WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

PARTIES COMMUNICATIONS, ELECTRICAL, ELECTRONIC, ENERGY, INFORMATION, POSTAL, PLUMBING AND ALLIED WORKERS' UNION OF AUSTRALIA, ENGINEERING & ELECTRICAL DIVISION, WA BRANCH

APPLICANT

-v-

MILLENNIUM INORGANIC CHEMICALS

RESPONDENT

CORAM COMMISSIONER S J KENNER

HEARD MONDAY, 3 OCTOBER 2005, TUESDAY, 4 OCTOBER 2005

DELIVERED FRIDAY, 21 OCTOBER 2005

FILE NO. APPL 895 OF 2005

CITATION NO. 2005 WAIRC 02859

Catchwords Industrial law - Enterprise bargaining - Application for an enterprise order - Principles applied - Enterprise order issued - Industrial Relations Act 1979 (WA) s 6(af), s 6(ca), s 26(1)(c), s 32A, s 42H, s 42I, s 42J(1), s 42K, s 48B - Workplace Agreements Act 1993 (WA) - Minimum Conditions of Employment Act 1993 (WA) s 22

Result Order issued

Representation 

Applicant Mr L Edmonds of counsel of the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Workers’ Union of Australia, Engineering & Electrical Division, WA Branch

Respondent Mr H Downes of counsel instructed by Freehills

Reasons for Decision

1         On 18 August 2005 the Commission as presently constituted issued a declaration pursuant to s 42H(1) of the Industrial Relations Act 1979 (“the Act”) that bargaining had ended between the applicant and the respondent for the purposes of negotiation of an industrial agreement under Division 2B of the Act.   That declaration followed numerous conciliation conferences between the parties in relation to bargaining for an agreement.

2         By the present application made pursuant to section 42I of the Act, the applicant now seeks an enterprise order.  The terms of the enterprise order sought by the applicant originally, are set out at schedule B to the notice of application.  The respondent, in its notice of answer and counter proposal set out what it saw as its terms of an enterprise order in schedule R2 of the notice of answer and counterproposal.

3         The application for an enterprise order proceeded for hearing and determination before the Commission.  At the outset of the hearing of the application, the parties requested the Commission to convene a further conciliation conference pursuant to s 32A of the Act, in an endeavour to narrow the issues in dispute between them.  The Commission granted the parties’ request.   As a consequence of that conciliation conference, and further discussions between the parties, the issues in dispute have been, helpfully, significantly narrowed.  Furthermore, during the course of the hearing of the matter, the respondent also made further concessions such that as a consequence, the only substantive issue to determine is whether the proposed enterprise order should provide for a 36 hour per week roster and if it should, what annual salary should attach to that roster.  There is a relatively minor further matter to be determined, regarding the rate of calculation for shift allowances under the proposed agreed shift work clause.

4         Accordingly, despite the breath of the submissions of counsel and evidence adduced in the proceedings, the Commission’s consideration of this matter will only deal with the submissions and evidence, going to the remaining issue in dispute.

Relevant Principles

5         Both counsel for the parties properly submitted, that despite their consent to most matters in dispute, whether or not an enterprise order should be made, is ultimately a matter for the Commission as an exercise of its discretion.  Additionally, if it is determined that an enterprise order should be made, the next issue to determine is what terms of such an order would be fair and reasonable. 

6         The requirements of s 42I of the Act are straightforward.  There is no issue as to the standing of the applicant to make an application for an enterprise order in this case.  Furthermore, the condition precedent to the making of an enterprise order, contained in s 42I(1)(a) of the Act, has been satisfied in this case by the making by the Commission of the declaration under s 42H referred to above.  The requirements of s 42I and some relevant considerations are dealt with by the Full Bench of the Commission in Hanssen Pty Ltd v Construction, Forestry, Mining and Energy Union (Western Australian Branch) (2004) 84 WAIG 694 and Sealanes (1985) Pty Ltd v The Shop, Distributive and Allied Employees Association of Western Australia and Ors (2004) 84 WAIG 3158.  I need not say anything further about these matters.

7         It is of course for the applicant to persuade the Commission, in terms of an onus, that an enterprise order should be made, and moreover, that the terms upon which such an order is to be made, are fair and reasonable.  Ultimately however, it is for the Commission to determine that matter pursuant to s 42I(1)(d) of the Act.

Contentions

8         Counsel for the applicant, Mr Edmonds, submitted that the enterprise order should contain a 36 hour week roster in accordance with its claim.  The applicant claimed that an employee should be able to elect, in writing, what hours they wished to work whether that be 36, 37.5 or 40 hours per week.  Once an election is made, the employee would be bound by that election, until such time any agreement is reached between the employee and the respondent to change it.

9         The applicant submitted that a salary of $58,155 per annum should attach to a 36 hour week roster, which salary rate is simply derived from taking the agreed rates of $64,643 and $60,625.10 per annum,  for 40 and 37.5 hour weeks respectively, on an hourly divisor over 36 hours per week.  Mr Edmonds submitted that employees at the respondent work a variety of shift patterns over 40 and 37.5 hours per week, and it would not be any additional burden on the respondent, to make provision for a 36 hour working week.  It was also the case on the applicant’s submissions, that one of the instrument electrical technicians sought to be covered by the enterprise order, was offered a 36 hour week roster as a part of an offer for an Australian Workplace Agreement (“AWA”) earlier in 2005.

10      For the respondent, Mr Downes of counsel opposed the inclusion of a 36 hour week roster.  He submitted that such a roster is not presently worked at the respondent and will lead to inefficiencies and a reduction in available working hours for essential maintenance.  Counsel also submitted that the respondent was generally moving towards working a 40 hour week roster and reducing hours from the present minimum of 37.5 would be a regressive step.  Additionally, complications may arise such as the need for the engagement of contractors to cover shortfalls, which was not desirable from the respondent’s point of view.

The Evidence

11      Evidence was adduced in this matter from an employee instrument electrician and Mr Dallywater, the respondent's energy and reliability manager.

12      The respondent produces titanium dioxide for use primarily in the manufacture of paints and plastics.  It conducts its operations from two sites in the South West of this State, at Kemerton and Australind.  Once the titanium dioxide is obtained from various processes, the product is then transported to the respondent’s depot in Henderson in Perth where it is dispatched to customers.   About 75 per cent of the product produced is exported mostly to China.  The respondent employs approximately 200 production and maintenance employees.

13      Most of the maintenance employees, who would otherwise be subject to an enterprise order, are engaged on AWA's.  It was common ground that there were three employees presently engaged on expired workplace agreements under the Workplace Agreements Act 1993 (WA).  It is those three employees who would be immediately covered by the enterprise order.  However, the respondent has committed to employees accepting AWA's, that if they wished to revert to a collective industrial instrument then they may do so.

14      Mr Kirby has been employed under an expired workplace agreement since 1997.  He works as an instrument technician.  During the course of 2005, he testified in relation to various offers for an AWA that were made by the respondent.  Copies of these offers were tendered as exhibits A1 and A2 and R1 respectively.  These offers were tendered over objection by counsel for the respondent.  The Commission accepted the tender of these documents on the basis that whilst no concluded agreement was reached, the content of the offers was relevant to a central contention by the applicant justifying its claim for a 36 hour week and the salaries attached, mainly the offers themselves.  Moreover, the offer documents are not “without prejudice” and in my opinion the evidence was relevant and admissible as to a central contention advanced by the applicant and as part of the overall factual matrix leading to the present dispute.

15      Mr Kirby presently works a 37.5 hour week but is paid for a 40 hour week with historically additional hours being incorporated into an overtime “bank” which is then used as may be required from time to time.  Mr Kirby testified that the claimed range of hours of 36, 37.5 or 40 hours per week did not, in his view, cause any difficulties for the respondent’s operations as there is presently some variety in working patterns now across eight and nine day fortnights.  He suggested that a 36 hour week could be worked on a nine day fortnightly basis between the hours of 7.00am and 3.30pm.

16      Mr Kirby did accept however, that the terms of the offers of AWA's made to him, including those containing a 36 hour week and certain salaries, were also in part to resolve outstanding issues between he and the company that had been the subject of formal grievance processes. 

17      Mr Dallywater expressed strong opposition to any proposed 36 hour week roster and testified that the present arrangement of 37.5 and 40 hour week rosters works sufficiently well.  He said if anything, the respondent is attempting to move towards more uniformity of 40 hour per week rosters and did not consider a 36 hour week roster would be feasible.   From his point of view, in charge of maintenance, he said that a 36 hour week roster would reduce available working hours “on the tools” by about ten percent per employee per week and there would be a corresponding reduction in the number of days employees are working on site.  Mr Dallywater did not consider this would be conducive to promoting efficiency in the maintenance operation and would be contrary to the general direction the respondent wished to move into as to working hours. 

18      A further difficulty identified by Mr Dallywater in his evidence, was the need to increase the use of contractors if a 36 hour week roster option was introduced.  He did not consider this to be a preferable situation.  Additionally, Mr Dallywater said that the specific offer made to Mr Kirby, for an AWA, which included a 36 hour week roster, was a part of a proposal to settle some previous grievances that he had, with the respondent, about other matters.  This testimony was also supported by the terms of exhibit A4, tendered by the applicant, which was a letter from Mr Fenech the respondent's employee relations manager to Mr Game, the secretary of the applicant.  This letter referred to, as a basis for the proposed AWA for Mr Kirby, as follows, “If the AWA is signed then Steve's current grievance under the Fair Treatment Procedure in respect to his 2005 salary review is resolved.”  In terms of flexibilities, there was also evidence adduced through Mr Dallywater concerning an incident involving Mr Kirby when he declined to work additional hours in respect of shut down maintenance in October 2004.  This was the subject of a letter to Mr Kirby from the respondent tendered as exhibit R2.  However, Mr Dallywater conceded that there had been no other occasion that he could recall where this had occurred involving Mr Kirby or indeed other technicians, not being available to do after hours work.  In relation to this particular incident, Mr Kirby testified that he had in fact informed the acting supervisor about his inability to work beyond ordinary hours that day for family reasons and for personal reasons and suggested the letter to him was not entirely correct.  There was also some suggestion on his evidence, that he should not have received such a letter at all.

Consideration

19      As to the general issue of whether an enterprise order should be made in the present circumstances, I am satisfied on what is before the Commission in this matter, that such an order should be made.  The three employees immediately concerned have their terms and conditions of employment presently governed by an expired workplace agreement underpinned by the Metal Trades (General) Award 1966.  There is no other present and contemporary industrial instrument which would govern the terms and conditions of employment of the relevant employees.  In my view there should be one. 

20      As to the content of the enterprise order, I am satisfied that the terms now largely agreed upon between the applicant and the respondent, reflecting in many respects existing terms of employment and policies of the respondent, are fair and reasonable.  The agreement between the parties to the proposed terms, implicitly recognises that they consider the terms to be fair and reasonable which in my opinion, is a relevant consideration for the Commission in making a determination under s 42I(1)(d) of the Act.  I am also of the view that the proposed enterprise order would provide for a system of fair wages and conditions of employment consistent with s 6(ca) of the Act.

21      As to the issue in dispute, that being the inclusion of a 36 hour week roster provision, I am not persuaded that such a provision would be fair and reasonable in the circumstances of the present case.  The evidence is and I find, that the offer made to Mr Kirby in a proposed AWA, including a 36 hour working week, was one not generally made to all employees and importantly, incorporated consideration for the resolution of general grievances that Mr Kirby then had with the respondent.  It would seem that those grievances have had some history between the parties.  Moreover, from the evidence adduced through Mr Dallywater, I am not persuaded that it would be in the interests of facilitating the efficient organisation and performance of work according to the needs of the respondent, consistent with s 6(af) of the Act, to include such a provision at this time.  To provide a further variation on working hours to 36 per week, not presently worked by any employee, and which would on the evidence, create the potential for a reduction in workplace efficiency and further variations of working hours’ arrangements, would not be desirable in the present circumstances.  By s 26(1)(c) of the Act, the Commission is required to have regard to the interests of the persons immediately concerned in the matter, which includes not just the interests of the employees affected but also the employer. 

22      A final but minor matter arises in relation to the calculation of the shift allowance in the proposed cl 8- Shift Work.  The rate is to be determined by dividing the shift allowance of $13,600 by 40 hours per week and dividing the resulting figure by 52 weeks.  This leads to a rate of $6.5384 per hour which will be the rate specified in the order.

23      Subsequent to the hearing in this matter the parties provided the Commission with a revised proposed enterprise order setting out the terms and conditions about which agreement has been reached.  There are some clauses in the proposed agreed draft enterprise order that require variation to be consistent with the terms of the Act and other relevant State legislation.

24      As to cl 3 - Classification and Scope, by s 42J(1) of the Act the scope of an enterprise order must expressly be limited to the employees and employer to whom it applies.  Express provision must therefore be included in the clause to this effect.

25      As to cl 10.4 - Power of the Commission, I do not consider this to be an appropriate clause to insert in an enterprise order made by the Commission and that clause will be omitted from the order to issue.

26      As to cl 13 - Sick Leave, to be consistent with s 22 of the Minimum Conditions of Employment Act 1993 (“the MCE Act”) the order will provide for a requirement for an employee to provide to the respondent evidence that would satisfy a reasonable person of the entitlement.

27      As to cl 17 - Superannuation, such a clause is required to be consistent with s 48B of the Act in relation to choice of fund and therefore the first part of the applicant’s claimed clause, dealing with this issue, will be incorporated into the order.

28      The terms of the proposed cl 20 - Bereavement Leave, require amendment to be consistent with the MCE Act.

29      Whilst the Commission does not consider it necessary, the parties requested that cl 23 - No Extra Claims, be included in the proposed enterprise order for the benefit of readers of it.  It is plain by s 42K(3) of the Act that an enterprise order is not able to be varied on the application of one party only.  All persons specified in the order must consent to any variation.  There are further protections for the benefit of both parties set out in s 42K.  However, given the position of the parties, this provision will be included in the order.

30      A minute of proposed order now issues.