Storeworkers - IGA Distribution Pty Limited New South Wales Distribution Centres Award 2002 [2002] NSWIRComm 156 - NSWIRComm 2002 case summary — Zoe

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Storeworkers - IGA Distribution Pty Limited New South Wales Distribution Centres Award 2002 [2002] NSWIRComm 156

[2002] NSWIRComm 156

Industrial Relations Commission (NSW)|2002-07-01|Before: Walton J, Harrison DP, Mr J

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Source facts

Court

Industrial Relations Commission (NSW)

Decision date

2002-07-01

Before

Walton J, Harrison DP, Mr J

Catchwords

11/23/2001
03/12/2001
03/15/2001
03/26/2001

Source

Original judgment source is linked above.

Catchwords

11/23/200103/12/200103/15/200103/26/200104/05/200104/09/200105/28/200108/23/200108/24/200108/31/200110/24/2001 DATE OF JUDGMENT: 07/10/2002

Judgment (255 paragraphs)

[1]

CITATION : Storeworkers - IGA Distribution Pty Limited New South Wales Distribution Centres Award 2002 [2002] NSWIRComm 156 APPLICANT/RESPONDENT: National Union of Workers, New South Wales Branch PARTIES : RESPONDENT/CROSS-APPLICANT: IGA Distribution Pty Limited (formerly Davids Distribution Pty Limited) FILE NUMBER: IRC 3866 & 4312 of 2000 CORAM: Walton J Vice-President; Harrison DP; Patterson C CATCHWORDS : Award - Application and cross-application for new awards - Delegation to take evidence - Wide range contested matters - Significance of earlier decision and award - Privative provisions - S179 of Act - Contention Commission precluded from considering whether earlier award or decision wrong in law or principle or providing fair and reasonable conditions - Commission not so precluded - History of award relevant - Proper to evaluate previous basis for award made - Reasons for earlier decision may be examined - Relevant principles in examining award history - Principles concerning special case - S47 of Act - Not proscribe consideration of terms earlier enterprise agreement - History unusual - Changed circumstances - Issues as to whether previously fully compensated - Special case found - Engineered standards - Previous provisions re performance standards removed - Variation re hours of work refused - Wages adjusted - Removal limitations on use of casual, fixed term and seasonal employees - Other applications considered - Overtime - Payroll deduction of union dues - Saturday loadings - Sunday work - No extra claims - Settlement of disputes - Area, incidence and duration - Spread of hours - Working on rostered days off - Union picnic day - Sick leave - Date of operation - Orders - Award made - NUW to produce draft award Anti Discrimination Act 1997 LEGISLATION CITED : Industrial Relations Act 1991 s131 Industrial Relations Act 1996 s10 s19 s22 s47 s169 s179 Abigroup Contractors Pty Limited v Inspector Kathleen Maltby [2002] NSWIRComm 18 Ambulance Employees (State) Award Re (1988) 25 IR 38 AMWU and Others v Alcoa of Australia Ltd and Others (1996) 63 IR 138 Australian Federation of Principals Employed in Catholic Schools Re (1993) 49 IR 1 Campbell's Cash and Carry Pty Ltd v National Union of Workers, New South Wales Branch (No 2) (2001) 106 IR 429 Corrections Health Service Nurses' (State) Award (No 2) [2001] NSWIRComm 58 Crown Employees (State) Award Re (No 2) (1993) 52 IR 243 Equal Remuneration Principle Re (2000) 97 IR 177 Holpitt Pty Ltd v Varimu Pty Ltd (1991) 29 FCR 576 Journalists Sydney County Council Award Re (1959) 55 AR 555 Kellogg (Australia) Pty Ltd v Federated Millers and Mill Employees Association of Australasia, NSW Branch (1991) 39 IR 1 CASES CITED : Metal, Engineering and Associated Industries Award Re (2001) 110 IR 247 National Union of Workers, New South Wales Branch (on behalf of Phillip Charles Mumby and Victor Zammit) v Davids Distribution Pty Ltd (unreported, Matter Nos. IRC2056 and 2060 of 1999, 9 February 2000) Nutshack Merchant Franchise Pty Limited v Smith (1999) 90 IR 355 Operational Ambulance Officers (State) Award Re [2001] NSWIRComm331 Pastoral Industry (State) Award Re (2001) 104 IR 168 Public Holspital Nurses (State) Award Re [2002] NSWIRComm 100 Springfield Nominees v Bridgelands Securities (1992) 38 FCR 217 State Part-Time Work Case (1998) 78 IR 172 State Wage Case 2000 (2000) 97 IR 93 State Wage Case 2001 (2001) 104 IR 438 Storeworkers - Campbell's Cash and Carry Pty Ltd (NSW), NUW (NSW Branch) Award 2000 (2001) 104 IR 367 Storeworkers - Davids Distribution Pty Limited NSW Distribution Centres Award 1998 (No 1) Re (1998) 85 IR 179 Storeworkers - Davids Distribution Pty Limited NSW Distribution Centres Award 1998 (No 2) Re (1998) 85 IR 198 HEARING DATES: 10/17/2001; 11/23/2001; 03/12/2001; 03/15/2001; 03/26/2001; 04/05/2001; 04/09/2001; 05/28/2001; 08/23/2001; 08/24/2001; 08/31/2001; 10/24/2001 DATE OF JUDGMENT: 07/10/2002

[31]

Hours of work The NUW sought a 36 hour week with a limitation to spread of hours to 10 per day. IGA sought to retain the 38 hour week in the 1998 award and to extend the spread of hours to 5.00 am to 6.00 pm at Blacktown and 5.00 am to 6.00 pm at Silverwater (with consequential alteration to meal times). The NUW sought a meal allowance which would be paid in cash. It also sought a provision that any alteration in meal times would be subject to the consultative committee process. 2. Engineered standards The NUW sought the removal of reference to 'Engineered Standards' in the classification structure and consequently the use of 'performance against engineered standards' as a merit criteria for advancement. This was opposed by IGA. 3. Counselling Procedure The NUW sought the removal of the reference to performance standards, i.e. engineered standards, from the counselling procedures prescribed by the 1998 Award. 23 There were a range of other claims pursued by the parties in the arbitral proceedings. These were as follows :- 1. Limitations on use of casual, part time, and seasonal workers The NUW sought to restrict the use of casual, part time and seasonal workers. The NUW also sought a commitment to maximising full time permanent employment. It sought the deletion of clauses from the 1998 award concerning fixed term employees, the probationary periods and the exclusion of former casuals. These claims were opposed. 2. Rosters - Consultative arrangements The 1998 Award provides that: The company may alter the starting and/or finishing times within the spread of hours for a rostered shift without payment of overtime upon the giving of seven days notice. The NUW sought a new roster provision providing rights to employees to remain on existing rosters with capacity for additional rosters to be established in accordance with the consultative committee process. The NUW sought the following new provision: The company shall consult with the employees and, if requested, the union in relation to any change in roster. The Company will not unnecessarily impose a change of roster on employees where it would cause personal hardship.

[32]

IGA oppose this proposition, contending that it is unnecessary. 3. Hours of day work - Definition of early morning shift IGA sought to change the definition of early morning shift from any shift commencing from 4.00 am to 6.00 am (as provided in the 1998 Award) to any shift commencing between 4.00 am to 5.00 am; altering the spread of hours for day work from 6.00 am to 6.00pm to 5.00 am to 6.00 pm. 4. Working on a rostered day off (RDO) IGA sought the insertion of a new provision which allowed payment of a 25 percent loading in lieu of overtime rates when work was performed on rostered day off; and, in the case of shift workers, the 25 per cent loading or shift allowance, whichever is the greater, in lieu of overtime rates where an employee, by mutual agreement, works on an RDO. IGA's proposal was that work in excess of normal rostered hours would be paid at overtime rates. 5. Saturday work The parties were not able to agree on the method of payment for part time or seasonal employees rostered for Saturday work. There was no dispute that a 60 per cent loading should be paid. The NUW sought that the Saturday loading to be calculated into the all purpose rate for part time and seasonal workers in the same manner as full time employees, and that the Saturday loading be paid in addition to casual and shift loadings. IGA sought retention of the current award provision which distinguished between full time employees and casual/part time employees. The current award provides for payment of the 60 per cent Saturday loading in addition to casual loading, but not the shift allowance. 6. Saturday rates for shift workers IGA sought the retention of current arrangements which provided a 60 per cent loading in lieu of shift allowances; and for the 60 per cent loading to be paid in addition to shift allowances. The NUW sought that those provisions be deleted. 7. Sunday overtime The NUW sought an addition to cl 21(iv) of the 1998 award to provide that overtime worked on a Sunday would be paid at the rate of double time and one half (in substitution for the present provision found in cl 13(ii) Overtime which provides for payment at double time). 8. Weekend work meal breaks IGA proposed that, where an employee worked 9 hours overtime on a Saturday, Sunday or Public Holiday between the span of hours for day shift, the ordinary week day lunch break would be observed without penalty. The NUW sought the retention of the current criteria. 9. Holidays IGA sought the deletion of the picnic day entitlement. The NUW sought the deletion of the provisions of Clause 19 of the 1998 Award (which reduced the former payment for work on a public holiday, where that work was part of an employee's normal roster, from triple time to double time and a half payment). 10. Sick leave (i) Notification The NUW sought the retention of the current provision that notification of absence due to illness be given within 24 hours of the commencement of the absence. IGA sought a provision requiring notification prior to commencement of the rostered shift. (ii) Standard of proof IGA seek a provision that any absence prior to a public holiday and sick leave in excess of two single days be supported by a certificate issued by a duly qualified medical practitioner, in place of the current requirement that proof satisfactory to the company or, in the event of a dispute, satisfactory to the Commission, be the relevant standard. 11. Deduction of union dues The NUW sought a provision requiring the employer to deduct union dues from wages where requested (and authorised) by the employee to do so. This was opposed by IGA.

[33]

No extra claims The NUW sought that the no extra claims provision in the 1998 award should apply to all parties, not just the union. It also sought the introduction of a provision which permitted the parties to commence negotiations for a new award, two months prior to expiry of the award. 13. Area, Incidence and Duration IGA sought retention of the current provisions in the 1998 award. The NUW sought coverage of all storeworkers, other than staff at the specified locations, and the addition of a provision that the award shall apply to any "successor, assignee, or transmittee" of all or any of the work covered by this award. The NUW also sought the addition of a provision that, to the extent of any inconsistency, the award will prevail over the Storemen and Packers, General (State) Award (2000) 317 IG(NSW) 1097. The provisions were opposed. 14. Arrangement of the award IGA sought that rates of pay and conditions of employment in the 1998 award specific to the Silverwater warehouse be removed from the wage schedule and located in an appendix to the award. This was opposed by the NUW. Evidence 24 The evidence in these matters comprised some 63 exhibits, supported by oral evidence from: NUW Witnesses: · Mr W J Allison - employed by IGA as a storeworker and currently the union delegate · Mr K R Stewart - employed by IGA as a storeworker for some 23 years · Mr M Christmas - employed by IGA as a storeworker; previously occupied the role of union delegate · Mr F Belan - NSW State Secretary of the NUW; Mr Belan was not available for cross examination, his evidence provided by affidavit without objection IGA Witnesses: · Mr A McKenzie - Chief Executive Officer of Australia Asia Pacific Wholesalers and a Director and National Spokesperson for the National Association of Retail Grocers of Australia (NARGA). Mr McKenzie was not required for cross examination. His evidence was provided by statement. · Mr B Douglas - General Manager, IGA Distribution Pty Ltd · Mr G Gearing - Operations Manager, Perishable - responsible for operation of the Perishable Distribution Centre at 4 Newington Road, Silverwater. · Mr G Johnson - Group Employee Relations Manager, Metcash Trading Pty Ltd. · Mr P McNally - Training Manager Australia and New Zealand for EXE Technology (Engineered Standards); formerly State Human Resources Manager for Retail Distribution Division, Davids Distribution Pty Ltd, 37 Bessemer Street, Blacktown. · Mr M O'Neill - Group Occupational Health and Safety Manager, Metcash Pty Ltd · Mr R Kinnane - Training Supervisor, IGA Distribution Pty Ltd. · Mr D Bru - Afternoon Shift Supervisor, IGA Distribution Pty Ltd, Blacktown · Mr G O'Shea - Blacktown Warehouse Operations Manager, IGA Distribution Pty Ltd.

[46]

35 Nothing in s 179, precludes, in our view, the Commission examining, in that context, and for the purposes of making the determination required under s 10 of the Act, the reasons given for the making of the 1998 award. In doing so, the Commission will, subject to the correct application of principle which we will now discuss (and existence of relevant evidence) reach its own conclusion as to the appropriate terms of the award in accordance with the provisions of s10 of the Act. This is particularly so where the earlier decision of a single member is considered by a Full Bench in arbitral proceedings such as these. We respectfully adopt, as the correct approach, that which was stated by the Commission in Court Session in Abigroup Contractors Pty Limited v Inspector Kathleen Maltby [2002] NSWIRComm 18 at [7] as follows: We do not so view Kavanagh J's decision at first instance which, on one approach, is directed to whether the orders made by Wright J per se may be impeached. However, the appellant went so far as to submit that s179 of the Industrial Relations Act operated in such a way as to preclude a member of the Commission (even in arbitral proceedings) from questioning (that is, arriving at a different view) a decision of another member, and even where different parties were involved in later proceedings. This is said to extend to proceeding where a Full Bench is considering an earlier judgment of a single member or by another Full Bench. We have real doubts the section operates in such a manner. 36 The Full Bench of the Commission in Court Session in Nutshack does not assist IGA in this respect. That matter concerned whether an appellant should be heard upon an appeal where a stay of the decision at first instance had not been sought and an order of the Court at first instance had not been complied with by the respondent. The observations of the Court as to s 179 in that matter addressed the question of whether the decision and orders at first instance would continue to operate unless the subject of a successful appeal or stayed by order of the Court.

[55]

45 We also adopt, with respect, the statement of applicable principles as to special case proceedings stated by the Full Bench in the Re Operational Ambulance Officers (State) Award [2001] NSWIRComm331 at 168 as follows: A number of principles may be distilled from these authorities bearing upon the contention advanced by the HAC. In order to make out a special case the applicant is required to make out that the variation is necessary to establish fair and reasonable conditions of employment and that the matter has special attributes. In doing so, the applicant is not required to meet a higher onus or standard of proof. The evidentiary requirements of a special case are no more strict than would apply in an ordinary matter, although the applicant to a special case will need to establish an adequate evidentiary foundation for those factors which are relied upon as showing the special case attributes of the case. Whilst respect will be afforded earlier decisions of the Commission or its predecessors, the conditions of employment earlier established need to be ultimately tested against the requirements of s 10 of the Act and that which we have discussed as being applicable to making out a special case. Where, as here, the former decision involved a test case, particular care should be taken to ensure that the factors relied upon by an applicant in support of its claim do not replicate factors which were taken into account by the Commission or its predecessors in establishing the general standard emerging from such case. In any event, the basis for and circumstances under which the conditions in the award were established will be significant considerations in the Commission's deliberations in order to assess whether the factors relied upon by the applicant in support of a special case have already been accommodated by the earlier made award (in which case the present prescription may adequately compensate for those factors). (See also Re Public Holspital Nurses (State) Award [2002] NSWIRComm 100).

[91]

Contentions as to the 1998 Decision 65 Mr Shaw submitted that there were a number of unusual circumstances applying to the 1998 proceedings and decision which should bear upon the weight given to "the arbitrated outcome of that decision". The factors he referred to were as follows: 1. The proceedings were infected by the surrounding circumstances. There had been a failure to renegotiate the enterprise agreement. There was substantial industrial disputation and efforts by the NUW to avail themselves of a protected bargaining period involving extensive litigation in the New South Wales Supreme Court, Australian Industrial Relations Commission and the Federal Court. There were attempts to prevent the Commission further considering the matter as a matter of jurisdiction. No counter-claim or application was filed by the union. There was a failure to comply with directions of the Commission and adjournments refused. The proceedings continued in the absence of a representative of the NUW, either through its non-appearance or a failure to play an active role. There were other procedural peculiarities attending the proceeding, including the union presenting a counter-draft award during the course of cross-examination of an employer witness and later amending that claim but not, in fact, proceeding by application. 2. Those procedural irregularities, it was submitted, gave rise to an extraordinary result in the arbitration. For example, the Commission, he submitted, without precedent, increased the ordinary hours of work from 36 to 38 hours. 3. Another example of the extraordinary features of the decision was that there was also a reduction in the hourly rate of pay of the employees at Davids brought about by the decision. The increase in rates of pay granted by the Commission in the 1998 award did not sufficiently compensate for the loss incurred by the change of a devisor arising from the increase in ordinary hours. 4. In any event, the wage increase awarded by the 1998 decision was less than that sought by the employer in the proceedings. 5. The decision introduced, for the first time in New South Wales, "engineered standards" as an award condition of employment. That decision was contrary to the view expressed by a Full Bench of the former Industrial Relations Commission in its Report into Engineered Standards in the Warehouse Operations and Distribution Industry ( Glynn , Cullen JJ and Murphy C, 26 March 1996) ("engineered standards inquiry"). 66 The NUW also submitted that the 1998 decision proceeded upon an error of law as to the operation of s 22 of the Act. Her Honour had rejected a submission by the NUW that the then employees of Davids worked 36 hours per week under the enterprise agreement and therefore s 22 of the Act did not constrain the Commission from awarding 36 hours per week. Her Honour distinguished that situation from other cases where the Commission had found that it was not precluded from awarding 36 hours per week where there was agreement between the parties and the pre-existing conditions of employment provided for 36 ordinary hours.

[132]

88 In reply to the NUW, IGA submitted as follows: 1. There was a paucity of evidence from the NUW to demonstrate that the engineered standards had been applied unfairly. 2. The evidence disclosed that the counselling provided by the respondent provided a proper opportunity for explanation to be given by employees not meeting the standards. That evidence also disclosed that where the explanations were reasonable they are taken into account. 3. The evidence also disclosed that there are benefits which flowed to employees and the company from the use of engineered standards. For example, supervisors and managers did not generally take action where employees are seen talking or standing around the warehouse so long as they are achieving the standard. Further, if IGA were not able to use engineered standards as a monitoring tool, supervisors would again be required to be stricter in monitoring time wastage. 4. It was simply not correct to say that if an employee did not perform to standard they were counselled and then dismissed. The immediate achievement of the 100% standard was not required and training was provided to assist employees in reaching the standard. If an employee failed to achieve an acceptable standard they are given an assembly technique review ("ATR") by their supervisor. That review is a method by which a supervisor attempts to assist the employee in achieving an acceptable standard whilst following the preferred methods, particularly in relation to the safety of the company. The ATR is a form of training. IGA took into account individual circumstances in judging work performance when assessed against engineered standards. 5. It is also incorrect to say that employees were not counselled for failing to meet standards prior to the 1998 award. Employees did receive counselling prior to that award, however, industrial pressures and constant threat of industrial action had inhibited the use of that counselling option to some extent. 6. Whilst engineered standards were one factor taken into account in considering the promotion of employees, they are not the only element, and factors such as absenteeism, attitude, quality of the work, knowledge of systems, skills and length of service are considered in assessing the promotion of a particular employee. 7. As to the question of delays, the evidence revealed that the engineered standards themselves contained allowances for a number of factors. If delays other than those accounted for in the engineered standards occur, employees may seek a delay allowance from their supervisor. Such delays inevitably occurred during the normal course of warehouse operations and delay allowances are equally recorded and adjusted within the system to ensure individual performance of employees is not adversely affected. 8. Employees are not penalised for age. IGA takes into account individual differences in assessing whether an employee does not reach 100% of standard. It was also argued that some older employees perform better than younger employees. Age was considered when counselling or terminating employees as well as goal setting and reward. 9. As to the allegation that engineered standards had caused employees to use unsafe methods due to the pressures of meeting time constraints, it was submitted that the case led by the NUW exhibited the "unsubstantiated and scare mongering nature of the evidence sought to be led by the NUW in relation to engineered standards". Issues raised in safety committee meetings had already been taken into account by IGA. There was no real risk to safety. The focus was on employees working "smarter not harder". Further, the ATR's are designed to improve safe methods of work. The preferred method used by engineered standards was a safe method. There was a significant emphasis on safety at the workplace. There had, in fact, been a decrease in the number of workers compensation injuries. The WorkCover Infringement Notices issued against IGA should be seen in context as those notices were issued without the WorkCover Authority of New South Wales inspecting the area in question and talking adequately to company officers. 10. It was further submitted that the failure of an employee to reach the engineered standard did not give the opportunity to immediately warn and dismiss an employee. However, a failure to reach the standard did entitle IGA to have regard to it for disciplinary purposes. Further, in the disciplinary process, supervisors were expected to use experience and discretion. There was no firm policy as to how a failure to meet engineered standards might be taken into account in a disciplinary process. The approach may vary upon the supervisor's assessment of an employee's capacity to comply with the standard.

[137]

92 We are of the view that no single criteria for promotion or disciplinary counselling should be elevated to specific award prescription. This, we would note, was reflected, in part, in the views expressed by Schmidt J in the 1998 decision in dealing with promotion criterion (at 191) and counselling procedures (at 195), wherein her Honour concluded that reference throughout the award should be consistent and that "'the performance standards set by the company' is seemingly an appropriate term". However, the evidence in these proceedings demonstrated that the clause has not operated in this manner. The provision has operated primarily as a means of requiring performance to the 'engineered standards' per se. This is amply demonstrated by the evidence in this case of the practices of IGA and its supervisors. 93 Mr Shaw submitted that the relationship between the award recognition of engineered standards and warnings is diminished by the information available from exhibits 22, 23 and 24 - records of warnings issued, which revealed that, in 1996 and 1997, there were no warnings issued for poor work performance. In 1998 there were three warning subsequent to the making of the 1998 award. Six of the 37 warnings issued in 1998 were related to engineered standards and in 1999, 26 such warnings were issued. 94 It is noted that the information contained in exhibits 22, 23 and 24 is correspondence from Davids/IGA to the NUW advising of warnings given under an arrangement then existing between the parties. This arrangement is no longer in place, Davids/IGA withdrew from it on the basis that not all employees were members of the union and that the employer had no means of distinguishing between a member and non-member. IGA indicated that it would not wish to provide information to the union concerning non-members. 95 There can be no better illustration of the conclusion reached in paragraph 92 above than the decision in Mumby. Both parties relied upon the decision of Sams DP in Mumby and Zammitt to support their opposing positions. Mr Shaw contended that Sams DP in Mumby was improperly constrained by the award. He submitted that, notwithstanding a long period of service as an employee and union delegate, the decision of the Commission in dismissing an unfair dismissal application, appeared to rest upon the requirement of, what was described in the decision as, an unusual award provision (namely, cl 31, see at 7) and the failure of the applicant to meet the requisite engineered standards set by IGA. 96 Mr Hatcher submitted that the matter was fundamentally decided upon the basis that, although the applicant could, in fact, meet the engineered standards (notwithstanding submissions put on his behalf as to his age and medical condition), he had "persisted with an obdurate and inflexible opposition to" those standards; putting that the decision by the Deputy President was an appropriate exercise of discretion pursuant to Part 6 of the Act based on the facts of the case. What is more significant is that the decision was based, at least in part, upon the operation of the award provision and the failure of the applicant to meet the standard set by the employee.

Storeworkers - IGA Distribution Pty Limited New South Wales Distribution Centres Award 2002 [2002] NSWIRComm 156

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