be further discussions between the AWU and BlueScope Steel and, if necessary, conciliation and/or arbitration in accordance with the procedure set out in Clause 36. Until that process was exhausted, the status quo would prevail. (It would also mean that, if my conclusion is that the paintline employees are entitled to revert to the 8 hour shifts, any claims that the AWU may choose to make for overtime from Sunday, 10 February, 2008 to the current time for any time worked above 8 hours per shift would inevitably fail. The change in shift arrangements just cannot apply retrospectively.) 56 Nevertheless, neither Mr Taylor nor Mr Brotherson now share the view that the change being contemplated in this hearing from 12 hour shifts to 8 hour shifts for the paintline operators would be a significant change for the purposes of Clause 36.4.2(c). Mr Taylor argues that Clause 13.1.1 would stand alone, entirely distinct from Clause 36. And Mr Brotherson argues that Clause 36.4.2(d) would serve to exclude any claim by the paintline operators to revert to an 8 hour shift being classed as a significant change, viz:

"Where a change is otherwise provided for in this award, it will not be regarded as significant in nature for the purposes of this clause."

57 But the preservation of the status quo would certainly be required if BlueScope Steel management chose to unilaterally change shift patterns of its employees outside the terms of Clause 13.1.1. It would be unfair that different rules apply to the employees and BlueScope Steel management but, as Mr Brotherson suggested in his submissions, that appears to be the position. However, it would be no more than commonsense that the AWU and BlueScope Steel hold very comprehensive discussions over any change to shift patterns on the paintline before they take any steps to implement such a change, whether or not the change is "...significant in nature..." for the purposes of Clause 36.4.2(c).

58 As Mr Brotherson indicated in his written outline of contentions:

"...In interpreting an industrial instrument, the Commission must in the first instance give consideration to the actual words used and these should be given their plain meaning. However, the Commission is able to consider the context in which the words are used. The context in which the words are used must be considered having regard to the industrial instrument as a whole, and may also warrant consideration of the history of the award [ Zoological Parks Board v. Australian Workers Union (2004) 135 IR 56 and South Eastern Sydney and Illawarra Area Health Service v. Health Services Union (2007) 165 IR 43]..."

Mr Taylor adopted that reasoning as well in his submissions.

59 The Full Bench of the former State Industrial Court (Glynn, Cullen and Marks JJ) in Cepus v. Heggies Transport Pty Limited (1994) 52 IR 123 gave what I regard as very helpful guidelines for interpretation of State awards. The Full Bench commented (at pp.127 and 128) that:

"…it is neither necessary nor desirable to put a judicial gloss on phrases in awards and determinations to decide if those phrases are ambiguous. The following principles emerge: (i) awards are not to be interpreted as strictly as statutes;

(ii) awards are to be interpreted on the basis that the intention of the parties is gathered from the whole award:

(iii) awards are often expressed in loose language used by the parties to meet their needs;

(iv) situations which fall accidentally within the words of an award should not be regarded as coming within such award; (v) where the words used are susceptible of more than one meaning, the tribunal should place itself in the position of the award-making body in order to understand its intended meaning: regard may be had to evidence as to usage of the trade; (vi) the meaning to be attributed to an award term is to be found by reading it in its industrial context, recognising that awards are drawn up by those who cannot be expected to be perfectionists in legal drafting; (vii) it is desirable that, in interpreting an award, the tribunal should have the fullest knowledge of the circumstances under which it is made;

(viii) the context of an award should be considered in the first instance and not merely when ambiguity might be thought to have arisen; (ix) the history of the award provision is relevant to the ascertainment of its meaning…"

60 Also Mr Brotherson referred in his submissions to the judgment of the High Court (Gleeson CJ, McHugh, Gummow, Kirby, Hayne, Callinan and Heydon) in Amcor Limited v. Construction, Forestry, Mining and Energy Union (2004/2005) 222 CLR 241 and, in particular, comments made by Kirby J (at pp.272 and 273), viz:

"...Certified agreements, such as the one presently under consideration, derive their binding force from the (former 1996 Federal Workplace Relations Act). As such, it is useful to consider the principal object of the Act in the light of the result in this case. Although not determinative in so large an Act, frequently amended since its original enactment in 1996, its principal object is a relevant consideration when one of its terms, or the terms of an instrument deriving from it, is in dispute. If possible , a court will construe a disputed clause in a way that is consistent with the purpose and object of the Act in question. As this court has observed, such instruments are construed on the prima facie footing that its provisions are intended to give effect to harmonious goals.

The principal object of the Act is '...to provide a framework for co-operative workplace relations which promotes the economic prosperity and welfare of the people of Australia...'. That object favours a construction, if available , of industrial agreements that will operate fairly to both sides and foster a co-operative workplace environment..."

And Callinan J had this to say (at p.283): "....An industrial agreement has a number of purposes - to settle disputes, to anticipate and make provision for the resolution of future disputes, to ensure fair and just treatment of both employer and employees, and generally to promote harmony in the workplace... It is important to keep in mind therefore the desirability of a construction, if it is reasonably available , that will operate fairly towards both parties. In this connection it is not without significance that the primary judge adopted a construction which he thought to be not only arguably absurd, but also potentially unjust to the appellant..."

61 Those comments by Kirby and Callinan JJ appears to me to reflect what I meant earlier in this decision when I described my role in this hearing as an arbitral interpretation. In determining the issue before me, I should bear in mind the stated objects set out in S.3 of the State IR Act - in particular, "...to provide a framework for the conduct of industrial relations that is fair and just...[S.3(a)]; "...to promote efficiency and productivity in the economy of the State...[S.3(b)]; and "...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..." [S.3(g)]. 62 I see my role in all matters before me essentially as providing a mechanism to resolve industrial disputes in an orderly manner without unnecessary industrial disruption and I am concerned that, if the paintline reverts to the 8 hour shift pattern, it is likely that BlueScope Steel may take the view that it has no option other than to exercise the similar right it would have under Clause 13.1.1 of rescinding the arrangement for 12 hour shifts elsewhere and take other employees off the 12 hour shifts with which they are presently apparently satisfied. 63 If the employees have the right by virtue of Clause 13.1.1 to rescind the agreement to work 12 hour shifts, BlueScope Steel has that right as well - and both Mr Brotherson and Mr Taylor are prepared to accept that right by BlueScope Steel. I cannot think of anything more likely to promote disharmony in the workplace than removing a shift arrangement which has worked for other parts of the Springhill site of BlueScope Steel when the employees involved are content with it to remain. I would only be transferring one industrial dispute to other parts of the Springhill site of BlueScope Steel: I would not be settling an industrial dispute but, in fact, creating another worse one elsewhere.

64 But there is one important qualification, highlighted by the words I have emphasised in the passage of the judgement of Kirby and Callinan JJ in Amcor Limited v. Construction, Forestry, Mining and Energy Union to which I have just referred - "...if possible...", "...if available..." and "...if it is reasonably available...": I still should not adopt an interpretation of any industrial instrument in a manner which would offend the actual wording of that instrument. The task before me in this hearing, confined as it is by the S.146A referral agreement, is simply a question of interpretation of Clause 13.1.1 and, as Mr Taylor asserted in his written outline of contentions:

"...It is important to note...that the matter before the Commission is not concerned with the merits of whether it is appropriate for the employees on the No.3 Paintline to move from 12 hours to 8 hours. The only question to be resolved is whether, pursuant to Clause 13.1.1 employees are to work 8 hour shifts where the majority of employees in a relevant work area no longer agree to work/offer 12 hour shifts..."

65 State award provisions are ordinarily interpreted by looking at what is actually said in them and not necessarily what may well have been the intention of the parties when they were made and external information may only be relied upon where there is some doubt as to the ordinary meaning of the words used, ie they should be interpreted in the same manner as any other legal instrument. Ultimately, it is the literal meaning of the words on which I am obliged to rely. For instance, in Bryce v. Apperley (1998) 82 IR 448 the Full Bench of the Commission (Hungerford, Marks and Schmidt JJ) explained the position (at p.452) in the following manner:

"...In our view, in construing the true meaning of an industrial award, like any other instrument with legal force, the task requires an approach according to the actual words used and their plain, ordinary English meaning..."

Those comments reflect the familiar statement by Mason J in the judgment of the High Court (Stephen, Mason, Aickin, Wilson and Brennan JJ) in Codelfa Construction Pty Limited v. State Rail Authority of New South Wales (1982) 149 CLR 337 at p.352, viz:

"...The true rule is that evidence of surrounding circumstances is admissible to assist in the interpretation of the contract if the language is ambiguous or susceptible of more than one meaning. But it is not admissible to contradict the language of the contract when it has a plain meaning. Generally speaking, facts existing when the contract was made will not be receivable as part of the surrounding circumstances as an aid to construction, unless they were known to both parties, although...if the facts are notorious, knowledge of them will be presumed..."

66 In this case I am satisfied that the plain meaning of Clause 13.1.1 would permit the revocation by employees of any agreement to work the 12 hour shifts at any time, subject only to the proper notice and any obligations which flow from the dispute settlement procedure. The views expressed by the Full Bench of the Australian Commission in Australian Licensed Aircraft Engineers Association v. Qantas Airways Limited would support such a conclusion. The special provisions of Clause 13.1.1 were written into the BlueScope Steel Award in contemplation of the more general provisions of Clause 36 and, to that extent they must be read as a qualification of the obligations to which Mr Brotherson has referred in his submissions.

67 In Mr Brotherson's view, Australian Licensed Aircraft Engineers Association v. Qantas Airways Limited was not a precedent on which I may confidently rely in the current proceedings because that decision was made under the more restrictive regime dictated by Work Choices and the Federal certified agreement being considered in that case did not have at its base the comprehensive provisions that are found in Clause 36 for structural efficiency in the BlueScope Steel Award. In this hearing, by virtue of the S.146A referral agreement and the more accommodating provisions of the State IR Act as far as structural efficiency is concerned, my role is not as restricted as that confronting the Full Bench of the Australian Commission in Australian Licensed Aircraft Engineers Association v. Qantas Airways Limited. 68 But ultimately, as I see the position, my task and the task confronting the Full Bench of the Australian Commission in Australian Licensed Aircraft Engineers Association v. Qantas Airways Limited are virtually identical. It is just a question of interpretation of Clause 13.1.1 alone. I have no license, in interpreting Clause 13.1.1, to depart from what appears from the unambiguous wording of the provision to be what it so clearly states. It is, as Mr Taylor submitted, that all employees covered by the BlueScope Steel Award work 8 hour shifts and may only depart from that standard upon agreement with the employees concerned and that agreement may be rescinded by the employees (or BlueScope Steel) at any time.

69 However, where I believe that some ambiguity does creep into the actual wording of Clause 13.1.1 is in the expression "...relevant work area..." and, in particular, the word "relevant" over which there remains dispute between the parties in this hearing between Mr Brotherson and Mr Taylor. To that extent, I may turn to the negotiations between BlueScope Steel and the AWU which surrounded Clause 13.1.1 and other external factors for assistance in interpreting the provision [George A Bond and Company Limited v. McKenzie (1929) AR 498 at pp.503 and 504, Perisher Blue v. Australian Workers' Union (1999) 91 IR 274 at pp.283 and 284 and Kingmill Australia Pty Limited v. Federated Clerks' Union of Australia (2001) 106 IR 217 at p.229]. The word "relevant" in Clause 13.1.1 means applicable, appropriate, apt, bearing upon, connected with, fitting, logical, pertinent.

70 Mr Gerovasilis has argued in his evidence in this hearing that the paintline is a part of the PFD. He regards the PFD as the "...relevant work area..." for the purposes of Clause 13.1.1. The result would no doubt be that the 12 hour shift would be likely to remain unchanged because, as I understand the position, the majority of the PFD employees, as distinct from the paintline operators, would support its retention. The paintline employees are out of step to that extent with the rest of the steelworks. Mr Gerovasilis has commented in the written statement which formed the basis of his evidence in this hearing that:

"...over a period of time the Springhill site has become much more integrated. Following the introduction of the coil management system [CMS] across the Springhill plant in 1996, the business became highly automated and synchronised in its product flow. Significant efficiencies arose from this investment. CMS operates using a system of automated guided vehicles [AGV's] which track through the site, moving coils as required to satisfy delivery performance for plant customers. The CMS effectively manages the flow of material across the site.

More recently, the introduction of the painted coil packing project [PCP] in 2004 and 2005 further integrated the Springhill site by further connecting the paintline to the packline and despatch by means of an automated exit end...

Following the creation of the PFD, a number of steps occurred to allow each of the component groups of the PFD to operate as an integrated operating department at Springhill and enhance the efficiency of the business, including:

a common management, including a single engineering manager, single reliability manager, single technical manager, single safety officer and single supply chain representative;

common management systems, including quality, safety, environment and the PFD stewardship system...;

the formation of a single maintenance crew to service all areas of the PFD: to the present time, the shift trades persons on each crew in the PFD service the entire department;

location of all shift staff and maintenance employees in a common shift office - the PFD operations office;

common shift start up meetings, end of bloc reviews, maintenance outage planning and execution; and

from July, 2002 a common shift pattern for all continuous shift workers.

In respect of the common management, currently on each shift there are two supervisors within the PFD: one is designated the finishing supervisor and the other the paintline supervisor. This has been the case for about seven months. Prior to that, for the previous five years there has been shift supervision for the PFD. The recent change is to provide appropriate supervisory coverage whilst various systems to improve business efficiency are implemented. It does not alter the essential structure of the PFD or its management systems. Indeed, it is essential that the two shift supervisors attend common shift changeover meetings and generally co-operate within work groups such as maintenance. There is also a requirement that one supervisor would cover for the other if necessary..."

71 Mr Taylor asserted in his submissions that the No.3 Paintline was, in fact, an "island" and it alone was the "...relevant work area..." for the purposes of Clause 13.1.1 and Mr Gorgievski disputed Mr Gerovasilis' claim that the No.3 Paintline was a part of the PFD, asserting in his written statement that:

"...the company is wrong to contend that the paintline employees are part of a bigger work area... In the PFD there are other units, ie the packline, despatch, and these sections have nothing in common with paintline operations or procedures and work practices. They do not have the same supervision or management. None of these other units had any input when the decision was made to have the paintline go on to 12 hours and staying on 8 hours. Each unit went to 12 hours following their own discussions and agreements. Each area had their own agreements. These specify separate career paths for employees in each section, such as the No.3 Paintline Restructuring Document and the Restructuring Agreement. That they are separate areas is clear from the fact that employees in one section cannot work in another section. Employees on the paintline only work on the paintline and are never rostered to work in any other area of the PFD. Similarly, employees in the other areas never work on the paintline. They are not even allowed to go into the work area of another section without obtaining additional training..."

72 Mr Taylor asserts that to treat the paintline operators as just a part of the PFD would fly in the face of the reality of the situation. The paintline operators were always treated as separate by BlueScope Steel management and, in fact, it was the No.3 Paintline which was treated separately as part of the "trial" in 2002, ie BlueScope Steel management regarded it at that time as a separate work area and the trial was confined to it alone. 73 But the reason why it became necessary for BlueScope Steel to treat the paintline operators separately in 2002 was simply because they had, in fact, insisted in being treated separately themselves in their opposition to the 12 hour shift arrangements. BlueScope Steel treated the paintline operators separately only because they appear to have been alone in their opposition to the 12 hour shifts at the time. That does not make the No.3 Paintline a "...relevant work area..." for the purposes of Clause 13.1.1. It is the way the work area is organised which I believe properly provides the key in this hearing.

74 Mr Brotherson argues that it was the PFD which would be relevant (appropriate or logical) and I accept his argument and adopt the PFD as the relevant work area for the purposes of Clause 13.1.1. The No. 3 Paintline operators may regard themselves as a separate and distinct group of employees but, from an organisational point of view, I am satisfied they also now form a part of the PFD. Moreover, as Mr Brotherson indicated in his submissions, the position adopted by the AWU in these proceedings was "AWU-centric", concentrating only on a specific group of employees - the paintline operators (who are AWU members) - and not the work area, which includes maintenance trades employees, fixed term employees and supervisors for the No.3 Paintline. That work area may also possibly involve contractors who work on site from time to time. Even if I regard the No.3 Paintline as the "...relevant work area..." for the purposes of Clause 13.1.1 - and I do not - it does not automatically follow that the views of the operators alone would constitute a majority view. It is, as Mr Brotherson submitted, a "...relevant work area..." described in Clause 13.1.1 and not a "...relevant work group...". To my mind, the only logical way to properly address the interpretation of Clause 13.1.1 is to make the PFD the "...relevant work area..." and that is my conclusion.

75 I have to say that, having particular regard to the history of this matter which has been outlined in the evidence before me in some detail - and also in view of my involvement in other proceedings arising out of earlier disputes over the 12 hour shift pattern on the paintline - I do not regard the 12 hour shifts per se as the real issue for the paintline operators, even if the majority of the employees, in fact, see it that way. I have consistently taken the view that the paintline operators may simply be cutting their noses off to spite their faces with their claim of reverting to the 8 hour shifts. I always understood that their concerns centred on manning levels and excessive overtime. I note that, whilst there may have been some issues for the employees with the introduction of the 12 hour shifts for the paintline from time to time early during the trial, the change to the shift patterns never appears to have presented the paintline operators with any real problems until late in 2006 when the issue was first raised as a complaint by the AWU.

76 In those circumstances, I would believe it to be critical that the AWU (and the AFMEPKIU and the ETU) hold further discussions over this issue and that, as far as the paintline operators are concerned, the AWU and BlueScope Steel address any current issues of concern by the parties. My task in these proceedings is actually concluded after the interpretation of Clause 13.1.1 that I have now given but I renew my offer of assistance to the parties for further conciliation and/or arbitration over any issues remaining in dispute between them following those discussions.

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Judgment (163 paragraphs)

Cases Cited (14)